Microsoft came out with more big news this week following its announcement that it will buy LinkedIn. The tech giant is dipping its toes in the marijuana industry, partnering with a startup company that will track legal marijuana to make sure everything is in compliance with regulations from “seed-to-sale.“

As more and more states legalize marijuana either recreationally or medically (the total count is up to 25 states now) corporate companies are shying away from joining the green profit boom–marijuana is illegal in the eyes of the federal government, after all. But, Microsoft is the first big tech company to break this taboo.

KIND Financial, a company focused on cannabis technology, and Microsoft will collaborate with governments to ensure marijuana stays within legal realms. The software will monitor the entire process, from growth and harvest of marijuana plants to sales in stores, entering a special niche in the marijuana market.

Only nine of the twenty-five states that have legalized pot, either medical or recreational, have implemented regulatory systems. These sorts of systems can also track how much marijuana is being sold to whom, the taxes that are being collected, and if growers and sellers are obeying the law.

“Microsoft is helping us support governments in their expansion of cannabis legislation,” KIND CEO David Dinenberg told The New York Times. “They’re experienced at providing platforms for government regulation. This is something Microsoft does every day of the week with other businesses in other categories.”

For now, Microsoft is sticking strictly to the government and compliance side of business, while KIND is more hands-on with the weed, but that could change. In the beginning, Microsoft will market the software at government-employee conferences, but it could eventually make appearances at cannabis events where KIND already has a regular presence. KIND, a start-up from Los Angeles, is one of the many companies trying to mainstream the marijuana industry. One of their most popular products is an ATM-style kiosk that dispenses marijuana.

“We do think there will be significant growth,” Kimberly Nelson, the executive director of state and local government solutions at Microsoft, told The New York Times. “As the industry is regulated, there will be more transactions, and we believe there will be more sophisticated requirements and tools down the road.”

Although KIND and Microsoft do not currently have any state contracts, they have applied to provide their software to Puerto Rico, which legalized medical marijuana earlier this year. Microsoft’s willingness to join the up-and-coming legalized weed industry is a big step forward.

“Nobody has really come out of the closet, if you will,” said Matthew Karnes, the founder of Green Wave Advisors, a company that provides data and analysis of the marijuana business. “It’s very telling that a company of this caliber is taking the risk of coming out and engaging with a company that is focused on the cannabis business.”

State governments and weed stores alike are relying on start-ups like KIND to facilitate the sales flowing through the industry. Because many banks are unwilling to hold money that is “illegal” in a federal sense, dispensaries are forced to rely on cash or the types of kiosks like those that KIND provides. States like Washington, New Mexico, and Illinois currently depend on start-ups similar to Kind to monitor marijuana sales.

Either way, partnering with KIND was a solid business decision for Microsoft, whose revenue is declining from its fading software business. Legal marijuana sales are expected to jump to $6.5 billion this year, from $4.8 billion last year; and another five states will vote in the fall on whether or not to legalize marijuana.

Inez Nicholson

Inez is an editorial intern at Law Street from Raleigh, NC. She will be a junior at North Carolina State University and is studying political science and communication media. When she’s not in the newsroom, you can find her in the weight room. Contact Inez at INicholson@LawStreetMedia.com.

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The Supreme Court of Canada has just ruled that the users of marijuana for medical purposes now have the right to bake the drugs in cookies, take it in lozenge form or as tropical oils in addition to smoking it. The unanimous ruling against the federal government expands the definition of medical marijuana beyond the “dried” form, and speaks volumes about the changes happening in the marijuana industry.

The Court found that the current restriction to dried marijuana violates the right to liberty and security “in a manner that is arbitrary and hence is not in accord with the principles of fundamental justice.” Restricting medical access  in Canada to marijuana in a dried form has now been declared “null and void.” That renders sections four and five of the Controlled Drug and Substances Act, which prohibits possession and trafficking of non-dried forms of cannabis, unenforceable.

This decision supports earlier rulings by lower Courts in British Columbia that said they went against a person’s right to consume medical marijuana in the form they choose.

Medical marijuana patients don’t always want to expose themselves to the effects of smoking the drugs. Inhaling marijuana could present health risks, and is said to be less effective for some conditions that administer cannabis derivatives. With inhalation being a large issue, the smoking process is said to irritate the lungs, which is why smokers are more likely to have an ongoing cough or other health problems like chest colds and lung infections.

