LeafLink – The Booming B2B Cannabis Platform That Drives Sales

ryan smith Leaflink

Ryan Smith is focused on streamlining the process of bringing cannabis cultivators, infused products companies, and dispensaries together. If you want your cannabis product to get into dispensaries you need to hear this interview.

Key Takeaways:
[0:59] – What is Leaf Link
[1:30] – Ryan’s background
[3:24] – How does Leaf Link work
[6:07] – What type of companies are using Leaf Link
[8:26] – Most common transactions on Leaf Link
[10:03] – What makes Leaf Link different from other platforms
[14:01] – Ryan talks about Leaf Link doesn’t touch the money in a transaction
[14:42] – How does Leaf Link generate revenue
[15:58] – Bringing attention to your product on Leaf Link
[19:10] – Ryan talks about sending samples
[21:35] – Ryan talks about the future of Leaf Link
[25:40] – Ryan answers personal development questions

Learn More at
https://leaflink.com/

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Read Full Transcript

Cultivators and infused product companies are always trying to get their products into more dispensaries, and dispensaries are always looking to sell the products that customers want. Here to help us understand how these parties can connect is Ryan Smith of Leaf Link. Ryan, welcome to CannaInsider.

Ryan: Hey Matt, thanks for having us.

Matthew: Give us a sense of geography. Where in the world are you today?

Ryan: Today I’m in a very homey Airbnb in San Francisco. For the next few days I’ll bounce around between California, Colorado and New York a bunch.

Matthew: Okay. At a high level, what is Leaf Link?

Ryan: Leaf Link is a wholesale B2B management platform. We connect now over 1200 retailers across 5 states with more than 200 of the leading brands. Everyone from Incredibles to Dixie to Cheeba Chew to Kiva to Wana and they’re our clients. We provide two things, an online marketplace where they can communicate and purchase inventory, and an order management systems that sales teams use to process those orders internally.

Matthew: What’s your background before starting Leaf Link, and why did you start it?

Ryan: Sure, my background I went in as an undergrad in college. Started an investor relationship management platform for real estate. My family is in real estate in New York. I found there’s really an old school industry and we could build this solution for how general partners communicate to limited partners, so we launched that my senior year, raise a bit of capital, sold it to a public company back in 2014. Then I met my co-founder Zach, who was at LimeWire back in the day, previously at EBay, and we began investigating the space and seeing how we could support other amazing pioneering entrepreneurs building businesses.

Matthew: I think that’s a saying about general partners and limited partners. At the beginning of the relationship, the limited partners have all the money and none of the knowledge. At the end, they have no money and all the knowledge. Have you heard that before?

Ryan: I guess it depends on who you’re getting (2.27 unclear) to the general partner.

Matthew: I don’t know, that’s a saying I’ve heard before. I wanted to see if you thought that happens at times.

Ryan: Yeah, I mean, definitely it happens at times. It’s more than that, actually a pretty scary thing that’s happening in this industry particularly is people getting pretty wide eyed at any potential opportunity in the space. So, definitely people losing their wallets for not properly placing capital.

Matthew: You said you’re in five states right now. Could you say those states one more time?

Ryan: That’s right. We originally launched about 15 months ago in Colorado, then Washington. Now we’re also in Nevada, Oregon and California as well.

Matthew: The dispensaries and cultivators and these different parties could be doing this on their own, but it’s not the most efficient way or the best way and there’s some tradeoffs to try to do it that way. How does Leaf Link make that whole process better?

Ryan: The way we came up with Leaf Link was really by entering with no preconceived ideas. Zach and I flew out and we met with whoever would take a meeting with us, brands, amazing brands, cultivators, retail purchasing managers and just said, what are your problems. Tell us about them. We looked for patterns. We found that in the world a year ago, before we launched, a purchasing manager at a lean dispensary, in any state, is buying from somewhere between 20 and 50 brands every other week. In order to do that they need to manage PDF menus and emails. They send text messages with purchase orders, faxes sometimes.

Matthew: Oh, I hate that word! We got to stop faxing. What year is this?

Ryan: Exactly, but the industry is so just grinding away and trying to get everything done to grow, and people are not stopping and thinking, this doesn’t make sense. Why am I spending a day and a half a week placing orders when I can just do it. Zach and I thought we could virtualize all this, and that’s what we built Leaf Link to do. So now people can purchase from all those brands, live menus in one cart.

