Tech startup: Leaftrack
where Denver | FOUNDED 2009 | web www.leaftrack.com
INITIAL LIGHT BULB Two years ago, Reid Hanson was making a surfboard-inspired kid's bed in his garage listening to a story about Colorado's medical marijuana industry on the radio. He was in the process of deciding if he wanted to liquidate the vehicles and logistics equipment from a previous business, a consumer electronics installation company, and hatched a plan that evolved into "a seed-to-sale tracking system" for the medical marijuana providers.
"There's a lot of mistrust between business to business and business to government in this industry," Hanson says. "There's also a lot of misinformation. I wanted to provide third-party, unbiased data collection."
After discussing the issue with officials at the Colorado Department of Public Health and the Environment, Hanson launched LeafTrack in 2009. The company now has a dozen employees.
IN A NUTSHELL Using RFID tags and bar codes, LeafTrack allows users to track medical-marijuana plants through the grow cycle to delivery to dispensaries in Colorado. Tags remain on that plant and can be tied into sensor networks to allow growers to monitor temperature, carbon dioxide and air flow. At indoor grow facilities, "air quality is a big deal," says Hanson. "If they're getting a higher yield in a specific part of a room, they want to reproduce that. The tag is like the anchor to tie all the data together."
The state likes it because it eliminates black-market transactions and helps hold growers and dispensaries accountable. "They're only collecting a fraction of what they could be," Hanson says. "They're looking for any money they can find - this is a fantastic way for the state to make a lot of money based on good data collection."
But LeafTrack's customers are growers and dispensaries, who can demonstrate they are growing 70 percent of the product they sell, a new requirement this past summer. Dispensaries can also associate a code to marijuana produced under the system. Medical-marijuana consumers can then track the origins of product at a website, www.findmary.com.
"It's an awesome tool for the dispensary," Hanson says. The LeafTrack system, he adds, helps clients "keep on the straight and narrow."
THE MARKET With medical marijuana now legal in 17 states, the market is booming. LeafTrack has customers on both coasts, with plenty of potential in the West. Colorado has about 700 dispensaries and California roughly 1,000. "We have sales reps strategically placed around the country," he says, noting that vineyards and organic foods are potential future targets after medical marijuana.
FINANCING LeafTrack was self-financed by Hanson and a few angel investors. Is he pursuing more capital? "Of course, always," Hanson answers. "But we're on a good growth path right now. We also have a good legal team."
QUOTE OF THE NOTE
"Our main competitors are point-of-sales systems and basic inventory systems. That's great, but the way medical marijuana works, it's a product and a raw material at the same time. They're taking care of the ‘when.' We're taking care of the ‘where' - where it's grown, where it's transported and delivered - and the logistics of the ‘how.'" - Reid Hanson, managing partner and founder of LeafTrack