This editorial appears on stockhouse.com. The originally published editorial can be read here
Cannabis is no longer “new”. For both consumers and investors, the phasing out of antiquated cannabis Prohibition is now several years old. But cannabis is still an emerging industry. This means that cannabis companies not only need to meet the market demands of today,
need to prepare for the evolving parameters of this industry for tomorrow.
Nowhere is this reality truer than with respect to cannabis technology. One cannabis company that strongly believes it has the right technology – and the right strategy – for the cannabis market of today and tomorrow is CannaOne Technologies Inc. (CSE: CNNA, FSA: 3CT, Forum). The Company provides a unique B2C tech platform for the cannabis industry.
When Stockhouse Editorial connected with CannaOne’s management team for a conference call, CEO Solomon Riby-Williams wanted to stress two factors: flexibility and forward-thinking. We’ll return to the considerable flexibility of this technology platform later.
As cannabis investors position themselves for the future of this evolving industry, they may be more interested in learning about the Company’s strategy going forward. Indeed, as investors dive into CannaOne’s corporate presentation, it leads with the mantra A Roadmap for the Future.
What does this future look like? In speaking with Stockhouse Editorial, CEO Riby-Williams immediately began discussing “LTV”: the lifetime value of a cannabis consumer.
“The Lifetime Value of a cannabis consumer is one of the highest of any consumer. Our platform revolves around capturing the pertinent information and activity of a cannabis consumer to best serve their needs and retain them as loyal customers.”
On the one hand, the cannabis market has characteristics of a luxury good market: high margins and “recreational” consumption/demand. This means that each cannabis consumer represents a potentially large lifetime revenue stream – like alcohol and tobacco consumers.
On the other hand, unlike alcohol and tobacco, cannabis is not merely benign (non-toxic and non-addictive), it offers numerous, potent, health-promoting properties. This means a second, health-based market for cannabis consumption. It also means that “recreational” cannabis consumers will likely live much longer (and consume much longer) than regular alcohol or tobacco consumers.
CannaOne is already focused on this factor. Then there are user-acquisition costs. Here, CannaOne firmly believes that user-acquisition costs in the cannabis industry are going to soar going forward. Solomon Riby-Williams explained further.
As the cannabis industry has grown, numerous corporate entries have flooded into the sector. That’s one way in which competition for users/consumers is already increasing. But as cannabis investors can see for themselves, the Big Players are now also starting to enter this industry.
Several joint ventures or strategic investments by large multi-nationals have already been announced. And many rumors are swirling with respect to additional investing as alcohol, tobacco, and beverage giants jockey for position in this rapidly growing marketplace.
These are companies that can target major financial resources (and expertise) at claiming market share. CannaOne sees this coming. Its answer is to provide a better, more-comprehensive user platform to acquire these consumers, combined with data-driven retention tools to keep these valuable cannabis consumers.
CannaOne’s basic software template is known as Bloomkit™. This is a one-stop platform that provides consumers with full-service ecommerce, offering either delivery or in-store pickup options.
This leads to another one of CannaOne’s strengths: innovation. As noted, the cannabis market is a unique hybrid market. Likewise, cannabis consumers will be comprised of different demographic groups. CannaOne’s “design-focused cannabis commerce solution” provides several customized ecommerce platforms, so that the Company’s cannabis business clients can choose the template that is best suited to their own target market, and then combine this with Bloom Product Suite™.
While Bloomkit™ has been engineered to fully meet the needs of emerging consumption on the recreational side of the industry, it is also equally suitable to address ecommerce retailing for the medicinal market. It can fulfill software needs for single-brand or single-site cannabis operations or be easily scaled for multiple product offerings and/or locations.
CEO Riby-Williams framed this technology for investors.
“The uniqueness of differentiator of our digital environment is that it is 100% cannabis centric. The consumer facing side and backend dashboard of our platform is intuitive and easy to navigate. The entire user experience for both the consumer and manager were designed with the cannabis user in mind at all times. All the tools and modules within our platform are developed and geared towards cannabis products and consumers.”
More specifically, CannaOne already has three versions of its Bloomkit™ template ready for market. On February 15, 2019; the Company announced the launching of www.itsprimo.com, owned by Primo Networks.