Matthew: The biggest benefit is, or I should say, it solves the biggest frustration for the purchasing manager. It makes that person’s life much better compared to the others. I mean, it’s solving a problem for the other participants in this platform, but you’re saying it changes their lives probably because they go from dealing onsie, twosie, did you get my message or did you get my invoice, did you get my purchase order to it all being streamlined.

Ryan: So what we found was—that’s where it started, and we just met with purchasing managers and we heard that story. Then we thought, let’s just follow the life of an order. What happens once it gets through that fax and text message to the sales team, and then we got there and we realized oh my god, they’re putting it on post-it notes and whiteboards and Google Sheets, and that’s how it goes from the sales team to the production team to the distribution team and accounting team. We asked some of the sales side companies, these brands whose names you know, what was the most sold product yesterday or what moved really well last week, and they would give you a subjective answer. “I think it was this particular product.” I said, you don’t know. How can you not know? How do you make a proper decision on what to build next? So that’s where we built the order management tools as well that hook in seamlessly into the marketplace.

Matthew: Okay, that makes sense. What are the categories of companies that are on Leaf Link right now?

Ryan: At Leaf Link we have this general theory for the industry, and we believe every month it seems to become stronger and more validated, but brands are everything. This whole world of mom and pop growers and these amazing pioneering entrepreneurs that were in the space, have been in the space for 5-10-15 years, they’ll always be that part of the market. But the companies that are scaling the fastest, that are creating product that touches the most people, that are raising capital are brands. Like any other industry, they’re packaged goods, they’re consistent, people can understand what they are each time. Branded products, whether it’s edibles, creams, THC infused concentrates, all that stuff, and some flower as well. Some of the branded products are where this industry is going.

The three buckets of clients that we serve are—the first we like to think about is industry leaders. Companies that have more than 50 percent of the market that they’re selling to every day, but they need some structure. They’re looking to grow into the next state, that’s the first bucket. The second bucket are companies that are not brand new, but they want to one day be in that first tier of industry leading 50 percent plus of the market they’re selling to, and they’re looking to create some structure on how their teams operate, they’re hiring new people. They want to understand their business in a more granular data level. That’s the second. The third is brand new products. We’re just launching, we’re putting out one or two skews, maybe five or ten, and we just want to tap into this community that we built on Leaf Link of active buyers that can notice your product. There’s really no other way. There’s a lot of invitations around advertising in this space, but there’s no other community as active in purchasing as that on Leaf Link. That third bucket is you can basically start from nothing, progress your way up to an industry leader and we have different tools that are valuable to each of those different groups of sellers.

Matthew: If you were to login to your executive dashboard now and look at the transactions that are taking place and what’s happening on the platform, what are the most common types of transactions we would see right now if we were looking over your shoulder?

Ryan: In terms of product types?

Matthew: What’s the most frequent type of thing you see between different parties on the platform? What’s the frequency of different types of activities?

Ryan: Each market is a bit different. In Colorado there’s been this explosion of concentrates. Branded concentrates are super popular. They’re all over the place. Lots of inbounds from concentrate companies wanting to get listed. That product is selling really well. We’re seeing some really ingenious, everything from gum to sparkling water. You pretty much name it and we’re starting to see these (9.12 unclear) products on the platform. It seems like the strategy of a lot of companies now is what—everyone is seeing baked goods. Gummies always do really well. What new can be created to change that experience for the end consumer, and those are the ones that get a lot of attention because it’s completely fresh and it’s exciting and different and something you haven’t seen before.

If you think about it from the retailer perspective, in a lot of these cities it’s crowded. There’s more retailers than Starbucks in Denver, and you need to find that new cool product to beat the person across the street that’s running a dispensary. How can you make yourself more competitive and that’s by having the great products that are Leaf Link for you to purchase.

Matthew: There’s a couple B2B platforms out there. What makes Leaf Link different?

Ryan: There’s definitely companies that have a similar goal to be what we are. A lot of them are ones that we hear about at conferences or on podcasts or interviews. When you go into the market and you speak to the brands that we work, the retailers that use us every single day, those names don’t really come up. I think there’s a lot of thoughts as to why that’s the case, but ultimately the main differentiator is people in this industry have been screwed over by companies, fly by night companies before. People are not paying for products that have been purchased.

