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One of the highest profile marijuana companies doesn’t grow, process or sell weed, but is rather a tech company that connects customers to businesses in the industry.

Founded in 2008, California-based company Weedmaps lists and directs customers to adult-use and medical marijuana dispensary locations and menus in addition to cannabis-friendly doctors’ offices, weed brands, and delivery services available in the U.S. and Canada.

Christopher Beals became CEO of the company about three years ago, and has led Weedmaps during a period when an increasing number of states have legalized adult-use marijuana. Beals sat down with NY Cannabis Insider to talk about the company and his thoughts on the coming adult-use market in New York.

This interview has been edited for length and clarity

As CEO of a marijuana tech company, how in-the-weeds do you get when it comes to keeping up with what’s going on with legalization and regulations in each state?

I kind of built the policy team and so until recently, and I spent a lot of time on the road. So I’ve been pretty involved with legalization in a lot of states, and I generally tend to read the regulations when they come out in different places. I’ve also worked a lot on our product roadmap, and – much more than people realize – a pretty high amount of the state regulations have to make their way into product requirements and product specifications for the software to work and all the different states.

In the next year or two, what do you see Weedmaps doing in NY aside from adding new retailers to the map?

There’s two halves to theWeedmaps business. One is the marketplace, which – in legal markets – is sort of the largest online marketplace for cannabis where retailers can show real time inventory off their point-of-sale (POS) system of what they have for sale for people shopping online. But we also have WM Business, which is kind of this business-in-a-box, software as a service (SaaS) solution set. That includes customer relationship management software; delivery, dispatch and logistics software – for which there’s many compliance requirements for fleet management, order dispatch and driver safety. We also have a sort of ‘Shopify for cannabis’ called WM store. We have an in-store kiosk and menuing solution called ‘Enlightened’ that we brought aboard.

Chris Beals is the CEO of Weedmaps.

Delivery is going to be where it’s at for New York and having really tight logistics software that handles all the compliance requirements, and integrates with your point of sale system is going to be critical. So there’s going to be a lot of growth on that. And then the other pieces, there’s parts of our marketplace platform that have less relevance in a medical market than adult-use. Deals, customer promotions – and frankly just the breadth of the menu – and really good catalog management all change when you go adult use. There’s going to be a pretty big uptick, I would say, in our deals platform and the brands platform, as you see more brands emerge that aren’t directly tied to the retailer.

How much work is it for a small business owner who’s coming online to get on the Weedmaps platform?

In most states, the heart, the lifeblood of the cannabis industry is mom and pop small-to-medium sized businesses (SMBs) on the retail side, So it’s got to be a pretty tight cycle. We invested really heavily in Point-of-Sale integration so that in theory, the person can say, ‘I want to be on Weedmaps,’ and we can get them set up with their POS integration. In theory, somebody who’s only lightly tech savvy who works with our customer success team could be up and live in less than a day with their own website that has a real time menu, a CRM, where they can start marketing to people as they get emails and phone numbers, in-store kiosking and a transactable menu on their own website in less than a day. That was really why we called it this business-in-a-box concept.

You’ve been collecting data on New York consumers for years on the medical side and the native operations. Are there any key takeaways from what you’ve learned in the past about New York consumer behavior that is informing kind of where you’re planning to go in the future? Are there any things that maybe you know that other people don’t that would just be interesting for readers to take away?

New York had under the medical system had a very constrained market; limited retail, limited brands. I think the biggest thing we see right now is this period of extreme confusion for consumers, especially consumers coming from a large gray market like California’s. Most of these new brands that are emerging are not familiar to them, there’s going to be types of products that they’ve never seen before; things like sublingual strips, beverages. Those are unusual. There’s not that many beverages in the unlicensed market, because they’re bulky and hard to carry. Customers have a very hard time with overwhelming choice, and early cannabis markets are like a classic case study in too much choice. I think a lot of what we do is work with brands and retailers on making sure that their product information is cleansed, that we’re trying to get as many consumer reviews from verified purchasers as possible on the products, so that we can use that to seed algorithms to better guide people towards products that won’t give them adverse effects, or will work well for them.

