While out core team is working to bring the Parsl product to market, our president in North America, Mark Crandell, has been quite busy over recent weeks making connections and meeting with important figures to let Parsl hit the ground running when we officially launch.
Meeting with the Nevada State Treasurer for the “Closed-Loop Marijuana Banking Pilot Program”
A bill was recently passed into law in Nevada which creates a pilot program for a closed-loop payment system in the State Treasurer’s Office. The Pilot Program would provide legal cannabis businesses, their vendors and employees, as well as government workers a safe, reliable and efficient method of processing financial transactions.
The State Treasurer’s Office will contract with one or more qualified vendor(s) to create and administer a closed-loop system for the program. As this type of system is right in line with the service Parsl offers, Mark attended the Vendor Stakeholder Meeting on September 30 in Nevada.
Mark had met with the Nevada State Treasurer, Zach Conine, Sr. Policy Director, Erik Jimenez and Sr. Policy Director, Kristen Van Ry (author of the upcoming RFP) to discuss potential stakeholders of Nevada’s “Closed-Loop Mariijuana Banking Pilot Program”.
We came to learn that in the coming weeks the State Treasury of Nevada will be sending out an RFP for the closed loop cashless payment tracking system which Parsl is eagerly awaiting.
Essentially, the State of Nevada realizes the disadvantages and dangers of a cash based industry and essentially wants to remove the amount of cash in the cannabis system. To mention just a few of the reasons behind the creation of the Pilot Program:
- To reduce the risks to the safety and welfare placed on the public due to the holding, distribution and transportation of large amounts of cash
- To provide cannabis and medicinal cannabis establishments with a safe, secure and convenient method of paying state and local taxes
- To provide the government a safe method of collecting taxes from cannabis businesses
- To provide transparent financial transactions related to cannabis businesses
The way the system will operate will be through the use of fixed-value tokens for all transactions. Tokens will be created with an equivalent amount of USD and will be used among consumers, cannabis businesses, employees and suppliers.
This proposed system has a lot of equivalents with the solution Parsl utilizes with the use of our smartcoin, PODs.
The cycle of the token will begin with actual cash used to initially purchase the tokens. These tokens will then be used to purchase goods and services, the supplier will use the tokens to pay the final vendor, the final vendor will request the redemption of the tokens and then finally the system will redeem the tokens into USD.
In addition to this, Nevada imagines a second phase of this program whereby digital tokens could be used by dispensaries to pay merchants (i.e. utilities, repairs. etc.)
The system is expected to be successfully running by July 1, 2020.
The 2019 US Cannabis Symposium
Mark also attended the US Cannabis Symposium in Toronto, Canada earlier in October. The one-day event featured company presentations and one-on-one meetings with senior management teams which represented all aspects of the U.S. cannabis industry. This included technology providers, brand owners, hemp producers, oil extractors and ancillary products businesses.
Overall, Mark attended 19 meetings throughout the day with key figures in the cannabis industry. He gained valuable insight from those in the best positions in the industry, below are a few of the common themes that we took away from the meetings:
The financial aspect of the cannabis industry
- It was quite clear that vertically integrated cannabis companies are growing the industry.
- While it is good to get to market as fast as possible, if a product isn’t up to scratch it is likely that the product could fail, which is why it is integral to ensure the quality of your product/service prior to launching.
- We also discovered that financial failure is currently the trend with mostly every CEO mentioning their declining stock price.
Strategy in the cannabis industry
Many big vertical businesses are buying smaller operations that are;
- In a strategic state
- Holding a coveted license
- Dominant in their niche
- Many vertical businesses and labs are endorsing new formats for cannabis consumption.
- We learnt about water soluble formulations which would allow for edibles to provide a predictable dosing and the effects can take effect within minutes and wear off in only a few hours.
There was a lot of talk about the states that matter most in the battle to legalize cannabis across America and it the Financial community is clearly looking to Illinois in 2020, Florida 2021 and Arizona by 2022.
The importance of Branding and the Customer Experience (CX) was a common talking point among vertical CEOs. Most spoke about creating step-up brands that guarantee quality to the end user.
- It was commonly discussed that small to medium cannabis businesses must create a plan to get through the current down-cycle if they want to succeed in the industry.
- Cultivation capacity has mostly come online
- The investment in hardware and software technology is the coming force in the cannabis industry and is mostly in B2B
Mark has had an eventful few weeks and we are so pleased with the outcome of the many meetings he attended. We are incredibly excited to begin sharing what has feasibly come from the meetings in the near future!