MJ Freeway – Managing your Cannabis Business from Seed to Sale

MJ Freeway Interview

Interview with Amy Poinsett (CEO) and Jessica Billingsley (COO) of MJ Freeway. MJ Freeway provides hosted software solutions for Cannabis cultivators, dispensary owners, and marijuana infused products companies.

Compliance, operations, and marketing is a huge part of running a successful business in the cannabis industry. Learn how to create an operations plan that will successfully manage all aspects of your business.

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Matthew: Hi, I'm Matthew Kind. Each week I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at cannainsider.com. That's C-A-N-N-A insider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. That's C-A-N-N-A insider.com/trends. Now here's your program.

What is it like to be in the dead center of the cannabis industry creating the software that literally runs the operations or cultivators, dispensaries, and infused product companies? We're going to find out the answer to that question today in our interview with MJ Freeway executives. We are very fortunate to have on the show today Amy Poinsett who is the CEO of MJ Freeway and Jessica Billingsley, the COO of MJ Freeway. Welcome, Amy and Jessica.

Amy: Thank you so much. We're delighted to be here.

Matthew: Great.

Jessica: Thanks for having us.

Matthew: Can you give us a little background on yourselves and how you got started in the cannabis software business?

Jessica: Sure. This is Jessica speaking. I guess back in 2009 Amy and I had, each had businesses in kind of the techie geek space already. I had an IT company and she had a web development firm and although we didn't work directly with each other we shared a lot of friendly clients in common that used both of our services. I had invested in one of the first dispensaries in Boulder, Colorado and as the owner that owned an IT company was tasked with choosing, picking out, putting in software for the business.

Matthew: Okay.

Jessica: To run the business and there really wasn't anything super appropriate that worked to use and Amy and I were meeting on well how can we get involved, what can we do. I was sharing my investments and we were talking about how we could get involved more at the stuff that we knew how to do, the geeky stuff. Right?

Matthew: Yeah.

Jessica: And so she said, "Well, I've kind of been thinking about this transaction system," and I said, "Well, I think they really, what they really need to start with is a point of sale system." She very famously said, "Well, point of sale. How hard could that be? Let's do that."

Matthew: Sure. Wow.

Jessica: So, four and a half years later. Well, three products later. We have three products now.

Matthew: Wow. For people that don't know what MF Freeway does exactly, I mean obviously point of sale, but can you summarize? I know there's three parts to the suite but just kind of give a high level overview of the MJ Freeway package.

Amy: Absolutely. We're a business software platform and we were built from the ground up specifically for the cannabis industry and we've got two main things that we do that always, that have guided us through the years and through our future development. The first is our tag line. Track every gram. So we provide really robust inventory tracking from seed to sale, so plant tracking all the way through to the point of sale of a finished product and we also do compliance. We really believe that regulation is the way forward to bring marijuana to the country and want to help with that in any way that we can. The main way that we see being able to contribute to that effort is by providing software that meets state of federal compliance requirements for tracking marijuana and making it really easy for our clients to use that to stay in compliance and meet their reporting requirements.

Matthew: Yeah. Compliance is a huge issue. Have they rolled out penalties for being out of compliance? I mean you could straight up lose your license in some places but is there big monetary penalties for not being in compliance as well? I guess I'm talking about in Colorado but elsewhere as well.

Amy: Absolutely. Every state that's putting forward a regulated model includes in their rules a whole section on the various penalties, which might range from a relatively small financial penalty if maybe their signage is not up to requirements to much more significant penalties including, as you said, losing their license and the very large both time and monetary investment that with it and even in some cases looking at criminal charges. We don't like to hear about that too much in the regulated cannabis industry but unfortunately there have been a couple examples of bad actors and the regulatory agencies have had a structure in place where they were able to crack down on that and really support a legitimate regulated model, which is of course what we want.

Matthew: Okay. Can you tell listeners what hosted software means? I mean I'm sure most know but there still might be some people out there wondering what hosted software means and what the benefits of hosted software is.

Jessica: Sure, sure. So essentially hosted software means you're getting rid of having to maintain all of your own hardware. So it means that you are essentially paying a fraction of the cost of maintaining your own hardware to have much better, much more secure hardware in a off-site location. So the main benefits are better security, better performance, the ability to respond quickly to any change in regulations. This hardware is hosted in a facility that's monitored to the absolute nth degree biometric scans for, and only certain people with access and just a level of security that nobody can do in their own store when somebody can just bust the windows.

