Google, Apple, Microsoft and Other Tech Companies' Entry into the Cannabis Market

In June of 2016 Microsoft became the first technology giant to enter the cannabis business. It did so very quietly, without sparking any controversy, in collaboration with Kind Financials, a company that offers a software suite for the commercialisation and tracking of cannabis production.

As part of this particular alliance, Microsoft works closely with Kind's governmental solutions division, developing programs to help state and local governments with the implementation of new cannabis regulations. How? By providing tools to supervise the production, distribution and sale of cannabis through the monitoring of the entire process. This tracking, from cultivation all the way to delivery, aims to keep part of the cannabis generated from ending up on the black market, thereby ensuring that no link in the chain is exempt from the applicable taxes. 

David Dinenberg, founder and CEO of Kind Financials and the architect of the agreement with Microsoft, is still surprised that he managed to convince the giant: "I remember the first 15 conversations I had with them, which I concluded by saying: 'just to make it clear, you know what business I'm in?'" he recalls. 

Although Microsoft certainly knew whom they were dealing with, maybe it was not a bad idea for Dinenberg to remind them. After all, Kind Financials' website, and the entire firm, is extremely discreet. Although the word "cannabis" appears in the website's header, there are no leaves, or the usual green colour typically found on the pages of other companies in the industry. "We are a technology company that provides services. It just so happens that we are focused on the cannabis industry, but we do not cultivate it," clarifies the founder of the company, making it clear with his words what makes them the perfect partner for Microsoft as it delves into this market. 

Thanks to Kind Financials its entry in to the cannabis industry has not entailed too many risks for the giant from Redmond, as its first alliance was with a company that has no contact with cannabis itself. 

A historic agreement

Dinenberg views the agreement reached with Microsoft to work together on the development of software as an extremely significant event. "Someday, when they teach the history of the cannabis industry, the announcement by Microsoft and Kind will appear on the timeline," says the CEO. "And I am proud to say that, as an entrepreneur." In fact, the founder of this cannabis technology company believes that the agreement with the giant is only a first step. He is convinced that this will be just the first domino, at it were, bound to make other large firms begin to fall into the cannabis business, thus fostering progress and legalisation. 

And he's not the only one who sees it that way. Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws (NORML), believes that this alliance will facilitate cannabis transactions, not only thanks to the software, but the legitimacy and mainstreaming that the Microsoft name infuses into this sector. "Having a name like Microsoft will get people's attention," argues the expert. "It is very telling that a company of this calibre has assumed the risk associated with a company focused on the cannabis business," added Matthew A. Karnes, Founder of the consulting firm Green Wave Advisors.

At Microsoft, however, they seem determined to downplay the alliance. "We provide support to solution providers who work with government clients, and help them fulfil their missions," reads the brief statement of the technology giant, referring to their collaboration with Kind Financials. There are no big celebrations or speeches in support of the plant. 

Other tech players

Although for the time being Microsoft is the only giant that has officially entered the cannabis industry, rumours surround many other technology companies linking them to the sector.

In late January of 2017 Apple was granted a patent for a vaporiser that raised suspicions in the cannabis world. Although the documents did not specifically mention cannabis, the device patented featured a moveable plate to heat a substance, and that descends as the vaporisation process progresses. According to experts, this design would make a lot of sense for cannabis consumption, as it would make possible consistent vaporisation, as the element that provides the heat (the movable plate) would always remain close to the substance. 

Based on its design, this kind of vaporiser could operate with liquid extracts of flowers, although it seems to have better results with oils or solid products, such as a small amount of grass, properly prepared. So, is this patent really for a stealth "iVape"? The company's history with the cannabis industry is not a cause for optimism in this regard, and suggests that it is not. 

In the past Apple even removed from its App Store an application related to cannabis, although it ultimately ended up backpedalling and permitting it. Although many would like to see the company in Cupertino fully delving into the industry, we must not forget that vaporisers are used for industrial purposes, and could even be integrated into "smell-o-vision" systems, technologies that integrate scents into movies, or immersive Virtual Reality experiences, which could very well be the application of this new device. Therefore, at least for now, it is more likely that this patent will end up forming part of one of its technological products than revolutionise the cannabis market. Although it is still too early to be sure.

Companies that ignore the cannabis sector are ignoring the billions of dollars that are on the table.

The case of Google

Rumours have also hovered around Google, with there being speculation about its potential entry into the cannabis industry. A month after Microsoft's announcement an executive at the company LivWell Enlightened Health, one of the largest retail cannabis chains in the United States, said that the company boasting the world's most popular Internet search engine had contacted them to explore possible forms of collaboration. 

"I can confirm that Google contacted us and asked us if we would be interested in talking to them about the needs of the industry and how they could work with us to address them," said Matthew Givner, the American chain's spokesman. 

If Google and Enlightened Health LiveWell ultimately reach an agreement, the "big G" would continue with its timid but progressive opening up to cannabis market tech companies. It is a business opportunity that is tough to ignore, but which they approach warily due to the limitations still posed by federal law. These are small steps towards the full normalisation of cannabis and an industry that, despite obstacles, continues to grow.