In June 2016, Microsoft made a startling announcement: It had partnered with a Los Angeles-based company called Kind Financial to start offering marijuana software to government agencies. The software, part of a government-specific version of Microsoft’s Azure cloud platform, allowed states that had legalized medical or recreational marijuana to easily track that cannabis from the moment it was planted to when it was sold at a local dispensary. Through the relatonship, Microsoft became one of the first major tech companies to affiliate its name with the cannabis industry.
Now two years later, Kind’s software is being used by the state of Rhode Island and by hundreds of companies in states with legal marijuana across the United States, as well as in Canada, Australia, and Jamaica. And Kind Financial is gearing up to introduce a new product: Kind Pay.
“We hope Kind Pay will be the PayPal for the cannabis industry,” says Kind founder and CEO David Dinenberg. An obvious next step for the company, the service will enable credit-card transactions in states where marijuana is legal. Accepting plastic is currently a problem for the legal-cannabis business: The drug is still illegal at a federal level, leaving banks unwilling to work with the industry.
“We’re going to be bringing a phone-based payment system,” says Dinenberg. “Very similar to your Starbucks app or your Dunkin’ Donuts app or any of those retailer rewards-payment mechanisms.” That payment system will arrive first in Canada, but the U.S. likely won’t be far behind, he adds. Kind is partnering with Link to Banking, a consulting and technology company for the cannabis industry run by former bankers and ex-federal regulators.
Growth of an industry
Kind Pay is powered, like Kind’s other tools, by Microsoft’s Azure, and will work alongside them. “In other industries, it’s called track and trade,” says Dinenberg. “In the cannabis space, it’s called seed-to-sale.” The company’s software monitors the growth and harvesting of plants using attached RFID sensors. When the final product arrives at a local dispensary, Kind’s point-of-sale module can identify shoppers using biometrics or state-issued medical ID cards. Overall, the company can provide up-to-date information about what’s being grown where in a state, where it’s being sold, and who’s buying it.
The legal cannabis industry is changing rapidly: Just since Kind and Microsoft announced their collaboration in 2016, California, Maine, Massachusetts, and Nevada have all legalized marijuana sales. “You have to be very nimble,” says Dinenberg. “I think the fact that we’re built from the ground up and we’re partners with Microsoft is a huge advantage.” For instance, when a local government enacts a new piece of legislation that impacts the marijuana industry, Kind can roll out relevant changes to its tools quickly and efficiently.
Beyond the technical benefits of building on top of Azure infrastructure, Dinenberg says that the number-one thing partnering with Microsoft did was provide credibility. Thanks to the vast amount of business the software giant already does with government agencies, Kind gets better access to prospective customers.
“They saw where everything was going,” Dinenberg says. “And their idea was, ‘Let’s collect some government contracts together.'”