Franwell and METRC Withdrawal Proposal; MJ Freeway Is Washington’s New Marijuana Traceability Software

Attention Licensees: The below message was sent yesterday by Deputy Director Peter Antolin to licensees who had written to the Board and staff regarding the marijuana traceability Apparent Successful Vendor and RFID tags.

WASHINGTON: The WSLCB will not require RFID as part of the marijuana traceability project. It’s Request for Proposal (RFP) was clear that the marijuana seed-to-sale traceability system must support a variety of tagging methodologies such as bar codes, RFID, etc. The RFP requirements did not allow a vendor to make any assumptions regarding use of a single tagging methodology or allow vendors to include any such costs affecting the state or our licensees in their proposal. In addition, unique plant and inventory identification numbers will be centrally created, maintained, and made available to third-party software systems via the API. Licensees will also be able to print their own labels, according to an WSLCB press release.

Traceability Advisory Group

As the WSLCB prepared the RFP, it engaged representatives of the major industry trade organizations., and held several meetings together to gather input and clearly communicate its intentions. At the most recent meeting held June 6, the LCB again asked that the representatives of the Traceability Advisory Group communicate with their members about this important point.

Change in Apparent Successful Vendor

The Apparent Successful Vendor (ASV) was not final until contract negotiations were complete and a contract was signed. Earlier today, the initial ASV, Franwell, withdrew its proposal for Washington State.  An ASV is the procurement term used for the highest scoring, responsive vendor.  The WSLCB today announced that second place bidder MJ Freeway is the new ASV.  WSLCB will soon schedule a product demonstration with our Traceability Advisory Group and begin contract negotiations quickly to get this project implemented.

Timeline

This project is on a tight timeline. The new traceability system must be in place Oct. 31, 2017.

Delaware Executes Cannabis Tracking Contract With BioTrackTHC

DELAWARE: The State of Delaware Department of Health and Social Services (DHSS), the government agency responsible for regulating the medical use of cannabis in Delaware, has executed the state’s cannabis seed-to-sale tracking and patient registry contract with BioTrackTHC.

Delaware’s stated goals for the Medical Marijuana Program include, “protect the people of Delaware by minimizing the risk of theft and diversion of marijuana to unregistered individuals,” and, “regulate the production and sale of medical grade marijuana to registered individuals.”  In pursuit of those goals, DHSS in 2016, issued a Request for Proposals for the Delaware Enterprise Consolidated Cannabis Control System, their designation for an integrated statewide seed-to-sale cannabis tracking and patient registry system.

“Our sincerest thanks to DHSS for choosing Team BioTrack,” said Patrick Vo, CEO of BioTrackTHC.  “DHSS has been wonderful to work with throughout the contracting process, and we look forward to partnering with them to provide the tools and data they need to continue overseeing the industry and protecting their patients.”

The implementation of an integrated seed-to-sale tracking and patient registry system will enable the state to keep close tabs on the activity of the Medical Marijuana Program.  Designated state officials will be able to view compassion center data—including plants counts and usable inventory, lab results, transportation, and point-of-sale data—to perform periodic audits and ensure compliance.  Additionally, the patient registry portion of the system will improve patient accessibility to the Program by automating the patient application process and decreasing application processing times.

BioTrackTHC currently has live seed-to-sale government traceability systems in WashingtonNew MexicoIllinoisHawaiiNew York; and the city of Arcata, California.

Washington State’s Cannabis Tracking Contract Up For Bid

By Bart Schaneman, Marijuana Business Daily

WASHINGTON: Washington state regulators have begun accepting bids for a new seed-to-sale tracking system to keep tabs on marijuana commerce, a deal with an initial value of about $3 million.

The competition likely will be fierce, given that the contract involves one of the nation’s largest cannabis markets.

But businesses won’t be squaring off against the provider of the state’s current seed-to-sale system, BioTrackTHC. The company said it has no plans to bid for the new contract, saying it is uncomfortable with some specifics of the state’s proposal.

BioTrackTHC’s contract expires in October.

Bids for the new contract are due by April 26, and the state hopes to have the new system in place by Oct. 31, Brian Smith, communications director for Washington’s Liquor and Cannabis Board (LCB), told Marijuana Business Daily.

The contract length will be negotiated.

BioTrack Bowing Out

State government contracts have become a lucrative – and prestigious – source of income for software companies that provide seed-to-sale tracking systems. In some states, numerous competitors have submitted bids for contracts, which are often worth hundreds of thousands of dollars, if not millions.

BioTrackTHC first won Washington’s contract in 2013.

It beat out 21 other companies, netting $750,000 for the base deal and even more as part of a two-year maintenance agreement. But the company’s software platform has come under criticism from commercial cannabis growers who complained it was costing them time and money.

Patrick Vo, CEO of BioTrackTHC, argues that the LCB’s proposed system is less robust than the company’s existing platform.

And he believes the language in the bidding documents, or RFP (request for proposals), may not satisfy requirements spelled out in the U.S. Justice Department’s Cole Memo.

“At this time, with the requirements that are in the RFP, we are not comfortable with bidding,” Vo said.

System Price Tag, Revamp

Washington’s planned seed-to-sale system carries a price tag of approximately $3 million for initial installation.

