As GrowerIQ founder and CEO Andrew Wilson puts it, the compliance burden associated with growing cannabis in a legal capacity is “so high that it’s very easy [for cannabis growers] to get out of control [or] to fall behind.”
Enter GrowerIQ, which aims to be “the operational backbone” for cannabis producers around the globe by helping them manage their business and meet the often stringent regulatory requirements they have to abide by.
The Toronto-based startup helps cannabis growers stay compliant, streamline their operations, and boost their bottom lines with its enterprise resource planning (ERP) platform.
GrowerIQ wants to be “the operational backbone” for cannabis producers around the globe.
GrowerIQ has seen its business grow since its 2020 launch, as Canadian cannabis sales rose during COVID-19 and other jurisdictions have begun to loosen restrictions on marijuana use. After bootstrapping for the past four years, GrowerIQ has raised $3 million CAD in seed funding to expand the reach of its cannabis industry-specific ERP software.
GrowerIQ’s $3 million convertible note round, which closed this summer, was co-led by Houston-based Golden Section and Toronto’s MaRS IAF, with participation from LAGO, Delbridge, GTM Fund, and Gaingels.
In an interview with BetaKit, Wilson said GrowerIQ plans to invest the capital in marketing and sales as well as product development. On the latter front, Wilson sees an opportunity to leverage data analysis and machine learning to turn all of the cannabis production data it has gathered into insights its customers can use to operate more efficiently.
GrowerIQ, which sells its software on a subscription basis to licensed cannabis producers, offers modules for every team in the cannabis growing process, from cultivation to manufacturing, warehouse, customer relationship management, orders, and quality management. With its platform, designed to comply with Health Canada’s regulatory framework and integrate directly with cannabis producers’ sensors and other hardware, GrowerIQ aims to offer growers “seed-to-sale traceability.”
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MaRS Discovery District CFO Nicole Barry described GrowerIQ as a “well-respected brand” within the cannabis sector. “We see them as a pioneer in this space, at the very start of a considerable growth industry and we believe they are well positioned to capture a dominant share in the space,” Barry told BetaKit.
Barry said GrowerIQ competes mainly against generalist ERP systems that are not equipped to address the needs of the cannabis industry. While the cannabis compliance market is “fairly new,” Barry acknowledged that GrowerIQ faces “some noteworthy competitors.”
But according to Barry, “with the recent, and forecasted, growth in the industry, acquiring new customers is more important [for GrowerIQ] than displacing any existing incumbents.”
Fellow Toronto-based startup Ample Organics set out to tackle the same problem as GrowerIQ in a similar fashion years earlier. Founded in 2014—pre-legalization of recreational marijuana in Canada—Ample has operated what it calls a “seed-to-sale” platform that offers tracking, reporting, and compliance tools to cannabis producers, sellers, and clinics. In 2020, Ample was acquired by Akerna in a $46 million deal.
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Today, GrowerIQ serves facilities in 13 countries and four languages, including some countries where cannabis is legal for recreational use, some where it is only permitted for medicinal reasons, and some that produce but only export marijuana.
Currently, the majority of GrowerIQ’s business is in Canada, which first legalized recreational marijuana in October 2018. Since then, the country’s legal cannabis market has experienced significant growth, particularly during the pandemic.
Legal cannabis sales in Canada overshot predictions by 25 percent, or $811 million, during COVID-19, according to research from Hamilton’s McMaster University, St. Joseph’s Healthcare Hamilton, and the Homewood Research Institute. Another study suggests this rise was due to cannabis industry expansion rather than pandemic-related factors.
Regardless of where this growth came from, GrowerIQ, which launched its platform in 2020, benefitted from this trend. Last year, Wilson said GrowerIQ saw 300 percent year-over-year revenue growth.
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Despite this growth, the cannabis growing sector has also endured rough patches, and many marijuana producers in Canada have continued to generate heavy losses.
In recent months, larger players like Aurora Cannabis and Canopy Growth have shed staff in the hopes of speeding up their paths to profitability amid shifting economic conditions that have made cash-burning companies less attractive to investors.
Meanwhile, public cannabis company stocks have fallen as firms have failed to meet lofty expectations, and the illegal cannabis market appears to remain strong. “There were some early overextensions, perhaps, and that’s being reflected now at some of the bigger public companies,” said Wilson.
“We see them as a pioneer in this space, at the very start of a considerable growth industry and we believe they are well positioned to capture a dominant share in the space.”
-Nicole Barry, MaRS Discovery District
Going forward, Canada’s legal cannabis industry faces a number of challenges. With an uncertain road ahead, made more difficult to predict by rising inflation that has made it tougher to access capital and could dampen consumer spending, Wilson believes GrowerIQ is well-positioned to thrive as a tech platform that helps cannabis growers operate more efficiently and meet regulatory requirements.
To succeed in these challenging conditions and stand out amid a crowded field, cannabis growers need to have “really tight operational control … good lab results [and] show incredible product quality,” said Wilson. “It’s a very competitive space.”
GrowerIQ has seen success to date helping its customers save time by reducing their compliance risk and automating tracking—freeing them up to focus on the other aspects of the cannabis growing process.
“[There is] efficiency associated with digital tracking, digital production, being able to save time and dedicate your team’s time to more important things than making sure all of your plants are tracked,” said Wilson. “I think the winners in this economic environment will be the ones that are very tech-first, tech-focused, and adopt some of these more advanced practices.”
Feature image courtesy GrowerIQ.