Matthew: It makes a lot of sense and having come from the IT world myself too and knowing about servers fail and there's security patches and all this maintenance and upgrades and there's so many things that just need to done and this outsourcing that to professionals is a huge, huge benefit in my mind. I think about Tim, not Tim Cook, the gentleman from Intuit. I can't remember. His name eludes me. Scott, Scott I think his name is. The gentleman that started Intuit and how he got so far ahead was he actually sat down and watched how people used his software, Quickbooks. How they installed it. how they used it and then just made it easier and easier. When I was asking people about MJ Freeway and people were volunteering information about you they were talking about how you got feedback from people that are actually in the industry.

Can you tell us a little bit about that? Because that's so important because I feel like so many software companies create software, then try to jam it down their clients throats instead of finding out what the needs are, understanding those intimately, and then building a solution around that.

Amy: Absolutely. We really feel like that's one of our big competitive advantages. Because we did build MJ Freeway from the ground up just for the cannabis industry, we were able to put in place certain things that are only relevant if you're looking at a product like this. So for example, obviously this is an agricultural product it changes over time, maybe dehydrates, maybe becomes shake in the jar, things like that and our inventory tracking algorithms, which are patent pending, take into account the nature of cannabis and how it changes over time whereas a regular point of sale system for a t-shirt shop or something like that doesn't have to worry about like a sleeve of the t-shirt falling off over a period of time.

Matthew: Right.

Amy: Those kind of inventory adjustments just aren't relevant for most of the rest of the world so it's something that we were able to put into MJ Freeway based on feedback from clients and on observing actual operations as you've described.

Matthew: Yeah. That's great. There has been tremendous positive feedback so you're doing something right. Let's dig into the weeds a little bit. Let's say I own a dispensary or I just applied for a license, I'm an applicant. I win one of the Florida licenses. That's apropos because they have a ballot measure coming up. What are the things I need to do once I win that license and how could MJ Freeway help me do that?

Amy: Well, first I would say before you apply you should get in touch with us and get some of our application support materials.

Matthew: Huh, gotcha.

Amy: We've assembled over the years obviously a tremendous amount of intellectual property and experience around inventory tracking of cannabis and we provide that in a few different formats to people who are applying their licenses, applying for licenses. That ranges from a free document that we put together for every new state where we go through the proposed regulations and respond point by point on how we meet every requirement related to tracking cannabis and then goes all the way up to very detailed plans that can be used in the development of the business plan for the operation. For example, an inventory control plan or transportation plan. Things like that that we've prepared to help people through that process that can be quite arduous to put together an application.

Matthew: Yes.

Amy: So we want to provide insight where we can. Then I guess after winning the license my advice would be to get started early with training, setup, configuration of all your systems, not just MJ Freeway. I would say that the most successful new businesses we've observed are the ones that have really planned ahead rather than waiting until the last minute. You know maybe they're focused on their construction build-out in the early days and then all of a sudden they're a week out from opening and realize that they haven't put in place MJ Freeway and maybe the security system and maybe their payroll system and then they're really trying to scramble at the last minute to get a bunch of stuff done and I think planning ahead and getting started with things early lets you be more thoughtful in your setup and configuration and training.

Matthew: How long does it take to get set up for, let's say, a dispensary owner with MJ Freeway software? I mean what's the roadmap to onboarding?

Amy: We provide support to all our clients through our support team, which is a fantastic group of people, and we provide through them remote training for all clients as well as an extensive knowledge base with a lot of recorded demos and training sessions in video format that give people background both of the software as a whole and on various specific features. We also offer scheduled training lab classes on a regular basis. We encourage our clients to take advantage of those. To come get classroom style training on MJ Freeway.

Matthew: Okay.

Amy: Then as far as the software itself, it really ranges. People have gotten set up and configured and ready to go live within a 24-hour period in some cases. Other people, especially new operations, want to take a little bit more time to think about how their standard operating procedures should best be developed and they'll take a little bit more time but we can be accommodating to whatever the time frame is that the client is looking for.

Matthew: Okay. And digging into the weeds again, let's say I have, I'm the owner of a infused products company. I make chocolate that is infused with THC. How do you, how does MJ Freeway help track dosages because I keep on hearing stories about people coming to Colorado, eating a whole candy bar, having an issue, and top of mind for me is dosage, there's not clear dosages. I mean 10 mg is a serving. Most people know that but when you look at a candy bar most people are thinking, "Oh, I can eat a whole candy bar." So that has me thinking in terms of dosages a lot and how can you help a infused product company, with MJ Freeway, keep track of those critical dosage levels in their products?

