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 nascent stage, there are no playbooks for determining which products will sell or what strains you should be growing.
That’s where companies like Massachusetts-based Canold come into play. The company sorts through piles of cannabis data produced by seed-to-sale tracking systems and other cannabis-related software to create actionable insight for businesses.
I recently sat down with Matt Kurtzman, the company’s founder and CEO, to talk about how he got into the cannabis space and the way Canold’s work impacts cannabis consumers and the general public.
What inspired you to get into the cannabis industry?
Kurtzman: I’ve always been interested in cannabis. I started using cannabis in high school, and it was always a part of my life in some capacity. As my career progressed, I focused on data analytics and business intelligence. As cannabis legislation started to change in Massachusetts, it became interesting that new things were going on in the space. I never really thought I would have a place in the cannabis industry, but then in 2017 I was transiting out of my consulting career and into an alcohol distillery that I had started with a few friends in college.
Eventually I realized I was kind of missing some of the analytic work that I used to like 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 cannabis retail and cultivation company based in Quincy. At the time they were trying to use their seed-to-sale tracking software to try to identify patients who were churning out of their retail operation. The reports that the software was providing weren’t adequate enough to get that kind of depth in the data modeling that was needed. I had rich data analytics experience from my previous role at Boston Consulting Group, and I was able to get into the back end of the software and pull out the data to build a churn identification model.
What’s a churn identification model?
Kurtzman: It’s a model that looks at deviations from expected visit frequency for every customer, and then if that customer is deviating from their expected visit cadence, the model flags them as a “churn risk.”
Once you know who those customers are, you can go and find what those customers like to buy. The reason you know that is because literally all their purchase behavior is tracked by the point-of-sale software. You can send promotional campaigns to people who are exhibiting churn, and sure enough, you get people to come back.
The campaign we did was super successful and brought a bunch of people into space. Then I started getting calls from other cannabis companies about providing similar services to them, and I quickly realized I needed to scale the business up.
Are there any data trends that you see in Massachusetts that are surprising, or unique to the state?
Kurtzman: One of the things we don’t do with the data from our customers is aggregate it. We just use the data access to standardize it and then access it in meaningful ways. So I don’t have any macro-level trends; the insight we’re gaining is on the micro-level for each operator.
These micro-level signals influence the opportunities for businesses. I use this example: Let’s say I see a report that in Central Mass. that concentrate sales are up 10 percent. Does that mean I should allocate 10 percent of my inventory budget to buy concentrates? Maybe, maybe not, but if I knew my specific dispensary was trending in that way, then I could start making decisions to pay more attention to that product category than before.
How does your work impact the general public and the average cannabis consumer?
Kurtzman: At the end of the day, you could make the argument that as the cannabis operator is improving the process, the end result is going to trickle down to the consumer. Whether that’s from a pricing perspective, or a quality perspective, or even just a product diversity perspective, at the end of the day consumers are the ones who keep these businesses afloat.
We touch the entire value chain. We’re influencing operators to make available what the market wants. For instance, if we see people are trying to buy packaged flower and want to go into a dispensary and see 30 different options of eighths they can buy, what that allows us to do is go and see which cultivars generate the highest percentage of flower that is of the quality where you can sell it as packaged flower. So if the goal is to maximize your ability to grow packaged flowers, we’re able to give guidance to operators on how they can turn that flower into packaged goods based on those demand signals, and we can control these models for whatever variables are relevant, like yield or cannabinoids.
You’ve been in the cannabis industry for a while now. Have there been any people you’ve met or experiences you’ve had that really stick out in your mind as special? How would you sum up your time in the space?
Kurtzman: The first time I saw a proper cultivation facility was a really magical opportunity for me. The first time I saw a grow was actually in Jamaica. It was a spring break trip during college, and we asked a taxi driver to bring us to a weed farm. We went up to some mountaintop, and it was great.
If you had asked me even six or seven years If I would be doing this full time, I would have said you were crazy. When I was younger I always hustled and tried to make money at restaurants running food from waiting tables; I’d get my paycheck and buy a big bag of schwag. One time I was in my room removing all the stems and seeds and my mom barged into my room. She was completely anti-weed and was super upset and very disappointed. She sent me to rehab.
It was such a s**** part of my life because I had to do all these things in rehab that were completely unfounded, but now here I am. This is my career now. I’ve been here 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 molding them together to build something bigger than myself.
My mom passed away before I got into the space in 2010, but now that a lot of the stigma has been loosened and I’m building a successful company and adding value to a larger community, I think my mom would be really proud to see that. At least that’s what I tell myself.
This interview was edited for length and clarity.