High Country: How Denver’s hottest startup is streamlining sales and service for dispensaries
Even though Kyle Sherman traded entertainment for cannabis five years ago, he still has a hand in making movies. Tapped through industry connections, he served as an associate producer for “Weed The People,” which premiered at SXSW in 2018 and is now on-demand. From filmmakers Ricki Lake and Abby Epstein, this look beyond politics and propaganda will challenge everything you might have known about cannabis as it reveals the brave stories of ordinary families who are exploring the benefits of medical marijuana to save the lives of their most precious loved ones—their children.
‘Weed The People’
Runtime: 1 hour, 34 minutes
Founder and CEO of Flowhub Kyle Sherman has crazy luck — and courage — on city streets.
Growing up in Barrington, Illinois, he was a movie-obsessed kid and a hopeful future filmmaker, going as far as ordering Sundance Film Festival merchandise from eBay to look the part. When he was 17, he stumbled upon the production of Marc Forster’s “Stranger Than Fiction” in downtown Chicago and asked the first crew member he saw if he could intern. The eager entrepreneur credits wearing Sundance’s signature director puffy jacket that day to the production saying “yes.”
After graduating high school early and bypassing college, Sherman headed for Los Angeles, where he spent the next decade in entertainment. He discovered medical marijuana to help manage the stress that came with his career choice. Finding so much relief, he was compelled to make another move to pursue his newfound passion for advocacy and legalization — this time to Colorado to get into the cannabis industry as it was taking shape.
“It was so serendipitous, that first day I got to Denver, I met Tripp Keber (the co-founder and then-CEO of Dixie Brands). I recognized him on the street from a block away and ran right up to him,” shares Sherman, who was recently in Aspen as part of the Fortune Brainstorm Tech conference (he was first invited as a speaker in 2016). “I always tell people that you should always research in depth about whatever it is you want to do, because if you’re prepared for the opportunity when it arises, you just never know what might happen.”
That chance encounter resulted in a marketing position at Dixie, where he had a crash course in canna-business. Sherman went on to work at the online dispensary resource Weedmaps and as the chief compliance officer at Neos, where he navigated state regulation needs for the vertically integrated company.
Realizing a major void in reporting data to the state and in tracking inventory, Sherman explains, “In 2015, I said ‘OK, I’m just going to start my own company.’ I knew the laws and at that point, everything was just getting entered manually. I couldn’t ever get ahold of anyone to help push the process forward and we were losing data. I’m just thinking, ‘This is ripe for disruption.’”
Sherman adds, “It was really just a fascinating time of learning because the regulators were still trying to figure it out, too. I was audited in 2014 by the state and it was really stressful. I couldn’t pull the data they needed. So my next chapter became, ‘Let’s use technology and capitalism to end the war on cannabis.’”
Since then, Sherman has grown Flowhub from a team of one to having 70 employees in its headquarters near Union Station and expanded its software footprint into more than 700 dispensaries, working with 30 integrators across 11 legal states. While point of sale and employee solutions are at the company’s core, Flowhub also serves retailers to drive business by helping to streamline everything from scaling operations and managing risk to providing data via application programming interface. Flowhub also offers a mobile device — the patented NUG scanner — that’s compatible with two proprietary apps to manage inventory and scan customer IDs, reducing wait times during peak hours.
Flowhub also enables an easy implementation of rewards programs which, for local retailers like The Green Joint, sets them apart from the majority of downtown Aspen dispensaries by offering loyalty points that grant deeply discounted products.
“Flowhub’s supreme software and support team has been a pivotal partner for us, which we’ve grown with for over three years,” says Brian Sullivan, vice president of retail operations at The Green Joint. “Their platform has been a crucial component to the success we have achieved throughout our retail operations. Flowhub has a robust inventory management system, which tracks and records all activities, and ensures that we remain 100% compliant at all times.”
Roots Rx has six locations based in the tourist-heavy mountain communities of Aspen, Basalt, Eagle-Vail, Edwards, Gunnison and Leadville.
“Flowhub provides tracking codes that allow us to identify patterns in our promotions giving us a clearer picture of our sales,” adds Brittany Centifanto, general manager at Roots Rx. “Gaining insight into when product sells is such a valuable tool that Flowhub continues to deliver on.”
Sherman, who also is the founding director and treasurer of the Cannabis Trade Federation, which is focused on lobbying for passage of the STATES Act (a bill introduced by senators Cory Gardner and Elizabeth Warren in 2018 that would amend the Controlled Substances Act, exempting state-approved marijuana activity from federal enforcement), assures that Flowhub is not a cannabis company but rather a “technology backbone” for the ever-expanding landscape of cannabis retail across the country: “We really believe that if we provide best-in-class (service) to our customers, they’re going to provide best-in-class experiences to their customers and legalization will spread. Prohibition can, and will, end.”
Katie Shapiro can be reached at firstname.lastname@example.org and followed on Twitter @bykatieshapiro.