First ‘Seed-to-Sale’ Accounting Case Study On Cannabis Industry

UNITED KINGDOM: Cambridge Judge Business School (CJBS) and cannabis operator and investor White Sheep Corp. announced their collaboration on the first “seed-to-sale” accounting case study on the cannabis industry – “High” Profits From Accounting For Cannabis Plant Inventory – co-authored by Alan Jagolinzer, Michael Miller and Steven Looi. The case study will be taught for the first time today by co-authors Jagolinzer and Miller at CJBS.

This case examines questions raised about financial reporting in one of the world’s fastest growing industries, cannabis, aiming to guide students through the reporting process for an industry that is being legalised by an increasing number of jurisdictions. The case focuses, ultimately, on what key decisions go into deciding the fair value of a cannabis crop and how this is reflected on the financial statements.

Michael Miller, Director of Finance at White Sheep Corp., says: “We are honoured to partner with CJBS on this landmark case study. As the first accounting case to directly address the cannabis industry, this is a strong signal to the academic community that it is time to build cannabis into the curricula. The issues explored in the case will continue to emerge as new jurisdictions and new companies enter the industry. We aim to help investors understand the income statements and make better informed capital allocation choices.”

Alan Jagolinzer, Professor of Financial Accounting at CJBS, says: “CJBS is partnering with global business experts to create and enhance complex, innovative, and pertinent academic curriculum to develop students for business leadership. We are very excited to join White Sheep in creating the world’s first accounting case study on the cannabis industry, which is seeing enormous capital growth despite considerably complex and confusing financial reporting. I can see why investors might want to consider publicly-traded cannabis companies. However, I highly doubt they understand the accounting because of the unique rules for agricultural inventory. This case will certainly liven up our discussions of financial accounting and help the professionals of tomorrow to start building these skills today.”

White Sheep was evaluating the financials of several of the top publicly traded cannabis companies when they identified recurring gross margins in excess of 100% on the income statements. Miller and Looi realized this could not be the norm for any company. To explain the exceptional circumstance, they focused on how cannabis plants are treated under IFRS, the accounting reporting standards which govern Canadian public companies. This inspired an article in February 2017 to serve as a healthy warning to investors looking to pile in based purely on the ‘profitability’ of these companies.

 

MJ Freeway Reports Cannabis Retail Sales For April 20 “4/20” Holiday Exceeded $45M

COLORADO: MJ Freeway, a leading provider of seed-to-sale traceability solutions for the cannabis industry, reports that retail sales for the largest marijuana holiday exceeded $45 million, a 20% increase compared to the 2016 holiday.

Prior to the holiday, MJ Freeway predicted a 20% increase in retail cannabis sales and a 10% increase in customer traffic. MJ Freeway’s predictions and reports are based on sales data figures compiled through analysis of their majority cannabis retail market share.

April 20th is widely recognized as a holiday by cannabis enthusiasts, increasing cannabis tourism and events. “With the increase in widespread acceptance of cannabis, we anticipated a large jump in US sales for the holiday. 4/20 is an excellent opportunity for adults to purchase and consume products in a responsible, regulated market, while learning about the culture and history of the industry,” said Jessica Billingsley, COO and Co-founder of MJ Freeway.

4/20 by the Numbers

  • MJ Freeway predicted a 10% increase in order count (number of transactions) for the week of 4/20 (4/14 – 4/20). This year’s 4/20 week saw a 13% increase in order count compared to the weekly average.
  • On the day of 4/20, MJ Freeway predicted a $6 per transaction average increase from an average order sale compared to the rest of the year. This year, the actual results were much higher at $77.21 for 4/20 – a $10 increase per transaction compared to the 2017 average.
  • On average, 13% discounts have been applied to all sales for the year. On 4/20, MJ Freeway saw an average discount of 24.11% applied to all sales.

*Note: One physical location may operate with two individual licenses – medical and recreational

The next largest holiday for cannabis sales is July 4th, which ranks as the third highest holiday in total cannabis retail dollar sales following 4/20 and New Year’s Eve.

