Point of Sale Systems Market May Be Maxed Out

No point-of-sale provider holds more than 16% of the market.

A key ancillary sector within the larger cannabis industry could be too jam-packed with companies to provide a good new business opportunity, according to a new report on point-of-sale systems for cannabis retailers from Cannabiz Media.

According to the report, the number of POS vendors in the U.S. has hit an apparent ceiling, having remained stable for two years running at 79 providers. The number of participants had nearly doubled from 43 providers between 2018 and 2020.

“The rate of growth of POS solutions may have reached its apogee,” the report stated, noting that the number stayed stable despite a national uptick in operational cannabis retailers, which grew from 8,875 in 2021 to 10,528 this year.

The report also noted that the 79 total POS systems included some companies that fell out of the sector and a few new ones that entered, which suggests that market demand for POS services has leveled off.

Of those 79, Cannabiz found that the top five market share leaders control 60% of the cannabis retailer market, and the top 10 account for 79% of the market.

The top 10 POS market share holders in the U.S. include:

  • Greenbits, with 652 retailers and 16% of the market
  • BioTrack, with 531 retailers and 13% of the market
  • Leaflogix, with 470 retailers and 11.9% of the market
  • Flowhub, with 466 retailers and 11.8% of the market
  • MJ Freeway, with 258 retailers and 6.5% of the market
  • IndicaOnline, with 186 retailers and 4.7% of the market
  • Cova, with 168 retailers and 4.2% of the market
  • GrowFlow, with 167 retailers and 4.2% of the market
  • Blaze, with 121 retailers and 3% of the market
  • Treez, with 118 retailers and 3% of the market

Several of those market leaders actually lost market share over the past four years, Cannabiz noted. That includes a steady downward trend for Greenbits, for instance, which in 2018 held 26% of the overall POS solutions market and is now down by 10 percentage points.

This year, Leaflogix had the biggest increase in market share, up to nearly 12% from just over 6%. Other POS companies that successfully grew their industry footprint include Treez, Blaze, GrowFlow, and Cova.

In the Canadian cannabis market, there are 53 POS providers, and only 15 POS companies operate in both the U.S. and Canada.

When Cannabis took both national cannabis markets into account, it found that Cova was the true North American POS market leader, with 859 retailers total in both nations and nearly 16% of the market. Greenbits, which doesn’t operate in Canada, fell to second place overall.

There were also 176 cannabis retailers that switched POS providers in 2022, Cannabiz found, down from 298 that changed providers in 2021. The biggest winner in that regard was easily Leaflogix, with a net of 93 added customers. The biggest net loser was BioTrack, which lost 111 clients.

“The last year has been difficult for the cannabis market and by extension the point-of-sale software industry,” the report concluded, and predicted more bundling of POS services with other offerings, such as advertising, by large tech companies such as Weedmaps.com.

John Schroyer

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