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Kind Financial Acquires Agrisoft Seed to Sale
Home » KIND Media – Cannabis Industry News » Kind Financial Acquires Agrisoft Seed to Sale
Read The Deal.com's latest article about Kind Financial, and its recent acquisition of the Agrisoft Seed to Sale software. This robust software integrated into Kind Financial's existing suite of business services will create a "one stop shop" for the cannabis industry.
Written by: Laura Berman | Published: June 30, 2015
Marijuana financial services firm Kind Financial acquires software maker Agrisoft
KindManage LLC's Kind Financial, a marijuana industry financial services company, acquired the assets of marijuana company software maker Agrisoft Development Group LLC for undisclosed terms.
Based in Kansas City, Mo., Agrisoft, which designs and sells a suite of software for operating businesses in marijuana wholesale, manufacturing and retailing, was sold to Kind Financial on Thursday, June 25.
"We look at [the Agrisoft acquisition] as an opportunity to integrate our services and products into their software in the future as well as controlling the individual transactions in the industry," Kind founder and CEO David Dinenberg said in an interview.
Agrisoft's cloud-based software, "Agrisoft Seed-to-Sale," is used throughout the U.S. and Canada by purveyors of both recreational and medical marijuana, as well as by regulatory agencies. The software is intended to both improve marijuana business' efficiency and transparency, and simultaneously to aid state governments by providing records for tax collection and remittance.
Agrisoft could not be reached for comment.
The software tracks individual plants as they grow with standard barcoding and with radio frequency identification (RFID), which speeds production by eliminating the need for each plant to be coded with a scannable barcode and allows producers or distributors to track the plant's exact location after distribution. Cultivation management software monitors lighting, plant conditions, harvest yields and other agricultural metrics.
Seed-to-sale software, which tracks the plant's growth and its transit to the seller, is not a legal requirement for marijuana businesses, but Dinenberg believes that the rigorous monitoring of the product that the software provides might become compulsory with more federal regulation. "Right now seed-to-sale is kind of an optional thing in the industry, but as regulation gets more rigid, and if the federal government gets into it, it'll become more standard. We believe in compliance and transparency," he said. Agrisoft's physical security software integrates security cameras and biometric access control, which replaces keys with biological data, such as fingerprints and retina scans. Agrisoft software also aids in the production of marijuana-infused products (MIPs), such as cookies and soda, with features such as recipe automation, automatic adjustments to the concentration of marijuana, inventory and storage, and expiration information. The software also integrates with TurboTax and QuickBooks accounting software, tailored to assist users with IRS 280E, the portion of the tax code that governs licit marijuana businesses.
Kind, based in Los Angeles, offers traditional banking services to marijuana businesses, which often have difficulty obtaining basic financial support, such as small business loans and credit lines, due to banks' wariness of the business. Because both medical and recreational marijuana are illegal federally, traditional banks are reluctant to grant such companies credit or allow them to open checking accounts. Although these businesses' products are illegal under federal law, the Obama administration and the Department of Justice have indicated that businesses in full compliance with state law are not considered prosecution targets. Dinenberg noted that his company, which provides investment capital to growing businesses, conducts industry research and plans industry events, among other things, has grown from just himself and his wife to six employees last fall to 20 employees now. "It's a new industry with lots of consolidation taking place over time," he said. Surna Inc., which manufactures equipment for the legal marijuana industry, acquired a majority interest in Agrisoft in January. Kind purchased Agrisoft's assets from Surna, which will remain a "strategic partner" with the combined companies, according to a Securities and Exchange Commission filing for the deal. The sale was conducted privately with no outside advisers or private equity backing. Marijuana's differing legal status across the country has hampered the industry. Medical marijuana is legal in 24 states and in Washington, while recreational marijuana is legal only in Alaska, Colorado, Oregon and Washington state. However, it is still federally outlawed, listed by the Drug Enforcement Administration as a Schedule I controlled substance, a drug "with no currently accepted medical use and a high potential for abuse," the same category as heroin and LSD. The government may be moving towards relaxing these policies. Dinenberg lauded the possible changes. "The [current U.S. attorney general Loretta Lynch and her predecessor U.S.] attorney general [Eric Holder] as well as the Obama administration in general are allowing states to develop their own laws and rules and regulations and watching it. As long as it operates the way it's supposed to operate, then the current position of the government is, 'We're going to leave them alone and not spend money or resources fighting them.' I think we can all say that the billions and billions of dollars spent on the war on drugs hasn't worked. The marijuana industry is a tax collector, it's a job creator, and it's a tax savings from a budget standpoint because if you're not fighting something you're saving money."
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