In response to voter support of Proposition 64, marijuana legalization, the state of California has begun creating regulations governing the cultivation and sale of cannabis. The Statewide Technology Procurement Division is managing the procurement of a bid for a "track-and-trace" system, the software that will help track and maintain inventory over a crop’s lifetime in the medical and recreational cannabis industry.
Bids were due April 26. The California Department of Food and the Procurement Division is expected to award a contract any day.
BioTrackTHC is one of the vendors being considered for California’s system. The company has deployed five other government track-and-trace systems prior to this and has partnered with Natoma Technologies in Sacramento to facilitate interoperability with the other systems that will be involved in the industry.
The following interview was conducted over email, and answers have been edited for length and clarity.
Techwire: You’re in the business of tracking cannabis from “seed to sale.” Manufacturers use the software. Do localities use the software too? What’s the workflow?
BioTrackTHC: There are two types of “seed-to-sale” systems with respect to cannabis tracking; there’s tracking at the business level and tracking at the government level.
Business-level seed-to-sale systems enable a licensed cannabis business — be it a grower, manufacturer or dispensary — to tag all of their plants and inventory items and track both the movement and transitions of those items throughout the product lifecycle.
Not only are these business management and record keeping tools, they are also compliance reporting tools since they can exchange data with the government seed-to-sale system to ensure that there is a one-to-one relationship between the data contained locally in the business system and the data contained in the state’s system of record. For example, if a grower moves plant No. 123 from the vegetation room to the flower room, the moment that is recorded in their local business management system, it is also transmitted in real time to the government system so the two data sets match.
The government-level seed-to-sale system both coordinates and aggregates all of the cannabis tracking data from all licensees in one place for the government agency. This enables the agency to “zoom out” and view cannabis industry activity from a high level: There are currently 500,000 registered plants statewide, there are 76 transportation events happening today and over $250 million in product was dispensed to patients last month, etc. The agency can also “zoom in” to view the statistics for a specific licensee and the minute details of any single item.
TW: What are your thoughts on the aggressive time frame of getting a minimally viable product out in California by the beginning of 2018?
BT: Make no mistake, because of the sheer size of what will be California’s regulated cannabis industry (larger than all other existing medical and adult-use cannabis industries combined) this will be a herculean task. Just scratching the surface is the scale of the technology infrastructure setup, system implementation, system testing, training tens of thousands of licensees, and registering and tagging every cannabis plant and inventory product in the product lifecycle from border to border. Only companies possessing both an off-the-shelf cannabis tracking product and experience in implementing that solution for a state-level government agency will have a realistic chance of making that time frame.
TW: How long did it take for you to stand up systems in other jurisdictions?
BT: The time to stand up a government cannabis tracking solution depends on many factors, but one of the primary determinants of timing is the state’s willingness to deploy the solution as close to out-of-the-box as possible. Obviously, the system will need to be tailored to comply with the state’s regulatory requirements, but any modifications above and beyond that should wait until after the deployment of the minimally viable product. For example, three of our government systems were deployed in 75 days or fewer, and a fourth was deployed in under 120 days. However, the scale of California is many times larger than any of these; so even with BioTrack’s speed-of-deployment track record, every day counts.
TW: What unique challenges will California face?
BT: From the perspective of the tracking system, California’s greatest and most unique challenges will be its size and the historical absence of regulation. To put the size into perspective, California is the sixth-largest economy in the world and the largest cannabis economy in the world. California is seven times the population of Colorado and six times the population of Washington state [both of which have legal cannabis industries]. Beyond size, California's cannabis industry has grown and operated without cannabis activity tracking, reporting and compliance requirements for two decades; inserting not only a track-and-trace system but also a more structured regulatory environment after such a long time will be a large paradigm shift for many. Without a doubt, there will be some pain in the transition.
TW: The state of California is going to use Accela as part of a licensing system for cannabis. Does your system talk to Accela?
BT: Cannabis industry oversight requires many components: business licensing, cannabis activity tracking, patient registry and others depending on the government’s regulatory structure and authority such as law enforcement, tax obligations and payments. Nearly all of BioTrackTHC’s government cannabis tracking solutions exchange data with other government systems to increase efficiency and reduce the likelihood of data inconsistencies between systems. For example, the state of New York requires that the BioTrackTHC government system interface via API with the New York Medical Management Data System provided by Oracle to provide encrypted patient information to the pharmacist in real time at the point of sale. As a second example, BioTrackTHC’s government system in Washington receives licensing data from a legacy AS400 system in addition to exchanging data with a Washington State Patrol system and with the bank that accepts cannabis tax deposits for the Liquor and Cannabis Board.
BioTrackTHC’s California partner, Natoma Technologies, has experience specifically in integrating Accela systems with other software systems. As such, we don’t foresee any issues with exchanging data with Accela’s tailored cannabis licensing system.
Techwire has previously interviewed one other vendor up for the contract.
