Marijuana Business Magazine September 2018

But it hasn’t been smooth sail- ing for the company. In its quest to make its trimming robot commercially available, Bloom Automation has encountered challenges in funding and technology. Gowa shared Bloom Automation’s strategies for navigating those hurdles. Funding is an Issue Raising money hasn’t come quickly or easily, Gowa said. “That’s something I think the major- ity of cannabis entrepreneurs will be facing or are already facing,” he said. After hitting a high in the second and third quarters of 2015, funding and deals for robotics startups slowed in 2016, and at a recent exhibition in Massachusetts, Bloom Automa- tion was the only robotics company offering automated solutions for the cannabis industry. Investors outside the industry have a lot of questions about the cannabis sector and its regulations, Gowa said, and they can be hesitant to invest. Bloom Automation had raised nearly $1 million in seed and preseed funding as of June, and the company is planning a Series A funding round later this year. Bloom Automation recently started courting firms outside the marijuana industry, and all its funding as of June had come from cannabis investors. The company’s late 2016 partici- pation in an Arcview Group inves- tor forum – a gathering of cannabis investors, industry leaders and emerging business owners – jump- started its fundraising by introducing Gowa’s team to investors interested in the cannabis industry. It’s important to understand that the cannabis sector is a serious industry with serious investors, Gowa said. Be prepared to share your business plans, financial projections and a cer- tificate of incorporation with potential investors, Gowa said. Letters of intent to buy your product or purchase orders from clients are good to show investors, too, he said. They demon- strate traction for your product. “From our experience, investors in this industry are sophisticated,” Gowa said. “They take the time to do their due diligence. Typically, they’re inves- tors in other industries, and they’re not changing their practices. They’re new to the cannabis industry but not new to investing, so you don’t see funds being thrown around.” Potential investors who don’t invest upfront can provide valuable advice, Gowa said, even if they don’t write you a check right away. Be willing to run new models of sales projections or adjust market size and the size of market opportunities in your pitch based on the investors’ feedback. It fosters relationships with those inves- tors, who may be more willing to open their checkbooks later. “Sometimes we present our models or projections, and investors disagree and propose alternatives,” Gowa said. “Listening and responding or adjust- ing as necessary is vital to maintain- ing the most accurate and reasonable projections.” Technology a Challenge Technology in cannabis cultivation and processing is in its early stages or nonexistent, which makes it difficult to identify immediate solutions to chal- lenges, Gowa said. “We’re working with a plant that no one has studied from a machine- vision or computer-vision aspect,” he said. “The robot in the proof of concept was somewhat rudimentary, to say the least.” The first iteration was a three-axis robot commonly used by hobbyist carpenters and metal workers. Gowa’s team mounted a handheld, commer- cially available electronic cannabis trimmer and a high-resolution camera to it. Its algorithm was based on just 100-300 images of cannabis, so in its EXECUTIVE SUMMARY Bloom Automation, a Massachusetts robotics startup, is testing an advanced robot that has shown the ability to trim leaves from cannabis flower with 97% accuracy. But bringing the product to the commercial market isn’t without its challenges. Funding and technology have been hurdles for the company, but CEO and founder John Gowa offered tips for navigating both: • Participate in investor forums by The Arcview Group and be prepared to share with potential investors your business plan, financial projections, a certificate of incorporation and purchase orders or letters of intent to buy your product. • Listen to potential investors who don’t invest upfront; they can provide valuable information that helps you adjust your pitch. • Partner with cannabis cultivators and processors to better understand operations; leverage their expertise to improve your technology. • Evaluate whether a seed-stage cannabis accelerator can provide the necessary networking, mentorship, education and funding opportunities to jump-start your ideas into more formal, fundable businesses. Jon Gowa is the founder and CEO of Bloom Automation, a Massachusetts-based robotics startup that is beta testing an automated cannabis-trimming robot. Photo courtesy of Bloom Automation 90 • Marijuana Business Magazine • September 2018