Tag Archives: seed-to-sale

Steven Burton
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Why Traceability Is Crucial for the Cannabis Industry

By Steven Burton
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Steven Burton

The stage is set: cannabis legalization is rolling out around the world. With legalization comes regulations and smart companies will adapt to make new requirements work for them. In the end, our shared goal (as industry, consumers and government) is the same: provide safe, high-quality, reliable products. This is where traceability comes in.

If a cannabis product isn’t safe (cannabis is vulnerable to the same kinds of hazards as most food products), the reputation of the entire industry suffers. Earning public trust is the first step toward favorable government regulations. With upcoming decisions that will decide taxation and distribution, it’s more important than ever that cannabis producers can react quickly if recalls should occur – and that means taking traceability seriously.

Comprehensive Traceability for Cannabis Means More Than Legality

A crucial key to producing safe and high-quality cannabis products is detailed traceability. Many states require cannabis businesses to use systems like Metrc, a technology that uses RFID tags to track cannabis from seed to sale to ensure nothing is diverted to the black market. However, Metrc focuses only on the chain of custody, not on the safety or quality of the product.METRC logo

Ensuring a secure supply chain is only one piece of the cannabis puzzle. Public health hazards like toxic chemical contamination, mold growth and pathogenic contamination introduced by pests or improper employee handling need to be controlled in order to earn public trust and comply with regulations. State-mandated traceability systems don’t address these imperatives, so an effective safety technology that includes traceability, in addition to mandated systems like Metrc, is absolutely necessary to complete the cannabis picture.

Automation Technology Supports Cannabis Companies’ Growth and Helps With Audits

Cannabis professionals are aware of the regulatory scrutiny the industry is under and many have turned to automation technology to help stand up to this scrutiny, as well as collect and manage all the data necessary for compliance. Automating data collection pays off in several ways. For one, interconnected, real-time IoT technologies that are accessible to the entire facility 24/7 are giving cannabis businesses the tools they need to create the best possible products now, as well as providing them with the data they need to make their products even better. Since frequent audits are a part of the legalization transition, automation also makes preparing for audits and inspections a matter of minutes instead of days.

Ron Sigman, chief executive officer of marijuana compliance consulting firm Adherence Corp. and former investigator for the Marijuana Enforcement Division (MED) in Colorado, lists the most common violations for cannabis businesses that he found during more than 200 audits in an interview for Marijuana Business Daily. These violations include:

  • Metrc issues, especially accounting not matching inventory (too many plants or ounces of marijuana on the premises);
  • Security issues like lack of sufficient camera coverage;
  • Failure to upgrade licenses;
  • Improper or incomplete training of new employees.

Adopting safety and traceability concepts that the food industry developed over many decades can yield huge benefits for cannabis businessesA proper cannabis traceability technology mitigates these problems by providing notifications of inventory inconsistencies, certification expirations and more. Traceability for cannabis must be able to handle the complexities of procedures like terpene extraction and injection. With the rapid growth of the industry, it must be able to set targets and track actuals. It should track, not just cannabis plants and related derivatives, but also every other ingredient, material and packaging material used during production. There must be monitoring at each stage of production and a system in place to ensure all employee training is up to date. Preventative maintenance must be scheduled and tracked and hazards must be identified and controlled. In the event of an audit or recall, precise mass-balance calculations must be available to account for every gram of product, including non-cannabis ingredients like coconut oil and packaging materials like pouches and labels.

GMPDetailed traceability can make the difference between a cannabis business keeping their license or being shut down. “You have to make a diligent effort to stay compliant 365 days out of the year, because you never know when a regulatory agency is going to come knocking on your door,” says Sigman. Knowing exactly what went wrong when and where allows a company to make changes so failures don’t happen again.

