By Chris Clair
Cannabis has been used for centuries for pleasure and for hemp fiber. However, as a nascent “industry” in the contemporary sense, little data exists as to market trends, user demographics or financial information.
As a self-described serial entrepreneur, Giadha DeCarcer saw this gap and an opportunity to create a business that would fill it. The result is New Frontier Financials, which will bring the analytic power of “Big Data”—the collection, sorting and analysis of vast amounts of data—to the world of cannabis. DeCarcer is the firm’s founder and chief executive.
In early February New Frontier Financials closed a successful $250,000 round of seed financing using CannaFundr.com and just kicked off its Series A venture capital funding round, in which DeCarcer said New Frontier Financials hopes to raise $2 million. She said New Frontier Financials is currently negotiating with two large venture capital firms and could close the Series A in March.
Money from the Series A will go to fund expenses for one to two years, giving New Frontier Financials time to grow with the industry. That growth involves helping cannabis growers, distributors, retailers, prescribing physicians and others involved understand the importance of data collection and analysis.
DeCarcer started looking at the cannabis space when a friend looking to capitalize on medical marijuana licenses being issued in Maryland asked her to help him come up with a business plan. “I did what any investor would do, any business person would do, I looked at the data,” DeCarcer said. “What I found was not only was there no industry report, there was no data. There was no research with methodological standards that would allow you to take the data in it seriously.
“The industry is not very sophisticated right now in terms of understanding it needs data,” DeCarcer said. “Owner-operators who have the data are mom-and-pop shops that don’t get the value of actionable intelligence to support their business.”
Much of the data that is collected is collected via surveys. But the response rates tend to be in the 30 percent range and the data collected doesn’t pass statistical muster, DeCarcer explained. “You have to vet your sources and have comprehensive data that gives you a statistical representation of any conclusions you come up with,” she said.
DeCarcer wants to build a system that collects data, analyzes it and produces information that industry members can use to make decisions. Basically, if it’s data, New Frontier Financials wants it, DeCarcer said, quantitative or qualitative. This includes retail pricing, quantity over time and consumer profiles of what patients and consumers are using.
All of this would produce information that would be predictive and help operators produce and order the right amounts of the right products. Regulators could also use the company’s analytics to gain visibility into the cannabis industry, DeCarcer said.
One big part of making all of that happen is reaching out to those “mom-and-pop” shops and first convincing them they have or can collect important data already. Next New Frontier Financials has to sell the business operators on the ease and safety of turning that data over. Then the company must analyze all that data and produce information that’s useable. Finally, it has to build a market for that information.
DeCarcer said New Frontier Financials has partnered with RackSpace and MarkLogic on data analytics and distribution. She said the company is about 45 percent finished with its first quarterly report. The plan now is to make that available in March. DeCarcer said it will be a macro-level view of the industry.
According to DeCarcer, the rest of the data collection and analytics platform should be up and running in the next two to three months; subsequent reports will be more focused in scope. Marijuana Investor News will distribute the reports.
Additionally, in its first year, New Frontier Financials will deliver directly to owner-operators free customer relationship management and consumer behavioral studies.
The company is ready to move on its first-year business plan, with a staff of six full-time employees, including an executive team consisting of DeCarcer, Chief Operating Officer Richard Gilchrist and Chief Technology Officer M. Glenn Harless.