Trail Blazin’ Productions
Unbelievable. Totally unbelievable.
Eight days. We went EIGHT days without the ability to make a sale due to MJ Freeway (NASDAQ:KERN), the state traceability provider chosen by the Washington State Liquor and Cannabis Board. They totally and completely crippled our industry for days on end.
Again. (See my Living the Dream column in the April 2018 issue of Marijuana Venture.)
The hate is so heavy in my heart I could scream! And the worst part is that consumers and the public will never know. Retailers can just sell a different product that they have in stock. This debacle hits the farms the hardest, hindering our ability to create manifests and transfer products to another licensee. No manifest? No sales.
Can you imagine if your business was unable to make a sale for eight days? That’s 27% of the month.
Did I mention payroll fell on one of those eight days? Most farms survive delivery to delivery; there is no extra money or savings account. Where are they going to get money for payroll?
On Saturday, July 13 at 11 p.m., the Liquor and Cannabis Board and MJ Freeway turned off their traceability system for what was supposed to be 29 hours. That weekend date was picked because most farms deliver on Monday through Thursday, so having the traceability system down on a weekend would have the most minimal impact. But approximately a week before doing it, they upped the downtime by 24 hours and scheduled the system to be back up at 8 a.m. Tuesday. First and foremost, if they needed more time and wanted minimal impact, they should have started the update at 11 p.m. Friday, not add the 24 hours on a weekday. We all knew we wouldn’t be able to do anything as a product processor on Monday; that’s a full day with no computer work and no sales. Legally, we’re not supposed to package anything or move any plants either during that time. It’s a full stop.
Tuesday came, and Trail Blazin’ was smart enough not to have any deliveries scheduled. However, the entire industry couldn’t deliver that day, for the most part, because the one main thing that the update was supposed to fix — test results — didn’t work. Read that again: The major issue that the update was supposed to fix didn‘t work. Palm to forehead.
To give you just a small taste of the situation, I’ll provide this anecdote: At Trail Blazin’, we follow the Department of Health’s pesticide and heavy metal standards for medical marijuana compliance. We also participate in “Pesticide Tested with Confidence,” which pesticide tests every five-pound lot, in an effort to put public safety at our forefront. Since we don’t use any pesticides, the vast majority of our test results come back as “none detected” or N/D. From a scientific standpoint, N/D is very different than zero, so most of our results were left blank in traceability since zero isn’t accurate and N/D is not numeric and thus not allowed as a result. It turns out that leaving a blank caused the system to think that the product had failed. So every single test Trail Blazin’ had done, every additional test that we did for public safety but weren’t required to do, had to be updated. But what do we update it to? Can’t put zero, as that’s not accurate and is not the same as “none detected.” Can’t put a number it isn’t. Can’t put 9999 because that’s over the threshold and causes it to fail again. And it wouldn’t allow us to put a negative number either.
Ultimately, the Liquor and Cannabis Board told the lab to put in zeros. Manually. Well, that’s a solution, but that is going to take a ton of man hours. And it’s not accurate. On top of all this, two days later the Liquor and Cannabis Board signed a Board Interim Policy stating, “Any traceability workaround must not compromise or misrepresent true test results of products involved in Quality Assurance (QA) testing.”
Ummm, you mean like putting in a zero when it’s supposed to say none detected?!? Ultimately, we have to put facts aside to input misinformation into the state’s traceability system in an effort to get medicine and clean products to the patients that need them.
All this begs the question: Why do we even have traceability? And does a state-run traceability system, theoretically tracking all cannabis from seed to sale, address those needs? This is a question The Cannabis Alliance has been asking the state of Washington and the Liquor and Cannabis Board for years (since early 2017 when BioTrack was pulling out).
The reason we have traceability is to prevent inversion and diversion. The Cole Memo, which was federal guidance to states legalizing cannabis, suggested states try and prevent cannabis diversion to minors, other states and criminal enterprises. However, Attorney General Jeff Session rescinded the Cole Memo on Jan 4, 2018; it hasn’t even been in effect for almost two years. But Washington state and others are still trying to use traceability in a good faith effort to keep the Feds from interfering with our state’s cash cow. Is that even necessary?
The idea of tracking plant matter from seed to sale is a myth. It’s not like we are stamping marbles — pull the lever 1,000 times and get 1,000 marbles. This is plant matter. There is up to 20% moisture loss; any reputable farm packages over the weight listed on the package; there is a wide variance when it comes to extracting … traceability is not real.
And it’s only as good as the numbers licensees put into the system. Guess what? If an unscrupulous person is looking to divert product from the market, they don’t put correct numbers into the traceability system in the first place. All a state-run traceability software program provides is bureaucratic red tape, making it that much more difficult and expensive for good licensees to do business, while doing very little to catch bad ones.
What happens with these state-run traceability software systems when we can move cannabis across state lines? What about country lines? And I haven’t even started talking about cannabis with less than 0.3% THC, which has no traceability requirements anywhere.
I have advocated for and will continue to advocate for a record and audit system. Let the licensees record their information and allow state regulators to conduct audits any time they want to. It is time to approach traceability differently than when this great experiment first began and stop hindering small businesses from doing business.