Software giant Microsoft is getting into the marijuana business. Announcing a partnership with Kind Financial, software designed to serve the cannabis industry will be added to Microsoft’s list of products.
Kind Financial, a software company that specializes in the legal marijuana industry, offers services to cannabis growers that helps track pot plants from “seed to sale.” States with legalized medical or recreational cannabis can also use the software to ensure transactions are within the law.
While many tech start-ups have been eager to get involved in the controversial weed industry, Microsoft is the first major corporation to jump on board the growing industry. The Kind’s customized software will be a new product in Microsoft’s cloud computing business.
“Nobody has really come out of the closet, if you will,” said Matthew A. Karnes of Green Wave Advisors. “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.”
Since marijuana is considered illegal under federal law, most large and established companies have avoided the weed industry, fearing legal problems from the U.S. government. The ongoing conflict between federal and state laws has created considerable ambiguity in the legality of cannabis sales. While unlikely, the Fed could still put up barriers to slow or stop the legalization movement happening within many states.
Generally, banks are unwilling to open accounts for cannabis industry participants. Los Angeles, California-based Kind Financial is one of only a small handful of companies willing to offer financial solutions to marijuana growers and sellers.
Many stores that sell weed have relied almost entirely on cash transactions or payment-taking kiosks provided by companies like Kind. Working through the few state-chartered banks that are friendly to the weed industry, the software start-up has a range of products, including A.T.M’s that simplify marijuana sales.
Microsoft itself will stay away from the money machines as well as the plants. Instead, the tech juggernaut will be interacting with Kind’s “government solutions” department to develop software systems specifically for state and local governments.
Moving from Philadelphia to California to start the company, Kind Financial founder David Dinenberg said finding companies to work with has been quite a challenge.
“Every business that works in the cannabis space, we all clamor for legitimacy,” the former real estate investor said. “I would like to think that this is the first of many dominoes to fall.”