Higher Standards Will Be Demanded

The standard sought by most in the cannabis industry is only GMP (Good Manufacturing Practice) certification, which is actually the lowest level of certification possible in food production. With the public demand for edibles and concentrates on the rise and major retailers scrambling for seats at the table, the demand for transparency from growers and manufacturers will increase. Cannabis companies will soon find that GMP compliance simply won’t be enough to earn trust and expand their market share, especially when it comes to edibles and concentrates.

SQF-Certified“Every day, patients express interest and assurance of wanting to know that the foods and medicines they consume are safe and of the best quality available,” says Lindsay Jones, president of Curaleaf Florida, the first medical cannabis company in Florida to achieve SQF Certification. Safe Quality Food (SQF) certification ensures a company meets the highest levels of safety and quality on a reliable basis. Curaleaf has set a new bar in the industry that others will be compelled to follow and they should be congratulated for their proactive vision.

Adopting safety and traceability concepts that the food industry developed over many decades can yield huge benefits for cannabis businesses, but it will be interesting to watch the technology evolve to accommodate the specific needs of retailers and consumers. Imagine a traceability system that ensures safety and quality while also tracking consistency and potency.

The Future of Cannabis Is Bright

The emerging cannabis industry is facing challenging hurdles on its path to widespread legalization and acceptance but the forecast is sunny – for companies who are prepared.

New Frontier Data CEO Giadha Aguirre De Carcer, explains that California’s “legal (cannabis) industry is forecast to grow from $2.8 billion in 2017 to $5.6 billion in 2020. That spending will be increasingly directed at products and retailers who understand and serve the market’s evolving tastes and preferences.” That includes implementing comprehensive traceability systems to deliver safe, quality product.

Cannabis Track Added to 2018 Food Safety Consortium

By Cannabis Industry Journal Staff
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The 6thAnnual Food Safety Consortium Conference & Expo has announced a series of talks focused on cannabis. In addition to the categories such as Operations, Detection, Compliance and Supply Chain, the Call for Abstracts now includes a fifth category in this year’s program: Cannabis Quality.

The Cannabis Quality series will feature presentations by subject matter experts in the areas of regulations, edibles manufacturing, cannabis safety & quality as well as laboratory testing. The Food Safety Consortium itself is hosted by our sister publication, Food Safety Tech, but the Cannabis Quality series will be co-hosted by Cannabis Industry Journal as well.

Rick Biros, President/Publisher, Innovative Publishing Co. LLC
Rick Biros, conference director of the Food Safety Consortium

Citing the need to address safety in a burgeoning market, Rick Biros, conference director, believes education is key to helping the cannabis industry mature. “As the cannabis industry evolves, so does the need to protect the consumer,” says Biros. “Just as we protect the safety of our food supply chain, it is important to educate the cannabis industry about protecting their supply chain from seed to sale. Through these educational talks, we want to help bridge that gap, hosting a forum for those in the cannabis industry to interact with food safety professionals.”

The 2018 Food Safety Consortium Conference & Expo will be held November 14–16 in Schaumburg, Illinois. The event is a top food safety conference that features Food Safety and Quality Assurance (FSQA) industry experts and government officials.

The conference focuses on food safety education and networking, providing attendees information on best practices and new technology solutions to today’s food safety challenges. Previous keynote speakers have included food safety leaders such as Stephen Ostroff, M.D., deputy commissioner for Foods and Veterinary Medicine, U.S. Food and Drug Administration and Frank Yiannis, vice president of Food Safety at Walmart and author of Food Safety Culture: Creating a Behavior-Based Food Safety Management System.

Before submitting an abstract, following are a few points to keep in mind:

  • The abstract should be about 300 words
  • Presentations will be judged on educational value
  • Don’t submit a sales pitch!
  • Presentation time is about 45 minutes—this includes a 10-15 Q&A session

To see the Call for Abstracts and submit a presentation for consideration, click here. The deadline for submissions is May 31, 2018. The conference will notify everyone who submits an abstract on the status of acceptance by June 15.

Iowa’s Medical CBD Program Gets Tracking System

By Aaron G. Biros
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BioMauris, LLC became the 5th company in the United States to win a state contract for a seed-to-sale platform today. BioMauris is a technology company that manages product tracking, fulfillment and distribution with a focus on the healthcare market. According to a press release, the company announced today that the state of Iowa selected BioMauris to manage their tracking system for the medical cannabidiol (CBD) program.

That program’s contract includes inventory tracking, medical cannabidiol sales and patient and caregiver registration. In 2014, Iowa’s Medical Cannabidiol Act was signed into law. Three years later, in May of 2017, Governor Terry Branstad expanded the state’s program, including manufacture and dispensing in the previous legislation. On December 1st, 2018, Iowa expects sales to begin and fully implement the program.

This is BioMauris’ first state contract in the cannabis industry. According to the press release, BioMauris bases their platform on Salesforce for point of sale, tracking, customer loyalty and distribution services in the healthcare sector. The company says they use Salesforce because it is extremely customizable and secure.

Erik Emerson
Erik Emerson, founder and president of Biomauris

According to Erik Emerson, founder and president of BioMauris, they’re poised to deliver on this front, given their experience in other industries. “Our team has extensive history in the pharmaceutical business, and therefore has a unique appreciation for data integrity and security,” says Emerson. “Additionally, we fundamentally believe the opportunity to track patient progress and associate the benefits received with the products used, is an incredible opportunity for the cannabis industry.” BioMauris has worked with clients on similar projects in the healthcare space for some time.

The company touts their platform as fully PCI-DSS and HIPAA compliant, allowing them to process payments and protect sensitive patient information. “Our patented technology, makes this not only possible, but simple for all users,” says Emerson. “We are excited to bring our product to the great state of Iowa and look forward to a long partnership with them. We believe strongly in what Iowa is attempting to do with their program and believe it is a perfect fit with our strategy for the cannabis industry.”

Washington Security Breach Delays Traceability System Rollout

By Aaron G. Biros
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On February 8th, Peter Antolin, the deputy director for the Washington State Liquor and Cannabis Board (WSLCB), sent an email to licensees explaining why the transition to their new traceability system was disrupted. Last Saturday, someone gained access to the sensitive information in Leaf Data Systems, the state’s traceability software that is powered by MJ Freeway.

“A computer vulnerability was exploited on Saturday, allowing unauthorized access to the traceability system,” Antolin told licensees in the email. “There are indications an intruder downloaded a copy of the traceability database and took action that caused issues with inventory transfers for some users. We believe this was the root cause of the transfer/manifest issue experienced between Saturday and Monday.”WSLCB

The email goes on to say that no personally identifiable information was available to the ‘intruder,’ but some sensitive information was clearly accessed. That data includes route information of manifests filed between February 1st and 4th as well as transporter vehicle information including VIN, license plate number and vehicle type, according to the email.

That email leaves much to be desired. For one, they do not exactly have a solution, instead trying to alleviate licensees’ worries with a hollow inanity full of meaningless jargon: “The WSLCB and MJ Freeway continue to implement several strategies to prevent future vulnerabilities to future intrusions,” reads the email. “This includes full logging and monitoring and working with third-party entities. Since this remains an active investigation, details on security are not publicly available.” However, today the WSLCB is hosting a webinar where Peter Antolin, their IT division, the MJ Examiners unit and enforcement will be available to answer questions, according to the email.

WSLCB emailThis is by no means the first security breach that Washington and MJ Freeway have suffered. In May of 2017, Washington originally selected Franwell’s METRC as the contract partner for their traceability software system. Less than a month later in June of 2017, after a mistake in the selection process, Washington selected MJ Freeway instead of Franwell for the traceability contract. Three days later, MJ Freeway’s source code was stolen and published online. Then in September, Nevada cancelled their contract with MJ Freeway after a security breach, their services crashed in Pennsylvania and Spain, and in October it became clear that the company could not meet the October 31 deadline for their new Washington contract.

In November of 2017, BioTrackTHC, the company that held the previous contract for Washington’s traceability software, helped the state through the transition period with a temporary Band-Aid solution to hold the state over until January of 2018. A month after they expected to implement the new MJ Freeway system, the latest security breach occurred this week and disrupting the rollout yet again.

At the end of the email Antolin sent to licensees yesterday, he says there will continue to be attempts to breach the system’s security. “The bottom line is that this incident is unfortunate,” says Antolin. “There will continue to be malicious cyberattacks on the system. This is true of any public or private system and is especially true of the traceability system.” This begs a few questions: why aren’t we hearing about this kind of security breach in other states’ traceability systems? What are other companies doing that prevents this from happening? Why does this keep happening to MJ Freeway?

Integrating Your LIMS System With State Tracking Systems

By Cannabis Industry Journal Staff
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Cannabis Labs Virtual Conference: Part 3

Integrating Your LIMS System With State Tracking Systems
By Hannah O’Brien, Operations Manager, Confident Cannabis

Running a lab is hard. Running a cannabis lab is harder. Watch this webinar hosted by Confident Cannabis, the most popular and only free cannabis LIMS in the country, to learn how cannabis compliance and regulatory burdens impact analytical testing laboratories in any state, and how important purpose-built software solutions are to make their business run smoothly.

BioTrackTHC To The Rescue: Contingency Plan for Washington

By Aaron G. Biros
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According to a press release published this morning, BioTrackTHC successfully implemented their Universal Cannabis System (UCS) in Washington State, a temporary solution for the state’s seed-to-sale cannabis tracking system, while the new system is yet to be deployed.

BioTrackTHC had a contract with Washington State for four years, which expired just weeks ago at the beginning of November. Back in June, after a few minor hiccups, the state announced that MJ Freeway would be the successive software platform used for the state’s seed-to-sale traceability system.

The deadline for the new software to be ready for deployment was set for November 1st, when the BioTrackTHC contract would expire and the MJ Freeway contract would begin. Between when the contract was awarded and the deadline for implementation, MJ Freeway made headlines for a series of security hacks and systems failures. Subsequently, MJ Freeway said they could not deliver the software platform until January of 2018, leaving a two-month gap where businesses have no state-mandated software to use for the tracking system.

The contingency plan that the state laid out consisted of business owners manually inputting data in excel spreadsheets. When first pressed for a Band-Aid solution, representatives of BioTrackTHC cited security concerns related to MJ Freeway’s hacks as reason for being hesitant to extend their contract through the interim period.

In an open letter to the Washington cannabis industry back in October before the end of their contract, Patrick Vo, president and chief executive officer of BioTrackTHC, laid out an explanation for what went wrong and provided an alternative solution, essentially a private sector version of their government-mandated traceability software system.

The open letter to the Washington cannabis industry, written by Patrick Vo

Announced this morning, the new system, UCS, is being used by over 1,600 of the 1,700 cannabis licensees in Washington. The UCS has so far submitted 39,000 individual excel spreadsheets to the Washington State Liquor and Cannabis Board (WSLCB). “After the WSLCB announced that their replacement system would not be ready in time and that the only other option was for all 1,700 licensees to submit their seed-to-sale data via manual spreadsheets, BioTrackTHC created the UCS—a privatized clone of the government system—within a few days and deployed it minutes after the termination of the old system to minimize the impact on all licensees,” reads the press release.

The UCS allows business owners to streamline data recording, instead of manually entering information into spreadsheets. It is also integrating with 3rd party software competitors such as WeedTraQR, GrowFlow, Mr. Kraken, TraceWeed, GreenBits, S2Solutions and DopePlow. “After the WSLCB’s announcement, we knew that we had only a few days to provide a universal system to which the whole industry could submit compliance data and enable communication across the supply chain between licensees and their seed-to-sale system,” says Vo. “Our priority was to ensure that licensees could continue to operate in the absence of a government seed-to-sale system. Not having that system in place could have left Washington licensees vulnerable to noncompliance in a variety of ways, not to mention the potentially crippling volume of extra work needed to manually track a business’ entire inventory.”

