In Episode 22 of the Investing in Cannabis Podcast, Brandon David interviews Aeron Sullivan, CEO of Tradiv, a  B2B marketplace for cannabis growers, marijuana-infused product companies, and dispensaries. Tradiv, which operates in Colorado currently, seeks to make wholesale cannabis trade efficient, easy, and secure.

Summary

• Tradiv is a disintermediary
• All-in distribution costs are 1.5-9% on platform
• Tradiv is asset-light,  relying upon outsourced solutions for transportation and other services
• It takes about 4 orders to achieve customer loyalty
• Best producer did $350K in two weeks, with one order of $90K
• Typical order is $35K, which would generate about $700 to Tradiv.
• California continues to be a leader in flower but not concentrates due to lack of regulation
• 85% flower currently on platform but Sullivan expects this to become more balanced
• Tradiv provides data to help customers understand market better
• Trim in Colorado is wholesaling at $1800, while premium flower is around $3000
• There are many alcohol distributors now, a huge deconsolidation due technology improvements
• Tradiv could enter the alcohol space by replacing supply chain with better technology
• Series A capital raise ahead in Q1-2016 – no details yet
• Looking to expand to Oregon and Washington in 2016 and California in 2017
• Seed round through CanopyBoulder raised over $1mm
• Delivery liability covered by strict terms of service, but no issues so far with inability to return, transporters carry liability insurance, rules established to resolve any disputes
• Tradiv has a strong team at 14 total and is adding, including a recent addition of a supply chain engineer  from Procter & Gamble to manage Oregon and Washington
• After next round of financing, the company will be adding staff in those states
• Currently looking for a regional director in Colorado
• Seed round was mixed between private equity and angels
• Investors Poseidon Asset Management and Anslinger Capital provide significant value
• Aeron shared several questions he uses to screen potential investors
• 12 companies have failed to solve the problems that Tradiv addresses
• Revenue is growing 60% per month, with client value exceeding initial expectations
• Aeron has 3 meetings a month with regulators
• CanopyBoulder was a great experience, compressing 9 months of progress into 3 months

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