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Transcript

Amanda Guerrero: Welcome to the Cannacurio Podcast powered by Cannabiz Media. We’re your hosts, Amanda Guerrero and Ed Keating. On today’s show. We’re joined by Jeff Harris, CEO of Springbig. Springbig had joined the Cannabiz Media platform in 2018 and we are so happy and excited to have them on today’s show.

But, as is a custom to our typical podcast here, we’re going to check in with Ed and see what he’s learned this week from the Data Vault. Ed.

Ed Keating: Thanks Amanda. So, as we do periodically and ideally on a monthly basis, we take a look at some of the main categories of licenses to see how they have grown since the beginning of the year. So we dug into cultivation licenses, and what we found is so far the nation has added 2,382 cultivation licenses this year.

And as we have seen through the other months of the year, over 90% of those are in California and Oklahoma, 92% to be exact. California is up year to date 26% while Oklahoma is up 20% and Michigan was a very, very distant third with 88 licenses added through May.

Amanda Guerrero: We’ve covered so much of… So much of our year to date license wrap-ups have been focused around California, Oklahoma, and Michigan, Ed. I know you’ve noticed this as well. Are there any other runner-up markets to note, or is most of the licensing coming from these three markets?

Ed Keating: Yeah. You nailed it, Amanda. Unless a new state or market comes online, we’re not going to see any onslaught of new licenses, because typically, there’s that whole process of getting the program voted on and up and running, which takes a long time. And unless it’s a big market, you’re not going to see big shifts in licensure. So the last one we had was way back in December, January when Missouri came online and they started issuing licenses.

Amanda Guerrero: That’s right.

Ed Keating: But they essentially issued them all in one day. All right, here’s the people who got the cultivation licenses. We’re good. And here’s the dispensary people. We’re good. And that’s it. So we haven’t seen a lot.

So, until we get another state program rolling out, it’s unlikely that we’re going to see a lot of movement there. And obviously that contrasts with hemp where they announced the program, they start kicking out licenses, and before you know it, you’ve got a thousand growers in some of these states.

Amanda Guerrero: Ah, don’t you love licensing programs for both cannabis and hemp? Crazy. All right. Well, Ed, thank you for the data update here. As I mentioned, we’ll be joined by Jeff Harris of Springbig when we come back. So everybody stay tuned.

All right. Welcome back everybody. As I mentioned, today we’re joined by CEO of Springbig, Jeff Harris. Welcome to the show, Jeff. How are you?

Jeff Harris: Thank you so much. Doing great. It’s great to be here. I really appreciate it.

Amanda Guerrero: We’re so excited to have you on the show. As I mentioned earlier, you and your team have been subscribers of the Cannabiz Media platform since 2018 and what we would consider one of our Cannabiz Media power users. With that, I’d love to open it up to share a little bit more about yourself. So how long have you been in the industry?

Jeff Harris: Sure. So we actually pivoted to the cannabis industry in late ’16, early 2017. Prior to pivoting to just focus on cannabis, Springbig was focused on providing loyalty and digital communication software to the small business community. And as we saw more and more cannabis dispensaries taking advantage of our platform, we looked into it further and thought it was a great opportunity to just focus on cannabis. So I would say starting January of ’17, so about three and a half years, we’ve been solely involved in cannabis.

Amanda Guerrero: And so what industries were you involved with prior to the cannabis industry?

Jeff Harris: So I launched a loyalty marketing agency in the late ’90s. The name of that business is called Inte Q, that is based outside of Chicago. It’s a still active business. It’s actually being run by a team that I put in place a few years ago. And it’s been an amazing experience because it really informed the creation of Springbig. We actually were able to understand exactly how loyalty marketing works and how it plays in the market.

Jeff Harris: And from there we launched Springbig, and originally we launched Springbig, as I mentioned, for the small business community, the pizza shops, the yogurt shops, the nail salons, the hair salons. And then over time as we started looking at our customer base, we felt that we would have more traction and have more focus if we just focused on one market, and we chose the cannabis market. And it seems, based on the performance of our business over the last few years, it was a good choice.

