Exclusive Interview with LeafLink Co-Founder and CEO Ryan G. Smith
Cannabis wholesale platform LeafLink has continued to scale throughout what has proven to be a challenging year for the industry. The technology company has been bundling together its solutions across its marketplace, payments, financing and logistics to offer its largest customers a way to run their businesses more efficiently. Co-founder and CEO Ryan G. Smith reconnected with New Cannabis Ventures, following a conversation in 2021, to talk about the company’s growing platform and evolving leadership team.
Listen to the entire interview or read the summary below:
Technology and Operational Efficiency
LeafLink has set out to provide the cannabis industry with a platform that marries technology with operational efficiency. It works with some of the largest operators in the industry, providing a consistent technology stack, as they build multi-state footprints.
The company has formed partnerships to help build its offerings. For example, it has invested heavily in logistics offerings. LeafLink can support the full lifecycle of an order from the moment it is created through payment, financing and delivery. As a part of that offering, the company has partnered with plant-touching companies on the logistics side to connect customers with pieces of the supply chain, like warehouses and trucks.
LeafLink is active in some of the largest U.S. cannabis markets with its logistics offering, including California, Michigan, Colorado, Massachusetts and Missouri. The company is planning to expand that solution to more strategic states by the middle of next year, according to Smith. It is working with large cannabis companies that could leverage that same solution across more of their footprint.
Serving Retailers and Brands
The company is currently serving 28 states. Over the past year, the company has added approximately 2,000 brands and retailers to its platform, bringing the total of companies in the LeafLink network to 11,000. The platform’s reach is nearly ubiquitous. It serves four out of five cannabis retailers in the U.S. and 85 percent of the largest brands, according to Smith.
The company has strong market penetration. Going forward, the LeafLink team is looking for ways its customers can use more of the solutions its offers through its platform. It is focused on building customer engagement and adoption of new tools.
The LeafLink team is excited about opportunities on the East Coast. The company’s public policy team has been spending time with regulators in markets like Washington, D.C. to help develop a strong, competitive market. Smith is eager to take the solutions and knowledge it has built across its footprint into high-population states on the East Coast. While the development of some of these markets has been slower than anticipated, the company remains invested in the opportunity there.
Beyond the East Coast, the company is watching a couple of markets in the Midwest. The team is also excited about developments around traditional distribution happening in California right now. LeafLink could partner with other companies in the state to help operators navigate that market.
Given LeafLink’s position as a leading technology company in the industry and the challenging capital markets environment, it has been fielding plenty of inquiries from companies looking to partner, sell or merge. While the company is staying in touch with companies it respects, it has nothing to announce in the M&A arena for now.
An Evolving Leadership Team
As LeafLink matures, it has added more talent to its leadership team. This spring, the company welcomed Artie Minson as President and COO. He comes to the role with experience at companies like Time Warner Cable, AOL and WeWork. Smith also highlighted the additions of Harish Mukhami as Chief Product Officer, Sam Lee as Chief Revenue Officer and Melanie Riddick as Vice President of Marketing. Smith has dedicated significant effort to building the team and attracting mainstream talent.
LeafLink’s Balance Sheet
Over the past six to nine months, the LeafLink team has been watching how it spends capital and considering where it could reduce burn, according to Smith. He considers the company to have a strong capital base with investors that continue to stand behind it. Lerer Hippeau, Nosara Capital, Thrive Capital and Founders Fund are among those investors. Going forward, the company is open to forming relationships with more strategic investors as it continues to virtualize the supply chain. It may be the right move for it to pursue the public markets at some point, but, for now, the IPO market is quiet.
The cannabis industry has been experiencing significant price compression this year. While this factor is at play, LeafLink has been able to grow its revenue and its market penetration. The company broke $1 billion in payments cumulatively processed for its customers recently, and it has continued to focus on GMV and adoption rate. The company had its second best month for GMV this year; it is at a $5 billion run rate for annual GMV, according to Smith.
In terms of adoption, the LeafLink team closely looks at customer usage of its platform. Eventually, the company wants to increase the number of users engaging with every part of its platform to more than 70 percent. Smith expects it will take a couple of years to reach that goal, converting customers through strategic account management, integrations and onsite training.
Many cannabis retailers and brands have taken an approach of building everything themselves, including technology, according to Smith. As capital runs short, more operators have been forced to look at how they are investing their resources. Smith points out that this has created an opportunity for the company to offer its support, allowing customers to do what they do best. LeafLink is partnering with some of the largest companies in cannabis to support their national strategies with technology that can drive cost savings, margins and efficiency, according to Smith.
To learn more, visit the LeafLink website. Listen to the entire interview: