Despite a few setbacks to plans amid the uncertainty of the pandemic, a startup with local ties has found ways to pivot through and hit its stride, landing its pre-seed round to kick off more growth.
Kanna, a gig work platform for the cannabis industry based in Oklahoma, but made up of North Texas and Austin natives, announced raising a $500,000 Pre-Seed funding round from Jon Oringer (founder of Shutterstock), Operator Partners, Dallas’ Mockingbird Ventures, Matt Stacy, Crown The Crew Capital, among other undisclosed investors. And working in an industry that has historically done well during dark times, Kanna has its eyes on growth and getting people back to work.
“Cannabis, as an industry, has been doing fairly well throughout this economic detraction, primarily because it has acted as medicine for a lot of people and there’s also the job creation side of it, where it’s helping a lot of people who have been displaced find opportunities to create… a source of income,” Farhaj Mayan, CEO and co-founder of Kanna, told NTX Inno, a sister publication of Austin Inno.
Launched in 2019, Kanna trains workers for jobs in the legal cannabis industry, connecting them with vetted farms and dispensaries. The company started off with acceptance into Austin’s DivInc fall 2019 cohort, later moving on to Dallas’ Capital Factory VIP accelerator and 2019 MassChallenge Texas cohorts.
Back in May, NTX Inno spent a month following Kanna’s journey through the pandemic. At the time, Kanna was working to figure out new pricing models and build relationships with cannabis farms for a planned expansion into Oklahoma – where cannabis is legal – but the funding round had been put on hold, as some investors “put out their fires,” as Mayan put it.
“We thought growing the supply side of growing our business would be a challenge, but during an economic downturn people are looking for employment,” Mayan said at the time. “The beautiful thing about this is being forced to pivot so fast helped us build more scalable processes into our existing operational funnel.”
With the new influx of cash the startup plans to build out its KannaU training platform, which teaches potential applicants about the different aspects of the job they could encounter. At the moment, KannaU teaches the 101 on cannabis and its trimming techniques. However, as the pandemic has forced some out of their jobs, the startup has been able to put more than 750 people to work by moving that digitally.
The new funding will help expand that platform to things like packaging, budtendinng, harvesting and working with different types of machinery, like those that make concentrates. Mayan said the ultimate goal is to put between 2,500 and 3,000 people to work through the platform in the next year. The company has also brought on some experts in the field, like Jason Pinsky of Vice TV’s “Bong Appétit” cannabis cooking show to help with KannaU.
“I think one of the things that doesn’t exist is education and training and if we’re able to democratize that, we can remove that barrier to entry,” Mayan said. “A lot of people who want to come into the industry for the first time, who might not have a traditional background or prior experience, we can give them a shot.”
Kanna is also planning to use the funds to hire engineering talent, with the goal of launching Kanna HR beta – a worker fulfillment and scheduling platform that can help cannabis farms manage their workforce.
“…our really great relationship with our farms, and we’re lucky to be able to talk to them almost every single day, helps us really understand the next wave of feature sets and how we can build a payroll product that can help them,” Mayan said.
While the pandemic has hit many industries hard, the cannabis industry in Oklahoma – where Kanna operates – has been increasing during the pandemic. Last month, the state passed a sales tax record of about $79 million. Other states, like Illinois, have seen similar trends. Due to this and Kanna’s close relationship with the farms it works with, Mayan said the plan is to “double down” in Oklahoma for the next year, before eyeing expansion into other legal states.
“[We want to] help to build infrastructure to help people of color and people who are marginalized to be able to take their first job too,” Mayan said. “I don’t believe in the fact that having diverse talent is a pipeline problem. I think it’s about being a lot more intentional about your top of funnel and advertising in places where they can also discover what you’re building.”