I think generally, one of the big growth areas you see post adult-use legalization is the slightly older demographic with heavy purchasing of edibles and topicals. And part of that’s just been fear, stigma, concern that if you’ve got a medical card that was somehow trackable, or sort of Big Brother is watching. Ironically, moving to adult use, you see a lot of the exact core consumers who the medical market was intended to address: people with sleep or pain conditions and that sort of thing, but who were a bit older and fearful of getting a medical card.

When these new markets open up and consumers are possibly confused by all of this choice, is that an opportunity for Weedmaps to offer an educational kind of product, or is that incumbent on the retailers and dispensaries who are advertising on your platform?

We provide the technology pathways, the data curation and the machine learning to make that as easy as possible. That’s where we do the Ingest from the point of sale system. And then we do what we call, ‘hydration.’ We hydrate with as much brand information as we can pull from the brands, and then start to – from consumer reviews – describe reported effects and things like that. We serve as the glue layer for helping with that discovery.

The comment period for New York’s marketing and advertising regulations are set to close soon. What are some of the concerns that you and Weedmaps have regarding these proposed regulations?

I think the mistake a lot of new jurisdictions make is they think that because the legal industry is new and kind of forming from whole cloth, that there is no competition and they can shape what it is however they want. But the reality is, that New York has probably one of the most robust unlicensed cannabis markets I’ve ever seen in my seven years working in cannabis – the closest thing would be LA during the transition from medical to adult-use.

I think the fact that the unlicensed market is so widespread in New York means there are things you need to do to combat it. One is giving licenses to those operators, bringing them into the licensed market, and then requiring them to follow the rules.

But the other thing is realizing if you make licensed operators jump through hoops or not be able to advertise cannabis in a way that it is normally advertised in other states – or not be able to label it, package it, recommend it and market it to people in the way it’s done in other states – you’ve got two problems. One is, other states are going to be marketing it in that way, and they’re going to court those consumers. But separately, those restrictions don’t apply on unlicensed operators. So, when you take all these steps to make the products less appealing, all you’re doing is bolstering the size of your unlicensed market. And that is the core problem with the regulations is they have a lot of the hallmarks of what we’ve seen in other states.

I think part of the reason that the Oregon market is so robust vis-a-vis the Washington market is that there were a lot of structural regulations that Washington put in place that Oregon didn’t duplicate. Oregon also didn’t do a bunch of these overly restrictive marketing regulations that Washington did, where the products were limited in sort of the way the packaging could be presented, and rules prohibited just common product names and marketing tactics of cannabis businesses. The stores had to have opaque windows with very small signage. It took what should have been a welcoming retail experience, and frankly, made it look like a fly-by-night operation.

New York’s taken a very progressive stance toward licensing and their social equity concerns. What are Weedmaps plans to address social equity concerns in New York?

We actually have a program called “Deal,” where we basically give free software and services to social equity businesses. It’s not just giving the software and not just giving the tools; it’s also making sure that new operators of licensed cannabis businesses understand some of the pitfalls and traps that we’ve seen in other states. That’s a program that we invest pretty heavily behind. We have dedicated employees who just work on the Deal program and are trying to make sure that we’re doing our part to support social equity. We’re also pretty active and vocal in the legislation when it was being written in New York to make sure that there was a social equity program I’m very proud of. It’s the strongest social equity program, I think, anywhere in the United States, which I think is really something to be proud of. But there’s no finish line on having a successful social equity program, there’s always pushing it forward, there’s going to be monitoring to make sure that the social equity licenses don’t become shadow owned by large non-social equity operators. I think of it also in terms of the forward advocacy and what needs to happen. I think if we’re going to give this early access period to social equity applicants, it’s doubly important that the regulations get fixed now and not when non social equity operators start to enter and then fix the regulations.

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