Pubdate: Wed, 11 Dec 2013
Source: Denver Post (CO)
Copyright: 2013 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Eric Gorski

STATE, BUSINESSES CLASH OVER TRACKING OF POT INVENTORY

On the cusp of recreational marijuana sales in Colorado, business 
owners and state regulators are at odds over a high-tech system that 
is supposed to track the substance from seed to sale.

The inventory tracking system is incompatible with software many 
stores already use and requires the purchase of non-reusable tags 
from the state's contractor, prompting industry complaints about 
cost, waste and monopolization.

But state officials say their goal is to enforce the rules, and 
keeping things simple improves the odds of success when 
recreational-pot shops open Jan. 1.

"There's a lot of misinformation out there," said Julie Postleth 
wait, spokes woman for the state Marijuana Enforcement Division. 
"It's not the big bad scare everyone is expecting."

The program Marijuana Inventory Tracking Solutions, or MITS, was 
supposed to be in place after the state began regulating medical 
marijuana in 2010. But budget shortfalls led to the program's being mothballed.

So far, the state says it has paid about $1.2million to its 
contractor, Franwell Inc. of Lakeland, Fla., to develop the tracking 
system.. Company officials began training business owners Nov. 12 and 
are expected to finish this week.

Postlethwait said owners have begun entering data into MITS and 
ordering radio-frequency identification tags bearing 24-digit unique 
codes they must attach to plants and packaging.

State enforcement officers canwalk into businesses on compliance 
checks, point an RFID gun at plants and product and instantly confirm 
through MITS whether all is where it should be.

Businesses must input data into MITS to document transfer of medical 
marijuana inventory to the recreational side, and then account for 
all marijuana moved from grow to center to customers and patients on 
a daily basis.

All medical marijuana businesses-not just those expanding into 
recreational pot sales - are required to use MITS by Dec. 31.

Many businesses complain that their existing inventory software will 
not be fully integrated with MITS, at least initially.

Ryan Cook, general manager of The Clinic medical marijuana centers, 
said information must be entered manually daily because his tracking 
software isn't integrated with the state's.

He said The Clinic may need to hire an employee at each of its 11 
locations - which includes dispensaries and grows-to plug in data.

"We're all on board. We want the tracking," Cook said. "We want to 
get through this. We just don't want to make it where it's so 
cumbersome that companies can't do it."

Amy Poinsett, CEO of MJ Freeway Software Solutions, whose product is 
used by The Clinic and dispensaries across the state, said Franwell 
has indicated it can start uploading daily sales numbers through 
other systems as soon as week's end. But there is no timetable on 
fully integrating the systems.

"I wish we could say we were fully integrated now, but I know 
Franwell is doing everything they can to get us there," she said.

Franwell officials did not respond to requests for comment.

The state is drawing criticism for requiring businesses to purchase 
tags from Franwell and not reuse them, which business owners say 
could lead to higher prices and fuel the black market.

"It's incredibly expensive to comply with this," said Mike Elliott, 
executive director of the Medical Marijuana Industry Group. 
"Businesses just want to be able to go out and find the best deals 
they can on these tags."

Business owners also say a prohibition on transfers of more than 1 
pound of marijuana per package will require them to buy more bags and 
more tracking tags.

Postlethwait, with the marijuana enforcement division, said the state 
worked hard to get tag costs down to 45 cents for plant stakes and 25 
cents for packages. She said each tag is designed to be resistant to 
indoor grows' tropical environment.

The division will consider outside vendors and recycling tags in the 
future, but for now regulators want to make sure the system works, she said.

State officials repeatedly told industry officials not to spend money 
on tracking software expecting to meet a regulatory mandate, 
Postlethwait said. Some still use pen and paper, she said.

While the state has agreed to at least 10 industry requests for 
tweaking the system, she said, "This isn't a system for the industry. 
This is one of the regulatory mandates they have to meet."

In some corners of the industry, doubts persist about whether the 
tracking will stop marijuana from flowing out of state.

"People can have plants all over and not tag them," said Mitch 
Woolhiser of Northern Lights Cannabis Co. in Edgewater. "Sure, it's 
on a camera. But until someone comes looking and conducts an audit, 
no one is going to know."

Toni Fox, owner of 3-D Cannabis Center in Denver, has no complaints 
over the cost of the tags or the system.

"If that is what it's going to take to show the rest of the world we 
are trying to track every marijuana pot out there, we will do 
whatever we have to do," she said. "I will do whatever they tell me to do."
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MAP posted-by: Jay Bergstrom