pos report 7.17.19...retailers nationwide and estimate that to be 42% of the market. each licensee...

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Background

TheCannabizMediaLicenseDatabaseistheonlyCRMandleaddatabaseforthemarijuanaindustry.Ourplatformcontainsinformationonover50,000licensedmarijuanaandhempoperationsacross43states,13provincesand10countriesoutsideofNorthAmerica.Wesourcelicensedatafromregulators,andthen,ourresearchteamgathersadditionalinformationabouttheselicensesandbusinessesandaddsittotheLicenseDatabase.

Ayearago,wesupplementedthateffortwithphonecallstoconfirmandupdateourinformationandtobuildoutourEnhancedDataCollectiononpointofsalesoftware,numberofemployees,extractiontypeandaccountingsoftware,amongothers.

Usingaconveniencesamplemethod,wegathereddatafrom2,178ofthe5,148activedispensariesandretailersnationwideandestimatethattobe42%ofthemarket.Eachlicenseewascalledseveraltimestocollectandverifyinformation,butsomelicenseeswereunwillingtoshareinformation.Wefollowedupwithemailquestionnairesandourresearchwillbeongoing.

Onekeychangewe’vemadesincereleasingourinitialreportisthatifastorehadbothadispensaryandretaillicense,weonlycountthepointofsalesoftwarevendoronce.ThiswillimpactvaluesinstateslikeColoradoandCaliforniawheremultiplelicensesmayhavebeengranted.

Pointofsalesoftwareprovidersareacriticalpartofthecannabiseconomy.Theyareembeddedineverydispensaryandretailerandhelpmanageinventory,cash,dataandcompliance.Inreachingouttolicenseddispensariesandretailers,weuncovered68uniquepointofsaleresponses,whichisup58%fromthe43wefoundonlysevenmonthsago.Theseincluded“proprietary”forthosethathadthetemeritytobuildtheirownaswellasnamebrandchoiceslikeSquare,SalesforceandQuickBooks.

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Here’sthecompletelistofcurrentproviders.Newvendorsarehighlightedinyellow:

420SoftwareAceAdilasAgrisoftAntheaBigCommerceBioTrackBlackbirdBLAZERetailBonBryteMapCafeCartelSystems(CCS)CalOriginCannabisComplianceTechnologyCannapointCannasaverCloverCOVACultiveraDauntlessDispenseFirstElavonEposNowERPLY

FlourishFlowhubGreenBitsGreenleafGrowOneGrowFlowGrowPositiveIndicaOnlineKlicktrackKrimzenLeaflogixLightspeedLIMSMeadowMicrosoftDynamicsMJFreewayMMJMenuNASNatureTrakNCRNetSuiteOMMOptileafPayanywhere

Portal42POSNationProprietaryProteus420QuickBooksRetailUp!:AtLast!RevelSalesforceShopkeepSlickPOSSquareStashStockTHSuiteTreezVendViridianSciencesWeaveWebjointWeedwareYobi

Basedonthe2,178responseswereceived,thisisstillahighlyconcentratedmarketwithfivevendors—BioTrack,GreenBits,Flowhub,MJFreewayandIndicaOnline—accountingfor68%ofthemarket.ThisislessconcentratedthanourreportfoundinNovember2018wherethetopfivecompaniesaccountedfor80%ofthemarket.Still,theremaining32%issplitamong63vendors.

ItisimportanttonotethatweonlysurveyedActivelicenses.ManyofthesepointofsalevendorsareactivelyworkingwithPendingandAppliedlicensesinstateslikeCaliforniaandMichiganwherethelicenseprocessislengthy.OthersareactiveinCanada,whichwasnotthefocusofthisreport.Pleasenotethatthechoice“Proprietary”isforthosecompaniesthatchosetobuildtheirownsystemratherthanuseacommercialoption.

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Key Findings

● ThePointofsalesoftwaremarketishighlyconcentratedwithfivevendorsaccountingfor68%ofthemarket.BioTrackremainstheleaderwitha24%share.

● Oursurveyfound68vendorsupfrom43inOctober2018.● SomeconsolidationishappeningasDauntlessjoinedwithSoroSoftwareandGrowFlow

acquiredLeafOps.● Wearenowstartingtosee“namebrand”companiesbeingusedatpointofsaleincludingNCR,

NetSuite,andSalesForce.TheyjoinothermainstreambrandslikeQuickenandSquarethatwereinourfirstreport.

Market Share – Overall

WhiletheTop5accountfor68%,theTop10makeup84%ofthemarket.

