Cannabis Business Executive 100 Top Ancillary Businesses of 2016

The Cannabis Industry has attracted more than its fair share of creative, driven, and successful entrepreneurs and business executives since (and before) states began licensing producers, processors, and retailers to sell medical and then adult use marijuana to customers in the United States.

There are now 25 states with medical marijuana programs and four (4) with adult-use programs in the U.S., and more coming in the fall with several states supporting ballot initiatives, including the holy grail of states — California.

To date, CBE estimates that there have been in excess of 10,000 licenses granted to Producer, Processor and Retailers (PPRs), and there have easily been thousands of new, ancillary businesses (ABs) that are targeting these licensees and consumers.

These ABs are a key part of the industry food chain as they sell their products and services to the PPRs to help them grow their business as they pursue profitability, and, to help consumers of licensee products satisfy their individual needs for the plant whether they use it for recreational or medical purposes. Unlike PPRs, ABs are not prohibited, for the most part, in doing business nationwide or internationally, so their targets are not limited to their home states or even to licensed businesses only. In fact, many have supplied the black market for years.

On the other side of the coin, many nationally and internationally recognized brands have not entered the industry for fear of retribution by their current non-cannabis related customers who want to distance themselves as far away from marijuana as they can instead of being viewed as a friend to an industry that is still Federally illegal.

Banking, payroll, insurance, security, software, and staffing are just a few of the basic segments of products and services needed by any industry, yet the large national providers are eerily absent from the Cannabis Industry due to Federal Prohibition. Brands like Chase, Citibank, Bank of America, Prudential, Allstate, Marsh & McLennan, ADT Security Systems, IBM, Oracle, ADP, Spherion, and Kelly Services have remained on the sidelines, and their absence has produced unprecedented opportunities for several of the categories recognized in the inaugural CBE 100 Ancillary Businesses rankings.

The 2016 list is composed primarily of pioneering private companies and others that have decided to target the fastest growing industry in the U.S. and arguably worldwide, cannabis, and is represented predominantly by over 10 segments including but not limited to:

  • Compliance;
  • Consulting;
  • Cultivation Products & Services;
  • Extraction Equipment;
  • Lab Testing Services;
  • Media/Publishing/Events;
  • Packaging;
  • Payroll;
  • Staffing;
  • Security; 
  • Software.

The list does not include other segments that have  clearly contributed to the success of PPRs like venture capital, accredited individual investors and investment firms since it is virtually impossible to track annual revenues or services like accounting and legal which are populated by hundreds and thousands of local players.

Like the 2015 CBE 100 PPR list, our goal was to help attract capital to companies that we believe will generate revenues and play a key role in industry expansion.

As usual, transparency is a key issue that CBE Press is following in the industry, and we have been fortunate to collect 2015 employee counts and revenues for the majority of the companies listed. In some cases, we were able to estimate revenue based on publicly available information and our own calculations. We have ranked companies in revenue slices this year and included 10 companies that have either shared their revenues and asked not to be ranked by revenue segment or have flat-out declined to share revenues. In these cases, CBE Press believes they belong on the 2015 list and have included 10 companies that fit this profile in slots 91-100. Several of these firms would rank towards the middle to top of the 2016 rankings if we used their revenue figures.

This year’s list is represented by companies based in 17 states and three foreign countries. More specifically, here are the top five locations for CBE 100 ABs by location and the number in each:

  • Colorado — 31;
  • California — 20;
  • Washington — 7;
  • Florida — 6;
  • Oregon — 5.

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