The software sector forming around the medical cannabis industry is growing. Starting with some simple cannabis delivery services and online search tools, there are now a range of different farm management, traceability and tracking tools that also help growers comply with state regulations on the production, processing and dispensing of the herb.
While the investor line-up has included names such as Snoop Dogg, Peter Thiel, and Tao Capital, startups have been limited in the investors they can attract. It’s been a diverse pool of individual investors and family offices, with a smattering of cannabis-focused investment firms slowly coming to the fore.
But this week, Meadow, a San Francisco software startup, has raised $2.1 million in seed capital bringing a new set of investors into the cannabis sector, both individuals and institutions.
In fact, the list is a bit like a who’s who in Silicon Valley tech: Ex-managing partner of SV Angels David Lee, Y Combinator partner Justin Kan, Reddit co-founder Steve Huffman, co-founder of analytics company Kissmetrics Hiten Shah, Facebook and Twitter investor Slow Ventures, SOMA Capital and a cannabis-focused VC Poseidon Asset Management.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
Meadow is also a Y Combinator alumnus — something that no doubt helped it gather such an investor line-up — and received $120k in funding from the accelerator last year. It was Y Combinator’s first cannabis-related startup.
Meadow now presents quite a different offering to the names mentioned above, but started off as a delivery tool with getmeadow.com in 2014. From there it built MeadowMD, a platform connecting consumers with a doctor over a video chat, and enabling them to obtain a prescription electronically. This platform then connects with a nearby dispensary, which will deliver to you. Meadow is now developing a sales software-as-a-service called Meadow Platform. Launched in November 2015, this currently enables dispensaries to sell to customers through its website, track deliveries, comply with legal requirements, and keep in touch with customers over an SMS messaging system. With the proceeds of this seed round, the company is expanding Meadow Platform to develop a point-of-sale and inventory management tool.
“We plan to connect the entire cannabis supply chain, from farm to flame” said David Hua, CEO and co-Founder of Meadow in a statement. “We started with the last mile, facilitating access between dispensaries and patients. Going forward, we’ll continue building Meadow Platform to fuel operational efficiency and regulatory compliance from farmers to patients. We have the opportunity to build technology that will become the backbone of this industry–in California and beyond–and we’re thrilled to have an incredible group of forward-thinking investors backing our mission.”
Here are some shots of the Meadow platform in action.
Legal sales of cannabis surpassed $5 billion in 2015 and are expected to reach $22 billion in less than four years, according to Justin Kan, the Meadow investor and spokesperson for Y Combinator. And there are firsts happening all over the US — just last month we reported on Florida’s first legal cultivation facility Surterra Therapeutics. As more and more states legalize the drug for medical use, the opportunity for entrepreneurs to fill gaps in the industry is huge, but financial backing of the sector is still low, with AgFunder reporting just under $69 million of investment into the sector in 2015.
“With Meadow you have the combination of the right team, with the right product, at exactly the right time. We’re coming to a tipping point. Support for marijuana legalization has hit an all-time high, medical research is demonstrating the far-reaching applications of cannabis,” said Kanin a statement. “At YC we see software disrupting old industries all the time. Meadow is disrupting this budding new industry by bringing the growers, dispensaries, and patients all to one platform.”
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