The Industry

Understanding how cannabis APIs can improve your business

Team Headset
January 27, 2020

The cannabis industry is becoming more complex every day. Cannabis APIs can help businesses get ahead of the competition by delivering essential data that drives actionable reporting.

In this article, you’ll find:

  • How cannabis APIs work
  • Types of cannabis APIs and their uses
  • Cannabis API standards
  • Comparisons of cannabis dispensary integrations

What Is a Cannabis API? 

An application programming interface (API) is a code or set of specifications and rules that enables two-way connections between software programs. Cannabis APIs allow old and new cannabis technologies to communicate with data sources.

APIs provide a safe, trackable format, and similar user interfaces to facilitate interactions between people and computers on the web and mobile devices. Many software companies use dedicated APIs to allow other service providers or software to interact in a secure, consistent, and trackable format. For example, Amazon purpose-built its merchant platform to allow for easy merchant onboarding. Another example is media platforms like Twitter that use APIs to collect and provide access to user data. Another type is cannabis APIs that among other things, can provide valuable data analytics and market intelligence. 

“Developers, marketers, business owners, and consumers can access useful information using cannabis APIs in an incredibly complex and dynamic marketplace,” says Scott Vickers, Co-Founder and Chief Technology Officer of Headset.

Cannabis strains, extracts, edibles, products, producers, seed companies, brands, and stores and dispensaries number in the tens of thousands, and the data they generate can be tracked to serve people in the industry and their customers. “Headset tracks thousands of products across multiple markets in real-time to help cannabis business owners make informed decisions,” Vickers notes.

How Do Cannabis APIs Work?

APIs improve the relationship between cannabis and people through education, outreach, and technology. Like other APIs, they can serve up information on what people are engaging in or will engage in soon, detect opportunities, and interpret situations based on data. The APIs expose data for many aspects of canna-business, described in the cannabis API chart.

Open APIs

An open API, (or public API) allows a service owner universal access to consumers of that service, usually to developers. Open APIs commonly implement Representational State Transfer (REST) architecture that shares a specific service or software functionality while protecting the rest of the application. Most cannabis APIs are open.

 

Cannabis APIs: Their Role in the Industry 

“APIs can be developed to support everyone in the cannabis ecosystem which is why the number of APIs is on a growth trajectory,” says Vickers. Read about what Headset found about consumers in What Does The Average Consumer Look Like?, and National Weed Day news in The 2019 Post 4/20 Update.

Different types of professionals and entities make use of APIs. Some gather market data for cannabis-related businesses and e-commerce sites, including customer relationship management (CRM), while developers use APIs to enable interaction between software systems.

 

Cannabis APIs Use Cases

Market, compliance, and science conditions are subject to constant change. Get up-to-date information on cannabis news from a variety of sources via Marijuana RSS Feeds, and The Science Daily.  

Benefits of Cannabis APIs

“In many ways, an API is a product,” Vickers explains. “Some people use the term business APIs. The term applies when it comes to the cannabis industry because APIs are a beneficial tool to support business strategy.” 

In the cannabis business, APIs provide valuable information for businesses and consumers struggling to make sense of the daunting array of products and the questions they provoke, such as:

  • How do you differentiate between cannabis flower varieties with the same name? 
  • How similar — or different — are 100 or 1,000 unique samples of Acapulco Gold or Blue Dream?
  • What are the differences between data from test labs, and how do or should the results influence operators?
  • Most importantly, is it even possible to set industry standards when legal status varies in every state? 

An API provides the link between these questions and the data that can answer them. They surface structured, queryable data that businesses can use to make decisions.

Different Types of Cannabis APIs

Cannabis APIs provide business intelligence and specific product information to help recreational retailers and medical dispensaries understand the characteristics of what they’re selling, and market data for making informed decisions. Here are some ways businesses use APIs:

Product and Information Provided via Cannabis APIs

 

Setting Cannabis API Standards 

In states where cannabis is legal, products must test for THC content, the chemical responsible for psychoactive effects. Fewer than 20 percent of products are labeled accurately, according to a medial cannabis product study, leaving the responsibility for quality assurance to cannabis businesses.