Amanda Guerrero: Yeah. It definitely sounds like it, especially getting in around the time that you did. There was so much opportunity in 2016 in terms of capturing the various markets. But out of curiosity, Jeff, outside of just the business opportunity that you saw, why did you decide to get into the industry?

Jeff Harris: What I found so amazing about the industry was that there was literally a complete ecosystem being built for this industry. And obviously cannabis being the leading edge, such a new industry, I felt it was unbelievably exciting to participate in it. How many times do you get to participate in an industry that’s literally being born in front of your eyes?

And I think that excitement, along with the opportunity that we saw, really drove it. And again, looking back three and a half years, I haven’t had a boring or a bad day working in this industry. There’s always things during the day that you prefer happen differently, but on the whole, it’s been an amazing experience to participate in an industry that literally was being built from the ground up. And had to recreate everything, all the services that are needed to support businesses in this industry from the get-go, from the ground. So it’s been pretty amazing.

Ed Keating: Well Jeff, I couldn’t agree more because that’s really when we started rolling out Cannabiz Media around that same time. And you’re absolutely right, watching this business form and this industry be created is really a once in a lifetime opportunity, I think to be there at the very beginning. So I’m right there with you.

Now, from what I’ve learned about Springbig, you’ve got a lot of consumers on the platform. You signed up a lot of stores. So, tell us what makes your company unique? What’s attracting both the buy and the sell side onto your platform?

Jeff Harris: Yeah. So the consumers are a result of the stores that are signing up with us. So our key constituency group is the cannabis retail community. So we have close to, somewhere just shy of about 700 clients, probably about 1400+ stores, locations or licenses on the platform.

And the way our platform works is because we’re helping these retailers design and manage the software, helps them design and manage their loyalty program. And then we pull in all their data and then we could help them leverage that data to be much smarter about how to communicate with their customers digitally, via text, via email, things of that nature.

And due to that, a lot of consumers come along with them because we’ve been fortunate that we have a lot of the larger retailers, not all of them, but a lot of the larger retailers. And I think it’s because we created a very easy to use, but full-featured product. And we understand the component of service in this industry. And we are a very high touch service organization that really supports our clients.

So I think the combination of a really great product that continues to get better and evolve and a great service orientation has helped us bring on retailers. And when retailers come they bring their consumers with them.

Ed Keating: Ah, very nice. And another parallel I would say with Cannabiz Media and Springbig is, I’m guessing, how you were able to operate, let’s say over the last 90 days. What we found and one of our sales people sent out a note to his customers back in March or early April saying, “I don’t know about you, but I just woke up and found out that my next four trade shows are canceled.” We use Cannabiz Media to reach the people that you want reach on the B2B cannabis side.

So I’m curious for Springbig, what happened during quarantine? If I was running a dispensary in a state where it was deemed non-essential, were you my only conduit to reach those people and keep them thinking fondly of my store?

Jeff Harris: It’s interesting. So in most markets where the stores were open, we saw increased activity through our platform during that time. Because they really, in addition to all of what I’ll call the normal communication that retailers were doing with their clients, they were doing additional communication regarding store hours and openings and closings, and things of that nature.

So we definitely saw increased activity. And that increased activity has not necessarily slowed down. We’ve seen a pickup in activity which has been great for us, and it’s also been great for our retail clients because they really use our platform to make sure that they’re staying in constant communication with their customers.

There were a couple of markets where things were either closed down. So for example, in Nevada where they closed down other than for delivery. So there were some markets where activity fell off a little bit, just because there just was not as much retail activity going on in that market.

But for any place where there was retail activity going on, we had an increased amount of activity. And then there were a couple of markets where that activity dropped. But on the whole we grew through this time, which was crazy to think about. We’re one of the few industries that really had the opportunity to really work through this, and hopefully, we’re going to keep coming out of it in a healthy way.

