Amanda Ostrowitz & CannaRegs: A Guiding Light for the Highly Regulated Cannabis Industry
The legalization of cannabis has ignited a new age of business, and marijuana-centered companies are emerging from the woodworks left and right. From dispensaries, to delivery services and CBD-focused wellness brands, cannabis has been dubbed the fastest growing industry and job market in the United States by Business Insider, Forbes, Yahoo Finance, CNBC, and more.
As wonderful as that sounds, it’s no doubt that working in an industry that’s so fresh means it comes with its own sets of interesting challenges. It’s extremely regulated, it’s hyper-local, and each geographical area’s laws a regulations varies slightly or heavily from the next. Needless to say, starting a business in this industry is a highly sensitive matter, and it’s advisable to discern the playground rules — to understand exactly how to play with fire … so to speak. Let’s not forget that cannabis is still considered a illegal under federal law.
But have no fear, this is where Amanda Ostrowitz and her company CannaRegs come in. The platform they’ve built makes tracking the ever-evolving laws and legislation within the cannabis industry simple, and businesses across the nation are utilizing their software to ensure they remain compliant and stay up-to-date with the regulatory framework. It’s basically like having a network of lawyers on your team to help keep your business in check — the ultimate BFF’s to the cannabis trade.
We chatted with CannaRegs Founder and CEO, Amanda Ostrowitz, about how and why she built the platform (because where the heck do you even start with something like this), being a female leader in male-dominated spaces (both tech and cannabis), and why this line of work once made her violently ill. (Hint: it has nothing to do with the cannabis part.)
Q - Can you tell us a little bit about your career background and how you transitioned into what you do now with CannaRegs?
A - I worked at the Federal Reserve Banking in regulatory law. I specialized in lending regulations and just knowing where relevant information was located was daunting — never mind understanding the content of the hundreds or thousands of related regulations. Working in this environment, I began to see an (unmet) need for specialized, highly focused access to regulatory data especially in highly regulated and hyper-local market sectors. There is a huge need in markets where regulations are evolving more slowly than the commercial sector. In 2014 I founded the parent company, RegsTechnology, and began to build CannaRegs as the first vertical market we serve. The CannaRegs platform combines ML algorithms and a seasoned legal team to aggregate regulatory, taxation, zoning, public meetings, and other related data. In minutes, customers gather data that would take days or weeks to research manually.
Q - What was your process and approach when building CannaRegs, and what were some of the obstacles you had to overcome?
A - I made a decision early on to build the product in a slow, steady and meticulous fashion. We took an approach that required us to prove the value to customers, analyze exactly where the market need was and to work with early customers by constantly asking them what worked for them—and what didn’t matter so much.
Q - Did you ever feel any prejudice, being that you are a female founder at the forefront of a male-dominated tech industry?
A - I’m comfortable meeting and socializing with anyone in the industry but where prejudice—or at least preconceived notions--revealed themselves perhaps the most was during networking related to fundraising. Female founders can be disadvantaged in a number of ways but I frequently experienced a scenario where in a conversation with executives I’d just met, if I was with a male CannaRegs colleague, the majority of executives made the assumption he was the CEO.
Screenshots of the CannaRegs platform.
Q - Do you feel you bring something different to the table being a woman in this industry?
A - We’re problem solvers and we spend wisely. In some ways I think it’s easier for us to check our egos at the door in the service of moving the ball forward. We also get a lot of support from other women in the technology and data areas as well as cannabis. I try to identify rising stars and give them opportunities to shine here. Many people helped me get where I am and while I can’t always pay them back directly, I can always pay that forward. It’s deeply important to me to continually look around to see how what we do at CannaRegs can assist those who find it difficult to fight effectively for themselves.
It’s not just about making money, it’s about making a better world.
Q - You were recently featured in Forbes because you’ve acquired a significant amount of funding and are paving the way for the Cannabis Industry. For our aspiring founders and business owners, what would you say are some of the key steps to getting investors to buy into you and your idea(s)?
A - Your plan only takes you so far, What matters is proof of concept. We had more than a few paying subscribers before we raised outside capital — in other words, we bootstrapped. I would recommend that method to everyone who can do it. It’s hard to get people to buy in to an idea. Paying customers erases the “does anyone care enough to pay for this product” question from investors.
Q - We understand that building a business from the ground up has to be such a rollercoaster ride. Can you tell us about one of the more disheartening moments you had, and what you learned from it?
A - That’s a great way to describe building a business. It’s truly a rollercoaster. The lows are lower than anything imaginable, but the highs are higher than anything you can experience working for someone else. We had our merchant services account cut off for simply being associated with the cannabis industry at a time when we were bootstrapping, living paycheck to paycheck from revenue. We didn’t touch, grow, process, ship or do anything with cannabis — we’re a data company!
So, you learn to move from “ouch” to how do we fix it? We did some industry consulting and made payroll the next week. Early on we were on a path to be acquired and then thought better of it. It was the right move for the company but it cost us 5 people quitting within a few weeks which was hell. During that time, my advisors helped me focus on the core product, and we replaced the people that left with even better qualified hires and breathed new life into the company. It’s one of the best things that ever happened. Lemons into lemonade.
I learned that with the right people around you, you can manage to get through just about anything. Team is critical. The first time I had to fire someone I slept on it for three nights (which means I didn’t sleep). I finally found the courage to let them go and then ran to the ladies room and was violently sick.
A - We are hard at work on vertical number two but for competitive reasons, we’re not quite ready to reveal the market we’re going after. Needless to say, it squarely fits the definition of “highly regulated and hyper local”. We expect to make an announcement concerning the new market during the summer. Stay tuned!
Q - Do you have any advice for our readers who want to start a new company themselves and get into the tech industry?
A - Truthfully, this is the hardest thing I can imagine anyone setting out to do. It’s not for the faint of heart. It requires all of you — even parts of you you didn’t know you had. It’s not like a TV show version of a startup. Don’t think it will be easier than what you do now — it’s not. That said, it’s incredibly, impossibly rewarding in numerous ways that have nothing to do with money. If you do it right, the financial reward will come but don’t start a business for that reason alone. The best advice I received (and I still seek advice from trusted advisors constantly) is take your idea to a few people.
Figure out if you’re solving a real problem. Find out if your solution is something people will pay for. Find out if it’s a “nice to have” or a “must have”. Be firm and painfully honest about those answers. Finally, if you come to a place where you know your idea is valuable and provides a solution that people need and will pay for, then ask yourself if you can live on rice and beans for twice as long as you think it’ll take before it starts to be real.
Q - Who are the 5 people (dead or alive) that you’d invite to your dinner party?
A - Chelsea Handler, Richard Branson, Thomas Keller (he might have to cook!), my best friend Jessica…and my right hand Stacey.