Akerna Archives - Green Market Report

Video StaffVideo StaffOctober 7, 2019

1min2020

Knowledge is power and the more data you have the better choices you can make for your brands. Akerna has been gathering data through its MJ Platform and will demonstrate how this data can be used for success with your brand. This panel was taped at the green Market Summit on September 11 in Los Angeles. It was moderated by Jon Smalls, Green Entrepreneur with panelists Jeanette Horton, VP MJ Freeway, Gordon Wade, Chief Product Officer Solo Sciences and Kimberly Brock, Sr. Manager Brand Reputation MJ Freeway.


Debra BorchardtDebra BorchardtSeptember 23, 2019
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6min4580

The cannabis industry’s first seed-to-sale enterprise resource planning (ERP) software technology company Akerna Corp. (Nasdaq: KERN) (formerly known as MJ Freeway) reported total revenue of approximately $11 million for the year ending June 30, 2019, which was a 4.2% increase over last year’s $10.5.

“Our fiscal 2019 results and recent milestones reflect the continued global adoption of both MJ Platform and Leaf Data Systems by cannabis enterprises and government entities,” stated Akerna Chief Executive Officer Jessica Billingsley. “We are also thrilled to have completed our merger with MTech. This transaction provided us a strong balance sheet and Nasdaq listing, which we expect will accelerate our product development efforts to meet the growing compliance needs of the global cannabis market.”

Revenue Breakdown

With regards to the revenue, Akerna noted that the first year of the Leaf Data Systems contract with Pennsylvania began in fiscal year 2018, returning to lower but stable run rates in the fiscal year ending June 30, 2019. The company said that monthly billings on MJ Platform increased in the month ending June 30, 2018, to the month ending June 30, 2019, by 55%.  Monthly Billings grew from approximately $268,816 in June 2018 to $417,163 in June 2019. The increase can primarily be attributed to growth in commercial software subscriptions to MJ Platform.

“We believe that demand for our MJ Platform software continues to be strong, evidenced by new contract bookings totaling approximately $31 thousand per month on average. This represents the revenue that would be recognized from newly booked clients in a month if they were all currently being billed. A newly booked client in a particular month may include those with actively billed recurring SaaS subscriptions, in addition to those with temporarily suspended subscriptions. An account may be temporarily suspended due to several factors, including:

  1. The client may be awaiting grant of operational license(s) from the state in which the client operates
  2. The client may be awaiting completion of their subscription implementation/setup
  3. Other operational factors which may result in a delay of client operations”

Software revenue in fiscal 2019 was $8.3 million, compared to $8.1 million the prior year. Consulting revenue was $2.4 million, compared to $2.3 million the prior year, driven primarily by the expanding legalized cannabis market.

The company said that its cost of revenue was approximately $4.6 million versus last year’s $4.4 million for an increase of approximately 6%. The statement said that the cost of revenue increased “primarily due to an increase in hosting and infrastructure costs incurred to support our Software business of approximately $0.4 million. Additionally, we incurred higher direct labor costs associated with providing the company’s consulting services of approximately $0.2 million. These increases in cost of revenue were partially offset by fewer third-party subcontractor costs associated with servicing our Leaf Data Systems clients.”

Post Quarter News

Akerna noted the following news events that occurred after the quarter closed.

  • July 2019, expanded further into Europe by serving clients in two additional countries, Italy and Macedonia.  Opened a Medellín, Colombia office to serve our growing footprint in South America.
  • July 2019, a new partnership with Leafly to provide seamless and real-time data updates.
  • August 2019, awarded a new contract from the Utah Department of Health and Department of Agriculture to implement Leaf Data for the state’s new medical cannabis program.
  • August 2019, MJ Freeway named to the Inc. 5000 list of the nation’s fastest-growing private companies.
  • August 2019, Leaf Data and solo sciences partnered to launch solo*TAG™, the world’s first cryptographically-secure, cannabis product authentication system. Exclusively for governments and only available with Leaf Data Systems, our advanced tagging technology combined with a closed-loop platform, significantly improves and strengthens the category of government track-and-trace products.
  • August 2019, announced a strategic partnership to integrate Isolocity’s quality management system (QMS), supporting GMP and ISO 9001 compliance, into MJ Platform.

