This piece was written for and originally posted on Stockhouse, in partnership with Equity.Guru
Last year, when the Pokemon Go app was launched across the world, Planet Earth was gripped (for a hot minute) in Pokemon fever. Imagine fidget spinners combined with cronuts mixed with 1990’s boy bands merged with bacon, and you’d be getting close to the level of mania involved. The PGo craze put $10 billion on Nintendo’s market cap overnight – even though Nintendo had precious little to do with the app – and earned just under $1 billion in revenue in 2016.
But Pokemon Go didn’t just appear from nowhere and magically hit a chord with consumers – its arrival was step three of a three-step plan that had started four years earlier, with another game entirely, that was specifically created to backfill Pokemon Go’s world ahead of time.
Google software spinoff Niantic had started out with a game called Ingress back in 2012, which was designed to encourage users to map landmarks across the planet. From park benches to statues to notable buildings to odd businesses; the more landmarks you submitted, photographed, and explained, the better you did in the game.
The point of all this was to encourage users to map the cities of the world, for free, so that Niantic could use that ensuing global database of landmarks as ‘pokestops’ down the road in the game they REALLY wanted you to play.
This way, when Pokemon Go was finally launched, it offered a full experience, even to the first user that logged in. It wasn’t an empty world that the makers hoped you’d pioneer while waiting for other players to show up, it was ready from day one and 65 million users still play it every month, a year later.
Apps can be a profitable business, if you do it right, but audience acquisition is always the big sticking point. If you spend money to get someone to download an app, and when they get there nobody is around, that app dies quickly. You can have the greatest chat app known to man, but it only works if there’s someone to chat to.
A great example of this conundrum was the $33 million social video chat app Airtime, which was launched by the guys behind Napster and with more pomp and circumstance than any app ever, back in 2012. There were celebrity-studded gala events and promises that the world would connect through its shared video feeds, but a year later there was literally nobody on the site to talk to. Nobody.
These two examples – Pokemon Go and Airtime – are what I always look to when someone tells me they’re putting out an app. Is that app opening to a full and real world? Does it have the ability to keep people coming back? And is there a revenue model that works?
Add a new question to those two: Does it have a weed component?
If you’d invested in Fundamental Applications, the company that Global Cannabis Applications (APP.C) used to be, at just about any point in the last several years, you probably didn’t make any money. By the same token, you probably didn’t lose any either, because APP’s stock chart has a certain prairie-like appearance to it.
If you’d invested in the company back then, you’d have been buying into a plan to make profitable, data-focused apps for cellphones and tablets, which the company duly launched several of, to its credit.
But if you looked at each of those applications by themselves, you’d be forgiven for thinking they didn’t succeed.
FORO, an app designed to help students sell their belongings to other students on campuses around the world, had 23,209 downloads in February of this year. Those numbers seem to be fairly consistent, month over month, with bursts around advertising and viral marketing campaigns with a minor celeb or two. Not bad – but not a gamechanger. LetGo entered this space around the same time and hit 30m downloads last year, on it’s way to a $175 million raise in January. We’ll come back to this.
Midway through 2016, APP.C acquired an existing app called OPINIT, which was described as a community-building platform, where users could gather around common interests and content. When they bought it, Opinit had 30,000 users, and APP’s stock went on a short run.
But Opinit hasn’t become the next Instagram at this point, so a short term thinking viewpoint would be that it’s another failure. Stay with me here.
Another app in the Global Cannabis Applications roster is TRUTH, an anonymous messaging app for people who already know each other. To be fair, I thought that was weird too when I heard about it. If I already know someone why do I need to send them an anonymous message for any reason other than “I have a crush on you” or “your boyfriend is cheating on you”?
To be fair, that’s possibly enough right there, and may be why the program had a userbase of 140,000 in April of last year.
So what does one make of all this? A handful of apps that didn’t go viral, a stock chart that has mysteriously held even without the ‘big win exit’ a lot of investors would have been hoping for?