Jessica: Sure. Our mix tracker product is the product that's used for tracking manufacturing and processing. In that product we track quantities of inventory as well as the conversion or preparation process whether that involves cooking or not regarding how much inventory is used to create any number of candies. So dosage can be determined by the amount of concentrate used to create any number of products, edible or otherwise and during the infusion process or the cooking process MJ Freeway will notify if the default amount defined up in the inventory creation doesn't match the actual amount being used based on the amount of concentrate versus the number of candies being used. So mistakes such as too much concentrate used in a batch can be seen really easily by checking inventory levels to make sure that what was entered in the software equals what was physically mixed.

Matthew: Huh, that makes sense.

Jessica: And there's a certain amount of the process that is somewhat out of the software's control and that involves mainly making sure that things are very, very well mixed.

Matthew: Sure. I mean there's technology is just one piece. You need the people, the process, and the technology all working together, a three-legged stool. That makes sense.

Jessica: Certainly.

Amy: But our reporting can go a long way toward helping.

Matthew: Sure. Now as far as MJ Freeway being mobile friendly, can users use tablets and phones as well?

Jessica: We are totally mobile friendly. Since we're a web-based app we work great on any internet enabled device. We actually have a mobile theme specifically designed to ensure that we work well on phones and tablets and our clients use mobile devices at the sales stations in their stores, at the grow, for delivery drivers, or for taking inventory.

Matthew: Okay. And I know that there's mobile scanners you use. Correct? For barcodes and things like that.

Jessica: Yes. We have sourced and tested a couple different pieces of mobile friendly hardware that connect via Bluetooth and so connect really nicely to mobile devices to make sure that they work nicely and can be used with a mobile device and our software as well.

Matthew: Okay. Now I'm kind of going to ask this question jokingly but maybe half serious, too. It's so hard to get the United States to move over to the metric system. We're still using these measurements from medieval times or something but, horsepower and so forth, but do you think since cannabis is largely measured in grams that that might be the catalyst that pushes us to the metric system?

Jessica: Not likely.

Amy: I don't think so.

Matthew: Okay. No I know most people are familiar with HIPA, the government protocol to keep the patients' information secure and private but, and it sounds like MJ Freeway is HIPA compliant but most people don't know what PCI is and PCI compliance. Can you tell us a little bit about what this is and why that's important?

Jessica: Sure. So HIPA protects patients' personally identifiable information and PCI protects sensitive payment information, so your credit card or your bank info, something like that. What MJ Freeway does is we actually connect securely to the gateway that actually processes the credit card payment.

Matthew: Mm-hmm.

Jessica: So that's how we enable PCI compliance. We make sure that when you're payment information is processed and sent through the internet that it's sent through completely secure channels to where it ultimately gets processed. We don't actually store any credit cards or payment information in our system.

Matthew: Okay. Now as more and more dispensaries roll out and, I mean there will always be strains and customer service that kind of makes certain dispensaries stand out and customers and patients want to go there. I know that MJ Freeway has some marketing modules like text messaging and emailing. Can you kind of tell us how some of your clients that use that really well use that to make sure that that their clients are loyal because you know, at some point there's a supply, there's going to be more supply and demand will level out so dispensaries are going to have to do things and be unique and have better customer service and really a good marketing plan to ensure that they get their share of the market. So if you could share how you see clients successfully using the text messaging and the email marketing that would be great.

Amy: Yeah. Absolutely. Our text and email marketing engine gives our clients the ability to send text and email communications to their customers who've opted in. Those can be automated so those might be things where a message goes out on the customers' birthday or a certain number of days after their last visit to the dispensary. They can also be outreach to the customers to encourage them to respond in the case of a specific promotion. So, for example, you might advertise at a show or in a local paper and say text code 1234 to this number to receive a discount and then they'll receive a coupon code discount in return. That lets our clients really do some very proactive outreach to their patients and customers but it also gives them, it ties in with our reporting as all our marketing tools do to give them really clear insight into the ROI of their various advertising and marketing efforts.

Matthew: Great. Now we touched a little bit about, on education about getting new users up to speed. Let's say I have a brand new bud tender that was starting today at my dispensary and I know you have a knowledge base and some videos and stuff but as a business owner of a dispensary what would I practically need to do? Say this person's of average technical competence. Do I start with some video modules and to say, "Watch these as many times as you want until you're comfortable." What would you suggest?

