Between the rush of a retail business model and the pressure to maintain compliance in a hyper-regulated space, cannabis operators have a lot on their plate. But as the industry matures, so have the ancillary services and business solutions that enable cannabis entrepreneurs to find success.
In this written Q&A, we ask James Yi — the founder and CEO of cannabis wholesale platform Leaf Trade — about his career before coming to the cannabis space, Leaf Trade’s efforts to maintain up-to-date compliance services, the value of customer feedback, and more.
Scroll down to find the full interview:
Ganjapreneur: What was your career path before joining Leaf Trade in its earliest stage?
James Yi: Over 10 years ago I started a tech company, NextME, which provides B2B software services to multiple industries. In 2015, Illinois launched its recreational market and I happened to get involved with a couple of cannabis groups. I helped launch new dispensary locations and manage operations. Through my work with these dispensaries, I noticed one of the biggest problems they were experiencing was the way in which retailers were buying from wholesalers. It was just an extremely inefficient process where they were spending 50% of their time just managing orders. I knew there had to be a better way and the problem could be solved with technology. Thus Leaf Trade was developed to bridge those gaps and pain points that have been rampant in the cannabis industry.
In working with companies from every corner of the cannabis industry, how does Leaf Trade juggle the different priorities of cultivators, manufacturers, and retailers?
This is really where Leaf Trade thrives, because we have the industry experience to recognize there are so many different peculiarities and nuances in the industry at large. Depending on your business type — a retail dispensary, cultivator, brand, etc. — and what particular state you are operating in, we recognize there are workflows and integrations we need to accommodate to help these businesses meet compliance standards and operate more efficiently. That’s how we got started: by listening to our clients. We help them create a balance between their custom workflow needs and leveraging our tech and industry expertise to create a platform experience that incorporates best practices, and is highly configurable to meet all of our client’s needs, no matter what side of the cannabis industry they are operating in.
How does Leaf Trade stay up-to-date on the shifting regulations of each state market?
Leaf Trade has been servicing the industry since the genesis of Illinois’ highly-regulated market starting in 2015. We’ve seen the evolution of how these states mature, and we’ve learned how to grow with them; with every new highly-regulated state launching, we’ve seen similar evolutions. Obviously, we stay on top of the nuanced regulations in each state. However, the way in which these states mature and grow follows patterns that are more or less known quantities to us by now. The states learn from one another and they see what does and doesn’t work, and they adapt. When there’s a new state coming into the legal cannabis market, regulators are doing things based on a precedent that we’ve experienced, so these shifting regulations and markets aren’t a complete mystery to us.
How has customer feedback influenced your business model?
At Leaf Trade, we actually listen. We’re prescriptive in helping guide our clients because we have experience working with a variety of businesses of different sizes with complex needs across the country. While we lean into our consultative role, we balance it with listening to each of our client’s specific needs. Particularly since the vast majority of our clients are enterprise-level businesses, including the top 20 MSOs, the reality is our tech has to be able to meet the needs of enterprise operations. It has to be flexible and adaptable, which includes building custom integrations for our clients that are very important to helping them operate most efficiently.
What advantages does Leaf Trade offer to cannabis companies looking to source private-label products?
Leaf Trade’s focus is not only on enterprise-level businesses but also on the top brands in each market. We make it easy for cannabis dispensaries and retailers using our platform to access the best brands to stock on their shelves. Our platform’s operational efficiencies truly work for cultivators and retailers alike. We integrate with compliance systems and the seller’s ERP and accounting software, so when purchases occur on our platform, they are actually processed as opposed to being just a glorified menu. We make it easier for cultivators to list as many brands as they’d like through one branded storefront, and they can add branding and product images to the page to really customize it to their brand image.
What are you most excited about for the future of Leaf Trade and the cannabis industry?
Coming off the heels of the merger between Leaf Trade and Sweed, I feel most excited about being able to provide even more value to our clients, who are often vertically integrated companies and multi-location dispensary groups. We look forward to providing the same operational efficiencies we’ve provided on the wholesale side to the dispensary side of their business. Through Sweed, these companies will be able to consolidate their retail tech stack. Sweed gives dispensaries access to a proprietary data engine delivering groundbreaking operational solutions that transform their cross-channel eCommerce, marketing and loyalty programs into truly data-driven solutions. Technology like this was previously only available to businesses with software development resources at scale, but with Sweed it will be available for all cannabis businesses at a fraction of the cost.
What would you say has been the biggest obstacle you’ve faced — or the greatest achievement reached — in your years of cannabis industry experience?
The biggest obstacle Leaf Trade has faced, which I’d also say has been our biggest gift, is having to navigate such a complex and nuanced industry. It wasn’t easy but once we were able to specialize in building the right tech to fill a gap that the highly-regulated cannabis markets were seeking, we’ve established ourselves as a household name in the industry. I’m proud to say we’ve maintained our near-zero churn since we launched in 2017. Above all, our greatest achievement has been anchoring our focus on people and product, and when it comes to those two priorities we’re always aiming to grow and set the bar higher.
Thanks again, James, for answering our questions! Our readers can visit the Leaf Trade website at Leaf.Trade to learn more.