Apottechcompanycalled Wurk has raised $1 million in seed funding tohelp cannabis businesses such as dispensaries or growers comply with all the different regulations coming into play around theburgeoning legal cannabis industry.
The seed deal closed before various ballots issues were voted on today in the U.S., which couldmake the sale and use of marijuana legal for adults ina broad number of new markets.
Wurk CEO Keegan Peterson saidhiscompanys software-as-a-servicehelps cannabis businesses do everything from background checks of potential new hires, to managing employeesschedules, benefits and training, as well as making sure they get paid on time.
WhenHR tech, including platforms to manage employees, abound, why did the cannabis industry need to, er, roll its own?
For one, banking in this industry is virtually impossible, the CEO said.
Cannabis is still deemed a Schedule I controlledsubstance at the federal level, so large banks arent permitted to finance (most) cannabis companies.
Peterson also said, Where it is legal for medical or recreational use, theres a marijuana division inevery state, a governing body that establishes the rules businesses have to comply with So alongside all the regular Department of Labor rules, etc. etc., cannabis businesses have to do a whole different layer of reporting.
Wurk has developed relationships with local state banks or credit unions that are permitted to finance cannabis companies, and developed a network of these financial services firms to help cannabis companies handle all their payroll issues as they grow.
Investors in Wurks seed roundinclude members of an investing organization called the Arcview Group, which is comprised of hundreds of high-net-worth individuals evaluatingdeals in the emerging legal cannabis industry.Other backers includeCanopyBoulder, and Poseidon Asset Management.
Arcview Group CEOTroy Daytonsaid, If Wurk can get the growing number of dispensaries and cultivation centers to unplug whatever they were hobbling together before to run their businesses, all you have to do is look at the industry growth curve and extrapolate. They will be able to build a business that is long-term sustainable and delivers great returns.
Dayton also said not many companies are building tech to help cannabis companieshandle operations. Most have focused on cultivation of cannabis, or sales, marketing and front-end concerns instead.
Petersonsaid his Denver-based startupwill use its seed funding primarily for sales and marketing of its software-as-a-service. He also wantsto participate in the national discussion about cannabis, connecting withregulators who may want to consider legalizing or expanding legal use of marijuana in their states, or even at the federal level, he said.
Prior to closing its seed round, Wurk graduated from Canopy,the cannabis industrys specialized accelerator in Boulder, Colorado.