Exclusive interview with Ryan G. Smith, co-founder and CEO of LeafLink
Wholesale cannabis trading platform LeafLink has continued to grow in what has been a challenging year for the industry. The tech company has bundled its marketplace, payments, financing and logistics solutions 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 after a conversation in 2021 to discuss the company’s growing platform and evolving leadership team.
Listen to the entire interview or read the synopsis below:
technology and operational efficiency
LeafLink is committed to providing the cannabis industry with a platform that combines technology with operational efficiencies. It partners with some of the largest operators in the industry and offers a consistent technology stack as they build multi-state footprints.
The company has formed partnerships to expand its offering. For example, it has invested heavily in logistics offerings. LeafLink can support the entire lifecycle of an order from the time it is created through payment, financing and delivery. As part of this offering, the company has partnered with factory-related companies on the logistics side to connect customers to parts of the supply chain such as warehouses and trucks.
LeafLink has logistics offerings in some of the largest U.S. cannabis markets, including California, Michigan, Colorado, Massachusetts and Missouri. According to Smith, the company plans to expand this solution to more strategically important states by the middle of next year. It partners with large cannabis companies that could use the same solution for a larger portion of their footprint.
Serving retailers and brands
The company currently serves 28 states. Over the past year, the company has added around 2,000 brands and retailers to its platform, bringing the total number of businesses on the LeafLink network to 11,000. The reach of the platform is almost ubiquitous. According to Smith, it supplies four out of five cannabis retailers in the US and 85 percent of the largest brands.
The company has strong market penetration. Going forward, the LeafLink team is looking at ways its customers can leverage more of the solutions it offers through its platform. It focuses on building customer loyalty and introducing new tools.
The LeafLink team is excited about the East Coast opportunity. The firm’s public policy team has spent time with regulators in markets like Washington, DC to help develop a strong, competitive marketplace. Smith is committed to bringing the solutions and knowledge it has built across its footprint to populous states on the East Coast. Although development in some of these markets has been slower than anticipated, the company remains invested in the opportunities there.
Beyond the East Coast, the company is monitoring a few Midwestern markets. The team is also excited about the developments around traditional distribution that are currently taking place in California. LeafLink could work with other companies in the state to help operators navigate this market.
Given LeafLink’s position as a leading technology company in the industry and the challenging capital market environment, the company has received numerous inquiries from companies looking to partner, sell or merge. While the company remains in touch with companies it respects, it has nothing to announce in the M&A space 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 brings experience from companies such as 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 put significant effort into building the team and attracting mainstream talent.
LeafLink balance sheet
For the past six to nine months, LeafLink’s team has been watching how it spends capital and considering where it could reduce the fire, Smith said. He believes the company has a strong capital base with investors who remain behind him. These investors include Lerer Hippeau, Nosara Capital, Thrive Capital and Founders Fund. Going forward, the company is open to building relationships with more strategic investors as it continues to virtualize the supply chain. Going after the public markets at some point may be the right move, but for now the IPO market is quiet.
The cannabis industry has seen a significant drop in prices this year. While this factor plays a role, LeafLink has been able to increase its revenue and market penetration. The company recently cracked $1 billion in cumulative payments processed for its customers, and it has remained focused on GMV and acceptance rate. The company had its second-best month for GMV this year; According to Smith, it’s at $5 billion in annual GMV.
In terms of adoption, the LeafLink team takes a close look at how customers are using their platform. Ultimately, the company wants to increase the number of users engaged with each part of its platform to over 70 percent. Smith anticipates that achieving this goal and converting customers through strategic account management, integrations and on-site training will take a number of years.
According to Smith, many cannabis retailers and brands have taken the approach of building everything themselves, including the technology. As capital becomes scarce, more and more operators are being forced to review how they are investing their resources. Smith notes that this created an opportunity for the company to offer its support so customers can do what they do best. According to Smith, LeafLink works with some of the largest cannabis companies to support their national strategies with technologies that can drive cost savings, margins, and efficiencies.
To learn more, visit the LeafLink website. Listen to the entire interview: