NatureTrak Founder Jontae James on Legitimizing the Cannabis Industry

 
NatureTrak on Republic 2021

Summary

Though recreational and medical cannabis has been legalized in a large number of states across the US, the drug is still illegal at the federal level. This creates a banking challenge for the cannabis industry. While cannabis banking is not illegal, many financial institutions are wary of its risks, given that the industry is still not fully legalized.

NatureTrak aims to help by providing its own cannabis banking service. Among its many features, the company permits financial institutions to track their risks in real time. We reached out to founder and CEO Jontae James to learn about the positive social impact of cannabis acceptance and NatureTrak’s mission to validate the industry.

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.


Kingscrowd
In your own words, how would you describe your company?

NatureTrak’s culture is creative, innovative, and fast-paced. We challenge convention and standards and continually push boundaries in preparation for rapid growth.

Kingscrowd
What inspired you to take the leap and start a company in the cannabis regulatory industry?

My inspiration behind NatureTrak is to legitimize the cannabis industry. I always tell everyone that I was a D.A.R.E. kid. I grew up on commercials that said, “This is your brain on drugs. Don’t use marijuana. Say no to drugs.” With the legalization of cannabis happening, not only are we tearing down the barriers around the war on drugs, we are also de-stigmatizing what it means to be part of the cannabis community.

My inspiration was also fueled by my experience having friends and family incarcerated because of drugs. I saw the pain of family and friends who had people ripped away from them, and I wanted to do something about it. With legalization happening, this was my opportunity to give back to the communities that have been hardest hit by the war on drugs. I was driven to bring legitimacy to an industry that lived in the shadows for a long time and knew my education, background, and experience could have a critical impact towards accomplishing this. And hopefully, the movement to legalize cannabis will provide those who were wrongly incarcerated the vindication they so badly deserve.

NatureTrak’s mission is to legitimize the cannabis industry and to provide those most affected by the war on drugs with a new outlook on life and the ability to participate rightfully in the cannabis industry as a means to create generational wealth.

Kingscrowd
Who is on your team and how did you come together?

My team consists of experts with 30 years of experience in cannabis, banking, and technology. We came together with one goal in mind, and that was to build NatureTrak as the gold standard for cannabis banking.

Kingscrowd
How is naturetrak transforming the cannabis banking industry?

We are enhancing the legitimacy of the cannabis banking industry through real-time transparency and risk management, empowering all stakeholders from seed to bank via our cannabis banking as a servicea full suite of federal- and state-exam-tested compliance tools for any financial institution banking cannabis.

Kingscrowd
What does the competitive landscape look like, and how do you differentiate?

The biggest differentiator is our patent-pending technology, Marijuana Anomaly Detection (MAD). Our solution validates cannabis products and transactions. The competition is only monitoring the transaction at the point-of-sale, or POS. The competition’s solution only works for dispensaries where NatureTrak’s comprehensive platform is ideal for the supply chain (cultivators, distributors, manufacturers, etc.) and POS for dispensaries. But it is important to understand that no single competitor has more than 20 clients, and there are a reported 212 financial institutions banking cannabis. It is also important to understand that most of the competitors charge the cannabis operators for banking services, and this creates a barrier for deposits for banks. Our solution allows banks to have a direct relationship with the cannabis operator and provides incentives for the cannabis operators to increase the amount of money deposited. That’s why our platform enabled close to $2 billion in cannabis-related transactions to date. The competition may have more clients today, but our volume exceeds all but one in less than two years.

Kingscrowd
How do you intend to use the money you raise this round to scale the business?

The plan is to heavily invest in sales and marketing to scale quickly. The breakdown is as follows:

  1. 50% of the raise to sales and marketing
  2. 25% of the raise to research and development
  3. 20% of the raise to infrastructure
  4. 5% of the raise to intermediary fees, and any remaining funds to be allocated evenly to the three buckets above.
Kingscrowd
Can you tell us more about your base point pricing system business model?

We’ve had the pleasure to speak with credit unions, banks, and larger financial institutions all over the country. Some of those parties are just now learning about the cannabis industry while others want to scale quickly. With regard to the banks who want to scale quickly, they are searching for a financial technology partner, like NatureTrak, with a business model that has a lower barrier to entry in terms of upfront costs versus traditional software licensing models. The model is such that by ensuring whether all transactions are compliant (or non-compliant), NatureTrak is paid a certain amount of basis points (cash, check, wire, ACH transfer, etc.).

Kingscrowd
What do you want potential investors to know about you and/or your company?

I am the founder of NatureTrak. I have consulted with government agencies to build track-and-trace solutions creating proprietary algorithms to uncover unusual or suspicious activity in the supply chain. I have more than 15 years in government and enterprise software-as-a-service supply chain management. Prior to NatureTrak, I was co-founder of Bluntli, a digital licensing platform in the cannabis industry that specialized in patient and entity license verification back in 2015. This was the first of several track-and-trace technologies to bring transparency and visibility into the emerging cannabis market. I led a boutique venture capital organization’s sales and marketing for early-stage startups. I am passionate about entrepreneurship and launched a consumer-driven mobile app created to promote more active, connected, and productive employees called Your Out Of Office (YOOO!). I did that along with a community-building solution aimed towards the entertainment industry and media agencies to develop business partners to align resources with social media platforms — celebrity campaigns, political media campaigns, news releases, events, and promotions. I hold a BA from University of St. Francis in business management.

Kingscrowd
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?

We will likely be acquired by a large bank or institution within five to 10 years or sooner. Currently, we are actively in talks with several parties about long-term strategic partnerships, which will certainly cement NatureTrak’s technology in the marketplace. On the other hand, we would love to IPO, and that may happen, but the industry is heating up so quickly that we think hard offers to acquire NatureTrak are close.

Kingscrowd
As a minority and underrepresented founder, what difficulties have you encountered working on your company? what advice would you give to minority founders?

There’s a lot of adversity to overcome regardless of race, and only the best companies are going to make it. However, as a black entrepreneur, resources are not as accessible as they can be. Companies that are well funded or have more resources will always have an advantage.

If you’re good enough, you will make it, and I look at it the same way for entrepreneurs. If I’m great, if the company is solving a huge problem, if there’s a market need, I have revenue, I have traction, I’m a leader in the industry… If I have momentum, then I will succeed. And I think all entrepreneurs fall into that category.

My advice to black entrepreneurs and entrepreneurs in general would be to do your homework. Ideas are a dime a dozen. It’s all about execution. Will someone pay for the product or service you’re providing? If they would, that’s the key to starting a company.


We look forward to seeing where Jontae and his team take the company. NatureTrak is currently raising on Republic.


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About: Yasmin Sharbaf

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