Microsoft first to take step into marijuana business

Tech giant’s software to track pot plants from ‘seed to sale’

As U.S. state after state has legalized marijuana in one way or another, big names in corporate America have stayed away entirely. Marijuana, after all, is still illegal, according to the federal government.

But Microsoft is breaking the corporate taboo on pot this week by announcing a partnership to begin offering software that tracks marijuana plants from “seed to sale,” as the pot industry puts it.

The software — a new product in Microsoft’s cloud computing business — is meant to help states that have legalized the medical or recreational use of marijuana keep tabs on sales and commerce, ensuring that they remain in the daylight of legality.

But until now, even that boring part of the pot world was too controversial for mainstream companies. It is apparent now, though, that the legalization train is not slowing down: this fall, at least five states, including the biggest of them all — California — will vote on whether to legalize marijuana for recreational use.

So far, only a handful of smaller banks are willing to offer accounts to companies that grow or sell marijuana and Microsoft will not be touching that part of the business. But the company’s entry into the government compliance side of the business suggests the beginning of a legitimate infrastructure for an industry that has been growing quickly.

“We do think there will be significant growth,” said Kimberly Nelson, the executive director of state and local government solutions at Microsoft. “As the industry is regulated, there will be more transactions and we believe there will be more sophisticated requirements and tools down the road.”

Microsoft announced Thursday that it was teaming up with a Los Angeles startup, Kind, that built the software the tech giant will begin marketing. Kind offers a range of products, including ATM-style kiosks that facilitate marijuana sales, working through some of the statechartered banks that are comfortable with such customers.