Washington State’s new traceability software system by MJ Freeway is expected to deploy in January of 2018.

KIND Financial Launches Canadian Payment Solution

By Aaron G. Biros
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KIND Financial, a technology and compliance software solutions provider in the cannabis industry, is launching a new e-commerce and payment processing platform in Canada. According to the press release, they are partnering with a Canadian bank to launch the KIND Seed to Payment platform, which is essentially an e-commerce gateway integrated with their compliance software, KIND’s RegTech platform.

David Dinenberg, founder and CEO of KIND Financial

David Dinenberg, founder and CEO of KIND Financial, says this is an approach to help alleviate the cannabis industry’s banking woes. “We’ve been very focused on a global vision and taking a strategic approach towards solving the cannabis industry’s largest problem – banking,” says Dinenberg. “Not only have we built a broad portfolio of finance and compliance solutions with a high-level of technical sophistication, but we’ve made a strong commitment to security and compliance, which is evident through our partnership with Microsoft.” A little over a year ago, they entered a partnership with Microsoft to utilize their cloud-based solutions for government traceability software.

According to the press release, the software has regulatory and security features built in, such as age and identity verification, which can help companies comply with security and chain of custody regulations. “Our mission is to ensure business and technological growth for all constituencies within the cannabis industry while ensuring full compliance with evolving regulations, and that’s why we’re thrilled to make these services available to our great neighbors in the north,” says Dinenberg. “We understand compliance will be a critical issue for some time to come, but with our solution, all providers and their partners can focus on the job at hand while keeping in line with regulatory mandates.”

KIND Financial has not done much work in Canada previously, but this could be a sign of a greater push for international expansion. “We’re excited to be working in a new country to boost the Canadian cannabis industry in a safe and regulated manner, and we look forward to expanding into other markets overseas,” says Dinenberg. The press release says the new platform is designed to work with different languages and foreign currencies, including the euro and Australian dollar, which could help Canadian producers enter emerging markets.

In addition to their announcement of the KIND Seed to Payment platform, the company also announced they will be rolling out a mobile payment system called KIND Pay, a digital payment option for consumers that will accept Visa and MasterCard. They anticipate that KIND Pay will launch before the end of this year.

MJ Freeway Hardships Linger

By Aaron G. Biros
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MJ Freeway, a seed-to-sale traceability software company with a number of government contracts, has been making headlines this year for all the wrong reasons. A series of security breaches, website crashes and implementation delays have beleaguered the software company throughout 2017.

Just this morning, the Philadelphia Inquirer reported the company’s services crashed Saturday night and Monday afternoon. That article also mentions an anonymous hacker tried to sell sensitive information from the Washington and Nevada hacks in September. Back in April, when Pennsylvania awarded the state’s contract to MJ Freeway for its tracking system, Amy Poinsett, co-founder and chief executive officer of MJ Freeway told reporters “I think I can confidently say we are the most secure cannabis company in this particular industry.” It is safe to say this is now being called into question.

Earlier this week, New Cannabis Venture’s Alan Brochstein reported that MJ Freeway is unable to meet Washington’s October 31st deadline to integrate their software with the state, forcing customers to manually report data.

Roughly a month ago, Nevada suddenly cancelled their contract with MJ Freeway, just two years into their five-year deal. Back in June, the company’s source code was stolen and published online. And back in January of this year, the company’s sales and inventory system was the target of a cyber attack.

According to an email we obtained, all of MJFreeway’s clients in Spain experienced an online outage, but that services were restored within 24 hours. In an email sent to clients in Spain, the company told customers that the problems were the result of a system failure. “Our initial analysis indicates that this was a system failure and unfortunately none of the data was able to be successfully retrieved from the backup archive due to an error but we can assure you that none of your data was extracted or viewed at any moment,” reads the email. “We are extremely distressed regarding the event that occurred with the system and the service interruption that occurred yesterday. We recognize that this is a situation that is very serious and negatively impacts your club.” The email says that MJ Freeway is addressing those problems in a few ways, one of which being ongoing audits of their data backups. “The event has led us to reconstruct our “hosting environment” in Europe to use the latest technology from Amazon Web Services with the best redundancy, flexibility and security, using the highest stability measures in the AWS environment,” reads the email. While the site will be restored fully, according the email, historical data is lost. The company is working with their clients to help them get data back into the system. 