 

WeedTraQR Seed-to-Sale Software Certified For Oregon

WASHINGTON: The Oregon Liquor Control Commission (OLCC) has approved WeedTraQR cannabis seed-‐to‐sale tracking software as a validate software provider for Oregon’s recreational marijuana program. The Seattle-based company has developed a platform that is compatible for integration with Oregon’s Cannabis Tracking System (CTS) to meet the inventory traceability needs of the state’s producer, processor, wholesaler, and research.

Operational for over two years in neighboring Washington, with a rapidly expanding roster of clients, WeedTraQR lends proven expertise and hard‐earned credibility to Oregon’s fledgling system. WeedTraQR’s software will allow recreational cannabis producers, processors, and wholesalers to electronically transmit complete and accurate inventory and sales data into the state’s mandatory CTS, saving time and reducing the risk of error.

All OLCC recreational marijuana licensees must participate in Oregon’s CTS; they can choose an approved third-party provider to integrate company sales and inventory data with the state’s system. One of only four providers validated for use by producers and processors, WeedTraQR pragmatically solves the inventory‐tracking requirement in this early industry stage, turning traceability from burden to competitive advantage by supplying clients with data analytics and other operational resources.

WeedTraQR claims to be the first ‘meta’ traceability software, reporting to the CTS in both Washington (BioTrackTHC) and Oregon (Metrc), making it an appealing option for companies with national aspirations and for those who currently license products in multiple states who want a consistent interface for all facilities.

Touted by Washington’s recreational industry as the easiest‐to‐use, most efficient and responsive inventory platform in the cannabis space, WeedTraQR will focus on producers and processors in Oregon and will also support wholesale and research licensees.

“We like that we’re taking  a platform agnostic, commodity equipment, agile SaaS model to the cannabis industry. It’s a major advantage to be able to run your grow or processing facility traceability from any mobile device, like a tablet or your smart phone, ”  said company co-founder Eric Ogden.  “We’re technology disruptors. We’re unique in that we’re aligned  with the industry first, while providing competent  and reliable governmental support and reporting.”

Hawaii Selects BioTrackTHC For State’s Medical Marijuana Program

HAWAII: The Hawaii Department of Health’s Office of Health Care Assurance has selected BioTrackTHC as the winner apparent for its state contract for tracking the production, transportation and sale of medical marijuana.

“The development of a healthy and successful medical cannabis program is a top priority for Hawaii, and we are extremely proud to have been chosen to be a critical part of it,” said Patrick Vo, CEO, BioTrackTHC. “The islands of Hawaii are truly unique and we very much look forward to applying our expertise in solving the cannabis traceability challenges unique to Hawaii.”

BioTrackTHC’s government software solution will provide the Hawaii Department of Health real-time visibility into the seed-to-sale tracking data of every licensed medical marijuana dispensary in the state, including plant and inventory quantities, production activity, laboratory testing results, transportation activity, and dispensing activity.

This marks the fifth cannabis-related government contract won by the company. BioTrackTHC‘s seed-to-sale Traceability System for government agencies is currently being utilized by the states of WashingtonNew Mexico, and Illinois, and is in the process of implementation by New York. The company’s Enterprise System for businesses is used in more than 1,500 medical and recreational cannabis facilities in 23 states, Washington D.C.CanadaJamaica and South America. These technologies enable government agencies and businesses to track every plant and every fraction-of-a-gram of cannabis throughout the production lifecycle—cultivation, harvest and cure, quality assurance testing, transportation, destruction, and sale—bringing transparency, accountability, and meaningful insights to cannabis operations.

The Hawaii Department of Health’s Office of Health Care Assurance issued a Request for Proposals (RFP) in November of last year and posted a Notice of Award naming BioTrackTHC on December 28, 2015.

‘Seed-To-Sale’ Marijuana Tracking System Proposed For Michigan Medical Dispensaries

MICHIGAN:  Medical marijuana sold through licensed dispensaries would be tracked from “seed to sale” under new legislation in the Michigan House.

House Bill 4827, sponsored by Judiciary Committee Chairman Klint Kesto, R-Commerce Township, would require the state to establish or contract for a marijuana tracking system.

The legislation would complement an ongoing to push to formally allow and regulate medical marijuana dispensaries, some of which have continued to operate in a legal grey area since a 2013 Michigan Supreme Court ruling.