Ed Keating: Excellent, excellent. Now, one of the things that we study here through the questions that we ask license holders helps us understand the software stack. Like, what kind of software are these stores and businesses using? So I’m curious, how do you interface or how do Springbig interface with point-of-sale and seed-to-sale? Is that just an easy API connection or how do those systems work, or do they even have to talk to each other?

Jeff Harris: Yeah. So we’re more focused on integrating with the point-of-sales versus the seed-to-sales. So we integrate with over 15 of the industry’s point-of-sales. And that’s actually one of the elements of our secret sauce. We’re very, very good. Our technical team is very, very good at creating these integrations and making sure that they’re solid, that they work, and we’re pulling in all the data that’s necessary.

One of the big differences that Springbig has compared to other players in the industry is with the range of data that we pull in. They really don’t need another device on the counter at all. They could really just leverage our software by the integration with the point-of-sale. We pull the information and then they can go onto their Springbig dashboard and use it.

So, point-of-sale is the key for us, and we started integrating. We had our first integration with Greenbits in November of 2017, and we haven’t stopped since. And I think we’re up to 15 or 16, all of the major point-of-sale players we’re integrated with.

And now, we’re actually moving to the second evolution of our integrations, where we’re now enhancing those integrations to give the retail staff member at the store more power on how to leverage Springbig within the POS. And not only is the POS sending us data, but we’re sending the data back to the POS. So the retail staff member can really manage all aspects of a customer’s loyalty program on the POS while they’re leveraging Springbig.

Ed Keating: Wow. Well, given that leverage all those partnerships and that tech team, it sounds like you’ve got a good juggernaut going here. So what should we be looking forward to hearing from Springbig in terms of new product launches or enhancements looking forward?

Jeff Harris: Yeah. So our big announcement that we made about a week ago, a week and a half ago, so getting together with you guys is really the perfect timing, is we launched a platform for brands.

So as I mentioned, our key customer group has always been retailers. However, we kept getting calls from brands about, “Oh, can we use your platform to communicate with consumers? How do I get connected to the retailers to communicate with them?” And it actually opened up an opportunity that we saw where we were trying to solve two different sets of problems.

On the brand side, we were trying to solve a problem of how do we help brands get connected directly to consumers to get their message out? Because there’s just a lot of noise in this industry, and brands want to try to communicate directly with consumers. And then the retailers had a problem where, because they were bearing the brunt of the marketing that was going on, they continued to see their expenses go up, their marketing expenses go up. So they’re looking for ways how to get some of those expenses co-op’ed.

So we put together a brands platform where brands can actually create direct messaging to consumers. The way they get those messages delivered is they will serve them up to the retailer. And when the retailer sends out their next communication, presuming via text, they would include that brand’s message either via an MMS image or a link. And when they do that, the retailer will get a discount on their message cost, so it helps them reduce their cost. And the brands will pay a fee to get their message into the smartphone of the consumer. Because through the text feed, they’re getting their message directly into the smartphone of the consumer.

So we saw an opportunity to solve both issues and the platform’s off to a great start. We’ve signed on with some great brands and we continue to do so.

Ed Keating: All right, that’s a great expansion. I love that. There was a CEO that I used to work with who liked to use a term “land and expand.” And it sounds like that’s what you’ve been able to do with using that channel and the platform to reach a broader audience that will also benefit from what you guys bring to the market.

Yeah. And what’s amazing is, listen, no sale is easy. Every sale is difficult because you need to really work with the company you’re working with to make sure it works for them. If it doesn’t work for your client, it just doesn’t work. But compared to other sales, this sale is not as hard, simply because the brands are really excited about the opportunity.

Now, as I mentioned, we have over 19 million cannabis consumers on our database through our retail partners. So we know who the active cannabis consumer is and when a retailer messages their database, they’re messaging active cannabis consumers. So for brands to have the ability to actually be able to influence the behavior of a consumer by partnering with the retailer is like, they’re going gaga. They’re so excited.

So companies like PAX or Jetty or Coda Signature, some big brands are really starting to get excited about this. And are starting to build their marketing programs around this tool to be able to really get their message into the smartphone of the customer.

