Connecting cannabis and CBD buyers and sellers Cannabis banking prohibition makes wholesale transactions very inefficient. Michael Piermont the President and Chief Revenue Officer at Leaf Trade joins Dan Humiston to explain how their platform is helping many of the world's largest cannabis companies efficiently overcome these challenges. He also shares the details of their recent Series A funding round. Produced by podCONX
Connecting cannabis and CBD buyers and sellers
Cannabis banking prohibition makes wholesale transactions very inefficient. Michael Piermont the President and Chief Revenue Officer at Leaf Trade joins Dan Humiston to explain how their platform is helping many of the world's largest cannabis companies efficiently overcome these challenges. He also shares the details of their recent Series A funding round.
[00:00:00] Dan Humiston: Animas capital. We are joined by Michael Pyrmont, the president and chief revenue officer at leaf trade. Michael, welcome to the show.
Michael Piermont: Great to be here. You doing.
Dan Humiston: I'm doing great. Um, I'm glad you could join us today. Not just because what you're doing, I think is really cool, but because you validate something that I've been saying for a long time and that's business opportunity in cannabis goes way beyond just growing and selling weed. For instance, leave trade is a technology company and I think that's really cool because there's.
So much opportunity thatpeople just do not appreciate most of our listeners know that dispensary's can't process credit cards because federal laws make banking impossible for cannabis, but I bet most. People outside the industry have never really thought about the challenges that companies face.
Just do a basic business, wholesale transactions, and that's kind of where I [00:01:00] wanted to start off with. Michael, can you explain how leaf trade helps cannabis companies buy and sell their products from each other?
Michael Piermont: Yeah. I always use this analogy when explaining to people outside the cannabis industry, if you go to a seven 11 and you look at all of the different things on the shelves and they run out of Pepsi, They press a button or send an email or call someone and more Pepsi is delivered and that's it.
For a dispensary's the list of things that they have to do to get their items on the shelf is, magnified by a hundred. So first of all, depending on the market, There might be supply constraints, right? So they may not even be able to get the product that they want.
So if they are in fact able to find the supplier then they have to figure out when that actual shipment will get delivered, ups or FedEx or DHL won't touch cannabis. So that's a whole nother challenge then once [00:02:00] the orders received and they've gone through all that. Again, like you laid out they can't throw it on a credit card or, send a, normal chase, quick pay payment.
And so at every point in the supply chain, there are these issues that, Become their own separate departments in their own separate essentially animal every time they have to deal with and it leave trade. What we've done from the ground up is we followed that order all the way, from when the inventory is available to when the inventory gets placed on the shelf, even through the whole payment processing.
And then every point we've tried to use technology to make that part of the process easier. Okay.
Dan Humiston: Yeah. Like I saw each of your vendors has like their own storefront it seems like it's just so logical
Michael Piermont: it's definitely come a long way. And the storefront, like you said, it allows folks to build behavior on both sides of the supply chain. But you're getting rid of all [00:03:00] the manual processes in the back and forth, and you can build an efficient supply chain if we could save you 30 minutes here and 45 minutes there and an hour there and just make the process more efficient, that's where we think the business starts exploding.
Dan Humiston: Oh, I agree. I agree. A hundred percent that back and forth, those emails, those taxes, everything on a spreadsheet. I, you recently launched your own integrated payment platform called leaf pay.
Michael Piermont: So again, following our theme of just following the order and following it through the supply chain, where could we fix things? So first there was the order communication, and then it was how do we process the order?
Who from my organization on both sides needs to touch the order. And as we started fixing those things, yeah, call it. The last mile was payment and payment is so interesting because there are so many different payment relationships, there are the sales folks who are working on completing the order and, they get paid one way.
There's [00:04:00] the accounting and finance team that are worried about collections. There's getting the right information, what needs to be paid, what needs to be allocated. In the highly regulated markets. In fact they like one-to-one invoice to order to payment correlations. It's not about just the transferring the money.
It's really understanding kind of the business rules and terms in both these markets and relationships. And so what we've done is we've built a compliant payment method that can really run in any state. In any kind of scenario you could do escrows prepayments, you can also set term periods and leave trade because it's the system of record for that order.
We'll manage the term periods and, automate the payment for efficiency. And the thing that has surprised me most about this since launching is we understand , if you're collecting the money, of course, you're going to like an automated payment system. Do you get paid faster? But the surprise for us has really been how [00:05:00] much the payers or the retail folks enjoy it too.
And what that tells me is a lot of folks in this industry are not paying late because they don't have the money or they're delinquent on their payments. They're paying late because it's a hard business problem to navigate. , they don't have credit cards, a lot of banks won't bank with them.
And so not only are we trying to bring efficiencies. Through the business, but actually giving them the opportunity to, use systems or products that they wouldn't have had the chance to use before.