Looking Ahead

Billingsley added, “Looking ahead, being a public company is expected to afford us liquidity to capitalize on growing market demand and continue our organic growth.  We also intend to opportunistically execute on a targeted, accretive acquisition strategy aimed at building scale and enhancing our growth prospects.”


StaffStaffJuly 12, 2019
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8min13232

Jessica Billingsley is a technology pioneer, solutions creator and industry leader, providing proven compliance software solutions to the cannabis market. She is the Chief Executive Officer of Akerna—the first cannabis compliance technology company to be traded on Nasdaq—making her the first CEO from this market space to bring a company to a major U.S. exchange. Jessica is also the CEO of Akerna’s flagship subsidiary—MJ Freeway. She established MJ Freeway in 2010 and it is the leading seed-to-sale regulatory compliance technology provider and developer of the cannabis industry’s first enterprise resource planning (ERP) platform. Akerna also offers Leaf Data Systems as a government resource for public sector compliance. Combined entities tracked more than $15 billion in world-wide, client cannabis sales to date. She is the first woman ever from the cannabis industry to receive the prestigious Fortune’s “Most Promising Women Entrepreneur Award” and is also recognized as one of Inc.’s “Female Founders 100.” Jessica received a degree in Communications and Computer Science from the University of Georgia and lives with her daughter in Denver.

GMR Executive Spotlight Q&A – 

Full birth name: Jessica Billingsley 

Title: Chief Executive Officer, Akerna and Chief Executive Officer, MJ Freeway

Company: Akerna and MJ Freeway

Years at current company:  Akerna launched in June 2019. Nine and a half years at MJ Freeway.

Education profile:  At 16 years old, I received a full academic scholarship to attend the University of Georgia, where I received a degree in Communications and Computer Science.

Most successful professional accomplishment before cannabis:  Prior to forming MJ Freeway, I built and managed technology operations with an emphasis on executive management, corporate culture, finance, and strategic relations. I launched my first company at 22, and I’ve been a successful founder, owner, COO and CEO of several companies.

Company Mission: Our technology empowers a compliant cannabis industry to prove outcomes that positively change lives every day.

Company’s most successful achievement: Nine years ago, my co-founder and I invented seed-to-sale tracking upon identifying the need for organic material tracking and compliance SaaS solutions in the growing cannabis industry. We were supporting one of the first cannabis dispensaries and grows in Colorado, and saw that cannabis needed technology built for it not adapted from other industries. And we believed visibility across the entire supply chain from seed-to-sale would be a requirement for the industry’s sustained growth. MJ Freeway was born with the launch of our patent-pending cannabis seed-to-sale technology. Today, seed-to-sale tracking is a requirement of most state’s that regulate legal cannabis. And to date MJ Freeway has tracked more than $13B in legal cannabis sales.

In 2017, in response to what I saw as the maturing of the cannabis market to multi-state enterprise businesses, MJ Freeway launched the cannabis industry’s first ERP. We also led the international expansion in the cannabis technology sector very early on in 2012 in Canada then into Spain. Today, our total international footprint spans 13 countries. Innovation and seeing what opportunities are next on the horizon – and then being ready for them first – is a hallmark of MJ Freeway and now Akerna. 

Most recently, I’m proud of an accomplishment that is a testament to the entire MJ Freeway team. Via a merger between MJ Freeway and MTech, a shell company formed for the purpose of acquiring a cannabis technology company, Akerna is the first software company that serves cannabis businesses to be traded on a major U.S. exchange. Akerna is traded on the Nasdaq under the ticker symbol: KERN. It’s an unprecedented milestone signifying a shift in beliefs and generating ripples of opportunity.  

Finally, I’m proud to have broken a couple of glass ceilings by serving as CEO of a technology company and holding a CEO position in a publicly traded company. Unfortunately, both are very rare occurrences. MJ Freeway launched last year the One Woman Challenge campaign to empower women in their careers. I want to reverse the growing decline of women in tech. It’s appalling to learn there’s a smaller percentage of women working in tech today than 25 years ago. Please learn more about the #OneWomanChallenge on our website and social pages and get involved. 

Has the company raised any capital (yes or no): Yes

If so, how much?: $25M in private financing prior to this most recent public transaction.

Any plans on raising capital in the future? Yes. Akerna’s strategy is to consolidate cannabis technology companies to connect data points in the global cannabis supply chain. Raising capital is a piece of our strategy to fully execute on Akerna’s strategy and is a reason for our listing on Nasdaq to be able to access more cost effective capital.