Our differentiator is that we over deliver on everything we say we’re going to do. We execute endlessly on building this incredible platform that now has this general market acceptance and is in 80 percent of the retailers in Colorado, 70 percent of the retailers in Washington. That’s the main differentiator is that we do what we say we’re going to do. We do it really well, and we like to think that we’re leading the industry into this V2 of what cannabis will be as an example, this tech first industry example for other industries in the future.

Matthew: Let’s get into a little bit of the nuts and bolts of it. Let’s say I’m a dispensary purchasing manager. I jump on Leaf Link and I make an order of 1,000 units of gummy bears. What happens next downstream? What would I expect to happen?

Ryan: If you’re a dispensary in Denver, you would request an account with your license number that we would then check to make sure it’s in good standing with state regulatory bodies, and that’s the case in each state. Then once you’re approved for an account, you can login and each market in each state stands alone because obviously you can’t ship across state lines. As a Denver dispensary buyer, you’d login and you’d see all the available brands in Colorado with live menus, any deals that are happening for particular products, new products that have been launched. Then general community components as well around news that’s available to people that are active on the B2B side. Then you can shop products.

You can go to their menus. You can add different products from multiple brands and vendors to your cart, figure out the total expense, hit submit, and then all those orders are sent out to each of those individual brands, and you can then track the status of those orders as they’re accepted, packed and shipped. Just like on Amazon when you get an update that your package is on the way.

Matthew: Is there an estimated number of days that I would take or does that get communicated after the order?

Ryan: Like a ship date for example?

Matthew: Yeah. If I place this order for 1,000 units of gummies now, before I order, do I know it’s going to take 10 days or does that communication take place after the purchase?

Ryan: Since we don’t touch, grow or sell the product, we don’t touch the capital either, it’s really dependant on the brand and how these buyers—it’s the same notion they’ve always had. Some companies might list on their product and company pages how long delivery and processing times take. There’s actually a tool that allows them to update the buyer with the shipping date so they know, but generally we see most orders are accepted the day that they’re placed. Then depending on the location of the buyer it could take anywhere from one day to a week, I’d say. Unless it’s far off in a distant part of the state.

Matthew: You mentioned you don’t touch the capital, the money flow. You let that occur between the two parties. It’s not going into escrow or anything like that.

Ryan: That’s right. We want to be really respectful. There are great companies operating in this space and have been for a while, and they have certain ways of settling up, COD or using cash for example. Those are definitely challenges that we are keeping our eye on and things we’ll look to solve in the future, but for right now we want to stay hyper focused on creating this community and marketplace that people can communicate and place orders on in terms of handling the deliveries and stocking the product, touching the capital, they still do that.

Matthew: Okay. How does Leaf Link get paid? How do you generate your revenue?

Ryan: We right now charge a monthly fee for companies to be active on the platform. It’s free for retailers, depending on the number of brands, how many states they’re live in, how many brands they have. Those are the things that we use to judge what the payment should be monthly for them to be on the platform. I mentioned it’s free for retailers right now.

Matthew: Yeah, you got to keep the friction away from the buyers, the people pulling out their wallets. Good move. Let’s say the roles were reversed here and I have a new cannabis infused product, something interesting and fun. What would you do if that was your product and you wanted to jump on Leaf Link and put the best foot forward to get the attention of retailers.

Ryan: Starting off, not being on Leaf Link, a lot of the states that we’re in is really a disservice to your company. For example, if I’m starting a company and I knew that I could tap into 600 retailers in Colorado for example, just by paying a small fee immediately and I’m brand new, it’s the cheapest salesperson you could ever hire. Cheapest advertising choice. So, what I would do is hire a photographer, take amazing branded photos with beautiful layouts and come capture that really demonstrates what our mission and our brand is, and I’d spend time writing as well what the detailed description is. Thinking a lot about pricing, talk to customers about that.

Then put it on Leaf Link, and once it joins Leaf Link, with every brand that comes on our marketing team connects with their point of contact and we coordinate marketing blasts to the whole Leaf Link community, whether through the platform and/or through general email to let everyone know that there’s this new great brand. Matt’s ABC Products are now live, and Matt’s launching with a deal, you guys should check this out. Then what we tend to find and this is among the most exciting transactions that we see are great companies will always get deals because they are well known. When a company no one knows joins Leaf Link and they start getting sample requests or just straight up orders because they’re on Leaf Link, that is so exciting. We have a team slack where we all celebrate when small companies have wins because that to us (17.24 unclear) another entrepreneur’s dream to the next level, we love that.