The dispensary bill would see the state license larger-scale marijuana growers, processors, transporters, “provisioning centers” and product safety testing facilities.

New Mexico Department of Health Awards Medical Cannabis Software Government Contract to BioTrackTHC

NEW MEXICO: The New Mexico Department of Health’s Medical Cannabis Program has awarded BioTrackTHC™, a division of Bio-Tech Medical Software, Inc., a contract for the provision and deployment of an integrated patient and provider tracking software application. This award makes BioTrackTHC the cannabis industry’s first company with marijuana regulatory technology contracts in two states, following the company’s existing contract for the state of Washington’s Marijuana Seed-to-Sale Traceability System.

“I commend the New Mexico Department of Health on its comprehensive RFP process in securing the right technology and team for the state’s needs,” said Steven Siegel, CEO, BioTrackTHC. “Our experience implementing compliance technology in this sector will serve the state and the public well in maintaining a reliable and efficient regulatory infrastructure.”

The New Mexico Medical Cannabis Program (MCP) was created under the Lynn and Erin Compassionate Use Act to allow for the beneficial use of medical cannabis in a regulated system.  In pursuit of its mission, the MCP issued an extensive RFP on July 22, 2014for a software solution to maintain regulatory compliance. After extensive proposal evaluations and live software demonstrations, BioTrackTHC achieved a marijuana industry first: back-to-back government contract wins.

TraceWeed Ready for Use by Washington State Marijuana Growers and Processors

WASHINGTON: Recreational marijuana growers and producers in Washington State have a new option for meeting their seed-to-sale traceability requirements, as Seattle-based Dauntless Software Inc. has announced the release of TraceWeed, a solution that tracks plants, inventory, and storage locations using a combination of desktops and smartphones. All of it is designed to help make I-502 businesses fully compliant with the state’s traceability system and requirements, and eliminates the need for growers and producers to use other traceability solutions.

“What we aimed for is a secure and simple, easy-to-use way for I-502 businesses to manage their operations without the need to worry about if they are staying compliant with Liquor Control Board traceability standards,” said Dauntless CEO Clark Musser. “We’ve taken a lot of the time and headache out of traceability while keeping our pricing affordable.”

After a successful beta period with multiple producer/processor operations around Washington, the Dauntless TraceWeed solution is now available to everyone. Today’s release includes features to manage your day-to-day I-502 business including: detailed reporting, clone management, plant tracking, and full featured harvest capabilities.

“This traceability system is the future for our industry. It’s an incredibly smart design, it’s user-friendly, and highly adaptable. Pure elegance,” said industry consultant Chris Bayley of Hortistructure, Inc. “After listening to my clients talk about their experiences with the initially available traceability systems, I’m proud to now recommend TraceWeed.”

“We love how TraceWeed is mobile so you don’t always have to go to your computer to get things entered,” said Susan Strickland, co-owner of Happy Wayz Edibles in Spokane, Wash., one of TraceWeed’s beta customers. “Example: move a plant from one room to another, grab your phone, and ‘click, click, done!’”

TraceWeed customers tag their plants with PVC cards encoded with an NFC chip, the same technology that is behind many of the cutting-edge mobile payment systems like Apple Pay. Similar tags and stickers are used to mark locations within the grow operations. Once tagged, all it takes is a simple tap of a TraceWeed-enabled phone, to allow a grower to designate a single plant or whole shelf of plants as moved or ready for harvest.

Along with the software service, TraceWeed has approached hardware with the idea of making things as simple and cost effective as possible. The PVC tags used for plants are impervious to grow-room or outdoor conditions; all-weather stickers can be printed with government IDs and strain details using an optional portable Bluetooth printer. And no proprietary hardware is needed to run or manage a TraceWeed system – phones, pc’s and other items are off-the-shelf – and each PVC plant tag can be reused up to 10,000 times.

Customers who use the TraceWeed software will automatically get updates as they are rolled out, at no additional charge. “The sky is the limit around what we want to offer for future versions of TraceWeed. Our key goal is to help make it simple to run an I-502 business in order to allow our partners to focus on creating and selling great products” said Dauntless CEO Clark Musser. Dauntless is planning on expanding into other states with legal recreational or medical marijuana markets.