Most important company 5-year goal: To build the world’s most transparent and accountable consumer packaged goods supply chain. There’s an explosion of growth in consumers’ desire for transparency in products, which starts with transparency in the supply chain. With MJ Platform’s technology, I can tell you what farm the cannabis in your gummy was harvested from, what date it was harvested, and what nutrients were added prior to harvest. We can then follow the progression of the exact cannabis in that gummy until the moment it was sold to you. Seed-to-sale technology gives an unprecedented level of transparency across the supply chain. We intend to build on MJ Platform and grow Akerna through acquisitions to connect more data points across the cannabis supply chain and empower businesses, governments, and the public with the information they need to make better decisions. We are excited about the explosive growth of this industry and how compliance technology will underpin it. 


Debra BorchardtDebra BorchardtJuly 2, 2019
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5min11570

International expansion is the words of the day as several companies announced plans to reach beyond the borders of Canada and the U.S. It seems Colombia is where all the action is.

MJ Freeway

MJ Freeway, a subsidiary of Akerna Corp. (NASDAQ: KERN)  said it is expanding further into Europe by serving clients in two additional countries, Italy and Macedonia. The company also recently opened a Medellín, Colombia office to serve its growing footprint in South America. MJ Freeway client, Clever Leaves, is the first Colombian company authorized to export cannabis into Canada.

“We believe it is imperative for countries with emerging cannabis businesses such as Italy and Macedonia to have access to our compliance technology,” says Jessica Billingsley, CEO of Akerna and MJ Freeway. “By giving governments, businesses, and consumers the tools needed to productively manage regulatory demands, we are able to execute our plan to connect data points across the global cannabis supply chain.”

The company stated that Macedonia is one of the few countries in the world to approve medical cannabis for cultivation and export. Italy has significantly increased its hemp production to serve its growing domestic market for industrial products and infusing in cosmetics and other consumer goods. As a result of the expansion into Italy and Macedonia, MJ Freeway has increased its footprint to five European countries including Spain, Switzerland and Denmark.

MYM Nutraceuticals Inc.

MYM Nutraceuticals Inc.(CSE: MYM) (OTCBB: MYMMF) announced that its subsidiary in Colombia, Colombia Organica S.A.S signed agreements in principle to cultivate both THC and CBD-rich cannabis with independent farmers for an initial five acres. The company said in a statement that cannabis will be cultivated by farmers who will be licensees under the existing Colombia Organica cannabis cultivation licenses. The first crops cultivated on the initial five acres will function as test crops with the intention to add subsequent acreage.

“Our team in Colombia has begun to execute on our plan to cultivate both THC and CBD-rich cannabis in South America,” said Howard Steinberg, CEO of MYM. “The strategy of extending our licenses to neighboring farmers to cultivate cannabis will serve to increase our biomass supply that we intend on processing and exporting to the global market.”

The farmers will be responsible for all costs associated with cultivation from seed to sale. Colombia Organica agrees to purchase the harvested biomass at a price to be determined at the time of delivery based on the average market price at that time.

Aleafia Health

Aleafia Health Inc. (TSX: ALEF)(OTC: ALEAF) said it received multiple Export Permits from Health Canada, which allow the Company to begin its first international cannabis product shipment. Aleafia said it expects to ship its branded medical cannabis oils in the next month, which will be distributed by Australian Licensed Producer CannaPacific Pty. Limited. Aleafia Health owns a 10 % equity stake in CannaPacific.

“The receipt of Health Canada Export Permits enables Aleafia Health to sell high-margin, value-added cannabis products across international borders for the first time, representing a major milestone as we augment our global distribution platform,” said Aleafia Health Chairman Julian Fantino. “We continue to prove the international viability of our highly differentiated cannabis health and wellness ecosystem with products, clinic operations, education and distribution. With among the largest cultivation and extraction footprints in Canada coming online, we will continue to look to new international markets.”

“This is such a tremendous milestone for CannaPacific. Our relationship with Aleafia Health continues to accelerate our strategic vision of leadership in the Australasian medical cannabis market,” said CannaPacific CEO Joshua Dennis. “We have the facility, the proven management team, and now the product portfolio to continue executing towards our goal.”


