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🎙️ Podcast: Bespoke Financial (George Mancheril, Judson Hill) x Blaze (Chris Violas)
We chat about how the B2B Buy Now Pay Later (BNPL) partnership came together, why a solution was needed, why CA and MA as the first two markets, and more..
Bespoke Financial and BLAZE® Solutions Partner to Provide Dispensaries with B2B Buy Now Pay Later.
The partnership establishes an embedded lending product providing cannabis retailers access to Bespoke’s financing at the click of a button within BLAZE’s Dispensary POS software. This partnership addresses one of the greatest operational friction points for adult-use cannabis retailers. To service an increasing consumer base, dispensaries have sought a line of credit for timely vendor payments. Unable to meet suppliers’ demands for Cash on Delivery, dispensaries were left to choose between carrying limited product reserves or reinvesting cash flow into new inventory purchases.
As a solution, BLAZE and Bespoke have launched a new dispensary financing program, exclusively in California and Massachusetts, allowing dispensaries on the BLAZE platform to easily view financing terms without having to provide financial information or undergo an extensive underwriting process. By allowing easy access to funds for vendor payments, the financing program will boost retailers’ ability to make timely payments that trickle up the supply chain, operate at a larger scale to increase profitability, and carry an assortment of brands to keep a competitive edge.
Through this integration, BLAZE’s clients can opt-in through the POS to see qualifying options for Bespoke’s dispensary financing, which allows access to 60-day repayment terms on all vendor payments. Qualifying retailers can finance purchase orders to vendors seamlessly in the platform similar to a B2B buy now, pay later option. The ability to pay vendors directly from within the BLAZE platform via Bespoke’s financing will also minimize dispensaries’ reliance on cash transactions. Dispensary financing is currently in beta testing with a select group of operators and a broader launch coming later this year.
BLAZE’s POS software supports over 600 retailers nationwide and powers operations for 25% of California’s dispensaries — making it the state’s most popular POS platform. Bespoke and BLAZE will co-host a webinar on July 12th for retailers to learn more about how to access financing and scale their businesses seamlessly.
How the Relationship Between the Two Companies Started. Judson and Chris reconnected at a Highly Objective event in August 2021 (after meeting at the Denver NCIA Conference in 2016) and after numerous conversations after, decided that a B2B BNPL would be beneficial for both companies to offer to their respective customers. Chris points out that while many partners have come to the table, the follow through from potential partners is a much smaller amount.
Distinction as B2B Buy Now Pay Later (BNPL). While most know BNPL as a B2C product (installment payments with no/low interest), the B2B BNPL solution that Bespoke Financial x Blaze is offering is only targeted at retailers (vs. consumers).
Economics. For example, over 60 days, if a vendor gets paid Cash on Delivery (COD) and offers a 5% discount, while the retailer pays 4% for the BNPL financing, they could potentially save money and increase margins.
B2B Marketplace. Bespoke Financial doesn’t operate their own B2B Marketplace, which George Mancheril (CEO, Bespoke Financial) points out as a potential advantage as retailers can choose how they want to order products vs. being locked in to any one sourcing channel/marketplace/distributor. Judson Hill (Chief Revenue Officer, Bespoke Financial), points out that in California, most retailers are still buying directly from vendors.
Massachusetts as Second Market for the Offering. Blaze entered the Massachusetts market ~18 months ago and the company has continued to see increasing volumes from their customers (30+) in the State. Chris Violas (CEO, BLAZE) points out that MA clients tend to be competitive with CA clients.
Expansion. The two companies are targeting a larger roll out later this year. After ensuring that the products are working as intended, they will launch additional markets. Given the challenges in each state with regards to different infrastructure, regulations and compliance (Metrc, BioTrack), the companies have to carefully navigate each market they enter.
👋 The Highly Objective Podcast is hosted by Dai Truong, who leads Cannabis Investment Banking at Arlington Capital Advisors.. Third-party information presented here and links to third-party content are for informational purposes only and are not intended as a recommendation, offer or solicitation for the purchase or sale of any financial instrument, security or investment. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Linking to third-party sites in no way implies an endorsement or affiliation of any kind between Arlington Capital Advisors, LLC, or its affiliates and any third party. The information in this blog constitutes my own opinions (and any opinions posted by guest bloggers from time to time) and it should not be regarded as a description of services provided by Arlington Capital Advisors, LLC or any affiliate.