Dauntless is now scheduling installations for its initial signed customers. New customers can expect to be up and running within 60 days. For information or to schedule a demo, email info@dauntlessinc.com or call (206) 489-4942. 

Software Wars Slings And Arrows, Cease And Desist

WASHINGTON: MJ News Network has been reporting on the ongoing software wars between participants in the cannabis compliance, or so called “traceability” or “seed to sale” software arena.

Last week we reported on widespread accusations in social media that the official LCB portal, whose use is mandated for all licensees, contained security flaws — a charge the LCB flatly denied.

This week, following a meeting of the Marijuana Business Association in Seattle, MJ News Network was contacted by WeedTraqr, with accusations that BioTrackTHC, the author of the official LCB software, of “hacking” their system in a blog post on the company site. After attorneys for BioTrackTHC contacted WeedTraqr, the accusatory post was removed, but WeedTraQR’s Eric Ogden remains defiant:

Hi David, …so last night after MJBA BioTrackTHC tried to hack WeedTraQR. David [Busby] wrote a blog about this… We only have a couple hundred followers on our FB page and I was hoping you might share or at least ‘like’ our blog post… Check it out! Thanks! Eric
checking it out now.

They sent a cease and desist letter about 20 minutes ago claiming we are libelous! …we have documented proof of their hack attempt…
I read your blog.

before we had to pull it?
what will you do about the “cease and desist” demand from BioTrackTHC?

They faxed a letter from their attorney in FLA claiming our blog was libelous and demanding a cease and desist.

so we pulled the blog and posted a public response with documentation of the hack

We’ll get an attorney to respond. It’s not libelous if it’s true and we have proof

Attorney recommendation?
Chat Conversation End
MJ News Network contacted BioTrackTHC’s COO Patrick Vo, who passed along a copy of the response that he sent to WeedTraQR management:

WeedTraQR Management,

If you feel that you have been the victim of an internet crime, BioTrackTHC strongly advises that you contact the FBI’s Seattle office at 206-622-0460 so that the authorities can get involved and get to the bottom of this and so you can leave BioTrackTHC out of your problems. 

The information that you have provided thus far suggests that the attack came from Seattle by a user using the Google Chrome browser on a Mac OSX operating system.  TJ Ferraro is in Fort Lauderdale and uses the FireFox browser on Linux Slackware.  On top of that, to think that TJ would use his @biotrackthc email address in an attack is laughable.  It appears that your site allows anyone, even a six-year-old in another country, to sign-up with any email address they choose without an email verification process. 

We can assure you that BioTrackTHC was in no way involved in any attempted “hack”, and your continued baseless insinuations will not be tolerated and legal remedies will be pursued to the fullest extent possible.  

MJ Freeway Business Solutions for the Cannabis Industry Launches New Website

COLORADO: MJ Freeway, the industry-leading cannabis business software platform today announced the launch of a new e-commerce website detailing the company’s products, services, and solutions for marijuana retailers, infused product manufacturers, cultivators, and industry professionals.

The website offers clear, organized, and detailed information regarding each of MJ Freeway’s products: GrowTracker®, GramTracker®, and MixTracker™. Visitors can stream overview videos, recorded demonstrations, and interact with the cannabis regulations guide, which provides geographic specifics for marijuana law.

With a legible, modern design, easy-to-navigate functionality, and rich content, the new e-commerce platform allows customers to discover product features and complete the checkout process efficiently. According to Heather Smyth, Digital Marketing Manager of MJ Freeway, the new website is closely aligned with the company’s strategic vision for providing a full seed-to-sale solution for cannabis businesses.

“Our goal in launching this new website is to provide an online resource for companies and individuals to learn more about our product solutions, as well as gain valuable information about the industry,” Smyth said. “We also wanted to clearly depict how our software packages and suite of professional services help streamline workflow and increase business efficiency.”

As part of the new website launch, MJ Freeway is offering one free day of an in-person Training Lab with the purchase of a Pro or Elite package, a $300 value.  Training Labs provide users with high-level instruction of the MJ Freeway software and give valuable tools for effective management. This offer is valid through December 31.

“We’re very excited about the launch of the new website, and hope that it will provide visitors with an informative and useful way to learn more about MJ Freeway and the cannabis industry.”