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Flowhub: A Streamlined Experience for Large (and Small) Retail Operations

After discovering how CBD could help him get off of prescription SSRIs, Kyle Sherman, founder and CEO of cannabis POS software company Flowhub, moved with his family from California to Colorado in 2013. While California was still the medical cannabis hub, Colorado was about to legalize adult-use storefronts, an opportunity Sherman didn’t want to miss.

Kyle Sherman
Kyle Sherman, founder and CEO, FlowHub (Photo courtesy of FlowHub)

After working with Weedmaps, Dixie Elixirs, and other Colorado cannabis ventures, Sherman “ended up seeing firsthand that the number one spot for me to play as an entrepreneur, where I could make the most impact, was technology,” he tells Cannabis Business Executive.

By 2015, Sherman and his early Flowhub team were busy building out the platform and raising capital, all while lobbying the state government to open the application programming interface for the seed-to-sale tracking software that would eventually become Metrc. By the following year, the company succeeded in its lobbying efforts and became the first product integrator with Metrc. Flowhub has been scaling since thanks to its “deep-pocketed institutional investors,” according to Sherman.

Flowhub’s investors include the Kraft Heinz Company (through its Evolv venture fund), Headline (another global venture capital firm in the FinTech space), and the founders of Venmo, among others.

“These are people that add a lot of value to what we’re trying to do as a company focused on point of sale,” Sherman says.

This financial support carried Flowhub to where it is today: a POS software company that has a presence in 16 state markets and a newly designed platform just hitting the market.

Maui: Flowhub’s Newest Platform

On September 20, Flowhub announced the official launch of its newly updated software: Flowhub Maui. Maui is set to retire what Sherman refers to as “Flowhub Classic,” the original version of the software.

Sherman explains that one of the biggest upgrades to the system is increased functionality for multi-state operators (MSOs), including single sign-on access to view operations across state lines. “If I’m a retailer and I have 30 locations across 10 states, I can manage them in one view,” he says. In other words, executives overseeing retail locations in different states can compare store data with locations outside of their state of operation.

This feature will be especially useful when interstate commerce kicks in. “Our platform is built for interstate commerce. So when interstate commerce opens up, we can flip a switch and you can transfer products among all stores across the entire supply chain,” Sherman continues.

The software’s performance speed is another point of pride for Sherman and his team, a change that benefits all users, not just MSOs. Through simplifying the software’s coding and working with testing partners in three states prior to Maui’s official launch, “it’s really clear to me that … this is just a much better user experience,” Sherman says.

Maui also remains compatible with Flowhub’s other apps and devices, which can further increase usability and value for partner retailers. For example. Flowhub’s Nug and Nug Pro are handheld devices offering retailers the ability to streamline check-in and inventory management. With the Nug device, retailers can leverage the company’s Greet app (check-in and customer relationship management (CRM)), Stash App (workflow and inventory management), and the View App (retail analytics).

Additionally, all existing integrations and partnerships with Flowhub Classic still exist with the Maui platform. “All of the providers are integrated with, with Flowhub, still,” Sherman says.

Custom-Priced, Custom-Built

Flowhub operates using a custom pricing model, meaning all partner contracts are individually negotiated based on the retailer’s individual needs. This allows Flowhub to meet almost any dispensary budget. “We’re in a position now where we do custom quotes, literally for every environment. What state are they in? How big are they? How much revenue do they expect to do?” Sherman explains. “I wouldn’t want [them] coming here with some expectation [they are] gonna pay X because we don’t really know what we’re trying to solve for [them]. Are [they] a one-man shop? Are [they] an MSO? Because if your needs are entirely different, your module needs are different.”

The custom pricing model has its drawbacks, however. It can make it harder to compare Flowhub’s offerings to its competitors when shopping for service providers, as well as make financial projections more complex for the company. That said, the latter’s impacts are dampened by FlowHub’s strong financial backing (evidenced by the $50 million it raised since its inception).

Once signed up, Flowhub’s customers can see pretty rapid returns on their investment, Sherman claims, especially those dispensaries leveraging the company’s entire suite of products. For example, the company claims operators using Flowhub’s payment platform can expect an average cart size increase of 33%. “We’ve seen companies increase their average basket size by more than 50% on many occasions,” Sherman says.

Software integration can also help budtenders focus less on compliance and more on the customer experience, which in turn can yield a greater number of upsell opportunities.

Giving Back

Flowhub only publicizes one of its pricing tiers: the special rate it offers to social equity licensees. This group (and others who qualify under Flowhub’s terms), is eligible for a discounted rate of only $4.20 annually. The rate lasts up to three years, or “until their cumulative sales exceed a hundred thousand dollars,” Sherman details. “When they hit a hundred thousand dollars [in revenue], then they start paying us a different discounted rate.

The program also includes two free Nug Pro software subscriptions (including access to Greet and Stash apps), free access to the View app, a free payments terminal (if qualified), and a discounted $100 implementation fee.

With this program, Flowhub aims to help those people most impacted by The War on Drugs get off the ground. Since launching the program in 2021, the company has “granted over $4 million in software and services to minority business owners and underrepresented business owners in cannabis,” Sherman says.

Just as he found help in the cannabis industry in 2013, Sherman is committed to returning the favor to those seeking to enter the space today.

“I think more companies need to step up and do the right thing and build social equity programs into their businesses,” Sherman notes. “Because there’s a lot of entrepreneurs out there that need our help. And it doesn’t matter if you’re in retail or in supply chain or wherever, … there are other entrepreneurs that have a harder time raising capital or don’t have access to funds that need help, and we should be helping each other.”

Brian MacIver

Brian MacIver

Brian MacIver is a freelance writer and editor based in Vancouver, British Columbia. He also is Partner and Director of Strategic Communications for Guerrera: The Agency, a boutique communications and marketing agency serving small businesses, nonprofits and progressive groups. He can be reached at [email protected]

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