Data collection and analysis is a key part of running a modern business, and the cannabis space is no exception. With the industry still in its infancy, there is no playbook for determining which products will sell or which strains you should grow.
That’s where companies like Massachusetts-based Canold come in. The company sifts through piles of cannabis data produced by seed-to-sale tracking systems and other cannabis-related software in order to create actionable insights for businesses.
I recently sat down with Matt Kurtzman, Founder and CEO of the company, to talk about how he got into the cannabis space and how Canold’s work affects cannabis consumers and the general public.
What inspired you to get into the cannabis industry?
Kurtman: I have always been interested in cannabis. I started using cannabis in high school, and it’s always been part of my life in some way. Throughout my career, I have focused on data analysis and business intelligence. As cannabis laws began to change in Massachusetts, it became interesting that new things were happening in the space. I never really thought that I would have a place in the cannabis industry, but in 2017 I left my consulting career to enter an alcohol distillery that I had started with some friends at the ‘university.
Eventually I realized that I was missing some of the analytical work that I loved to do. Around 2017, my brother – who works in the industry – introduced me to one of his peers in the space who worked at Ermont, a Quincy-based cannabis retail and cultivation company. At the time, they were trying to use their seed-to-sale tracking software to try to identify patients who were leaving their retail operation. The reports that the software provided were not adequate enough to get the kind of depth in data modeling that was needed. I had a wealth of data analysis experience from my previous role at Boston Consulting Group, and was able to go into the back-end of the software and extract the data to create a model for identifying attrition.
What is an unsubscribe ID pattern?
Kurtman: This is a model that looks at deviations from the predicted visit frequency for each customer, and then if that customer deviates from their predicted visit cadence, the model flags this as a “churn risk.”
Once you know who those customers are, you can go after what those customers like to buy. The reason you know this is because literally all of their buying behavior is tracked by the POS software. You can send promotional campaigns to people who are having a churn rate, and of course you keep people coming back.
The campaign we did was very successful and got a lot of people into space. Then I started getting calls from other cannabis companies to provide them with similar services, and I quickly realized that I had to scale the business.
Are there any data trends you see in Massachusetts that are surprising or unique to the state?
Kurtman: One of the things we don’t do with our customers’ data is aggregate it. We just use data access to normalize it and then access it in a meaningful way. So I don’t have any tendencies at the macro level; the information we get is at the micro level for each trader.
These micro-signals influence business opportunities. I use this example: Let’s say I see a report that in Central Mass., sales of concentrates have increased by 10%. Does this mean I have to allocate 10% of my inventory budget to purchasing concentrates? Maybe, maybe not, but if I knew that my specific dispensary was following this trend, then I could start making decisions to pay more attention to this product category than before.
What is the impact of your work on the general public and the average cannabis consumer?
Kurtman: Ultimately, you could argue that as the cannabis operator improves the process, the end result is going to trickle down to the consumer. Whether it’s from a pricing perspective, or from a quality perspective, or even just from a product diversity perspective, ultimately it’s the consumers who keep these companies afloat.
We touch the entire value chain. We encourage operators to deliver what the market wants. For example, if we see people trying to buy packaged flowers and wanting to go to a dispensary and see 30 different options of eighths that they can buy, what that allows us to do is go and see what cultivars generate the highest percentage of flowers that are of the quality where you can sell it as a packaged flower. So if the goal is to maximize your ability to grow packaged flower, we’re able to advise operators on how they can turn that flower into packaged product based on those demand signals, and we can control these models for all relevant variables. , such as yield or cannabinoids.
You’ve been in the cannabis industry for quite some time. Are there people you’ve met or experiences you’ve had that really felt special to you? How would you sum up your time in space?
Kurtman: The first time I saw a real grow rig was a truly magical opportunity for me. The first time I saw it grow was in Jamaica. It was a spring break trip to college and we had a taxi driver take us to a weed farm. We climbed to the top of a mountain and it was awesome.
If you had asked me for even six or seven years if I would do this full time, I would have said you were crazy. When I was younger, I always hustled and tried to make money from restaurants that sold food to waiting tables; I would get my salary and buy a big bag of schwag. One time I was in my room pulling out all the stems and seeds and my mom burst into my room. She was completely anti weed and was super upset and very disappointed. She sent me to rehab.
It was such a part of my life because I had to do all these things in rehab that were completely unfounded, but now I’m here. This is my career now. I’ve been here for five and a half years, and it’s been an amazing opportunity to take something I’m passionate about and something I’m good at, and merge them to build something bigger than myself.
My mother passed away before I entered space in 2010 but now that much of the stigma has been released and I’m building a successful business and adding value to a wider community , I think my mom would be really proud to see this. At least that’s what I tell myself.
This interview has been edited for length and clarity.