By Rob Meagher
What has been interesting to follow about the cannabis industry is the qualifications and experience that industry leaders bring to the table while chronicling the evolution of their companies and sharing it with CBE’s readers. Let’s face it, nothing ever happens until individuals have an idea and then put the wheels into motion and a plan to make that vision happen.
Time and time again, the Cannabis Industry has seen ill-equipped pretenders enter the fray with nothing but a vision of getting rich off of the “Green Rush,” forget about a well-thought out strategy and the necessary skill sets to make it happen. And as was the case with the evolution of the internet, we have already seen too many companies fall by the wayside early in the industry’s developmental cycle and millions of dollars of investor’s money wasted.
So far to date, Green Bits and its visionary leader Ben Curren have executed a carefully thought-out plan and become one of the, if not the, dominant player in the point of sale (POS) supplier space by recognizing an opportunity when early stage entrants left the door open that Curren and his team have taken advantage of.
To understand how this has happened, it’s important to note the skill sets and experience that Curren, the 34-year-old, married, father of two, brought to the table when he started thinking about entering the cannabis POS fray, which was dominated in the early days by MJ Freeway and BioTrack THC, two companies that decided early on that they would play on both sides of the Seed-to-Sale (STS) and POS aisles.
A self-described nerd and adventure sports lover, Curren, as an adolescent, had a penchant for building things and was right in the middle of the internet boom and bust even before he entered the workforce after graduating from California Polytechnic State University with a degree in Computer Science in 2002. During his 6-year college journey, he had worked at or for heavy-weights like Sun MicroSystems, Xerox, Charles Schwab as well as a couple of start-ups and, at the young age of 20, had actually run large engineering teams. Shortly after graduating, he landed a job at Intuit (better known as QuickBooks).
It was at Intuit that Curren learned the ins in outs of the issues small businesses faced with payroll, HR, record keeping and the amount of time these owners spent manually creating the files that they needed to run their businesses effectively to meet federal tax requirements. He worked on streamlining the backend work required so that these small business owners could focus on what got them charged up every day at their respective businesses in the first place, the joy of being a fashion designer, a chef, a lawyer, etc.
As his career developed, he moved from writing code to building new products to managing teams, to sales and marketing and finance roles. He also part of several start-up teams, which gave him exposure to many of the pioneer Silicon Valley players like Marc Andreessen and Ben Horowitz at Sequoia Capital. As a founder and CTO at Outright, he streamlined the backend system for the e-commerce solution that was eventually sold to GoDaddy in 2012.
One of Curren’s life habits includes keeping an idea list and cannabis made its way onto his list when Colorado and Washington were marching towards adult-use (AU) legalization. While attending his first cannabis conference in 2013 in Washington, Curren spoke to many small business owners and became aware of the compliance challenges and need for business automation that they and the fledgling industry faced. After the conference, he began reaching out to potential clients with a POS solution outline and value proposition that he sent to 25 licensed dispensaries. He landed his first client before writing one line of code and by July 7, 2014 and Green Bits was open for business as Washington rolled out its adult-use program.
Many of the 750 or so dispensaries at that time had very little automation set-up to interact with the state’s BioTrack THC STS system so Curren and his small team were on the ground helping new and potential clients streamline their reporting processes. While at Outright, he had learned a valuable lesson: not to expand too quickly. So in Washington, Green Bits focused solely on retail and the nuts and bolts reporting and compliance requirements licensed owners faced to build a highly functional product in lieu of lots of sexy bells and whistles. Curren told CBE, “We said no a lot early on to be focused and great.” The lessons learned in Washington also expanded his idea list of questions with queries like how do you expand to multiple states with varying STS platforms and make a product work the same with different compliance programs and tax requirements topping the list.
After growing from 5 to 15 clients in Washington, Curren moved to Colorado, the first AU program in the country and began interacting with the state’s SOS platform, Metrc, and with the Department of Revenue to understand its program’s nuances. The differences in the two state programs were significant. Washington didn’t allow vertical integration whereas Colorado, which had started a medical program without vertical integration, forced licensees to become integrated prior to launching its AU program in 2014. Even though the state didn’t reengineer the new AU program it did not require vertical integration when Green Bits entered the fray.
Green Bits became the first POS vendor to integrate with Metrc’s API and once again stuck to its knitting, focusing only on POS while BioTrack THC, MJ Freeway and Trellis provided a solution for producers and processors. In September of 2015, TechCrunch, which had never before accepted a company from the cannabis industry, recognized Green Bits as the first runner-up at San Francisco’s prestigious TechCrunchDisrupt Battlefield competition.
The success that Green Bits achieved in building market share in Washington and integrating with Metrc in Colorado allowed the company to expand into other states in 2015/16 and they added clients in Oregon, Alaska (Metrc STS states) and Nevada (which would move to Metrc in 2017). When Green Bit Co-Founders Curren and his former Outright colleagues Trae Robrock and Andrew Katz decided to make a bet on the Cannabis Industry, they were self-funded in the early years. At the time, they weren’t certain that the cannabis opportunity would be large enough to raise capital (they had a threshold number of under $30 million in annual revenues in mind to stay private) for an eventual public play.
The election results of 2016, that included several cannabis ballot initiatives passing, shifted the co-founders’ thinking. They raised $2.2 million from Casa Verde Capital in August 2017 to increase the staff and pursued additional regulated cannabis states/markets. Now, with a plan to go public at a future date, earlier this year, the Green Bits team raised an additional $17 million from Tiger Global through a Series A offering.
Green Bits, with a repeatable model, has its eye on full national penetration in the US and expanding internationally. They currently process in excess of $2.5 billion in POS sales in the states that they operate in and will begin tackling other issues/areas of operation, specifically looking to solve the banking payment issue that US operators face and developing automated solutions that will help their retail clients build their businesses like e-commerce or loyalty programs.
In addition to the typical smaller mom and pop customers, Green Bits also serves large enterprise players like Green Thumb Industries and Terra Tech and are looking to continue to innovate and stay ahead of the curve of competitors like Flowhub and Treez.
Not bad for a company led by a guy that just wants to build things!
CBE Company Background Information
Company Name: Green Bits
Ownership structure/operating entities:Green Bits Inc.
Management Team: Ben Curren, CEO, Charlie Wilson (CRO), Barry Duplantis (VP Customer Success), Craig Zarmer (VP of Product), Julio Santos (Head of Engineering), Amanda Shepherd (Director of People), Bridgett Thurston (VP of Finance)
Headquarters: San Jose, CA
Website Address: http://greenbits.com
Ancillary Business Segment/Category: Software & Technology
Marketing Strategy/Goal: Design and build the most excessive system that automates businesses while integrating the compliance requirements of the state and international regulatory bodies for the Cannabis Industry.
Number of Locations: 2
Current Markets/States Served: 12
Current number of employees: 85
Revenues 2015-2018: NA
Expansion Plans: Add all US states with regulated cannabis programs and expand internationally.
Financing Strategy: At launch, self-financed, have raised nearly $20 million through Series A offering this past summer and a private placement in late 2017. Plan to go public at a later date.