Amanda Guerrero: Well, speaking of getting your message to your target audience, I wanted to switch a little gears here, Jeff, and just learn a little bit more about some of the ways that you and your team utilize Cannabiz Media. Because it sounds like your platform is going to be able to address the consumers and we help to connect you to those license holders.

Jeff Harris: Yeah. So Cannabiz Media has been a core part of our business development strategy and our marketing strategy. And the tools that you guys provide companies like us have been really, really helpful. Your daily update is read by multiple people here every day. Literally, the minute it comes out they’re looking at the new license updates that you guys send out and we’re able to leverage that. And we’re able to get a jump on opportunities that you guys are uncovering for us and for others.

We leveraged some of the opportunities to be able to leverage the list that you guys have created to do unique marketing campaigns. So it is a core part of our technology stack, of our information stack. And I can tell you it’s one of the most widely used pieces of software and information that we have here at the business.

Amanda Guerrero: We love to hear that. In terms of your experience, Jeff, utilizing other sales tools, how does the Cannabiz Media platform compare?

Jeff Harris: No. So it actually compares really well and it actually works in concert with a couple of other tools that we use. So, what we’ll do is we’ll leverage your tool first, and then we’ll actually incorporate a couple of other tools to get some additional information to round out the information that we’re looking for. So when we start trying to reach out and contact some of these, either retailers or brands, we actually have the ability to really have an intelligent conversation with them. So, I think we’ve been using it for a couple of years now, and there is no end in sight to us wanting to use it. We really get a lot of value out of it.

Amanda Guerrero: Oh, I love that. I really do enjoy this part of the Q&A with our subscribers, especially those that are familiar with using the platform. Because it really, I think it helps to put the functionality of Cannabiz Media into perspective for our current subscribers, as well as future prospective clients. So, thank you. Thank you for those insights, Jeff.

Jeff Harris: No, we appreciate it. We really get… Listen, the tool is only as good as the value it brings. And I can tell you that people are really, they look for that daily email that comes out from you guys and that daily update. And they look for the tools and the new things that you guys are offering, the new opportunities to leverage the data that you guys have compiled. It’s obviously not easy work, what you guys do, because there’s no national database of this stuff and you’ve really got to dig in state by state and see what’s really going on. So, we appreciate the work that you’re doing and how it helps us.

Ed Keating: Well, thanks. As a guy who runs a data team, I’m glad to hear that. We are the national database. I’ll say that.

Jeff Harris: Right, you guys are.

Ed Keating: [crosstalk 00:18:58].

Jeff Harris: You guys are. But it’s funny, but it’s not easy to get. You’ve really got to go state by state by state. It’s not easy to compile at all.

Ed Keating: Yeah, and what we’re finding now is many states, because of privacy issues, are starting to dial back on the information they do make available to the public. So it’s getting harder to get where we have to actually be in touch with the regulators themselves, not just going to some website to go get information. Which is what others in the industry have tried to do, to say, “Oh yeah, we cover the industry.” Well, you really don’t because some places, it’s just not available.

But speaking of what’s happening on the regulatory standpoint, one of the questions I wanted to ask you is, I’ve seen that there have been some lawsuits around tech spamming in Colorado and Florida. And we see the same thing on the email side with CCPA coming out of California with the Privacy Act. So I’m just curious, what does this mean for your segment of the industry which reaches consumers through text messaging?

Jeff Harris: Yeah, so I think it’s definitely an issue that’s been gearing up over the last year actually. And what’s really, really important, we have the tools that help our retailers make sure that they get true express consent from every customer that they want to market to via text.

And listen, we’re the platform. We’re not the ones who are actually sending out the text, but our goal is to guide every one of our clients on how to make sure they get express written consent to be able to market via text to customers.

And there’s some of our customers that started really early on that were not as concerned about it, that we’re now converting and making sure that they get that express written consent from every one of their customers. And some of our clients are much more conservative, more aggressive in getting that. Some of them are a little less conservative, a little less aggressive.

