Over the last few years, many states have legalized marijuana usage in some form. (As of November 2019, cannabis is legal for medical use in 33 states. 11 states have also legalized cannabis for recreational use by adults over the age of 21). As laws shift to accommodate this burgeoning industry, supply and demand for cannabis products is expected to grow. In order to get products into the hands of consumers, there is a gap to be filled by independent wholesalers.
Enter: CannTrade, a central eCommerce platform for businesses in the cannabis industry. The CannTrade platform was designed to merge a compliant wholesale marketplace with supply chain management and an industry database. Businesses on the platform can purchase and sell CBD, hemp, cannabis, and related products.
Earlier this year, CannTrade conducted a successful crowdfunding raise on the MicroVentures platform. We checked in with CannTrade President, Adam Holub, to hear about what they’ve been up to since they closed their raise, hindsight on the campaign, and more.
How did CannTrade come to be?
Adam: CannTrade’s inception occurred in 2016 when Mark, a retired pro football player turned cannabis professional and advocate, linked with me and Brian, who were looking to enter the regulated space from a technology platform angle. Knowing that emerging markets are often fragmented and opaque, the team focused on creating a platform that brings businesses in the hemp and cannabis industries together, allowing them to manage supply chain and reach new clients.
What has been your greatest challenge since launching CannTrade?
Adam: The greatest challenge for any eCommerce platform is to establish an ecosystem of buyers and sellers simultaneously. Because cannabis is a state-by-state market, CannTrade has taken on this challenge multiple times. The key to attaining the traction has been to really understand what businesses need, and to present them with those opportunities as quickly as possible.
What drew you to equity crowdfunding?
Adam: CannTrade has always wanted to be “owned by the industry,” meaning that we want people involved with the cannabis plant, and who have passion for it, to be our investors. That includes businesses of course, but it also includes regular people who use cannabis/hemp medically or recreationally, or who may just be interested in the market. Equity crowdfunding gives those people a chance to get in on the ground floor with CannTrade, and gave us an opportunity to raise capital from everyday people—who are the folks we like to have backing our business.
What’s new for CannTrade since you closed your raise?
Adam: Since we closed our raise, we have begun earning revenue, and are maintaining our goal of being a profitable business by the end of 2020. We are also launching our inaugural monthly digital trade show on October 6. We’re quite excited about it, because our digital trade show is more than just a webinar. Because it’s supported by the CannTrade platform technology, the vendors presenting products will have a digital booth, and be able to accept orders, manage new potential clients, and receive payment on the spot, all through the app. We’ve just about filled the slots for the first show already, so we expect it to be a full show.
What do you think helped make your crowdfunding raise successful?
Adam: The folks at MicroVentures were all fantastic, and they really helped us put our presentation together, market the raise, and answer any questions we have. The CannTrade platform really does a lot of the work for us, on our end. So, really, any investors that are interested in the Cannabis/Hemp space, especially those that are looking to enter it from a tech angle, which carries less risk than investing in a “plant touching” cannabis business, were likely to jump in feet first.
In hindsight, is there anything about the crowdfunding process that you would approach differently now?
Adam: Well, our crowdfunding raise was happening just as the COVID crisis was really coming into focus in the United States and worldwide. We decided to continue the raise, and we were happy with the success! I think the only thing we may do differently now, is to have additional marketing materials—especially short video content, to share with potential investors. We had one strong video but having one or two additional sharable videos more tailored to consumer-focused people would have been nice to have. CannTrade is a B2B platform, so most of our marketing is tailored to business targets. Crowdfund investors are people, and they are used to a certain type of marketing. Having more of that at the ready may have allowed us to get even greater engagement from those types of investors.
What tips do you have for other startups looking to raise on MicroVentures?
Adam: I’d say, similar to above, have sharable content ready to disseminate all throughout the raise. You’ll probably end up creating more during the raise anyway…but find a good video and content production company (if you don’t produce great content yourself) and have a number of options to release over the duration of your raise.
Is there anything else you’d like to add?
Adam: Thanks for the opportunity, and good luck! If you know any businesses in the hemp or cannabis markets, make sure they know about CannTrade.com! We’re ready to connect them into our network.
Special thanks to Adam and the CannTrade team for chatting with us. You can learn more about CannTrade at canntrade.com. You can also find them on Facebook, Instagram, Twitter, and LinkedIn.
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