In June 2014, I attended my first cannabis tradeshow and had the opportunity to hear Lance Ott, CEO of Guardian Data Systems (GDS) speak. I was impressed by his knowledge of the banking, financial services, and payment processing world. My eyes opened to the importance of having a transparent and accessible system available to help the new, rapidly expanding cannabis industry grow and meet its true potential in a regulated environment. FinCEN rules were issued earlier in the year, and Lance’s presentation helped me to understand the guidelines that would allow cannabis licensees to operate and the risks that would be (hopefully) removed from businesses dealing (almost exclusively) in large volumes of cash.
When I met Lance, GDS was the market leader in providing legitimate, transparent payment processing and banking services to cannabis business customers before large commercial banks began closing accounts. Since CBE ranked Lance #38 on The 100 Most Influential People in the Cannabis Industry in 2014, we have followed the company’s evolution in the growing industry.
While in Orlando this past May, I ran into Lance and the president of GDS, Brett Taylor—both Certified Payments Professionals (per the Electronic Transactions Association, the premier trade association for the payments processing industry). They were with their team introducing ROAR ERP, GDS’ new fully integrated system and platform designed to meet regulatory compliance while serving cannabis producers, processors and retailer (PPR) licensees. They also serve varying segments of the traceability system and lab, delivery, distribution, and ancillary businesses in the industry. Once I heard Lance and GDS’ new chief revenue officer Rick Gilchrist, explain the competitive benefits of ROAR Enterprise Resource Planning (ERP), I came away wondering if the three horse race CBE had described in Seed-to-Sale Competition Heated-up in 2015. Expect it to intensify this year.
How the ROAR ERP Solution Came to Fruition
Going into 2012, Guardian Data Systems had more than 70 employees and agents, as well as agreements with more than 40 banks and credit unions in California, Colorado, Oregon, and Washington. Cannabis-related businesses comprised nearly 80% of GDS business prior to the rapid closure of banking and merchant accounts. The closing of cannabis banking accounts, and subsequently client merchant accounts which occurred in 2012, dramatically affected GDS’ business and forced them to look for additional ways to generate revenue.
GDS began diversifying and adding consulting services to banks and credit unions interested in supporting cannabis businesses as a result of the changing regulatory environment. Through this work, Lance and Brett created an extensive network of cannabis PPR license holders and banks interested in doing business with these potential clients, and a stellar reputation. Lance also a founding member and Ethics subcommittee member of the National Cannabis Industry Association.
With its proprietary knowledge and track record of working with cannabis clients looking for banking, payment technologies, cash management, and other financial services, GDS saw what the newly regulated industry demand and require success. GDS became acutely aware of the challenges that their customer base faced, and timing played a strong role in the evolution of ROAR ERP.
As GDS was helping to connect cannabis industry organizations with banking, lending, and investment opportunities, it became obvious that the cannabis industry needed a system that went beyond seed to sale. Unquestionably, track and trace is a necessary requirement for legal operations; but partners also want to know that their organization is transparent in their handling of product and money. Owners want to know that they are following best practices and that the organization can sustain financial audits, provide accurate business, and inventory reporting. In addition, the owner operators were struggling with being able to project and manage inventory and cash flow.
This experience led GDS to acquire a mature business platform with an integrated point of sale (POS), ERP, business intelligence, inventory, and warehouse management workflows. Strong financial controls would also need to be in place for companies to implement their Standard Operating Procedures into a software system—thus ROAR was born. With complete track and trace, robust lot tracking, and executive dashboards that allow financial analysis across different business entities, GDS is confident that ROAR is the most comprehensive business tool available in the cannabis marketplace.
Add to the mix a tech-savvy, business development leader with a strong work ethic and hustle like Chief Revenue Officer Rick Gilchrist, and GDS has the makings of a serious fourth horse with a solution set that serves not only the end user base but also the regulatory and ancillary supplier sides of the business.
A cannabis publication recently made a big deal about the Microsoft Cloud Services division team working with Kind Financial to serve the state and local government market. CBE Press believes that the Guardian Data System ROAR ERP offering goes beyond seed to sale by combining a robust and proven software solution that handles traceability and business management solutions that the cannabis industry has been searching for. As usual, time and execution resulting in signing up government contracts and end-users will determine the success of all of the players in the race. We will re-evaluate how many horses remain in the race at the end of 2016!
Company Name: Guardian Data Systems, LLC.
Year Founded: 2015
Ownership structure/operating entities: LLC
Management Team: Lance Ott/CEO, Brett Taylor/President, Joel Stangeland CTO, Richard Gilchrist/CRO
Headquarters: Vancouver, WA.
Industry Segment/Category: Technology: ERP (Enterprise Resource Planning) platform ROAR. Banking, Merchant Services, Consulting & Management
Current Markets/States Served: Worldwide
Current Number of employees: Far too few
Market Strategy/Goal: Global Domination
2014 Revenues: Confidential
2015 Revenues: Confidential
Product/Revenue Mix: Technology/Financial Services
Financing strategy: Self financed and from operations to-date. In process of a raise.