The state Liquor and Cannabis Board is contributing $980,000 to help cover the costs. State lawmakers must develop a plan to pay the rest.

The platform allows regulators to monitor cannabis companies’ supply chain – everything from cultivation and transportation to dispensary inventories and sales.

Washington’s cannabis market is burgeoning. Sales nearly doubled in 2016, increasing 95% to $696 million. (Last year, Washington merged its previously unregulated medical marijuana market into its heavily regulated adult-use industry.)

Initially, the state developed its requirements for the tracking system before any marijuana licenses were issued. The system met the state’s initial needs, the LCB’s Smith said. But now, with some 1,600 licensees, it’s necessary to revamp it.

Since operations began, Smith said, the state cannabis market has grown “exponentially” and has exceeded the current platform’s capacity. Washington has about 500 MJ retailers and some 1,200 producers and processors.

According to Smith, his agency wants an existing off-the-shelf system given the LCB’s “aggressive timeline.”

“The vendors for this aren’t limited to the marijuana industry,” he added. “It could be anyone who maintains systems like this for other products in other industries. We need a more robust system that can flex with Washington’s growing, maturing marijuana system.”

To pay for the system’s ongoing cost, the annual license fee for the seed-to-sale contractor would rise to $1,300 from the current $1,000.

Roll with the punches

Like state regulators, industry officials want a new system that’s flexible and can adapt to a changing cannabis industry.

“We didn’t know what we didn’t know when the state originally procured a system,” said Lori Lizotte, a member of the Washington CannaBusiness Association. “The industry has evolved, and as the industry evolved, the needs have changed.”

When Washington legalized adult-use cannabis, regulations were applied that have since been amended and changed. The state has struggled to alter the tracking system to account for those changes, according to Lizotte. Each change requires customizing the system, which comes with a “very, very expensive” price tag, she said.

BioTrackTHC’s Vo countered that his company’s current system “is very configurable.”

“The government platforms that we have deployed in other states are all different. They’ve all been configured for their specific regulations,” he added.

Mixed reviews

Karl Keich, who owns two marijuana retail stores in Washington, hasn’t experienced any glitches with BioTrackTHC.

“We haven’t had any issues,” he said.

He does hope the state will award a contract for a system that uses an interface that integrates easily with the different of point-of-sale software systems used by rec shops and dispensaries.

By contrast, Jeremy Moberg – president of the Washington Sungrowers Association and CEO of Cannasol Farms, a producer/processor company in Okanogan County, Washington – hasn’t been happy with BioTrackTHC.

Moberg uses the system for the reports the state requires and said simple tasks, such as sorting correctly and narrowing margins, have been “subpar.”

“It really doesn’t function on a business level very well, or very efficiently,” he added. “So I’ve invested a lot of time and resources and money into writing functional software over the top of BioTrack.”

 

Labor Day Sales For Marijuana To Trend High As Summer Comes To A Close

COLORADO: Like the cannabis holiday on April 20th (4-20) and the Fourth of July,Labor Day marks one of the highest grossing sales days in the cannabis industry. Once again, MJ Freeway takes a look at holiday trends in the cannabis market and gives some advice for what retailers can do to prepare for higher foot traffic in the coming weekend.

MJ Freeway’s retail data set, which accounts for 40% of the legal cannabis market and includes nearly $5 billion in retail sales transactions, helps businesses across the industry understand everything from sales cycles to inventory management and more.

“Cannabis is a young industry and it’s important to track trends early and often, which is why we’ve made it a priority to provide businesses with a full picture of high-volume sales days,” said Amy Poinsett, CEO of MJ Freeway. “The more we understand about the industry as a whole, the better we are able to provide our clients with solutions that they need for smooth and efficient business practices.”

Labor Day by the Numbers

  • In 2015, total cannabis retail sales exceeded $32M on Labor Day weekend (Sept 3-6, 2015), which represents a 43% daily increase from an average sales day.
  • In 2016, we expect Labor Day weekend retail sales (Sept 1-4) to reach $41M
  • Sales spikes begin the Thursday before Labor Day with Friday being the highest grossing sales day.
  • In 2015, individual cannabis licensed retail locations* – dispensaries and delivery services – sold on average $5,694 in retail sales on September 3$7,266 on September 4$5,985 on September 5, and$5,100 on September 6 in 2015, the four days of Labor Day weekend.
    *Note: One physical cannabis retail location may operate with two individual licenses – medical and recreational.
  • Customer traffic increased on average by 20% during Sept 3-6, 2015 as compared to a non-holiday sales day.
  • Individual customers spent on average $69.14 per trip Labor Day weekend 2015, a rise of 3% compared to customers visiting retail locations on an average day.

Green Bits Conquers Washington Cannabis Compliance Market

WASHINGTON: In episode 25 of the Investing in Cannabis Podcast, Brandon David interviews Ben Curren of Green Bits, discussing the company’s point-of-sale service designed specifically for cannabis companies. Founded on March 24, 2014, Green Bits has been growing steadily and building out its service to help canna-businesses grow and stay legal. Green Bits was also named the first runner-up at TechCrunch Disrupt, the first time in history that a cannabis technology company had been invited to participate.

[youtube http://www.youtube.com/watch?v=5eUTNVzbx04&w=560&h=315]