, which builds regulatory compliance software for the cannabis industry, said on Thursday that it had raised $1 million as part of a larger Series B funding round.
The funding round, which the company said could reach $3 million when it’s completed, has a number of investors, including Merida Capital Partners, who provided the initial $1 million commitment.
“Simplifya’s compliance tool has helped companies across Colorado navigate a constantly evolving regulatory landscape and set an example for the rest of the nation,” said Simplifya CEO and co-founder Marion Mariathasan in a statement, announcing the capital raise.
Mariathasan added the company’s goal is to make it as easy as possible for the legal cannabis industry to comply with state and local regulations. “This round of funding will allow us to expand into additional markets and develop more features to help cannabis businesses not just survive, but thrive,” Mariathasan said.
The investment comes at a time when the regulatory field is at a crossroads, after U.S. Attorney General Jeff Sessions rescinded memos from the Obama administration, specifically the Cole memo that allows for the medical or recreational use of marijuana.
“The recent DOJ marijuana policy shake-up might have raised concerns for some cannabis industry investors, but it strengthens the case for investing in Simplifya,” said Brian Vicente, a co-founder of Simplifya and founding partner of Vicente Sederberg LLC, one of the nation’s leading cannabis law firms. “The cannabis industry is a compliance industry. Now more than ever, businesses are going to want to be in clear compliance with state and local laws, and they are going to need assistance.”
Despite Sessions’ attempt to curb the use of legalized marijuana, many experts believe his actions may, in fact, do the opposite, helping it to become legal.
In an op-ed for CNN
, Michael Chernis a Los Angeles-based attorney and expert specializing in the cannabis industry wrote it would help the industry. “If Sessions intended to quell the enthusiasm of California’s cannabis business enthusiasts and government officials, he once again fell short,” Chernis wrote.
The investment comes at a crucial time for Simplifya, which has boosted its compliance offerings as California’s adult-use system comes online. The company said that the investment by Merida will help it grow its tools, which already include allowing them to delegate, review and manage compliance tasks. They also have tools for audit management, scheduling and keeping track of certain issues.
Merida Capital Partners managing partner Mitchell Baruchowitz said the investment in Simplifya highlights the company’s promise, citing other investors who have previously invested in the company.
“The fact that Simplifya is backed by cannabis industry leaders like Vicente Sederberg and Hypur Ventures, and partnered with companies like New Frontier Data, just furthers our belief that they are going to play a key, long-term role in this nascent industry,” Baruchowitz said in the release. “Product trends will come and go, but regulatory compliance will always be of paramount importance to every successful cannabis company.”