Matthew: Yeah, that’s great. That’s got to feel good when that first one comes in.

Ryan: Yeah, it makes it completely real. One is million more than zero.

Matthew: You should trademark that. That’s a good one. How do merchants then, after they launch, get the attention on the platform? Can you advertise or how do you stay at the top of mind for the retailers once you’re in Leaf Link, if you’re trying to sell to retailers?

Ryan: We have a ton of programs, some virtual, some manual that we use to engage buyers and sellers. What we’ve found some of our clients actually doing on their own, which has been really affective, is they are sending information out to their buyers to let them know this is how we accept purchases. They put it up on their websites, they put it in their marketing material. We go to conferences now and people say they find us on Leaf Link. These are things that companies have just begun doing because they see the value, they see the transactions that they’re getting. It’s exploding for them and they see that they want to add fire to that or they want to add gas to that. That’s been a great tool for us.

Matthew: Did you say you could request samples on Leaf Link, if you’re a retailer and you like hey I just want to request a sample here. Okay, now is there any way to do that to make yourself stand out more than another, I mean include some other collateral besides sending a sample? Do you see that executed? Is there a spectrum on how well sending samples is executed?

Ryan: There is. The way samples work right now is you can request a sample of a product that’s available for purchase, but what we see a lot of companies doing is actually creating sample packs. So, instead of requesting product A, there is a whole pack that comes with information about the mission of the company and the pricing list and let’s say three to five products, just to give a complete picture of this is what we do, this is our mission. I think that’s been really affective for some companies to have these complete sample packs instead of just one product, just two products with the individually sample request for people to learn their brand.

Matthew: Where are you in the capital raising process right now?

Ryan: We got started back in 2015. We raised our first round of capital from investors and friends and family that we worked with previously on the last companies I had mentioned earlier. We closed a little over a million dollars in capital in 2015, December. That took us through 2016 and helped us tackle the Colorado market and the Washington market. About three months ago we closed an additional round of capital for another $3 million led by (20.35 unclear) and Casaverta Capital. Have some other amazing partners in there too like FIDO partners and Wisdom VC. We’ve total raised $4 million over the last 18 months and that’s what we’ll use to take down the next states that we’re conquering.

Matthew: If there are investors that are listening that are interested in keeping up if you’re going to be raising more capital, is there anything they can do to keep up on that process or just go to your website, what’s the best way there?

Ryan: The best way would be to shoot an email over to info@leaflink.com. It’s funny, we’ve actually gotten requests, people asking if we’re publically traded and things like that. Not just speaking to those kind of investors, but if there are people that are in the space and interested in getting behind a company that’s really in the way, then feel free to shoot a email to that and it makes sense to connect.

Matthew: Okay, what do you think we can expect from Leaf Link over the next one to two years? How do you think things are going to evolve and expand?

Ryan: Part of the success that we’ve had is how focused we are. This is the case for all companies in the in the industry, but you know companies that are focusing on so many things and trying to be everything for everyone, Leaf Link has no interest in doing that. We want to absolutely crush what our primary focus is, and that is to be a marketplace, a communication tool, a community for buyers and sellers in this industry and empower their businesses and that’s what we’ll continue to do. Fortunately there’s new states opening up every several months it seems that we need to be in yesterday.

So our focus is taking the model, the product fit that we have in Colorado, in Washington and now in Nevada, Oregon and California and continue that into the next states. The really exciting thing is that our clients are thinking the same way. That they’re opening new states and they need structure, they need process, they need Leaf Link. We’re working really closely with them to see—further that mission of helping them get to the next level. Staying focused on what we’re doing, not doing anything completely from left field until we absolutely own this. As a luxury of that success, we’ll look at the next product lines, tools that we can provide for our companies.

Matthew: One thing that I’ve noticed when I’ve gone into and talked to dispensary owners, quite a few and also going into grows that I talk to the growers, the growers always tell me they have some sort of unique process and formulation that makes their flower great. I think that’s great to be excited and have some methodology of what you’re doing. Then the dispensary owners always think that they’re doing a better job than other dispensaries. When you go to other dispensaries, especially a few in one day, dispensaries are as different as people. They can be entirely different in their processes, methodology and some execute way better or have a better experience and so forth. Is there anything generally that you think you can say about dispensaries that seem to execute well or seem to have good management? Any tips that you see looking from the outside as you go in and talk with them?

