Since the inception of the legal cannabis industry, navigating the financial aspect of business operations has been an intricate conundrum, exacerbated by the plant’s ongoing federally illegal status. As a result, cannabis operators have found themselves entangled in a web of complexities, compelled to overcome numerous obstacles in order to maintain profitability.
The ever-present specter of theft and security threats looms over retailers, while the rigid restrictions imposed by financial institutions often shut them out from accessing crucial loans and other forms of financial aid. Amidst these challenges, forward-thinking technology innovators have recognized the industry’s needs and stepped up to create financial and technological solutions that embrace the ever-changing regulatory complexities of the cannabis industry.
We sat down with Treez, a cannabis technology company focused on fueling industry growth through insights, analytics, and creative solutions to problems that have plagued the legal market for far too long. In an interview with CEO John Yang, we delved into the company’s origins, its diverse range of offerings, and the invaluable role its platform plays in empowering retailers to achieve sustained profitability and long-term success.
Leafwire: How was Treez first founded and formed?
John Yang: I co-founded Treez over six years ago, alongside Chief Strategy Officer Shareef El-Sissi. He is also the CEO of California-based vertically-integrated cannabis brand Eden Enterprises, so he came into Treez with a lot of on-the-ground experience as a cannabis multi-operator.
His background helped me realize that all of that activity throughout the cannabis supply chain is hugely reliant on the sale, which is represented by retailers. We saw that section of the value chain as most important for ultimate industry success, so we decided to narrow in on a product that would best optimize that step.
I come from an enterprise software background, so combining that experience with a grassroots cannabis operator in one of the largest cannabis markets in the world – Northern California – was a great way to kick off our beginnings as a company.
LW: As the cannabis industry progresses, what are the prevailing challenges it still confronts concerning critical areas like payment processing, inventory management, and reporting?
JY: Within the cannabis industry, retailers have been grappling with the lack of access to essential tools and financial resources that their traditional retail counterparts enjoy. In our six-year journey, we’ve come across a lot of deficiencies such as access to payment options, banking, sales software programs, inventory management, and efficient sales software programs that ultimately help businesses convert and complete a sale.
Our entry into the industry was driven by the recognition of this need, leading us to establish ourselves as a dedicated POS software provider catering specifically to the unique needs of cannabis retailers. Through our comprehensive suite of solutions, we aim to empower cannabis businesses to unlock their full potential and navigate the challenges they face, paving the way for a more prosperous future in this ever-evolving landscape.
LW: How exactly does Treez provide solutions to retailers?
JY: We help retailers become and stay profitable by providing essential tools such as point-of-sale software, data and analytics, e-commerce, cashless payment options, and customer relationship management tools.
A point-of-sale (POS) system is the backbone of a retail cannabis business. It is the central operating system that creates and adjusts product pricing, tracks products as they first enter the store, and traces the product as it is unloaded and processed by dispensary staff. A great POS system will do more than enable smooth transactions. It will have a larger focus on consistently keeping retailers 100% in compliance with their state traceability platform via automatic integration and data syncing. In addition to smoother transactions and lower waiting room times, you’ll see an increase in transactions and orders prepared while having a better insight into what inventory sells and what doesn’t. A strong POS system scales to a cannabis retailer’s needs and will allow you to reconfigure and adjust your business accordingly. Inside a robust POS system, there are a few vital characteristics you should find – inventory management, compliance, and multistore management.
Vertical operators require a seamlessly integrated system that effectively communicates with the entire supply chain, ensuring data visibility and streamlined workflows to achieve resounding success. Our software serves as the missing link, encompassing all the necessary technological layers a retailer may require, thereby enabling them to reap optimal outcomes with unparalleled efficiency.
LW: What sort of solutions do you provide when it comes to one of the biggest ongoing issues in the cannabis industry – cashless payments?
JY: In the nascent stages of our journey, a staggering 90 percent of cannabis businesses were constrained to operating on a cash-only basis. Today, we have witnessed progress, and that number has decreased to approximately 65-70 percent. However, in comparison to other types of retailers, this percentage remains relatively high. In the broader consumer retail landscape, the prevailing trend leans towards cashless transactions, with many retailers not accepting cash at all.
The three options you will traditionally see are PIN Debit, Automated Clearing House (ACH) and Cashless ATM. As the cannabis industry evolves, dispensary owners know that consumers expect cashless payment options. In fact, four in ten Americans say they make zero purchases in cash in a typical week. Offering a cashless payment option increases profitability, so much so that cashless payment adopters can see an increase in monthly revenue of up to 40%. The most successful dispensaries provide customers with secure, convenient, and integrated cashless payment solutions.
LW: How does your platform help ensure that companies stay profitable? What specific aspect of your offerings addresses this?
JY: When running a dispensary, a key indicator of success is profitability. Our POS system stands as the backbone of our enterprise, seamlessly optimizing workflows and facilitating high-volume transactions crucial for achieving profitability in the cannabis industry. But that’s not all; our software takes it a step further by efficiently reducing labor costs, providing long-term benefits for your business. By harnessing the power of our retail analytics, it helps dispensary owners make data-backed decisions.
Retail Analytics is the tool that transforms complex data into easy-to-understand visualizations and helps dispensary owners with tasks like tracking product performance, assessing the success of promotions, and monitoring customer behavior. It is important to invest in quality data reporting metrics, like sellable velocity, a unique metric created by Treez to judge how quickly products move, but only when they are available to be sold. Treez data shows that a dispensary on average loses over fifty thousand dollars ($50k) a month in sales due to missing restock opportunities. By tracking sellable velocity, dispensaries can see how quickly a product sells out after a restock and shows you when somebody didn’t replenish the sales floor when they should have. Sellable velocity removes the gut instincts approach and replaces it with solidified data that is easy to understand as a business owner.
LW: How can people stay up to date with your latest innovations and offerings?
JY: Check our website! We are constantly improving our products to take advantage of the latest technology. https://www.treez.io/