Dan Humiston: Yeah, it makes a lot of sense. It makes a lot of sense. It must be working for you because in a relatively short period of time, you guys have established a beachhead in cannabis. I saw on your website, you're working with. Like the world's largest cannabis companies like Cura leaf, GTI, Columbia care.
Can you give our listeners just like an approximate? You don't have to give us exact, but what kind of revenue dollars go through your platform in a year.
Michael Piermont: Yeah. Last [00:06:00] month, February, , we did just over 125 million in transactions.
Dan Humiston: You'll be closing in on $2 billion by the end of the year. That is insane. The other thing I love about your business model is that it seems. Sticky. I don't know if it is, but are you finding that once companies get on your platform, they stay on,
Michael Piermont: So the staff that I'm most proud of at leave trade is we've never lost a customer.
Dan Humiston: Oh my gosh.
Michael Piermont: Today. Yep. So we were founded in 2016. Had our first order come in January of 2017 and we have not lost a customer. So yeah, so it is sticky because, we don't just touch the inventory team or the sales team.
We built it in a way where at different points of the order in the supply chain, different parts of the organization, Interact with leaf traits. We're hooked into the finance team, the sales, the data though. So as these large MSOE get bigger, like Verano, for example, they start, [00:07:00] really growing operations.
And, leave trade essentially can grow around that or they can use us, to save some folks and automate more of the processes instead of, just hiring people to do manual entry you mentioned some of them Verano GTI clearly Columbia care really.
Some of the best. Customers and, we feel like we've made a big impact on their business, butwatching them and seeing what they need. We've built the product to try to fit what we think is the future of cannabis and, more organized companies really taking a more sophisticated approach has served us well.
Dan Humiston: yeah, your guys are part of the blueprint. It's the blueprint for the industry. You recently closed a series, a round, and maybe you could share a little of the, some of the details
Michael Piermont: yeah. Things have been going well. And we actually weren't fundraising. We were in between rounds cash in the bank, but some of the folks I just mentioned Veranos and the GTIs of the world. Started pulling us into other markets faster than we had [00:08:00] anticipated.
So I guess that's a good thing we're growing faster organically from our own customers, but we just felt, to make sure that we could keep up with the market demands and the new features and all that stuff that we we're able to, raise enough capital and make sure that we could do that.
And, we've always been really efficient with capital. We feel like putting the effort into the product has served us well. , like I said Artemis ventures are really sophisticated, really great cannabis fund. Who's got both plant touching as well as tech and ancillary companies.
We got to know them and decided that, now would be a great time . To do the round. We raised a very traditional seed round and I'm sure, as we expand both in this country and then internationally we'll raise more capital, but this was so organic because It's very rare that investors and companies find each other, when companies aren't looking for money, because it's always, we're out there, knocking on doors, giving our [00:09:00] presentation and they're looking at it.
Yes, no maybe later kind of thing. And this wasn't that it was like, we're not raising around. I'd love to get to know you for, next round. And people always say that and it never happens this time. It really happened. So we're super excited.
Dan Humiston: Good for you. That's really cool. It's I think a lot of it has to do with the relationship that you have with some of your core clients I'm sure that help facilitate that deal. What do you tend to do with the proceeds? You mentioned expansion.
Michael Piermont: Yeah. At leave trade, we've got about 23 folks, and we will probably grow to around 40, 45 before the year's over. Mostly on the technology side. A little bit of market expansion some sales and marketing folks what's great is because, the platform is great because we don't have a churn problem.
We don't have to waste money on, support. We have a mighty, but lean two person customer success team. And it really is a team that is focused on getting the [00:10:00] clients to use the platform correctly. And then we let the platform do the work. Soprobably about 70% of the proceeds will go towards expanding the platform.
Making sure that, The platform is as dynamic in Oregon, as it is in Connecticut, even though the rules are different and the players are different, building to the market, not making the market build to us.
Dan Humiston: Yeah, that's well, I'm going to have all the links to leave trade in the show notes. So if anybody wants to learn more about leaf trade, just click on the link and Michael, this has been great. I appreciate you being on the show and I'd like to have you back when you guys are raising your series B.
Michael Piermont: Yeah, I love to come back and I'll just add one thing. This is my fourth go around a high growth startup. And I've got a few exits under my belt. But to the extent in, or out of cannabis, anyone needs help I'm on LinkedIn, feel free to, to the extent that, I have time I'll always, try to point people in the right direction.
And some fundraisers are harder than others. Some [00:11:00] just go through like Domino's and some are, like pulling teeth. But, as long as you're focused on using the capital the correct way, and you've got a plan for what the capital is going to bring you and the next stage of the company, you should be okay.
So that would be my advice.
Dan Humiston: I think that's great advice, . Thank you for being on the show and let's do this again,
Michael Piermont: Great. Thank you so much for the invite. And it was a great conversation.