Ryan: Dispensary is a company. It’s a retail location, one that sells other products, whether it be liquor or clothes or a pharmacy. Our though is there’s no reason why the standards in this industry, if anything they should probably be higher than other industries just because of the product that’s being sold and the regulations that exist and the legislation that we need to be respectful of. The companies that do the best are typically the ones that have either figured out their mistakes or have experience running retail locations previously and they know there’s great tools we can use, tools like Leaf Link for purchasing product. There’s amazing POS systems that we can use that will create standardization on how we check customers out, how we’re managing our inventory, how are we communicating from different locations, because now we have a lot of these companies that have multiple retail spots. So I don’t think it’s all that different, but the ones that we know are doing the best and the ones that seem to be moving the most product as well are the ones that are in it, because they realize the challenges are similar and if anything higher they need to build some of the structures out as any other retail store would. The ones we know and what it can’t be really is unfortunately it always just be a bunch of friends and a family running a shop. That’s tough. It’s good to get more experienced people that have done it before or something similar before, and use that skill to better serve your customers.

Matthew: Good points. Ryan I like to ask some personal development questions to help listeners understand who you are as a person. With that, is there a book that has had a big impact on your life or way of thinking that you’d like to share?

Ryan: Less a book, I’ve been all about podcasts lately. Maybe like a similar concept but quite the audible listener too, but one that I’ve been listening to every day, and no offense to present company, but every day when I wake up I listen to an episode of How I Built This. It’s on MPR, and they profile all these amazing entrepreneurs and challenges that they’ve faced. To see the patterns similar to the way we see patterns around both what we both think as a solution. I really enjoy that. It gets me—I’m already pretty high energy and revved up for the day, but further excited to just get out there and continue to build Leaf Link.

Matthew: Do you have any other kind of daily rituals or morning rituals you do to help get yourself in the set for the mood in the day?

Ryan: Yeah for the last couple months I’ve actually been swimming every day when I’m on the road early in the morning. It’s a nice removal from just everything like constant emails or Slack or calls to just think a little bit and zoom out and how we tackle the day and thinking about things differently, or (26.56 unclear) enough to make the right decisions longer term because we are in it for the long term. That repetition, that quiet is great.

Matthew: Is there a tool web based or otherwise besides Leaf Link that you consider really valuable to your day to day productivity?

Ryan: Two that we use every day. One is Slack, which I don’t know if I love or hate. Have you used Slack?

Matthew: I’ve used it yeah, and I don’t know if I love or hate it either.

Ryan: I get the idea. It’s like death to internal email, which is a cool idea, but I also wonder is there a point of just too much communication. Do you get lost and just sucked in to this world of endless messages, but I’ll put it on the list that it’s a helpful team because we are a distributed team across five different states. So it’s a good way to keep everyone up to speed on what everyone else is working on. The second tech tool that we use is Inbox by Google. It’s not the same thing as Google Inbox. It’s basically a email client that allows you to snooze, remind, check off emails effectively as to do tasks, and it’s great for sales. It’s great for managing relationships because you can remember to follow up with people if they haven’t responded back to you. It pops back up into your inbox. Inbox by Google is great.

Matthew: That’s a great suggestion. I haven’t heard of that one.

Ryan: Check it out. It’s actually Google knocked off another great competitor. They just did a so much better job and it’s a great tool.

Matthew: Ryan in closing, how can listeners learn more about Leaf Link and connect with your company?

Ryan: Best way is to go to www.leaflink.com. If you’re a retailer, join right away with your license number and we’ll approve you usually in a matter of minutes, once we verify your license, to begin purchasing. If you’re a seller, send us your email through the website or at sales@leaflink.com and we’ll also get back to you very quickly. If you’re in Colorado, Nevada, Washington, Oregon or California, we are live in those states, hundreds of retailers on the platform in each of them, and excited to continue working with great companies.

Matthew: Ryan, thanks so much for coming on the show today and educating us. I really appreciate it.

Ryan: Thanks Matt. Appreciate you having us.


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