By Gregory Daurer | Jun 17, 2020
Palo Alto, California
Supply-chain software for cannabis
In the early days of cannabis software development, the goal was simply to assist businesses with compliance, says Huson. The available products tracked the "bare minimum -- [counting plants, recording sales]." He adds, "There was no system out there for the boots on the ground operator. The guys on the floor. The lab director. "
Various industries use software in order to track their operations and supply chains, Huson notes. There's software for breweries and distilleries. Makers of pharmaceutical gel caps. Tobacco. Chocolates. According to a press release, Backbone's software allows operators of cannabis cultivators and manufacturers to keep tabs on "cultivation, manufacturing, inventory, packaging, shipping, pricing, billing, purchasing, and logistics on an intuitive, easy-to-use platform."
Huson encourages cannabis companies to keep better track of testing results, which may just be sitting idle "in Google Drives, in PDFs." He often phrases the product's selling points in terms of questions for businesses: "How [can you do] analytics of [the] performance of your cannabis and of your facility and of your yield, if you don't actually have the full database of test results?"
There's more: "How do you know under what conditions the cannabis yields the best? What's the temperature of the solvent? What's the time history of your pressure on your CO2 extractor? How are you keeping track that your equipment has been maintained?" He adds, "What if we [as a software developer] tie in to the equipment? So, we're modelling people's processes. Within those processes, we have equipment profiles [like maintenance logs, cleaning logs]."
Huson says that by continuously analyzing data a businesses can find out in real time if, say, "my cost per gram just went up 50 cents. . . . I would make changes now [and] not wait until my end-of-quarter report and I just lost a bunch of money."
That involves flexibility with a wide range of processes, he adds. "Let's look at the temperatures, let's look at the pressures, let's look at all these pieces and see what's different. [As an example:] 'Guys that ethanol that we just bought is not definitely not performing like last year.' [Or:] 'It's hotter outside. Turn the chiller on the ethanol up a little bit.'"
Before he developed software for cannabis, Huson, a structural engineer, worked for the Department of Defense "studying the effects of bombs on structures." Ultimately, he became disenchanted with the pursuit. "It wasn't really great dinner conversation," he says.
While putting on a music festival for several years in a row on the border between Mendocino and Humboldt counties in Northern California, Huson met some of the region's cannabis growers. Subsequently, he translated his experience obtaining regulatory permits for the music festival into assisting recreational-market cannabis growers, securing "54 state licenses across the state for folks."
But he notes, "It's one thing to get a license, it's another thing to maintain a license. In order to maintain a license, things you say you will do, now you've got to do. . . . That's when the software [idea] kicked in. And that's when I started to realize that, specifically, in the center supply chain -- manufacturers, processors, distributors -- there wasn't good software in order to help them meet their permit needs."
In addition to working with a development fund that seeds "best in class" cannabis businesses, Huson joined forces with Rajesh Chandran, Backbone's CEO, who "sold his prior two companies to Oracle and Microsoft," according to a press release. Their challenge: to devise operations software for cannabis -- "the most highly-regulated and rigorously-tested" product in the marketplace, says Huson.
Today, Backbone has accrued 40 customers, strictly through "word of mouth," Huson says. "Before last month, we had spent $500 on marketing."
Not only do recreational cannabis businesses use the software, hemp businesses have begun utilizing it, as well. Huson says, "Our system tailors really well to hemp processors, so we're now in Kentucky, Kansas, Utah, Colorado, Arizona, Oregon." On both sides of the low- and high-THC spectrum, Huson says businesses tell him, "'Finally -- something that was built for us.' . . . The system works really well for fast-moving inventory."
Just like he enjoys "making people smile" by attending the music festival he co-founded, Huson calls his software work personally rewarding. "I'm in the industry of supporting people, and helping them make their lives easy," he says.
Challenges: There's so much that can be added to the existing software, there's a temptation to "try to do it all." So, Huson says it's "not getting distracted, and staying true" to his company's core mission.
Opportunities: Huson cites expanding opportunities for his business, given "the growing global market" for cannabis. "Cannabis is going to be a worldwide product."
Furthermore, there's the leg-up the company already has over newer competitors: "We are six to twelve months ahead of anyone thinking along the same lines," he says.
Needs: Huson says it's "strong partners who share a similar vision."