MJBizCon 2021: A Deep-End Plunge into the Lucrative Cannabis Vertical

By: Jim Roddy, VP of Marketing & VAR/ISV Business Advisor at the RSPA

Twenty years of experience in the retail IT channel has taught me the fastest and most effective way to learn a new market is through immersion. There’s no substitute for attending a multi-day in-person show to grasp trends and nuances that will accelerate understanding where your business could fit in that vertical.

I did just that at MJBizCon 2021, held Oct. 19-22 at the sprawling Las Vegas Convention Center. It was my first show in the cannabis vertical, and if I didn’t have members of the RSPA Cannabis Community guiding me, my education-by-immersion would have felt like a plummet over Niagara Falls. It’s not just the size of MJBiz that’s overwhelming – 1,100+ exhibitors and 35,000+ attendees. It’s also this nascent market’s seemingly infinite variables that can turn your question of “Where do I best fit?” into “What in the world am I doing here – and what’s that earthy smell?”

RSPA VP of Member Services Ashley Naggy and I attended MJBizCon with our core focus to recruit new members to the association. Nearly 20% of RSPA members play in the cannabis vertical, and the more cannatech orgs we add the greater our community IQ.

I also viewed the show and education sessions through the lens of a retail IT VAR or ISV hoping to carve out a niche in cannabis, and that’s what overloaded my brain. Let me explain:

  • Ashley and I reviewed the exhibitor list in advance and targeted companies in the categories if technology and software, security, and payments. Approaching this show without a battle plan was not an option.
  • Our list totaled 114 prospects plus nine current RSPA members: vendors APG Cash Drawer, Brother Mobile Solutions, CIMA Cash Handling America, Custom America, Solvent, and Star Micronics plus VARs POS Remarketing Group, RCS/Anthea, and Staley Technologies.
  • Sounds like a technology show, right? Hardly. As RSPA VAR member Ben Williams of TouchMate, who walked the expo hall for a day, told me, “This is an agriculture and manufacturing show with a little bit of technology.” That’s a spot-on assessment. (If you don’t believe Ben and me, follow this link to check out some of the what-in-the-world-is-that-contraption exhibitors we observed.)
  • Additionally, many of the “technology companies” at MJBiz aren’t IT folks that would fit into our ecosystem. Several I talked with are “platforms” cannabis dispensaries use for free to access information from cannabis “brands.” A few say they’re seed-to-sale ERP systems, but in reality their focus is on cannabis growers (cannabis farms) and manufacturers (companies that produce and package gummies, vape cartridges, etc.), and their only connection to the point of sale is through an API to someone else’s POS software.
  • A few other exhibitors could effectively expand their reach through established retail IT channel companies. The problem is they’re so new they haven’t even considered a channel play. I heard at one booth, “We launched the company in February” and then at the next booth, “Our product should go live in December.” They’re open to partnering with RSPA members, but essentially they’re open to pretty much anything at this point that could move their sales needle.
  • After many hours of pre-show planning and traversing the show floor, I figure about 70ish companies we talked with would fit as RSPA members. I’ve never panned for gold before, but I’m guessing this is what it feels like.
  • Adding to the cannabis market’s complexity are untested tax laws, a flurry of new players at every point in the supply chain, an influx of investors that can change an organization overnight (for better or for worse), terminology that’s never been uttered before in the retail IT channel, and ambiguous regulations that vary from state-to-state. So even if you’ve figured everything out in Oklahoma (which nobody has, by the way), you pretty much would go back to square one to tackle the cannabis market in Illinois.
  • Oh, and did I mention cannabis is still federally illegal?

Last year after attending a virtual cannatech event, I wrote a blog post titled Cannabis Tech Conference Reveals Vertical’s Possibilities (and High Hurdles) for POS VARs. The word “hurdle” certainly isn’t overstating the challenge. For traditional retail IT channel companies – distributors, hardware manufacturers, ISVs, and VARs – the distressing news is there’s no proven path to follow. As you hack your way through the thick brush in front of you, you’re not sure if you’re heading toward a nest of snakes, a cliff, or a pot of gold.

But from that confusion emerges the opportunity – possibly the most lucrative opportunity for high-initiative, growth-oriented retail IT solution providers for the next decade. Imagine being a newly licensed cannabis dispensary owner who has to understand everything I just described plus they have little experience with inventory management, digital signage, access control, kiosks, online ordering, receipt printers, cash management, alternative payments, or creating a positive customer experience.

But you do.

