In Microsoft’s hometown, or rather home state Washington DC, production, distribution, and sale of Marijuana (weed) is legal. No doubt that the legal weed industry has a burgeoning demand across Washington and other five states where it is legal.
On Thursday, Microsoft announced its decision to partner with Kind Financial, a cannabis industry-focused software vendor. Kind Financial provides software solutions to businesses and government agencies looking to track the sale of legalized marijuana “from seed to sale”. The company has been in the business for up to three years now.
Microsoft partnership with Kind Financial marks the first big tech company to delve into the legal weed industry. It has been observed that most big tech companies shy away from the pot industry, but that only gave plenty of room for small startups to venture in and they have been thriving.
Ramifications of Microsoft delving into Weed Business
The legal weed industry needs technology solutions in as far as the gathering, processing, and understanding of data on the optimized growth of cannabis and other logistics are involved. Tech solutions are also needed to capitalize better on the burgeoning demand for grass for both medical and recreational purpose. Making the pot industry hard to ignore by tech companies such as Microsoft, which traditionally has superior technology infrastructure and solutions.
While talking to The New York Times, Mathew Karnes, Founder of Green Wave Advisors a marijuana data company, said: “Nobody has really come out of the closet, if you will. It’s very telling that a company of this caliber is taking the risk of coming out and engaging with a company that is focused on the cannabis business.”
However, there is a considerable amount of hesitancy. Not just on Microsoft and other big tech companies’ part but other businesses such as banks, which you will assume will rush into supporting startup companies operating in the legal weed industry. This hesitancy comes from the fact that in most states in U.S. marijuana is outlawed and such businesses face federal crackdowns.
Again for a big company like Microsoft with a heavy presence not just across states in the United States but around the world. There could be a possible backlash since marijuana is outlawed in most countries across the globe. Nonetheless, there is always a risk in a change of government policies. Take, for instance, a new Presidential administration that will take over from the Obama administration could backtrack on the legalized weed business.
There is also the potential damage to companies reputation, as one Zach Bogue, a VC investor says, “[My company] has stayed away from investing in the cannabis industry because it’s like investing in the porn industry. I’m sure there’s a lot of money to be made but it’s not just something we want to invest in.”
How Kind Financial Weed Business benefits
Well those are various people’s opinions, but Kind Financial will now be able to leverage on Microsoft’s government cloud infrastructure and close “the loop between marijuana-related businesses, regulatory agencies, and financial institutions.”
A spokesperson from Microsoft wrote in an email to BBC that they support “government customers and partners to help them meet their missions. Kind Financial is building solutions on our government cloud to help these agencies regulate and monitor controlled substances and items, and manage compliance with jurisdictional laws and regulations.”
Kind Financial adds that Microsoft cloud infrastructure and integrity was the best of its kind “designed to meet government standards for the closely regulated cannabis compliance programs.”