Software firm that runs pot shop rewards programs raises $3 million

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.

Related: Canadian cannabis company pays $40 million for Florida pot grower

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.

Related: Palm Beach County’s first medical marijuana store opens

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.

Related: Bank of America’s misgivings delay Florida’s medical marijuana ID cards

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.”

Related: Florida bank risks federal scrutiny, does business with marijuana dispensaries

Reader Comments ...

Next Up in

Lytal, other Palm Beach County lawyers take lead at state legal group
Lytal, other Palm Beach County lawyers take lead at state legal group

Lake H. “Trey” Lytal III and other Palm Beach County attorneys have taken leadership roles in a state legal association that has lobbied the legislature heavily on issues including proposed repeal of Florida’s no-fault car insurance system. Lytal, 47, was sworn in as president of the Florida Justice Association in its annual meeting...
Draft contracts likely not inspectable records

Question: I live in a community with a HOA. I understand that, as a parcel owner, I have the right to view official records upon request. My HOA is currently in negotiations with a cable provider to renew our cable contract. I have access to the bids, as I understand those are part of the official records. My question is: Would I have the right to...
How safe is your home insurer in 2018? What you need to know
How safe is your home insurer in 2018? What you need to know

Hurricane Irma’s claims in Florida are still climbing to nearly $10 billion and nearly 10 percent are not closed, but the 2018 hurricane season barged right in anyway. It could not even wait until its official start date of June 1 to generate a named storm, Alberto. While the season’s ultimate severity remains to be seen, September&rsquo...
Affordable housing project lists new homes at $155K — see how it works
Affordable housing project lists new homes at $155K — see how it works

For nine years, Michelle Meeks crammed herself and her two daughters into a two-bedroom unit in what she describes as a “fly-by-night” apartment complex. The single mom saved money by skipping cable, and she slept in a bedroom where the air conditioning barely worked. “It was horrible,” said Meeks, a maintenance worker. Now...
AMC Theatres announces $20-a-month rival to MoviePass
AMC Theatres announces $20-a-month rival to MoviePass

AMC Theatres, the world's largest movie theater chain, has unveiled a $20-a-month subscription service to rival the fledgling MoviePass. The theater chain on Wednesday announced a new service to its loyalty program, AMC Stubs, allowing subscribers to see up to three movies a week for a monthly fee of $19.95. That's more expensive than the $9.95 monthly...
More Stories