You have delighted hundreds of retail, restaurant, and grocery customers, and there’s no reason you can’t repeat that success in the cannabis space. You will fail if you try to go it alone, but you don’t have to. Several RSPA member companies are navigating this space and would be happy to partner with you. As evidence of that, there’s the new RSPA Cannabis Dispensary Technology Providers Directory. It’s not an overwhelming catalog of 1,100+ companies; instead, it’s a focused list that will help RSPA members connect with each other to build total solutions together and create new business development opportunities. The directory is organized by technology category and features company overviews, important links, and contact details of the right person to talk cannatech with.

I also encourage you to email Membership@GoRSPA.org and join the RSPA Cannabis Community, a group of 180+ individuals from RSPA member companies who learn from each other’s experiences and tackle projects together. Without that community serving as both my lifeguard and my life jacket, my MJBizCon experience would have been a shipwreck.

More thoughts and stories from MJBizCon 2021:

  • Part of Ashley’s and my education-by-immersion plan was an evening field trip to Planet 13, the world’s largest cannabis dispensary, located just off the strip in Las Vegas. Joining us were several RSPA members including Craig Kaliebe, Robert Banker, and Logan Gleissner of APG, Allan Jocson of VAR Agilitec IT, Brianna Moriarty of Star Micronics, Vik Devjee of CIMA, and Debra Peters-Smith of VAR Advanced Business Computing. As Ashley said, Planet 13 was essentially a Louis Vuitton experience featuring products the non-wealthy can afford.
  • My top takeaway from Planet 13 is that dispensary associates, commonly known as “budtenders,” are key to the merchant’s success. If you drew a spectrum with a bartender/server on the left and a pharmacist/doctor on the right, the budtender would be plotted much closer to the pharmacist/doctor. A dispensary’s product array can be overwhelming to both cannabis newbies and veterans, so customers need a budtender to serve as their guide. And what can help a budtender access vital information quickly? Technology.
  • Many of the companies exhibiting at MJBiz were cannabis enthusiasts for sure, but more than I expected were successful in other verticals and intrigued by the potential of the cannabis market, so they were attending to discover where they fit.
  • The event kicked off with “State of the Industry & Predictions” by MJBiz CEO Chris Walsh who was incredibly insightful. Some of his observations included:
    • “Even with the spike in cannabis sales in 2020 during the pandemic, we expect to see growth the next couple years.”
    • More states have legalized cannabis since early November 2020 than the previous 3+ years. “We’re winning at the ballot box and with state governments.”
    • “This isn’t just about a few big states. We have seen continued growth in cannabis sales nationwide. We don’t know where the limit is.”
    • “I don’t know if Amazon getting into the cannabis market is a good thing, but look how far we’ve come! Two years ago you couldn’t get Amazon to comment on the cannabis market.”
    • “You can’t come in with your MBA jargon and cheesy sales lines and expect you’ll get traction (in the cannabis market).”
  • When discussing possible next states in play to legalize cannabis, Walsh listed for medical cannabis Kansas, Mississippi, North Carolina, South Carolina, Nebraska, and Wyoming. For adult-use legalization, Walsh listed Rhode Island, Delaware, Maryland, Pennsylvania, Ohio, Missouri, Arkansas, and North Dakota.
  • Walsh offered six predictions for 2022 with two most pertinent to our industry. First, he feels at least four more states will legalize medical or adult use cannabis including one “sleeper.” He also predicted there won’t be a change in federal legalization next year, even on just banking regulations, but the stage will be set for future progress. Once cannabis becomes federally legal and dispensaries can start taking credit cards, look out.
  • Trade shows with mask mandates are functional. Sure, you have to speak up a little and may need to have a word repeated occasionally, but masks didn’t detract from the experience much. RSPA members have asked me for months if NRF can pull off a large-scale show Jan. 16-18 in New York City. Before my MJBiz experience I said maybe; my answer today is a resounding yes.
  • Finally, if MJBiz wasn’t unusual enough, there was a monkey scampering on top of several booths Wednesday afternoon. (Video evidence here.) Maybe I’ll learn why in the next RSPA Cannabis Community meeting.

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Jim Roddy is the Vice President of Marketing and a Business Advisor for the Retail Solutions Providers Association (RSPA). He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim has been recognized as one of the world’s Top 100 Retail Influencers by RETHINK Retail, a Leading CannaTech Influencer by 420MSP, and is regularly requested to speak at industry conferences on SMB best practices. He is author of two books – The Walk-On Method To Career & Business Success and Hire Like You Just Beat Cancer – and is host of the award-winning RSPA Trusted Advisor podcast. For more information, contact JRoddy@GoRSPA.org.