Primo Networks is primarily targeting millennials demographic, with “an urban and West Coast lifestyle appeal.” As with all Bloomkit™ templates, it features a combination of functionality and aesthetics.
This is a turnkey solution with a fully integrated dashboard that delivers easy use and navigation for consumers. The software provides full logistics in monitoring/tracking orders while providing businesses with detailed analytics to ensure “optimal management of medical and recreational sales channels.” It also offers the aesthetic flexibility to create “unique themed” online storefronts.
Investors or consumers viewing itsprimo.com may see similarities with existing tech platforms like Leafly or Weedmaps. The User Interface Objective is “streetwear friendly” while the User Experience Objective is designed to generate strong customer engagement via continuous new product releases.
CannaOne was originally engaged by Primo in 2018 to begin custom web-development and design. The existing contract is a 24-month term, with CannaOne overseeing software/website performance, along with ongoing development and integration of additional Bloomkit™ features. This Millennials Platform will have greater appeal and applicability on the recreational side of the market.
Other templates are also market-ready. These target different B2C demographics, aimed more toward the health/medicinal side of the cannabis industry. For these reasons, these templates are designed to cater to somewhat older demographics (ages 30 – 50).
One example of this template, is the development of Craft Cannabis theme that’s British Columbia-centric, appealing to an outdoors lifestyle. Existing templates that offer a similar orientation include CannMart and Spectrum. The target demographic is cannabis enthusiasts who consume cannabis with primarily health-based or medicinally-based goals.
A different template for this older, medicinally focused market is somewhat parallel to Juul. In addition to a health/wellness orientation, this is a template designed for cannabis businesses that also wish to incorporate a significant education component for their target market.
Bloomkit offers ample flexibility to customize additional templates for different niches of the cannabis market as the cannabis industry evolves and as CannaOne itself continues to grow. With each template, CannaOne incorporates its data-driven retention tools – the Bloom Product Suite™.
BloomSuite™’s toolbox includes BloomWallet, BloomMachine, and BloomStar. BloomMachine is perhaps the most innovative of these tools. Incorporating Artificial Intelligence, BloomMachine is the heart of consumer acquisition for CannaOne’s corporate clients.
“Artificial Intelligence features to give e-commerce businesses a chance to boost conversions by up to 80%.”
BloomWallet is the payments portal for the Bloomkit™ platform. BloomWallet not only incorporates the latest ecommerce technology, it has a loyalty rewards program already engineered into the software. This focuses on another of CannaOne’s priorities for its clients: consumer retention. Complimenting this is BloomStar.
BloomStar covers a facet of ecommerce currently overlooked by a number of cannabis companies (and existing templates). It is a “predictive review engine”. It shows customers relevant reviews on “unique cannabis product attributes”, for both the recreational and medicinal sides of the industry.
“90 percent of respondents claim that positive online reviews influenced their purchasing decision while 86 percent of them had been dissuaded by negative reviews in the past.”
A powerful tool, for CannaOne and its clients.
After a strongly positive market response to this business model, shareholders (and the Company itself were jolted by a sudden drop in CannaOne’s share price. In speaking with Stockhouse Editorial, the CEO wanted to address this unexpected movement.
“As CEO the vast majority of my focus has been on driving and directing the Company to succeed and deliver on its core business directives. As far as any recent volatility with our share price is concerned, we can only presume that certain of our initial early stage investors, or those purchasers that participated in the $0.40 IPO round, determined it in their best interest to take profits on their investments. Given the reality that our Company is still very new to the public markets and it is only early on in its engagement with external investor and public relations providers to help increase its shareholder base and gain real market traction, this entirely surprising yet apparent liquidation had an unfortunately depressive effect on the recent share price. Stating that, however, it has done nothing to detract from the enormous strides our business has taken towards the widespread deployment of our technology and we stand more confident than ever about the long-term success of our Company and the long-term value we represent to our existing and future shareholders”.
While this has been an unpleasant development for further of the existing shareholders, it is very likely that value investors understanding of this sector may now again see this as an attractive entry window to get behind this unique cannabis tech platform.
One Company, one philosophy, one platform. Multiple templates, multiple innovations, and forward thinking. The Market already likes CannaOne Technologies, and many cannabis investors may like this Company as an addition to their own portfolios.
FULL DISCLOSURE: This is a paid article of Stockhouse Publishing.