Rank Vendor 2019# 2018# 2019% 2018%1 BioTrack 520 410 24% 28%2 GreenBits 451 382 21% 26%3 Flowhub 223 179 10% 12%4 MJFreeway 177 115 8% 8%5 IndicaOnline 105 16 4.82% 1.1%6 Adilas 83 79 3.81% 5.4%7 MMJMenu 77 55 3.54% 3.8%8 COVA 68 16 3.12% 1.1%9 Proprietary 65 33 2.98% 2.3%

10 Leaflogix 51 20 2.34% 1.4%

Copyright©2019byCNBMediaLLCdbaCannabizMediaSource:CannabizMediaLicenseDatabasewww.cannabiz.media

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PointofSaleSoftwareMarketShare–Top7


Market Share Oklahoma

Oklahomahasbeenalicensinganomalybyissuingmorelicensespercapitathananyotherstate.Thepricetoapplyforalicenseisveryinexpensiveat$2,500,andexpertsagreethattheapplicationprocessiseasytonavigate.TheCannabizMediaDatabaseshows1,564licenseddispensariesinthestateandwewereabletogatherpointofsaleinformationfor401dispensariessofar.

Althoughthemarketislessthanayearold,thecompetitionisfiercewithallthosedispensariesseekingalimitednumberofpatients.Indicaleadsthepackwith80,followedbyBioTrackwith54,Covaat46andFlowHubat45.MJFreewayisfifthwith37.Ourresearchfound28pointofsaleprovidersinthestate-whichisjustasmanyasCalifornia.

24%

21%

10%

8.1%

4.8%

3.8%

3.5%

25%

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Other

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OklahomaSummaryVendor # % CumulativeIndicaOnline 80 20% 20%BioTrack 54 13% 33%COVA 46 11% 45%Flowhub 45 11% 56%MJFreeway 37 9% 65%


Indiscussionswithvendors,theysharedthatthesalesprocessiseasierandfasterthaninestablishedmarketslikeCalifornia.InOklahoma,thelicenseholdersarecomfortablewiththecompliancerequirementsfortrackingwhileinstateslikeCalifornia,thereismoreeducationthatthevendorsneedtoprovidewhichslowsthesalesprocess.

Market Share California

Californiahaschangeddrasticallysinceourlastreport.Byyear-end2018,theBureauofCannabisControlstoppedissuingtemporarypermitsandrequiredbusinessestoapplyforprovisionalorannuallicenses.Thisledtoadrasticdeclineinactivelicensesasanexpirationextinctioneventhasoccurred.Herearethecurrentmarketsharesbasedonourresearch:

CaliforniaSummaryRank Vendor 2019# 2019% 2018# 2018%

1 Treez 30 15% 21 16.0%2 IndicaOnline 24 12% 16 12.2%3 BioTrack 23 11% 16 12.2%4 GreenBits 22 11% 19 14.5%5 Meadow 18 9% 13 9.9%6 COVA 16 8% 11 8.4%7 Proprietary 14 7% 2 1.5%8 MJFreeway 12 6% 6 4.6%9 BLAZERetail 9 4% 7 5.3%

10 420Software 5 2% 4 3.1%Copyright©2019byCNBMediaLLCdbaCannabizMedia

Source:CannabizMediaLicenseDatabasewww.cannabiz.media

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Key California Findings

● Theleadershavechangedandthetop10nowaccountfor85%ratherthan89%.● Thenumberofpointofsalevendorsincreased55%from18to28,and11ofthesevendorsare

currentlyonlyservingtheCaliforniamarket.● IfweincludedActiveandInactivelicenses,thetopfivewouldbeIndicaOnline(66),Treez(63),

BioTrack(53),Greenbits(51)andMeadow(41).

Medical States Versus Those with Adult Programs

Adultandmedicinalprogramsoperateverydifferently.Wecomparedtheresultstoseewhichvendorswerefavoredineachtypeofmarket.

Inmedical-onlystates,BioTrackisstillthewinnerwitha29%marketshareandMJFreewaycominginsecondat16%.ThesenumbershavechangeddramaticallyduetothevastnumberofnewOklahomadispensarylicenses.

MedicalStateSummaryVendor 2019# 2019% 2018# 2018%BioTrack 210 29% 116 53%MJFreeway 113 16% 64 29%IndicaOnline 80 11% - -Flowhub 48 7% 1 .5%COVA 46 6% - -GreenBits 41 6% 12 5.5%


IntheOctober2018report,wehadonly15vendorsandarenowupto34.ThetopthreefirmshaveremainedinplacewhileFlowHubmovedupto4thafterbeinginaneight-waytiefor8th.AllthetopvendorsincreasedthankstotherobustOklahomamarket.

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Inthisyear’ssurveyofadultstates,wefoundmanymoreproviderswith53comparedto40vendorsinOctober2018.ThebigchangehereisthatmanyCalifornialicenseshavemovedtoaninactivestatuswhentheyhittheirexpirationdatesandarenotincludedinthisreport.

AdultStateSummaryVendors 2019# 2019% 2018# 2018%GreenBits 410 28.0% 370 29.8%BioTrack 310 20.8% 294 23.7%Flowhub 175 12% 178 14.3%Adilas 74 5% 77 6.2%MMJMenu 67 4.6% 54 4.4%MJFreeway 64 4.4% 51 4.1%


METRC States

METRC,adivisionofFranwell,isakeyarchitecturalcomponenttothecannabiseconomyinmanystates.ItwasdeployedinDecember2013fortheStateofColorado’sMarijuanaEnforcementDivision.