A 2011 systematic review of the research concluded that long-term marijuana smoking is associated with an increased risk of some respiratory problems, including an increase in cough, sputum production, airway inflammation, and wheezing–similar to that of tobacco smoking. 

Some medical marijuana users wanted to avoid those side effects. But other methods like brewing marijuana leaves in tea or baking weed into brownies left patients vulnerable to be charged with possession and trafficking under the law.

“This is monumental,” said David Posner, CEO of Nutritional High, a Canadian company that has been testing marijuana-infused candy and drinks for sale in the United States later this year. “Another market the size of California just opened up for our products.”

So what does this mean for the U.S. exactly? Four states–Washington, Colorado, Oregon, and Alaska, as well as Washington D.C.–have legalized marijuana, while a total of 14 states have decriminalized certain amounts of possession. Legal marijuana is said to be the fastest-growing industry in the U.S. According to ArcView, over the next five years, the marijuana industry is expected to continue to grow. They are predicting that 14 more states will legalize recreational marijuana and two more will legalize medical marijuana. At least ten states are already considering legalizing recreational marijuana in just the next two years through ballot measures or state legislatures.

In that context, Canada extending its medical marijuana market, and the U.S.’s current growing market promise continued growth. Non-traditional ways to consume marijuana will continue to rise–this week’s decision was just the beginning.

Angel Idowu

Angel Idowu is a member of the Beloit College Class of 2016 and was a Law Street Media Fellow for the Summer of 2015. Contact Angel at staff@LawStreetMedia.com.

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There’s a hot, new startup in town and it’s solving a problem that has long gone unanswered–how to get medical marijuana delivered to you. It’s called Eaze and it’s being promoted as Uber for weed. As more and more states legalize marijuana, and many more allow the substance to be used for medicinal purposes, the commercial industry is going to continue booming. Eaze wants a piece of that–and from the looks of it, so do Eaze’s many investors.

The San Francisco-based company has already gotten quite a bit of funding. In its series A funding round–essentially its first big push for venture capital money–it received a very impressive grand total of $10 million. One of the more prominent investors is Casa Verde Capital. For those of you for whom that doesn’t ring a bell, that’s the name of the venture capital fund run by Snoop Dogg. Although this was Eaze’s first major funding push, it also received $1.5 million at the beginning of last year to get started.

Calling Eaze the Uber of weed, or at least medical marijuana, seems pretty much spot on. Users can order the drug with the click of a button, and Eaze promises a ten minute or less turn-around time. The company connects already-existing dispensaries with customers, and has a fleet of drivers ready to transport the orders. Eaze also allows customers to look through what each dispensary offers, including lab results, in order to find a good match between customer and product.

The business certainly has some kinks to work out, but they seem to be relatively minor. TechCrunch’s Ryan Lawler tried it out over the weekend and pointed out that right now it only accepts cash, which can be viewed as inconvenience for anyone who operates mostly in plastic.

Eaze isn’t the only business trying to capitalize on medical marijuana, however. There are plenty of others that have similar ideas and business plans. Some of the more well known include Nestdrop, Meadow, Grassp, Dave, and Canary, each of which have slightly different business models, platforms, and markets.

Moreover, that’s only considering the weed delivery industry. Other pot-based startups have already begun to try to break off chunks of what will inevitably end up being a gigantic market. For example, Privateer Holdings, based in Seattle, recently raised $75 million in funding for its many endeavors in the marijuana market. Privateer Holdings already has a hold on the Canadian medical marijuana market, and plans on “branding” marijuana to sell in the United States. One of those brands will be “Marley Natural“–based on the late Bob Marley. The business will involve his family and estate.

Now that the tide really does seem to be turning both for medical and recreational weed, it seems like there’s no good reason for funders not to back some of these projects. After all, legal marijuana has been named the fastest growing industry in the United States. A company like Eaze has the potential to become massively profitable, given the convenience of having items delivered to your door, as well as its ability to prevent any sort of “high” driving. Snoop Dogg’s investment is probably a pretty good one, and with that kind of backing, we should expect to see Eaze expand with this growing market.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

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