HP finds an opportunity in the marijuana industry

Correction: An earlier version of this story and its headline inaccurately characterized HP as jumping into the pot business. The technology company sold hardware to Flowhub, which is providing integrated hardware and software solutions to the marijuana industry.

As recently as December, the Justice Department reminded the public that marijuana remains a controlled substance that is banned by law and that the federal prohibition takes precedence over state laws. But the uncertainty over the substance’s legality on a national level hasn’t stopped marijuana’s growing popularity in the 29 states where it has been legalized for either recreational or medicinal use.

Now, technology giant HP counts a company that sells software solutions as one of its customers.

HP said it sold hardware to software firm FlowHub, which is launching a new point-of-sale hardware and software package specifically designed for the marijuana industry.

Denver-based Flowhub’s product not only provides business management and transactional processing tools for retail stores but also workflow specifically focused on the ever-changing compliance, regulatory and reporting rules that challenge the owners — many of them small business owners — of marijuana dispensaries.

So, why is HP dipping its toes into the potentially risky marijuana market at a time when the U.S. attorney general has stated his opposition to its legality and many banks still refuse to open accounts for businesses in the industry out of concern about violating federal law?

The answer, as always, is money. Marijuana sales are booming nationwide — with research firms like Cowen & Co. predicting that sales of regulated cannabis will skyrocket from $6 billion in 2016 to $75 billion within the next 12 years.

“Retailers across a wide range of industries use our hardware in their store operations,” HP said in a statement to Bloomberg. “Our retail solutions are widely available and used by all sorts of customers as they see fit to meet their business need.”

HP isn’t the only large tech company that is selling products to companies in the marijuana industry. According to Green Market Report, Microsoft in 2016 allowed a cannabis compliance company to develop and host its products on its cloud-based Azure Government platform. And even IBM has been pitching the Canadian government on a potential blockchain-based system that would help track seed-to-sales transactions in the country.