Proceeds Will Fuel Market Expansion Across the U.S. and Canada, Company Growth and New Integrations with Key Entities to Help Cannabis Entrepreneurs Grow their Businesses through Gift Card Technology
OAKLAND, Calif., October 18, 2021 — Birchmount Network (“Birchmount” or “Company”), a full-service, turn-key cannabis gift card and marketing solution provider leveraging decades of experience in the mainstream gift card industry, announced it closed a $2.5M seed round. The investment allows Birchmount to deepen integrations with leading point-of-sales (“POS”) systems and other solution providers for continued expansion throughout the U.S. and Canadian cannabis markets. The capital will also be used to optimize marketing efforts, grow its team with operational talent and support the growth of cannabis companies by providing robust, compliant gift card programs and related marketing services.
The round was led by Achari Ventures (“Achari”) with participation from WGD Capital, Poseidon Asset Management and Arcview Group. Achari Partner Merrick Friedman has also joined Birchmount as a board member. Birchmount is backed by a management team with a collective 20+ years of experience in the gift card industry managing programs for some of the world’s top brands, including Starbucks, Sephora, Lululemon, Shoppers Drug Mart, Kroger and more.
“We are thrilled to bring best practices across compliance and fraud mitigation within the mainstream gift card industry to the rapidly growing cannabis industry,” said Birchmount CEO and Co-founder Alex Barseghian. “Gift cards are a proven catalyst for customer growth, consumer loyalty and increased incremental revenue, but cannabis businesses didn’t have easy access to such programs. When we looked at the marketplace gap that was occuring, we saw an immediate opportunity to not only service consumers with more frictionless retail experiences, but also to arm business owners with this popular mainstream service used widely in the CPG sector.”
Founded in 2020, Birchmount brings gift card and related marketing solutions to cannabis retailers in the U.S. and Canada. Easily and seamlessly integrated into existing POS systems or available as standalone solutions, Birchmount’s physical and digital gift card programs create new avenues for brands to increase revenue, attract new consumers and deepen customer loyalty. The company will power programs for roughly 500 dispensaries across the U.S. and Canada by year-end.
Alex Barseghian added, “Our solutions help entrepreneurs enter cannabis’ modern age and we are confident they will also meet consumers’ desire to go digital while streamlining operations and supporting businesses’ bottom lines. We look forward to growing our footprint in this sector, rewarding cannabis consumers and spreading cheer throughout the holiday season — one of the busiest and most profitable times of year for retailers.”
“With decades of experience in the gift card industry across the executive team, Birchmount brings unparalleled expertise in scale and accountability for gift cards in the cannabis industry,” said Merrick Friedman, Partner at Achari. “Gift cards are proven to drive larger purchases and new customer acquisition, two critical bottlenecks for legal cannabis retailers. Birchmount is at the forefront of bridging that gap for the burgeoning cannabis market.”
Despite changes in consumer purchasing behavior due to the ongoing pandemic, the U.S. gift card industry has experienced rapid growth and is predicted to reach $170.8 billion in 2021. Online purchases of gift cards, specifically, more than doubled in 2020, outperforming the YoY growth recorded in 2019. At a CAGR of 8.8%, the U.S. gift card market is expected to be worth $239 billion by 2025. Gift cards drive increased consumer spending, with 72% of consumers spending more than the value of the gift card, while also accounting for 44% of net new customers. Birchmount is bringing mainstream gift card services to the highly regulated cannabis industry with compliance at the forefront.
Patrick Rea, Managing Director of Poseidon Asset Management, added, “Birchmount offers the cannabis industry a much-needed service that mainstream industries benefit from on a daily basis. As the lingering stigmas around cannabis subside, more and more consumers are gifting cannabis products, and they deserve to have access to one of the most requested items – gift cards.”
“Of the hundreds of cannabis companies we review, Birchmount is one of the few addressing a niche and underserved sector of the industry, and with the management team’s successful history in the gift card space we see only a bright future ahead for Birchmount,” commented Sam Znaimer, Managing Director of WGD Capital.
Some of the cannabis industry’s leading brands and retailers partner with Birchmount to power and optimize their gift card programs, including Airfield, Caliva, Harborside, Fire & Flower and Glass House Brands.
About Birchmount Network
Birchmount is a full-service provider of turn-key gift card solutions for the cannabis industry, powering programs for 500+ cannabis retailers and brands across the U.S. and Canada. With more than 20 years of experience in the mainstream gift card industry, Birchmount brings extensive expertise, helping leading global brands grow their business with prepaid card technology. Birchmount offers customizable physical and digital gift card solutions that easily tie into any existing POS terminal or online payment platform, as well as marketing solutions that drive customer adoption and business growth. For more information on Birchmount or to get in touch, please visit https://www.birchmountnetwork.
