Despite individual state laws, in the eyes of the federal government, marijuana is illegal.

But apparently, illegalities fail to intimidate Microsoft, who recently announced their partnership with the tech company Kind. In states where marijuana is legalized, Kind’s software helps governments monitor marijuana related sales and commerce from “seed to sale.” State’s need this software to keep the marijuana industry “in the daylight of legality.”

Kind

Kind is one of many companies seeking to take the marijuana industry mainstream. In partnership with state­-chartered banks, the tech startup also offers ATM-­style kiosks that facilitate marijuana sales. Of course, Microsoft is staying far away from that aspect of the industry. Their investment deals with the industry’s infrastructural development, not the actual production side. Dabbling that deep into the market is still a little too close to corporate taboo. Regardless, Microsoft’s mere association with the industry further legitimizes the trend toward legalization.

Save for a few small banks that offer accounts to companies growing and selling marijuana, thus far, not much capital has flowed toward the marijuana industry, especially from the corporate stream. Since legalization has gained momentum, mainstream companies have shied away from the marijuana industry. Even the purely logistical, government compliance aspect was left untouched, until Microsoft’s recent investment.

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Microsoft is staying far away from the actual sale of weed, but it’s a start.

Since most banks won’t touch the money flowing through the industry, dispensaries often rely on cash for transactions. Kind, whose kiosks take payments inside the dispensaries, can eliminate this inconvenience. But startups are no substitute for the legitimacy and efficiency provided by actual banks facilitating these marijuana transactions. Governments are just as ill­equipped in dealing with the industry’s boom as dispensaries. They too rely on startups for technology that tracks marijuana plants and sales.

Currently, 25 states have legalized marijuana. Pennsylvania and Ohio were the most recent, and Kind will soon provide its services to Puerto Rico, who recently legalized marijuana for medical purposes. Colorado, Oregon and Washington, where recreational use is allowed, are the big players. Soon, however, five states­­ including California­­ vote on the legality of recreational use. This year, marijuana sales are expected to jump from $4.8 billion to $6.5 billion. If California joins the recreational club, that number could hit $25 billion by 2020.

Sir Smoke A Lot

Bill Gates’ current mood.

In light of these predictions, Kimberly Nelson, the executive director of state and local solutions at Microsoft, notes that the industry will demand more sophisticated requirements and tools to regulate a skyrocketing amount of transactions.

As the cannabis industry grows, more corporations should realize its worth as a profitable investment opportunity. Doing so will spur growth and innovation, and more importantly, give ill­-supplied governments the infrastructural capacity to properly and effectively regulate a booming industry.

Simply, the marijuana industry is experiencing an ever-­increasing demand for the the tech services offered by companies like Microsoft. As that demand surges amidst the industry’s growth, more and more companies are expected to follow Microsoft’s path.