Denny’s Wi-Fi Pioneer Filling Holes in Cannabis Supply Chain with CanIdeal
September 23rd, 2019
App, Exclusive, Top Story
The legal cannabis market is unique in many ways. Never before has an industry come on so fast with the potential to top $130 billion in the next decade. Something else that is completely different is that cannabis isn’t some shiny new technology that people need to learn about; it’s already a gigantic market worldwide and one that is undergoing a sea change to end prohibition.
However, despite cannabis now being legal in 33 U.S. states for medical use and 11 states (including Illinois) for recreational use, black market sales are still booming. Cannabis insight firm Arcview Market Research estimates that cannabis sales in the U.S. tallied about $53 billion in 2016, of which a stunning 87% were illicit sales.
Incredible consumer demand is already there. The challenge is to shift those buyers to legal purchases, which isn’t an easy task. Part of the problem for legal operators is costs. Black market outfits operate on very different margins considering they’re not worried about regulatory obligations, taxes, product testing, R&D, etc.
For upstart tech company CanIdeal, the fragmentation is a friend, creating a vast opportunity to create the world’s first open business-to-business marketplace for the entire cannabis industry. By squaring the circle of disconnections, CanIdeal can improve supply chain commerce, resulting in lower operating costs and improved margins, which can be passed on to customers to encourage them to walk within the parameters of the law.
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The Window is Open
There are no real precedents for lawmakers to go by amid the burgeoning cannabis markets. In many ways, it’s like each jurisdiction is assembling the car as it rolls down the highway. Regionally inconsistent legal and regulatory frameworks against the backdrop of cannabis remaining federally verboten in the U.S. have resulted in isolated markets and increased expenses for doing business throughout the value chain. Not surprisingly, these conditions make it very difficult for companies to scale.
Further, cannabis remains a Schedule I drug at the federal level, a fact that has effectively repressed interstate commerce and kept any e-commerce giants from emerging.
Again, a problem is an opportunity for CanIdeal.
Against the backdrop of regulators ironing out some cohesive legislation, the leadership team at CanIdeal sees a rare window opening to lock-in long-range market share as a first mover helping businesses bridge gaps throughout the entire cultivation-to-retail chain.
Akin to when the gold rush created demand not only for shovels and picks, but also lawyers and banking services, the so-called “green rush” has created a swell for greenhouses, clean energy equipment, testing kits, software and much more that undergird the entire industry before a product makes it into a consumer’s hand.
Currently in early-launch phase, CanIdeal is looking to give companies faced with limited choices today a B2B solution that offers a menagerie of potential partners throughout their state and nationally where allowed by law.
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Mindful Model of Serial Entrepreneur
The CanIdeal technology will be of value to all types of sellers, including hemp and cannabis cultivators, processors and dispensaries. Remember, hemp (cannabis sativa containing less than 0.3% tetrahydrocannabinol (THC)) became federally legal at the start of 2019 with the passage of the 2018 Farm Bill, paving the way for interstate commerce of hemp and related products. Because CBD (cannabidiol), a component of cannabis with no intoxicating effects, can be derived from hemp as well, there is a new market segment on the rise. CBD has been shown to have a therapeutic effect for treating everything from common maladies like dry skin to notoriously difficult diseases and conditions, like PTSD and epilepsy.
CanIdeal recognizes the byzantine nature of THC/CBD products and how regulations can vary from town-to-town, much less state-to-state. To answer this, the CanIdeal technology platform is able to geo-target its product catalog. This is an instrumental feature to the roll-out of the platform to make “non-plant-touching” products immediately available where permitted, subsequently adding products and expanding into every U.S. state over the next three years.
Through its technology, CanIDeal will generate revenue from two sources: a 2.5% per transaction fee on each sale, as well as additional revenues from seller product placements and promotions throughout the network.
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The brand and technology are the brainchild of Joseph Farruggia, who currently sits as CanIdeal’s President and CEO. Farruggia is an investment industry veteran with a passion for emerging markets. A pioneer in corporate branded Wi-Fi for the restaurant sector, he co-founded Café.com Wi-Fi, Denny’s Wireless Internet. Café.com went on to deploy wireless internet for companies such as IHOP, Dunkin Donuts (NASDAQ: DNKN), hotels and coffeehouses before being acquired by ICOA, Inc. in 2005.
Farruggia is no stranger to investor relations either, previously being responsible for the launch of Money World Magazine and Money World Investment Conferences. He further built his expansive network serving as the IR Specialist at Atlantic Capital Corp. and Wall Street Marketing Group where he provided direction and facilitated capital raises for NASDAQ and NYSE American (formerly AMEX) companies.
Just as he got in front of the hospitality Wi-Fi industry, Farruggia is coming after the cannabis space. To date, the company has raised about $3 million to bring the Internet-based technology platform to market as it looks to capitalize by filling an area of need in cannabis supply chain commerce, something that will bode well for consumers and the entire industry.
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