GrowerIQ has made its first acquisition, purchasing fellow cannabis software provider Ample Organics from the latter’s American owner, Akerna.
The strategic, all-cash deal, which closed in December, brings the two Toronto-based cannabis production management competitors together and returns Ample to Canadian ownership three and a half years after it was acquired by Akerna. The financial terms were not disclosed. All of Ample’s seven employees are joining GrowerIQ’s 25-person team.
GrowerIQ founder and CEO Andrew Wilson told BetaKit that the move creates “the largest cannabis tech platform in Canada,” making the startup a market leader here and in Europe.
GrowerIQ CEO says startup now serves “all the leading cannabis producers” in Canada and Europe.
“Ample was one of the first movers in our cannabis tech space,” said Wilson. “They put together a great platform that provided tons of value to customers and was always a company we at GrowerIQ admired, as seen by the many strong producers, which continued to use their platform. When the opportunity came up, we knew we had to pursue the deal.”
Founded in 2018, when Canada first legalized recreational marijuana, GrowerIQ sells enterprise resource planning software to licensed cannabis producers. Its platform has modules for teams across the cannabis growing process, including cultivation, manufacturing, warehouse, customer relationship management, orders, and quality management.
GrowerIQ’s software has been built to comply with Health Canada’s regulatory framework and integrates directly with cannabis producers’ sensors and other hardware. Through its platform, GrowerIQ aims to provide cannabis growers with “seed-to-sale traceability.”
Ample set out to tackle the same problem as GrowerIQ in a similar fashion years earlier. The firm was founded in 2014—prior to the legalization of recreational marijuana in Canada. Like GrowerIQ, Ample sells “seed-to-sale” software that offers tracking, reporting, and compliance tools to cannabis producers. Ample also provides its solution to manufacturers, distributors, physicians, clinics, laboratories, retailers, and educators.
As BetaKit previously reported, Ample shed staff in July 2019 in a push toward sustainability, and a year later, the company was acquired by Nasdaq-listed, Denver, Colorado-based cannabis compliance software firm Akerna for $46 million CAD in cash and stock.
RELATED: Akerna closes $46-million acquisition of Toronto-based Ample Organics
Last May, Akerna reached deals to sell its cannabis software assets, including Ample, to a special-purpose acquisition company called MJ Freeway Acquisition Corp. for $5 million and exit the cannabis business and merge with a Bitcoin-mining firm.
According to Wilson, GrowerIQ has been well-connected with the Ample team for years, and many former Ample employees now work for GrowerIQ.
When Akerna began exploring a sale, Wilson said that the company approached Ample founder and former CEO John Prentice, but he was focused on other projects and not interested in buying back Ample’s business. Instead, Prentice connected GrowerIQ with Akerna.
“Joining forces with GrowerIQ opens up new opportunities for innovation and growth for [Ample] within the cannabis technology landscape,” Prentice said in a statement. “The combined expertise and resources of both teams will undoubtedly create brilliant solutions for licensed cannabis producers globally.”
RELATED: GrowerIQ closes $3-million seed round to help cannabis producers stay compliant
As BetaKit has reported, GrowerIQ bootstrapped for four years before closing $3 million in seed funding in 2022. The startup’s convertible note seed round was co-led by Golden Section and MaRS IAF, with participation from Lago, Delbridge, GTMfund, and Gaingels. Last year, GrowerIQ secured a more than $1 million loan from FedDev Ontario.
Today, GrowerIQ caters to facilities in 15 countries and five languages, including some countries where cannabis is legal for recreational use, others where it is only permitted for medicinal reasons, and some that produce but only export marijuana. The Ample deal helps grow the startup’s footprint both in Canada and abroad.
“Ample was one of the first movers in our cannabis tech space.”
“We now serve all the leading cannabis producers coast to coast across Canada, throughout Europe, and in 15 countries,” said Wilson. “Everybody from micros, through to public companies and governments.”
Going forward, Wilson said that Ample will continue to operate like normal. “The difference is that we’ll be actively managing and investing in the [Ample] platform,” he added, noting that GrowerIQ also plans to explore integrations between the two platforms.
Wilson noted that GrowerIQ’s stakeholders have encouraged the startup to become “as lean as possible” to survive any downturns. “We and our customers are not immune,” he said. “We’ve found that as customers face headwinds in the cannabis space, we do as well.”
Like many of its peers in the tech space, GrowerIQ made some staff cuts over the past year, laying off four employees to streamline its operations. “It’s always difficult parting with strong colleagues, however, it’s made our company both stronger and more nimble,” said Wilson.
From a tech standpoint, Wilson argued that the addition of Ample does much the same. “We see new point solutions come out all the time, however, we don’t see anybody competing with GrowerIQ on the breadth and depth of our offerings,” he added.