Debra BorchardtDebra BorchardtJuly 1, 2019
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4min14630

Cannabis consumers love a good holiday and July brings two in quick succession. First, of course, is the Fourth of July. Cannabis software company Akerna Corp. (NASDAQ: KERN) said that it expects Americans will spend more on cannabis this Fourth of July than chicken for their BBQs.

According to Akerna, Fourth of July-week (June 28 – July 4) cannabis sales are expected to increase by 80% compared with an average week, ringing in approximately $450 million in total sales nationally. If this keeps up, Akerna said that by 2020 Americans could end up spending more money on cannabis than they would spend on wine for the Fourth of July.

While sales are expected to begin on the weekend before the holiday, increased sales are expected to continue throughout the week. Since the Fourth falls on a Thursday this year, Wednesday’s sales are forecast to be the busiest of the year.

Akerna released these retail sales figures that they compiled through a statistically relevant analysis of the cannabis retail market analyzing data tracked in MJ Platform across 20 states, Puerto Rico and Washington D.C.

July 4th by the numbers:

  • The order total on average will be $3.43 more than the average daily order total of $97.57.
  • Average basket count for 2019 is 2.64. 4thof July week will ring in an average basket count of 3.12.
  • Cartridge/Pens are expected to take a category share increase of 5%, as the second most popular category purchased June 28-July 4.
  • In states where flower is legal, flower will be the largest sales category with 40% of all sales for retailers.

“Utilizing the largest data set in the cannabis industry, we are able to provide a unique insight into market peaks and trends to anticipate and prepare for their busiest days,” said Jessica Billingsley, Akerna’s CEO. “Cannabis sales rival the sales of traditional holiday staples. It’s time to stop looking at this industry as niche or marginal. The growth of consumer adoption is explosive as the legalization of cannabis expands and Americans across all demographic segments are incorporating cannabis into their everyday lives.”

7/10

However, the fun doesn’t end with the Fourth of July. Just as 4/20 holds significance for cannabis consumers, there is the extracts holiday on July 7. 7/10 looks like OIL spelled backward. Some take it a step further and call it Happy Dab Day to celebrate the concentrate side of the market. There is a Dab Day celebration in Miami on July 13 this year sponsored by Trulieve.

Flowhub, the seed-to-sale software company tracked a sample set of cannabis consumers on this holiday over the course of one year, and the company found that in 2017, concentrate sales rose 88% versus 2016. In 2017, Dab Day sales increased 34% for that specific day of the week. The most popular type of concentrate is shatter (by a large margin), followed by wax, vape cartridges and live resin.

 


Debra BorchardtDebra BorchardtJune 20, 2019
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3min13880

Akerna Corp. (KERN) is crushing it in the company’s first days of trading at the NASDAQ Marketplace (NDAQ). The cannabis compliance software company is a combination of special purpose vehicle company MTech Acquisition Corp. and the software company known for its seed-to-sale tracking program MJ Freeway. The stock debuted on the exchange at $11.51 on Tuesday and was lately trading at $42.33.

The company is set to ring the closing bell at the exchange on Thursday. “This is a great day for Akerna and an honor to be the first data company in the cannabis space to ring NASDAQ’s closing bell,” said Jessica Billingsley, Chief Executive Officer of Akerna.  “We listed on the NASDAQ just two days ago and believe we are well positioned to realize our vision to connect businesses with data and consumers with information which will modernize and propel the cannabis industry forward.”

At one point, it didn’t seem like NASDAQ would approve of the listing. The exchange has been reluctant to list cannabis companies and has only recently begun to ease up on Canadian-based cannabis companies like Organigram Holdings Inc. (OGI). Then it listed e-commerce company Greenlane Holdings Inc. (GNLN) which is known for selling smoking accessories. However, the majority of Greenlane’s online sales come from Juul tobacco pods and that seemed to give the NASDAQ comfort.

Akerna is considered an ancillary cannabis company. While it provides the software to track cannabis plants, the company doesn’t “touch the plant,” meaning it doesn’t cultivate or produce cannabis products. Billingsley said that the company is looking forward to expanding its markets. It is currently working in 29 of the 33 legalized states and is in 13 countries. The software is available in four languages. It works with two state governments and she hinted that a third may be announced soon.

The company is not only the first cannabis compliance technology company to list on the NASDAQ, but it is also the first cannabis company led by a woman to trade on the marketplace. Billingsley has been with the company from its early days and has navigated it through the rough waters of security breaches to come out on top as Akerna begins its life as a publicly traded stock.

 



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