Flowhub, a point-of-sale software platform for marijuana growers and dispensaries, announced today that it has raised $3.3 million in a Series A equity financing. The funding round was led by Green Lion Partners and Phyto Partners, both of which are venture capital funds that focus on the burgeoning cannabis industry.
Flowhub, based in Denver, CO, was founded in 2015 by Kyle Sherman in response to his own frustration as a former grower employee faced with a lack of systems to manage inventory, accelerate workflows, and simplify compliance. In addition to offering typical retail POS functionalities such as product cataloging, data synchronization, discounts management, and multi-device reporting, one of Flowhub’s most innovative features is compliance automation — a significant issue for growers and sellers.
Flowhub uses a direct API that automatically reports mandatory compliance data to state regulators. The company has also designed a custom “Check-in NUG“ device that allows cannabis sellers quickly to check customer IDs, verify age, and scan medical card and other relevant documents. According to the company, Flowhub has processed nearly $200 million in purchases across hundreds of dispensary locations in Colorado, Oregon, and Alaska, which are three of the eight states in America that have legalized recreational use of marijuana.
“Our business has changed for the better since switching to Flowhub several months ago,” said Matthew Aiken, a dispensary chain owner who is one of Flowhub’s clients. “We’ve seen a major productivity increase in our budtenders, managers, and compliance team, and we’re saving more time and money than I expected.”
“The technology solution Flowhub provides is critically important to operators; they can’t do business without it,” said Larry Schnurmacher, managing partner of Phyto Partners. “We believe the Flowhub team will dominate the technology backbone of the cannabis industry and are proud to have Flowhub in our portfolio allowing our investors the opportunity to invest in this emerging industry.”
As of November 9, 2016, the use of both recreational and medicinal marijuana has been legalized in Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington. According to Bloomberg, the cannabis industry in America is current growing at an annual compound rate of 24 percent, and it is on track to reach $50 billion in the next decade.