Trellis founder Pranav Sood says Canada's vertically integrated cannabis market was the problem the company set out to solve, starting with Supreme Pharmaceuticals in 2014.
Akerna acquired Trellis after Sood says it was drawn by Trellis's California traction and its deep integration with Metrc, the state compliance system.
Sood says the industry is shifting from compliance to competitiveness, forecasting and analytics, and Trellis plans to expand with Akerna over the next six to twelve months.
Cannabis software shifts from compliance to competitive analytics
Trellis grew from a Canadian seed-to-wholesale software tool into part of Akerna by building on Metrc, the state compliance system. Sood argues the compliance era is ending, and winners will be the software that helps operators forecast, manage demand and compete. The story shows how a startup with real customers and deep integration outlasted a crowd of 2015 to 2020 entrants.
Takeaways
Cannabis is moving from compliance to competitiveness. Sood says regulations have become fairly mature, so operators now focus on forecasting, demand management and analytics. He expects these to decide the winners, and compares cannabis with older industries that already have deep data.
Trellis layers workflows on top of Metrc. Trellis integrates deeply with Metrc, the state compliance system used in most US states. It adds invoicing, sales and purchase orders with single data entry, and it serves the seed-to-wholesale side, not consumers.
Canada's vertically integrated market created the opening. Licensed producers in Canada handled growing and shipping to patients themselves. Sood saw that as the problem to solve after the medical regulation change, and Trellis started in 2014 with Supreme Pharmaceuticals as its first major client.
The Oakland accelerator mattered for customers, not cash. Sood applied to Gateway mainly for funding, but the real value was introductions. Harborside, Caliva and LoudPack became large clients, and Akerna also came through the program. Casa Verde Capital led a seed round of about $2m.
Akerna bought traction and Metrc integration. Akerna was drawn by Trellis's California traction, while Trellis was struggling to raise a Series A during the coronavirus period. Support grew from four or five people to over 30, and Trellis could focus on software.
Blockchain suits government ledgers, not private operators. Sood says blockchain makes sense for a government-run system like Metrc, where everyone feeds one ledger. Siloed ledgers kept by individual operators lose that benefit, so he is skeptical of it for them.
Many startups lacked sticky products. Sood estimates three or four incumbents have operated for ten to fifteen years. Many startups that raised money between 2015 and 2020 did not build sticky products. Trellis is strong with large California enterprises and approved in several other Metrc states.
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