Mike France (Proper):
Proper was really founded to try to help consumers shop for cannabis. Particularly around e-commerce, but in Canada, we saw a couple of problems. Number one, the entire industry came about in kind of a quick 5 years, really. All of the brands that are on shelves, all the products were really developed in an incredibly short amount of time. And it's also one of the most fragmented industries you'll ever see. And that's in large part because of the regulatory environment. It just makes businesses very hard to form very hard to scale. And of course, at minimum, it's a different state by state with very different kinds of rules around what kind of type of products can exist and all these kinds of things.
So you have brands coming into existence, products coming into existence, and generally as well, just an environment where consumers don't know anything about Canada. Certainly not the new world of Canada.
Particularly with covid, then that brought online shopping of cannabis and delivery to the forefront. We wanted to really kind of organize the entire e-commerce space for consumers so that they can shop for any brand, any product as easily as possible.
And on the brand side of things or the industry side of things. Brands are kind of equally in the dark and are also kind of in the middle of distributors that are black boxes to them and the retailers that are generally black boxes to them. With the same kind of data set and the same approach. We help brands understand their product and store distribution so that they can plan their business so that they can sell and market better and so that they can actually provide an e-commerce experience to consumers. So that puts them a little bit more at the forefront of the relationship rather than just kind of standing back and saying I got distributors and stores. I can't do anything. I can't push my agenda. I can't get my brand out there I can't what why would a consumer come to my website?
So we help brands make their website shoppable we give them insights into their product distribution, and of course, that's an experience for consumers that puts them one click away from buying the product they want as conveniently as possible.
Shayan Mohanty (Watchful):
And let's zoom in a little bit because I found it really interesting you own data at proper. And I'm curious about how owning data helps drive towards sort of that conclusion of almost unifying this ultra fragmented market. What does owning data mean at proper. And how does that sort of drive your businesses growth?
Mike France (Proper):
Well, in an important way, we own no data, we have to source and scrape together, pun intended, all the data we get. We have to then do enrichment in a number of ways. Some of that we do with people more kind of like editorially to help make sense of products. Write descriptions of them or just provide better product imagery because that's a wasteland out there. But, most of this is we need to cobble together a data set that represents as truly as possible, the actual cannabis market. The data is in the hands. It's very fragmented same as the entire industry. But you essentially have kind of like 5 or 6 major platforms for online menuing that control about 80%-85% of the online menus out there. But each one of them at most has a fractional view of the world, right? They only have at most, the leading platform weed maps has kind of 30% or 35% menu share out there. So at most, they can see a third of the world. Now, all that data that's on there, all those store menus. They don't have all of that. Unified to any ground truth of products or brands either, right? These are just listings from thousands of individual stores. Overall there's more than 6,000 recreational cannabis stores that are legal in the U.S. You have most of these menus being populated by people, you know, who you have kind of what I call the hoagie grinder submarine sandwich problem here, certainly very regionally with some types of cannabis products that are referred to very very differently, but also just having that many people probably 30,000 to 50,000 participants that are populating menus. You just have a lot of inconsistent unstructured data, the menus themselves are used in very different ways. You see a lot of these things of the entire product information is dumped into one field, right? It's not well structured at all. Or you can't rely on that structure consistently. But fundamentally the gatekeepers that control the data, they also just control a very small part of the universe. So we need to source data from all these different sources that comes then in a very unstructured way. And we need to unify that and then we need to try to develop ground truth there and a sense of like, what is the unique set of brands? How do we recognize all of them? You know? What is this product category?
Classification itself is complicated, because you can have a cannabis concentrate that could actually be an edible product, you know. Well, that does contain cannabis concentrates. That's right. You know. But that's not a concentrate in the way that a consumer expects or desires and infuses pre-roll on 15% of menus is also classified as a concentrate. Well, it contains them. But you know, that's not what we mean. Either when I say I want to buy concentrate, I don't mean that. Yeah. That's kind of the biggest level where Watchful does the most work for us that a little bit. We also have a use case around identifying brands where we need to actually just try to figure out what the brand is and that's another use case of Watchful that we can talk about.