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“I knew that in a few years the consumer in cannabis would expect the same level of convenience and simplicity and purchasing power when shopping for cannabis as they would shopping for just about everything else in this world.” — Socrates Rosenfeld, CEO, Jane Technologies
Regulation has allowed the cannabis industry to go mainstream, leading to big profits for some businesses and more legalized access and retail options for consumers.
The cannabis market could reach $56 billion in revenue by 2026 — nearly triple the industry’s 2020 sales of $21.3 billion, according to BDSA, a cannabis market research firm.
But as the industry prepares itself for rapid growth, its ecommerce experience must keep pace. Today, the digital shopping experience for cannabis is still in its infancy, but Jane Technologies has created a platform that’s set to transform cannabis commerce.
Its CEO, Socrates Rosenfeld, joined a recent episode of The Unpacking the Digital Shelf podcast, “A Revolution in Data-Driven Digital Shopping in the Cannabis Industry,” to share how the platform delivers a compelling digital experience for cannabis consumers, executes its mission to support local businesses and has made data a core part of its monetization strategy.
Rosenfeld is an unlikely cannabis startup CEO. He spent seven years on active duty in the Army and started using cannabis to help with the emotional and psychological stress of transitioning back to civilian life. Ironically, he had never consumed cannabis before he left the Army.
“I was 29 years old, and after consuming cannabis, it really helped me connect with my loved ones and myself again,” he says.
After coming back home to Boston, Rosenfeld began a graduate MBA program at MIT and was surrounded by innovative technologists and thinkers. Rosenfeld says while in graduate school he uncovered a “really deep-rooted passion for cannabis, while I was also experiencing and uncovering a deep-rooted passion for technology.”
His two worlds ultimately collided. After a stint consulting on ecommerce businesses, Rosenfeld saw an opportunity to innovate the traditional analog retail infrastructure, go direct-to-consumer, and provide a digital cannabis shopping experience.
“I knew that in a few years the consumer in cannabis would expect the same level of convenience and simplicity and purchasing power when shopping for cannabis as they would shopping for just about everything else in this world,” he says.
Rosenfeld says convenience is currently the main challenge in cannabis commerce.
Consumers in the space don’t have a wide array of options when it comes to connecting their offline and online shopping experience locally in the same vein as DoorDash, GrubHub, or UberEats.
“In cannabis, the ability to go direct-to-consumer — fortunately or unfortunately, depending on how you look at it — is not available. It’s forced people to expect a level of purchasing power, convenience and simplicity as you would find on Amazon,” Rosenfeld says.
Jane Technologies has stepped in to fill that void with its platform, iheartjane.com. “You can go on Jane. You can type in a search term, either broad or specific. You can get verified reviews. You can get recommendations. You can compare by price — the exact same experience you would have on an aggregator like Amazon. Except unlike Amazon, due to regulations, all this value is forced to be pushed back into the local retailers.”
“We don't take a 20 or 30% cut … It has forced us to be disciplined and number one, be resourceful and efficient. But number two, it’s created other diversified paths to monetization, which will allow us to subsidize the cost of our ecommerce.” — Socrates Rosenfeld, CEO, Jane Technologies
Jane’s business model is anchored not just on conveniently connecting customers with great cannabis products. The company also wants to make it easier for a consumer to push his or her dollars back into the local ecosystem.
Jane does this by not taking a cut of retail sales on its platform in the same way Amazon, DoorDash, Uber Eats, and other marketplaces do.
Rosenfeld says Jane is a mission-driven company that aims to support local cannabis businesses, so the company doesn’t have a take-rate, which Rosenfeld says often crushes the margin of small businesses. Instead, Jane’s monetization model is focused on data and advertising.
Another characteristic that makes Jane unique is that it actually shares data with the brands featured on its platform.
Rosenfeld says Jane is really focused on taking good care of its seller ecosystem, so it:
Jane’s technology also largely operates in the background. The company, which has more than 2,200 dispensaries on its platform, primarily focuses on promoting the cannabis stores that sell through its website and simplifying the path to purchase for consumers.
“In North America, you won't see a Jane logo on any of these menus because it's not about us,” Rosenfeld says. “That's something that, as the tech community, we're responsible for. What is the purpose of tech? Is it to make the tech company the end all be all, or is it to service the people who use the technology and make their lives easier, better, more valuable? That's what we believe in.”
Similar to Instacart, Jane is discovering ways to monetize digital advertising data.
“We monetize on ecommerce by essentially giving this [its solution] away at cost. It’s a very low SaaS business. We monetize on the market basket data. We're also in a position now where we can do some very interesting things by brokering digital advertising from the brands who want to promote their products on local menus to consumers that have a high propensity to purchase their products,” Rosenfeld says.
For example, if a consumer goes to a dispensary menu on Jane’s platform and the company knows that customer is gluten-free, it will show a sponsored product — a gluten-free edible, perhaps — that might pique that consumer’s interest.
“What we've seen … is if a brand gives us a dollar, what we give them in the form of a sale, as an ROI, is $20 in return. And that's within 11 days,” Rosenfeld says.
Jane is unleashing the power of data to enhance the digital shopping experience for consumers, giving them a place to discreetly and conveniently buy cannabis products.
The company also is giving more data ownership and control to brands, so they can take action on these insights to better engage consumers and drive sales. Together, these shifts are paving the way for a better, more optimized cannabis ecommerce experience.
“Future generations of shoppers are not going to be those who are comfortable randomly driving around or walking into a [cannabis] store. They've been trained since the day they were born to use a digital tool. They have that purchasing power to become very well-informed consumers before they ever hit ‘order’ or go in and talk to someone at a physical retail store,” Rosenfeld says. “That is certainly the case here in cannabis, and I don't see that changing anytime soon.”
Check out this podcast episode of Unpacking the Digital Shelf, “A Revolution in Data-Driven Digital Shopping in the Cannabis Industry” for a deeper dive into how Jane Technologies is transforming cannabis commerce.