Biros' Blog

Washington Changes Course, Selects MJ Freeway as New ASV

By Aaron G. Biros
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Two weeks ago, we reported on the State of Washington choosing Franwell as their apparent successful vendor (ASV) for their seed-to-sale traceability system contract. Late last week, the Washington State Liquor and Cannabis Board (WSLCB) sent out an email explaining that they are no longer going with Franwell and the new ASV is MJ Freeway.

The email (left) consisted of a letter sent by Peter Antolin, Deputy Director of the WSLCB, to licensees “who had written to the Board and staff regarding the marijuana traceability Apparent Successful Vendor and RFID tags.” Apparently, the reason behind switching the ASV to MJ Freeway is because Franwell’s system requires only one method for tagging plants- RFID tags. According to the letter, Deputy Director Antolin says the initial request for proposal (RFP) stated that the traceability system needs to support a variety of tagging methods, including bar codes and RFID. “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,” says Antolin. As they made clear in the previous press release, the ASV is not the official contract winner until they complete negotiations and sign the contract.

On June 7th, Franwell withdrew their proposal for the state’s traceability system, thus Washington went with the second highest scoring vendor, MJ Freeway. Deputy Director Antolin says they submitted a strong bid, but there are still many questions left unanswered. How could such a glaring mistake be overlooked when the state named Franwell the highest scoring bidder? Is MJ Freeway’s system robust enough and capable of handling the state’s cannabis licensees’ traceability requirements even though they were not the highest scoring bidder? The deadline for the new system to be in place is October 31, 2017, which is quickly approaching for such a massive systems overhaul.

The WSLCB’s oversight highlights a few inadequacies with the state’s regulatory agency, particularly their indecision and lack of foresight. So much of the concept behind seed-to-sale traceability rests on Cole Memo compliance. A big reason why some states seek to implement a robust tracking system is to remain compliant with the Cole Memo; preventing diversion to crime organizations with regulatory oversight is a key tool that states use to tell the federal government they are complying with their directive and intend to protect their state’s legal cannabis operations from federal prosecution. Without a proper system in place, the state runs the risk of exposing their entire cannabis market to threats of federal enforcement, a scenario that seems unlikely but could be disastrous to cannabis businesses and the local economy.

The WSLCB needs to get their act together fast.

Washington Selects Franwell’s METRC for Traceability Program

By Aaron G. Biros
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The Washington State Liquor and Cannabis Board (WSLCB) announced today they plan to choose Franwell as their technology partner for the state’s cannabis seed-to-sale traceability system. While the release states they have not yet officially awarded them the contract, it says Franwell is the apparent successful vendor (ASV) to replace their current system. “An ASV is the procurement term used for the highest scoring, responsive vendor,” says the press release.

Rick Garza, director of the WSLCB, says they plan on making a number of changes that they couldn’t under their current contract. “Over the last four years we have learned a lot about this industry, including aspects to the industry that were unknown when the current traceability system was implemented,” says Garza. “We need a system that will grow and flex with Washington’s maturing marijuana system.”

Seven companies submitted bids for the new contract and the agency narrowed that down to three finalists, each of which gave presentations and demonstrations on their software products to WSLCB staff last week. They also worked with folks in the cannabis industry, selected by trade organizations, that provided input on the requests for proposal. Those industry stakeholders that participated with input will get a demonstration of the new software system in early June.

They plan on transitioning to the new system no later than October 31, 2017. Franwell’s METRC product is currently used in Colorado, Oregon and Alaska.