Amy: You know I think the recorded demos are a great place to start and the knowledge base information. Our support team is also always there to answer any questions or help get people up to speed. As I mentioned earlier, we're getting great response from our training lab classes on classroom style training so that people get some exposure to a full experience of the software, not necessarily maybe just the one or two things that seem critical to learn on day one. We give them a full grounding in aspects of the software they need for their job.

Matthew: Yeah. In person is always great if that's possible. Now I know MJ Freeway really has an international focus and I think your software is in at least two or three languages. Is that right?

Jessica: We're very excited about that. Yes. We're available in English, French, and Spanish currently.

Matthew: That's great. Now I saw on your website that you recently had a trip to Spain and there's, being here in Colorado my focus tends to be on Colorado and somewhat in Washington too. Can you just paint a picture of what it looks like in Spain? Like what legalization looks like and I know there's clubs and things but just for the audience, how is it different? What did you like about it? What didn't you like about it? Just any detail is great.

Jessica: Well, what was really interesting and what I am only slightly embarrassed to admit that I did not know until I was there in person was that it's not actually a medical program. It's just an adult use -

Matthew: Huh.

Jessica: program.

Matthew: Okay.

Jessica: So, uh, who knew? It's not even medical.

Matthew: Okay.

Jessica: So what's interesting is that they don't have regulation, not at the national level and not at the state or region level. Spain has a few different state regions that have their own governing bodies as well and they don't have any regulation at that level. They've had some cities pass some regulations here and there and it really varies from region to region, city to city and so in that respect it's a lot like California, that there a lot of operations are operating under somewhat gray guidelines for what's legal and what's not legal in which area and at what given month so that makes it a little bit challenging for the clubs. But I did find the clubs to be really interesting and I think we really enjoyed the trip and thought that it was, we're excited to be more involved with that market as it progresses.

But the clubs have dispensaries located within the club but then they are actually a club in the traditional sense of they usually have some kind of a hangout area and they usually have some kind of a bar that serves coffees and alcoholic drinks as well as just sodas and what have you. So it was definitely, you know the whole focus was on kind of adult, legal, recreational, social, club use.

Matthew: Was your sense that less of the total population as a percentage partakes in cannabis or more? I mean it's a hard thing to quantify I know but I mean, just trying to understand how large a part of the culture it is in Spain.

Jessica: I think it is very much a large part of the culture but what I found interesting was that at a number of clubs that we visited the owners, operators, or even some of the people in the club were cannabis refugees you could call them.

Matthew: Okay.

Jessica: So a number of them were people from other European countries or states that had moved to Spain so that they could use cannabis openly.

Matthew: That's interesting. It's kind of like Amsterdam in that way, it sounds like.

Jessica: A little bit. A little bit.

Matthew: Okay. What do you think the cannabis industry is going to look like in five years? What's going to change? It seems like there's so much change every day but what do you see?

Amy: Well, I mean it's exciting times. We're approaching half the country, half the states in the country that have some kind of marijuana legalization in some form or another whether medical or adult use or CBD only that's on the books and that's really becoming, it's becoming a watershed moment I think in the changing landscape. We've got two states, of course, with adult use measure up this fall. It will be really interesting to see what happens with that in a couple of weeks.

Matthew: Yeah.

Amy: And certainly we've got our fingers crossed for positive direction there. I think that it's the million dollar question. Isn't it? Of when the Federal Government will de-list or take some other action and I think people are going to be watching really closely over the next five years to see when that happens. It certainly feels closer than ever before, at least to me.

Matthew: Yeah. I mean that's the true, big, the break when the wall comes down is when it's taken off the Schedule I list of prohibited drugs. I mean is that what you think in your mind? That's when everything would change pretty quickly?

Jessica: We think so.

Matthew: Well, as we close is there any information you'd like to share with listeners how they can find out more about MJ Freeway?

Amy: Absolutely. Check out our website, mjfreeway.com. We've got all kinds of resources there. We're actually launching a new website in just a few weeks that's going to have even more great information about cannabis laws across the country and other resources like that. We're also on Twitter and Facebook at mjfreeway and our phone number is 888-932-6537 and we'd sure love to hear from anybody who has any questions. We'd be happy to help.

Matthew: Well, thanks so much, Amy and Jessica. We really appreciate you taking the time for the interview today.

Amy: Thank you. It was great to be here.

Matthew: If you enjoyed the show today please consider leaving us a review on iTunes. Every five-star review helps us to bring the best guests to you. Learn more at cannainsider.com/iTunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at cannainsider.com/trends. That's C-A-N-N-A insider.com/trends. Have a suggestion for an awesome guest on cannainsider.com? Email us at feedback@cannainsider.com. We'd love to hear from you.