James Yi and Michael Piermont
Exclusive interview with Leaf Trade Founder and CEO James Yi and President and Chief Revenue Officer Michael Piermont
Leaf Trade cannabis ordering platform focuses on the B2B supply chain and supporting the compliant cannabis business. The company operates in more than 20 markets in the United States, with a focus on highly regulated, emerging markets. Founder and CEO James Yi and President and Chief Revenue Officer Michael Piermont spoke to New Cannabis Ventures about how the Leaf Trade platform works, which scales with the complexity of the cannabis industry and the company’s growth path. The audio of the entire conversation is available at the end of this written summary.
The founders and the team
Before starting Leaf Trade, Yi started another B2B software company. When the medical cannabis industry started in Illinois, advice got him a foot in the door. He learned about the specifics of the regulatory environment and identified the wholesale transaction process as one of the main problems in the industry. Companies did wholesale deals through SMS, email, phone calls, and spreadsheets. Yi decided to use his software company launch experience to bring a solution to the Illinois cannabis market in 2017.
According to Yi, Leaf Trade has been able to partner and grow with some of the largest MSOs starting in Illinois as they expand into other states.
Piermont has a long history as a founder or former employee of B2B marketplaces and sales platforms. He worked with a number of B2B fitness companies and spent time in business development at Career Builder. Yi shared his vision with Piermont, and he saw an opportunity to leverage his experience building go-to-market plans and teams.
The leaf trade team
The co-founders highlighted other members of the Leaf Trade team including Director of Marketing Katie Byrd, VP of Engineering Mike Palac, and VP of Finance and Data Neil Block.
The leaf trading platform
When Leaf Trade first launched, the goal was to digitize and streamline the wholesale ordering process. The platform has grown to offer orders, fulfillment, and payment processing. The company is also rolling out a logistics platform. Farmers and retailers can use the platform knowing that all transactions will be carried out in accordance with national compliance requirements.
A buyers dashboard on the leaf trading platform
The Leaf Trade platform is also designed to be integrated with several different systems to optimize the customer experience. Customers can connect other systems such as QuickBooks, Sage and Salesforce.
Market reach and customers
Leaf Trade is currently represented in 22 states and will soon be 25. The company expects to be in nearly 30 markets by the end of the year. It’s growing 40 percent faster than the team expected a year ago, according to Piermont.
Leaf Trade works with most of the top 14 MSOs in the United States. Companies such as Verano Holdings, Holistic Industries, GTI and Curaleaf are among his customers.
A number of other companies offer a service similar to Leaf Trade, but most of that competition is concentrated in established leisure markets in the west, according to Yi. Piermont sees another company appearing as Leaf Trade’s main competitor on paper, but Leaf Trade has yet to lose a customer.
In many places, like the east coast, spreadsheets are Leaf Trade’s main competitor. According to Yi, emerging businesses don’t necessarily realize they need a solution like Leaf Trade until they start growing. The Leaf Trade team is working to get early conversations with companies in emerging markets and demonstrate the value of time savings through the Leaf Trade platform.
The industry consolidation that is taking place between MSOs and breeders is contributing to Leaf Trade’s growth. When one of his clients expands their footprint, they add more Leaf Trade accounts.
Leaf Trade has also been raised several times with potential M&A. The team is open to deals that will help clients long term, but the company won’t execute a deal just to make it look good in the market, Piermont said. There remain many partnering opportunities, and Leaf Trade still has many runways to go.
According to Michael, if state legalization happens, it will lead to more money in cannabis and more mergers and acquisitions as tech companies look to buy their way into the industry.
From a product perspective, the Leaf Trade platform was designed to be agile, according to Yi. It currently takes into account the nuances of different government regulations but could be adapted to interstate trade if legislation allows for this shift in the industry.
That spring, Leaf Trade closed its $ 5.5 million Series A. The company has a strong capitalization table and a history of capital efficiency, according to Piermont. Now the company is focused on expanding its West Coast sales team, led by Evan Stafford, and pouring more resources into its product. Leaf Trade would like to respond to customer requests for new features. Eventually, with the bandwidth to handle these types of inquiries, Leaf Trade adds important product features that serve many of its large corporate customers. It’s also ready to invest capital to really show off its brand.
The number of orders placed on the platform is an important metric for the Leaf Trade team. The team drills down one more time to examine the number of orders that customers are filling. Currently, 73 percent of orders are placed by retailers rather than sellers placing orders on behalf of their customers.
This year, Leaf Trade is targeting sales of $ 3 million to $ 5 million. That goal will be raised to $ 15-20 million over the next year. As the company’s sales grow, so do its margins. The team wants to offer more services to its existing customers and expand their relationship from simple order management to payments, data services and logistics. According to Piermont, customers will find greater efficiency and cost savings when using a single platform.
Leaf Trade takes on the challenge of entering multiple markets at the same time while trying to add employees and maintain its culture. The platform also needs to keep pace with changing regulations in its new and existing markets. Ultimately, the Leaf Trade team continues to look for ways to simplify the processes for their customers.
To learn more, visit the Leaf Trade website. Listen to the entire interview:
Carrie Pallardy, a Chicago-based writer and editor, began her career in the healthcare industry writing, editing, and interviewing subject matter experts from a variety of industries. As a published author, Carrie continues to tell her network of readers compelling, undiscovered stories. Contact us for further information.