As marijuana goes mainstream, a Boca Raton software company that runs customer loyalty programs for pot shops said this week that it has raised $3 million from investors.
SpringBIG plans to use the proceeds to double the size of its 10-person staff and to woo new customers, Chief Executive Jeffrey Harris said in an interview Thursday.
His company keeps track of cannabis dispensaries’ customers and offers rewards for repeat purchases. Loyalty programs are common in the retail industry, but they’re a new concept in the budding marijuana sector, which only recently joined the formal economy.
Harris said he stumbled into the cannabis field by chance. SpringBIG first focused on selling its services to mom-and-pop pizzerias, yogurt shops and nail salons.
But in late 2016, Harris realized that the cannabis dispensaries that had signed up for SpringBIG’s platform were far more profitable than other types of merchants.
“This seems like a great market to focus on,” Harris said.
The company’s customers include cannabis stores in California, Colorado, Illinois, Maryland, Michigan and Washington state.
Marijuana remains federally illegal, and U.S. Attorney General Jeff Sessions has voiced skepticism about legal pot. Still, more than half of U.S. states have introduced some form of legalization. In Florida’s tightly regulated system, a limited number of cannabis companies can sell oils and vape cartridges to patients who have won a physician’s approval.
Because SpringBIG is a behind-the-scenes vendor that never handles weed, it avoids the patchwork of state regulations.
“We’re not touching the plant,” Harris said. “We’re not involved in the sale or distribution of the cannabis.”
SpringBIG made a presentation to investors at a September conference at the swanky Eau Palm Beach Resort in September. The event was hosted by The Arcview Group, a California organization that matches cannabis businesses and investors. SpringBIG won a $50,000 prize for making the best pitch in a Shark Tank-style competition.
That was followed by this week’s news that the company had raised more than $3 million from a group of investors that includes Green Acre Capital of Canada, Halley Venture Partners of San Francisco and members of The Arcview Group.
SpringBIG is not yet profitable, Harris said. And while he’s focusing on an industry that remains on uncertain legal ground, he’s also concerned with such everyday challenges as finding workers versed in the Ruby programming language and opening offices on the West Coast.
And, he said, running a rewards program for pot shops isn’t much different from offering coupons to coffee shop customers.
“At the end of the day,” Harris said, “a loyalty platform is a loyalty platform.”