Think back to that Pokemon Go strategy, where one app was used to bring in data for the next app, and then behold CITIZEN GREEN.
The e-commerce setup of FORO, the community building of OPINIT, and the person-to-person messaging of TRUTH all come to the fore in this one app, in an undoubtedly hot sector that is exploding in popularity in countries around the world. With Citizen Green, Global Cannabis Applications comes to the party with a userbase (their existing users are a great source of marketing leads, and right in the demographic they’re looking for), proven technology, and IP that they’re getting double value out of because it was paid for one generation of apps ago.
But we’re not at the end of this road just yet. Coming soon is CANNAMED, which is currently being loaded with some 2000 products, and will be specifically intended for users of marijuana to find the strain they like, discuss that strain with others, and provide ongoing data input that Global Cannabis Applications will then spread throughout its cannabis universe. That means not just in CANNAMED, but back into Citizen Green, and forward into the next app making an appearance; CANNALIFE.
What’s CANNALIFE? That’s intended to be the medical side of things, intended more for the Boomers and Gen Xers, who are now beginning to understand the power of cannabis as a health product and are now looking for answers as to what they should be trying in the weed space.
So let’s map this out. FOLO proves the buy/sell works. OPINIT brings community building tech. TRUTH brings a scalable interactivity technology. C|ITIZEN GREEN takes all of those to create a global cannabis buy/sell/rate/review network that pumps data into CANNAMED, for folks looking to better understand and provide feedback with the products they have been prescribed, and where to buy, which then pumps data through CANNALIFE in terms of what people are finding success with to improve their health situation.
Pokemon Go had some cute monsters and a database of landmarks. Global Cannabis Applications is telling me there’ll be extracting some 580 data points from users that can be spread across their network to multiple apps and platforms, and then (here’s the kicker) SOLD TO THIRD PARTIES THAT COULD USE THAT DATA.
Imagine you’re a licensed producer growing 50,000 square feet of Raspberry Yuckle and Bang Melt Stonehenge (*random weed strain names provided by the Weed Name Generator). On a whim, you decide to toss 10k at APP.C to get into their data, only to find EVERYONE HATES RASPBERRY YUCKLE, and that Bang Melt Stonehenge is far less successful in fighting the effects of pinkeye than is Headband Irene Jesus! Now you’ve got to change your website and get some new clones in and, hey, what’s this Holy Knightrider Stargazer all the women under 25 are into?
Companies like Canabo Medical (CMM.V) are in the weed data business already and earning decent revenues in selling access to it, but they only play in the medical end of the pool, and only claim 400 data points as a result.
Also? Their market cap is $15 million, while Global Cannabis applications is pegged at a ridiculous $4 million, effectively making it the cheapest marijuana play on the Canadian exchanges. Even Matica enterprises (MMJ.C), which sat on the ocean floor for a year doing no business at all, is pushing $5m in cap.
It was cheaper a week go. Back then you could pick it up for $0.07 a share, but there’s been a rise in trading volume since that has pushed it up to $0.10, at the time of writing. That’s a 42% jump, and it’s STILL the cheapest pickup in the sector.
(NOTE: Since this story was published, APP.C jumped 35% on the day, and both Canabo (17%) and Matica (20%) also spiked – I’ve still got it, baby 🙂 )
And that’s before we even get to the fact that they just did a raise to fill the bank, and they’ve signed on cannabis industry consultant extraordinaire Scott Walker to the role of special advisor, and Adolfo Gonzales, creator of the respected Cann Help Deck, to being his medical knowledge bank into the fold.
APP.C is loading up the people, the parts, the audience and the cash to make a serious run at this sector. Maybe they’ll hit it out of the park, maybe they won’t, but you’d have to think this combo is going to move the dial in a positive direction soon.
— Chris Parry
FULL DISCLOSURE: Global Cannabis Applications is a Stockhouse marketing partner, and the author was paid by Stockhouse for writing this pieceDisclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.