- Recreational cannabis was legalized in Illinois on January 1, 2020. However, many in the nascent industry rely on outdated and inefficient methods to move the plant and product from grower to dispensary.
- Leaf Trade allows growers and manufacturers to create an online storefront where dispensaries can easily order products, knowing they are legal in their state.
- On the backend, wholesalers have access to tools to help with sales, fulfillment, data management and accounting and navigating state-by-state laws.
Long lines outside dispensaries prove that Illinois residents are more than ready to buy newly legalized recreational cannabis — but the cannabis industry is still playing catch-up.
Many dispensaries are relying on inefficient processes and old fashioned supply chains to get their products. To put it bluntly: “If a dispensary needed to stock [its] shelves with products, they were texting their dealer,” says James Yi, CEO and founder of Leaf Trade. He’s worked with legal cannabis sellers since 2015, the year after Illinois piloted a four-year medical cannabis program. While working on his previous business, NextME, James started consulting with companies that had secured a medical cannabis license and needed help navigating through the various legal hoops.
He launched Leaf Trade in 2017 after realizing the industry needed professionalizing. Leaf Trade is a wholesale B2B platform: Growers set up their own customized storefront so sellers can browse products legal in their state and buy them directly. “It was about digitizing that process and
centralizing it in one place,” James explains.
The cannabis industry is still emerging, dazed and confused, from the black market to the open market, presenting platforms like Leaf Trade the chance to make a big impression.
James joined the podcast to talk about Leaf Trade’s role in shaping the emerging cannabis industry, why wholesale is a challenge of its own and why he welcomes local governments’ say over how cannabis works in their communities.
Interview Highlights — James Yi from Leaf Trade
How Leaf Trade helps the cannabis industry
The first step for us is to help the cannabis sellers — the growers and the manufacturers of the product — launch a customized online storefront so they can communicate their product information and availability to all the retailers in their market — and by retailers, I mean dispensaries. It’s B2B wholesale.
Normally, these businesses would have tools in place to streamline their operations and fulfillment, but they were falling back on their old school way of doing business: If a dispensary needed to stock their shelves with products, they were texting their dealer.
We were able to add in other built-in features to further streamline supply chain management, like integrating accounting systems, drastically reducing the amount of time that both parties spent on managing orders.
Going to your dealer doesn’t cut it
The problem was, it was an entirely fragmented way of doing things. You may have texted somebody, hey, I want something, and then they’d email you back, does this purchase order look good? They’d be editing back and forth, via phone calls and stuff. And then if an order arrives incorrectly, where do I even begin to trace what happened to this order, because it’s so fragmented? So it was about digitizing that process and centralizing it in one place.
Once we were able to do that — connecting the two parties — that’s when things got really exciting. We were able to add in other built-in features to further streamline supply chain management, like integrating accounting systems and state-mandated seed-to-sale systems, which basically monitor where the plant is at any given point in the supply chain.
Wholesale relationships are different. With retail platforms you go on the website or app, you order stuff, click, and it gets delivered to your house. With wholesale transactions, there’s a relationship involved there, and back-and-forth in terms of how an order gets put together. And so I think it really takes complex domain expertise to put together a platform that can facilitate the way business is done on the wholesale side.
We’re drastically reducing the amount of time that both parties spend on managing orders.
Wild West no more: Working within a legal framework
The economic incentives of expanding and legalizing cannabis are very real — just look at the numbers.
But at the same time, I do understand how the regulating bodies and these states want to do it the right way, because the last thing that we want is to end up how the established recreational markets like California and Colorado got started. They’ve been around 20, 30 years, and the government basically turned a blind eye to it.
I like the fact that the municipalities are getting an opportunity to have a voice in whether their communities are going to get involved in this stuff.
That’s where we come in and do our best to educate the population on why the benefits are there, and why Leaf Trade specifically is helping by providing standardization and processes around this whole thing, so that it’s not like a Wild West.
The future of the cannabis industry is bright
I think more municipalities will start to understand that this is a huge benefit for the community and start opening up to it.
I’m really excited to have the opportunity for the industry as a whole to get face-to-face with all stakeholders involved, so that everyone is educated and making the right moves.
Also, I think job opportunities in this space are going to skyrocket, whether you’re involved in cultivation, retail or technology: The opportunities are there.
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