Microsoft and Kind will collaborate to provide city, county and state governments across the U.S. with a way to track and trace local legal marijuana market activity from “seed to sale.” The Los Angeles-based Kind offers a cannabis tracking and compliance platform called Agrisoft Seed to Sale. It will support the new government program by running that technology on Microsoft’s Azure Government cloud.
Kind’s technology is designed to monitor marijuana market activity to prevent the illegal trade of cannabis products along every part of the supply chain. The legal cannabis market in parts of the U.S. has grown rapidly over the past several years. Four states — Alaska, Colorado, Oregon and Washington — have to date legalized the sale, possession and use of the product for medical and non-medical purposes.
Designed for ‘Strict Oversight and Regulations’
Kind founder and CEO David Dinenberg welcomed yesterday’s announcement by posting on Twitter and LinkedIn, “What a huge day for @kind_financial and the #Marijuana Industry! I am extremely humbled by this!”
Established in 2014, Kind Financial said its mission is “the establishment and growth of businesses in the emerging legalized cannabis industry.” According to its LinkedIn profile, the company launched because the recently legalized marijuana market lacked the traditional banking connections that enable other types of businesses to access loans, lines of credit, investments and other financial services.
“No one can predict the future of cannabis legalization, however, it is clear that legalized cannabis will always be subject to strict oversight and regulations similar to alcohol and tobacco,” Dinenberg said in a statement. He added that he was “delighted that Microsoft supports Kind’s mission to build the backbone for cannabis compliance.”
For its part, Microsoft is looking forward to working with Kind Financial to help U.S. government customers launch successful regulatory programs, Kimberly Nelson, Microsoft’s executive director of state and local government solutions, said in the statement.
Market To Hit $7.1B in 2016
While cannabis remains controlled at the national level as a Schedule 1 substance — meaning it is regarded as a drug with “a high potential for abuse” with “no currently accepted medical use in treatment in the United States” — a large number of states currently permit its use under different circumstances.
National legal sales of cannabis in the U.S. reached $5.7 billion in 2015 and are expected to rise to $7.1 billion this year, according to the latest “The State of Legal Marijuana Markets” report from ArcView Market Research. Released earlier this year, the report noted that states that have fully legalized marijuana have seen dramatic increases in revenues from taxes and license fees.
“Legal sales have been a boon for state coffers in markets like Colorado, where the state was expected to generate $135 million in cannabis taxes and licenses fees in 2015, a 77 percent increase over the $76 million the state raised in 2014,” according to the report’s executive summary. “In Washington, the first year of legal sales generated $70 million in tax revenues from sales of $257 million, a significant windfall even after product shortages and pricing instability plagued the program during its early months.”