At the end of the day, it’s our job to educate. It’s our job to make sure they understand the rules, they understand the risks. And we do provide them with the tools as well. So it’s not like we’re saying, “Hey, here’s what you have to do. Go figure it out.” We actually provide them with all the tools they need to get express consent. And we hope, and most people are now because they realize, as you’ve seen that this is becoming an issue.

And we work hard to help them, because at the end of the day, we’re only going to be as successful as our clients are. So we need to make sure that they have everything in place to be successful. And as I like to say, our clients pay our salary. So, therefore, we’ve got to make sure that they’re armed with everything that they need to do things right, so they can continue to be successful.

Ed Keating: That makes a lot of sense. And what we find on the email marketing side, which is one of the ways that a lot of customers use us is we’ve had to educate people on what works best and what doesn’t. Because some people may, in the past, have relied on a spray and pray approach thinking that if I just get my message out to more people I’ll do better. And in fact, often the opposite is true. If you can target and segment who you’re trying to reach with a really good message, you’re going to have a much better response. And I think that’s probably true of your customers as well.

Jeff Harris: Yeah, no, for sure. I think the issue, whether it’s email or texting, especially email, texting is more expensive than email so it’s not the exact same thing. But people look at email and say, “Oh my God, it’s so inexpensive. I just might as well email everybody.” But you’re right. At the end of the day, whatever it costs, it’s still you’re spending money that you don’t need to spend if you’re emailing people that are not going to respond.

Ed Keating: Exactly.

Jeff Harris: So, I’m totally with you. And we try to, it’s funny, because we try to educate our clients on not texting the same thing to everybody, even though we probably would generate less revenue by teaching them that. But at the end of the day, as I like to say here at Springbig, we’re not in it for the short run. We’re in it for the long run, so we need to make sure that our clients are successful.

We believe if our clients win, we win. And if that means educating them on how to do it right, even if that means we make less money on them this month, I’m perfectly okay with that. Because the most important thing to us is for them to be successful, because we can’t be if they’re not.

Amanda Guerrero: I think that’s a great spot for us to end this interview segment, Jeff. Education is key. And especially when you’re looking at the SaaS sales cycle and you’re looking at the cannabis industry as a whole. We’re constantly asked and requested to pivot and to change at the drop of a hat. And so I think to have partners like Springbig on board with the retailers, it really is going to help them to continue to grow in the right direction and also keep the consumers in mind. So thank you so much for joining us today, Jeff.

Jeff Harris: No. And thank you guys very much for having me. I really appreciate it. It’s always fun to be talking to industry experts that know what’s going on and continue moving the ball forward.

Amanda Guerrero: Thank you. Well, now let’s take a look ahead and see what updates Ed has for us in regards to Cannacurio and the future outlook. Ed.

Ed Keating: So a couple things to highlight. One is we just published a blog post on Tennessee Hemp. The state provided us with a great deal of data on over 8,000 grow areas in the state, which are distinct from the licenses. So one license may have many grow areas. I think the number of licenses is about 3,400, 3,500, but 8,000 grow areas.

So far, what we’ve seen is they’ve got about 50,000 acres under cultivation and some farms have close to 2,000 acres under cultivation for hemp. So that’s a big deal. And it’s especially significant in that in some states, we’re seeing a decline in license acres farmed because last year a lot of the businesses weren’t able to make a lot of money.

The other thing that we’re working on is putting the finishing touches on our white paper which covers the companies that are connecting to Metrc and LeafData systems. So we’ve got about 29 categories of software, and we show which companies really are the most connected and also which ones have the most licenses they’re able to get in front of because they’re in certain states. So we’re very excited about this, and it’s been a long process to compile the data.

Amanda Guerrero: Oh, I know. And we are so excited to receive this white paper, Ed. Now, when should myself and our subscribers expect this to be available?

Ed Keating: End of the month.

Amanda Guerrero: Oh, how exciting! Okay, cool. Well, we’ll definitely look to you for those updates, Ed. Everyone, thank you so much for joining us on today’s podcast. We’re your hosts, Amanda Guerrero and Ed Keating. Stay tuned for more updates from the Data Vault.