{"id":7348,"date":"2017-04-16T07:55:18","date_gmt":"2017-04-16T07:55:18","guid":{"rendered":"http:\/\/www.denverpost.com?p=2617121&amp;preview_id=2617121"},"modified":"2017-04-16T07:55:18","modified_gmt":"2017-04-16T07:55:18","slug":"wanted-cannabis-tracking-system-for-billion-dollar-market","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/wanted-cannabis-tracking-system-for-billion-dollar-market\/","title":{"rendered":"Wanted: cannabis tracking system for billion dollar market"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/wanted-cannabis-tracking-system-for-billion-dollar-market\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><div class=\"row\" id=\"sticky-outer\">\n<div class=\"large-11 small-12 columns\">\n<div class=\"entry-meta-date\">Published: Apr 14, 2017, 10:19 am \u2022 Updated: Apr 14, 2017, 10:19 am<span class=\"single-comments-link\"><a href=\"http:\/\/www.thecannabist.co\/2017\/04\/14\/washington-marijuana-sales-cannabis-tracking\/77414\/#disqus_thread\" class=\"commentsNameLink\" \/><\/span><\/div>\n<p class=\"byline\">By <strong>Bart Schaneman<\/strong>, <em> Marijuana Business Daily<\/em><\/p>\n<p>DENVER \u2014 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.<\/p>\n<p>The competition likely will be fierce, given that the contract involves one of the nation\u2019s largest cannabis markets.<\/p>\n<p>But businesses won\u2019t be squaring off against the provider of the state\u2019s 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\u2019s proposal.<\/p>\n<p>BioTrackTHC\u2019s contract expires in October.<\/p>\n<p>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\u2019s Liquor and Cannabis Board (LCB), told <a href=\"http:\/\/bit.ly\/2pqcItb\">Marijuana Business Daily<\/a>.<\/p>\n<p>The contract length will be negotiated.<\/p>\n<h3>BioTrack bowing out<\/h3>\n<p>State government contracts have become a lucrative \u2013 and prestigious \u2013 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.<\/p>\n<p>BioTrackTHC first won Washington\u2019s contract in 2013.<\/p>\n<p>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\u2019s software platform has come under criticism from commercial cannabis growers who complained it was costing them time and money.<\/p>\n<p>Patrick Vo, CEO of BioTrackTHC, argues that the LCB\u2019s proposed system is less robust than the company\u2019s existing platform.<\/p>\n<p>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\u2019s Cole Memo.<\/p>\n<p>\u201cAt this time, with the requirements that are in the RFP, we are not comfortable with bidding,\u201d Vo said.<\/p>\n<h3>System price tag, revamp<\/h3>\n<p>Washington\u2019s planned seed-to-sale system carries a price tag of approximately $3 million for initial installation.<\/p>\n<p>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.<\/p>\n<p>The platform allows regulators to monitor cannabis companies\u2019 supply chain \u2013 everything from cultivation and transportation to dispensary inventories and sales.<\/p>\n<p>Washington\u2019s 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.)<\/p>\n<p>Initially, the state developed its requirements for the tracking system before any marijuana licenses were issued. The system met the state\u2019s initial needs, the LCB\u2019s Smith said. But now, with some 1,600 licensees, it\u2019s necessary to revamp it.<\/p>\n<p>Since operations began, Smith said, the state cannabis market has grown \u201cexponentially\u201d and has exceeded the current platform\u2019s capacity. Washington has about 500 MJ retailers and some 1,200 producers and processors.<\/p>\n<p>According to Smith, his agency wants an existing off-the-shelf system given the LCB\u2019s \u201caggressive timeline.\u201d<\/p>\n<p>\u201cThe vendors for this aren\u2019t limited to the marijuana industry,\u201d he added. \u201cIt 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\u2019s growing, maturing marijuana system.\u201d<\/p>\n<p>To pay for the system\u2019s ongoing cost, the annual license fee for the seed-to-sale contractor would rise to $1,300 from the current $1,000.<\/p>\n<h3>Roll with the punches<\/h3>\n<p>Like state regulators, industry officials want a new system that\u2019s flexible and can adapt to a changing cannabis industry.<\/p>\n<p>\u201cWe didn\u2019t know what we didn\u2019t know when the state originally procured a system,\u201d said Lori Lizotte, a member of the Washington CannaBusiness Association. \u201cThe industry has evolved, and as the industry evolved, the needs have changed.\u201d<\/p>\n<p>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 \u201cvery, very expensive\u201d price tag, she said.<\/p>\n<p>BioTrackTHC\u2019s Vo countered that his company\u2019s current system \u201cis very configurable.\u201d<\/p>\n<p>\u201cThe government platforms that we have deployed in other states are all different. They\u2019ve all been configured for their specific regulations,\u201d he added.<\/p>\n<h3>Mixed reviews<\/h3>\n<p>Karl Keich, who owns two marijuana retail stores in Washington, hasn\u2019t experienced any glitches with BioTrackTHC.<\/p>\n<p>\u201cWe haven\u2019t had any issues,\u201d he said.<\/p>\n<p>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.<\/p>\n<p>By contrast, Jeremy Moberg \u2013 president of the Washington Sungrowers Association and CEO of Cannasol Farms, a producer\/processor company in Okanogan County, Washington \u2013 hasn\u2019t been happy with BioTrackTHC.<\/p>\n<p>Moberg uses the system for the reports the state requires and said simple tasks, such as sorting correctly and narrowing margins, have been \u201csubpar.\u201d<\/p>\n<p>\u201cIt really doesn\u2019t function on a business level very well, or very efficiently,\u201d he added. \u201cSo I\u2019ve invested a lot of time and resources and money into writing functional software over the top of BioTrack.\u201d<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<p><!-- .row --> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Washington state regulators are accepting bids for a new seed-to-sale tracking system to keep tabs on marijuana commerce, a deal valued at about $3 million. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6811,6813,7079,77,5577,6815,6826,5667,6858,56,9,5019,1,3,61,1736],"tags":[6816,6818,7080,2655,5580,6820,6828,5673,6860,2636,5022],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7348"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=7348"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7348\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=7348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=7348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=7348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}