While the U.S. awaits legalization in 50 states and the strict oversight of other pharmacological products, some cannabis businesses are taking the lead. Cannabis Reports API has developed a Universal Cannabis Product Code (UCPC) system with a unique25-digit UCPC for data collection and labeling. Consumers gain access to information about the individual product such as seed company, producer, strain, product, and batch using the code.

FOCUS is a non-profit organization working with the American body of theInternational Standards Organization (ISO) and the American National StandardsInstitute (ANSI) for guidance on development and accreditation of standards.FOCUS is aiming for transparency as a pathway for the cannabis industry to become sustainable and fully legal.  

The Open Cannabis Project (OCP) was created to preserve the diversity of cannabis varieties and associated documentation for environmental, legal, R&D, and scientific purposes. The project closed in May 2019, and although some of its data survives there is no current API that connects to its database.

The access to data about different types of purveyors, products, and more provide the possibility of setting standards. In the meantime, valuable data helps everyone involved in the industry to thrive.

 

Cannabis Legal Issues

The evolving legal and political environment continues to impact the cannabis industry. Likely, the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act will pass since it has support by the House and Senate banking committees andPresident Trump. The Act doesn’t legalize cannabis at the federal level, but it does empower states to do so, which will resolve banking and tax challenges.Since the Act provides more tax revenue, the move to legalization moves forward. When legalization occurs, business owners and consumers will have an even greater need for the information provided by cannabis APIs. 

Despite legal uncertainties, the U.S. Patent Office (USPO) has been issuing an increasing number of cannabis-related patents and new guidance for trademarks for cannabis and cannabis-derived goods.

Keep abreast of legalization efforts through advocacy groups like the Drug Policy Alliance and NORML.

 

Cannabis Dispensary Integrations

“Headset provides integrated solutions for cannabis businesses to optimize operations by providing insights into everyday decisions,” Vickers comments. “We analyze data from a wide variety of sources presented in an actionable way.”

“For example, a dispensary owner can optimize inventory because it’s clear what products are moving best at his store or stores, and for competitors — it’s all about identifying opportunities and maximizing revenue streams,” Vickers explains.

Data collection, reporting, and integration companies are becoming more critical as the industry continues to mature. While new players are entering the industry and are focused on slightly different areas, there are several cannabis integration competitors APIs to Headset. Like Headset, BDS Analytics and Brightfield Group provide support and integration capabilities to licensed retailers. Cannabis Big Data provides reports for licensed retailers and other entrepreneurs. New Frontier provides overall industry analysis and reviews geared to investors and policymakers.

Find out more about how cannabis software integrations support cannabis operators by reading How Successful Retailers Use Their Sales Data to Intelligently Grow Their Business.  

Here’s a quick overview of the top integration APIs and how they support cannabis industry players with competitive and other data: 

For a look at the type of information that Headset provides to retailers and other businesses, download The 2019 Cannabis Buyer Basket Analysis and integration information for point of sale systems.

Headset Integrated, Real-Time Reporting

Interested in taking your cannabis business to the next level? Insight into consumer data can help you make better-informed business decisions that can enhance profitability, maximize growth, and create value for your customers. Headset is an integrated consumer data analytics platform that provides market intelligence for the cannabis industry. Our extensive, Industry Reports section takes a monthly deep-dive into specific categories and aspects of the industry to help businesses better monitor the market and perform exhaustive category analysis.

Headset offers three distinct products (Retailer, Bridge, and Insights) that help retailers, dispensaries, brands, product manufacturers, distributors, and investors move ahead in the industry. 

Whether you’re just getting started or looking to make your business more successful, Headset’s powerful data tools can help.

Contact us for a free demo of our product offerings.

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