As part of our Sacramento Inno coverage, the Business Journal for the first time compiled a list of Startups to Watch in the new year. These startups are poised to make big moves, either in growth, funding, technology or development. We're highlighting 13 startups, generally with fewer than 100 employees, about 5 years old or less and that have raised less than $50 million. The group includes a diverse mix of companies throughout the region.
Startup to Watch: NatureTrak
Sacramento-based financial technology company NatureTrak Inc. is finding success signing up banks and credit unions to use its tracking software to validate cannabis-related business deposits. The company in December signed up its fifth financial institution client, and founder and CEO Jontae James said new clients are in the queue.
NatureTrak’s platform accesses licenses in state and local databases and checks that they are valid for the transactions being done. It also creates receipts along the way from grower to processor to distributor and eventually retail sales. All those receipts are meant to create an audit trail that can help make financial institutions comfortable in banking cannabis-related businesses.
The cannabis industry has struggled to access the financial system because, even though state law allows growing and selling cannabis, it is still illegal under federal law. NatureTrak is paid by the bank or credit union for its software. All the tracking, verification and record-keeping gives a provenance to the money from state-regulated cannabis transactions, which could help allay the federal government's primary concern about money laundering.
NatureTrak’s platform automates what would otherwise be lengthy documentation if done by bank or credit union employees manually. And James said that if federal law eases on cannabis banking in the future, it would probably increase NatureTrak's business. “If the law changes, it makes compliance even more important. More institutions will jump in.”
