UK native Roy Bingham is a master of data analysis. His background in economics, statistics and finance have helped him see both macro and micro trends and develop successful strategies for business growth. He has been a banker, a consultant and a serial entrepreneur. His strength lies in number crunching and analysis. “I have a strong background in finance,” Bingham said. He graduated with distinction from Harvard with a Master’s in Business Administration in 1995.
Following a two-year stint with McKinsey & Co. after earning his master’s, he started a merger and acquisition firm in the natural food industry with other partners; invested in SPINS, a data analytics company; and co-founded Nutrition Business Journal. Later he helped develop health care/nutraceuticals products and market them using data analytics at NourishLife, LLC.
At Renew Life, Bingham’s helped create an e-commerce business and contributed to the company’s sustained revenue growth. His ability to use data and technology as tools of prudent business development led him to explore alternative avenues for professional success.
He first looked at the cannabis industry in 2013, but wasn’t confident about the heavily regulated industry’s future. Two years later, his friends at CanopyBoulder, a venture fund and business accelerator focused on ancillary products and services in the legal cannabis industry, asked him to consider building a database to track the industry, and introduced him to Liz Stahura.
“She had the expertise in sourcing, organizing and presenting the data to clients. I had the strategic knowledge, and the knowledge of how to use data to make product development and marketing decisions. It was a match made in heaven.” Bingham said.
That led to the founding of BDS Analytics in 2015, making him relocate from Rhode Island to Boulder. The company he co-founded with Stahura tracks sales of cannabis and CBD products and provides consumer and industry insights to subscribers for product development, marketing and branding decisions.
Recently BDA Analytics raised $7 million in venture capital to expand its coverage of global cannabinoid markets by strengthening its operating infrastructure with investments in machine learning, marketing and sales, and strategic partnerships. “We are adding about 20 employees in the second half of this year,” he said.
Last week we met with Bingham at his office in Boulder to find out more about him and his company.
The following interview has been edited for length and clarity.
1. What does data mean to you?
Bingham: Data drives action. Data are essential building blocks to creating successful businesses and promoting growth by focusing on critical areas. It helps you separate what may be termed as less important issues in a given context. Data collected and processed scientifically provides insights that otherwise are hard to glean from plain observation.
2. You have worked as a corporate executive, and you have been an entrepreneur. How do you see the two roles?
Bingham: An executive’s primary role is to improve an existing product or a company. An entrepreneur primarily creates something from scratch. Both need to understand the importance of data in growing their businesses.
3. What’s your advice for entrepreneurs trying to raise capital?
Bingham: Build a solid business, have a clear plan and communicate the plan, particularly the exit strategy, to the investors to help them get good returns on their investment.
4. How do you collect data at BDS? How is it changing the cannabis and CBD industries?
Bingham: We track retail transactions through dispensary point-of-sale systems. We track different products, product categories and brands. We also collect consumer data through online surveys across local, national and international markets that is updated every six months. Our expertise is in making sense of raw data and providing actionable insights to stakeholders in the space.
We can provide accurate forecasts and detailed financial models. Our analysts track everything from regulatory shifts that will affect multi-state business plans, to merger and acquisition deals that potentially impact markets in North America and around the world. We do a comprehensive tracking of the cannabis and CBD industry that no one else is doing. We are tracking sales in 40 major countries.
The industry is seeing a market expansion and some consolidation with the proliferation of sales channels.
Some small players have become savvy enough to make stocking, merchandising and shelving layout decisions based on data we collect. They know who their customers are and what they prefer to buy. We teach them how to use the system and give them extra help if they need it.
5. What are some of the important trends ahead in the cannabinoid market?
Bingham: The passage of the 2018 Farm Bill and regulatory changes have helped the industry. It also changed popular attitudes about cannabis and CBD-based products. People are hearing about the health benefit of cannabinoids and are not averse to trying different products. Also, researchers are working either to confirm or deny those claims. The industry will continue to grow rapidly.
The legal cannabis industry in the United States will contribute nearly $40 billion in total economic output and create a total employment effect of almost 414,000 full-time equivalent workers by 2021.
The CBD market in the United States will increase from $2 billion in 2019 to $20 billion in 2024. Currently, dispensaries sell 65% of CBD products in the country. Their share will come down to 26% by 2024. CBD is escaping from dispensaries to general sales channels.
The global cannabis market in 2019 is $15 billion, of which the U.S. has 88% share. By 2024, the global market will be $40 billion, with the share of the U.S. coming down to 75%.