Third-partyvendorswhowanttointerfacewiththeMETRCsystemmustapply,betrainedandcompleteacapabilityassessmenttobevalidatedandobtainaccesstothestate’sinformation.Currently,theMETRCstatesareAlaska,California,Colorado,WashingtonDC,Louisiana,Maryland,Massachusetts,Michigan,Montana,Nevada,OhioandOregon.ThesixprovidersincludedinthetablebelowhavethegreatestmarketsharewithintheMETRCstates.

METRCStateSummaryVendor 2019# 2019% 2018# 2018%

GreenBits 320 24% 257 23%

BioTrack 291 22% 270 25%

Flowhub 178 13% 179 16.3%

Adilas 74 6% 77 7%

MJFreeway 73 6% 57 5.2%

MMJMenu 67 5% 54 5%


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What’s Next?

CannabizMediahaspioneeredathree-stepprocesstogatherlicensedata.Westartwithgatheringinformationfromregulators.Next,ourresearchteamseeksoutadditionalinformationaboutthebusinesses,peopleandsocialmediarelatedtothoselicenses.Wethencallthelicenseholderstoconfirmtheinformationwe’vefoundandaskadditionalmarketresearchquestions.

Wearenowaddingafourthlevelofresearchwhereweinvitelicenseholderstoclaimtheirlicenseandshareinformationonawidevarietyofproductsthattheyuse(learnmoreathttps://cannabiz.media/claim/).Asthedatagrows,we’llreportourfindingstoyouinfuturewhitepapers.

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About the Author EdKeatingisaco-founderofCannabizMediaandoverseesthecompany’sdataresearchandgovernmentrelationsefforts.Hehasspenthisentirecareerworkingwithandadvisinginformationcompaniesinthecompliancespace.Edhasoverseencomplexmultijurisdictionalproductlinesinthesecurities,corporate,UCC,safety,environmental,andhumanresourcemarketsandfocusesonworkflowproducts.Edhasspentthelast25yearsintheinformationindustry.Duringthattime,hehasworkedforbothstartupsandestablishedinformationcompanieswherehehasledmarketing,productmanagement,andsalesorganizations.ThesecompaniesincludeWoltersKluwer/CommerceClearingHouse,CTCorporation,

EDGAROnline,andBusiness&LegalReports.AtCannabizMedia,Edenjoysthechallengeofworkingwithregulatorsacrossthecountryasheandhisteamgathercorporate,financial,andlicenseinformationtotrackthepeople,products,andbusinessesinthecannabiseconomy.EdgraduatedfromHamiltonCollegeandreceivedhisMBAfromtheKelloggSchoolatNorthwesternUniversity.

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Copyright©2019byCNBMediaLLCdbaCannabizMedia

CopyrightholderislicensingthisundertheCreativeCommonsLicense,Attribution3.0.http://creativecommons.org/licenses/by/3.0/us

FormoreinformationabouttheCannabizMediaLicenseDatabase,visitwww.cannabiz.mediaorcontactCannabizMediaatinfo@cannabiz.mediaor(203)653-7975.

LimitofLiability/DisclaimerofWarranty:

Whilethepublisherandauthorshaveusedtheirbesteffortsinpreparingthisreport,theymakenorepresentationsorwarrantieswithrespecttotheaccuracyorcompletenessofthecontentsofthisreportandspecificallydisclaimanyimpliedwarrantiesofmerchantabilityorfitnessforaparticularpurpose.Nowarrantymaybecreatedorextendedbysalesrepresentativesorwrittensalesmaterials.CNBMediaLLCdbaasCannabizMedia(“CNB”)shallnotbeliablefordamagesarisingherefrom.Thefactthatanorganizationorwebsiteisreferredtointhisworkasacitationand/orapotentialsourceforfurtherinformationdoesnotmeanthatCNBendorsestheinformationtheorganizationorwebsitemayprovideorrecommendationsitmaymake.Theinformation,analysis,andopinions(the“Content”)containedhereinarebasedonthequalitativeandquantitativeresearchmethodsofCNBandtheirextensiveprofessionalexpertiseintheindustry.CNBhaveusedtheirbesteffortsandjudgmentinthecompilationandpresentationoftheContentandtoensuretothebestoftheirabilitythattheContentisaccurateasofthedatepublished.However,theindustryinformationcoveredbythisreportissubjecttorapidchange.CNBmakenorepresentationsorwarranties,expressorimplied,concerningorrelatingtotheaccuracyoftheContentinthisreportandCNBassumesnoliabilityrelatedtoclaimsconcerningtheContentofthisreport.Further,readersshouldbeawarethatInternetwebsiteslistedinthisworkmayhavechangedordisappearedbetweenwhenthisworkwaswrittenandwhenitisread.Theimagescontainedinthisbookarethepropertyoftheauthors,individuals,oragencytowhichtheimageiscredited.

pos report 7.17.19...retailers nationwide and estimate that to be 42% of the market. each licensee...

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