As the legalization of cannabis for both medical and non-medical (i.e. recreational) uses continues to proliferate throughout the United States, regulators continue scrambling to establish uniform rules and guidelines. One of the sub-industries of the cannabis industry helping to make this possible is cannabis software companies. These companies develop software to handle various stages of the process from farmer to customer, or “seed to sale”. This ranges from monitoring legal plants to controlling inventory. With so many companies developing cannabis software and each state devising its own regulations individually, it’s still very much up in the air where all the chips in the legal marijuana industry will land. But if the cannabis software companies have any say in the matter, they’ll land profitably in the legal marijuana industry’s hands.
California & Colorado: A Tale of Two Legal Cannabis States
While California was an early adopter of legal medical cannabis, the state is only just getting started with legal recreational (or non-medical) cannabis. The new laws legalization cannabis for non-medical adult use that voters overwhelmingly passed in the 2016 election don’t go into effect until 2018. In the interim, state regulators are scrambling to come up with ways to track the cultivation and sale of legal cannabis in much the same way that protocols for pharmaceuticals require tight tracking and monitoring.
Colorado, by contrast, has been leading the charge in the legal adult-use cannabis area. With over $1 billion in sales, netting the state $200 million in extra tax revenues, the legal cannabis industry is proving its worth in Colorado. Part of the reason the state has been so successful in safely and profitably implementing its legal cannabis program is due to its use of cannabis software.
RFIDs, MSFT, and Other Seed-to-Sale Stories
One tool that Colorado regulators have been using to great effect is RFIDs (or Radio Frequency Identification Devices). These are tiny electronic chips that act as unique “tags” to identify each and every legal cannabis plant being cultivated in the state, all the way from seed to sale.
Other cannabis software that has been helping the industry move forward is inventory control software allowing dispensaries to track every bit of product that moves through their establishment. This type of tracking software will allow dispensaries to comply with government regulations.
Cannabis company Kind Financial produces a software product called Agrisoft that Microsoft has offered to help market to state governments. This entry into the legal cannabis space by a respected major corporation shows, maybe more than anything, how it’s not a matter of “if” cannabis legalization will succeed, but “when”.
Sessions vs. Pot
President Trump’s Attorney General, Jeff Sessions has described his view on the various benefits of marijuana as “dubious”. He has also said that he is compelled to enforce federal law regarding cannabis, even where it contradicts state law. His boss, Mr. Trump, however, has expressed an acceptance of state medical cannabis laws, suggesting that only the non-medical cannabis industry is at risk under this administration.
Taking action against the cannabis movement could conflict with voter resolve and clear evidence of state fiscal benefits, like in Colorado. And Mr. Trump is for nothing if not improving the economy. So many in the cannabis movement are cautiously optimistic that at least the medical part of the industry is safe moving forward. As for the recreational part, it’s wait and see.
Cannabis Software Concerns
Concerns about how companies like Microsoft are planning to use the software they market, such as by providing it only to governments and not to private cannabis companies are still on the radar. And a recent software failure in Nevada, where state-licensed software provider MJFreeway exposed 1,000 business across 23 states to outages and data loss also raises concern.
California is now beginning the process of accepting and reviewing bids from various cannabis software companies offering to help the state track and monitor all legal cannabis from seed to sale. There are many players in this market, which will ultimately advantage the state, its residents, and the cannabis industry at large.