Marijuana might not be legal in Florida yet, but that's not stopping a Fort Lauderdale software company from being at the forefront of technology helping the more enlightened states keep track of how cannabis is processed and sold.
BioTrackTHC is a 5-year-old software technology firm that has managed to make it to the top of the marijuana inventory game. It has developed an inventory program that is being used in 17 states as well as D.C. and Canada. In most states, the program is used by individual retailers, including medical and recreational, to keep track of inventory. And in Washington state, BioTrackTHC created the state government's official system that monitors every recreational cannabis product from the time a seed is planted until it's sold at a dispensary.
After Washington legalized recreational marijuana, state officials wanted a way to keep close track of sales. Twenty-two companies, including Xerox, submitted proposals but Fort Lauderdale's BioTrackTHC won the contract and quickly developed a statewide tracking system.
“In under 100 days, we developed the country's first real-time, full seed-to-sale state monitoring system that enables the Washington state liquor control board to have full, real-time visibility over every single plant and every single gram in production in their state,” says Patrick Vo, co-CEO of BioTrackTHC.
The phrase “seed-to-sale” is literal. Each seed planted in a growhouse is given a 16-digit barcode that keeps track of the production process from the seed's planting and onward. After the plant sprouts buds, the picked marijuana keeps the original barcode and a sample is sent to a lab for testing for mold and bacteria. If it passes, the marijuana with that barcode is then ready to be distributed to retailers and put on shelves. And when a customer finally purchases that marijuana, it's possible to find out where it was grown, tested, and transported.
“You and I can go into any retailer in Washington and have the peace of mind that every product on the shelf has passed laboratory testing,” Vo says. “You cannot say that for medical marijuana in Washington, let alone marijuana for any other state, because there is no system of controls preventing bad product from getting onto retail shelves.”
In December 2014, USA Today and Denver TV news station 9 News compared Colorado's recreational marijuana tracking with Washington's and found that Colorado was behind in tracking testing, contaminants, and potency.
As for the price of this system, it isn't exactly gargantuan, especially by government-spending-level standards. The initial set-up and install fee was $750,000, and the yearly maintenance and support fee is $180,000.
And Vo says other states might soon be emulating Washington's model.
“We have seen a greater interest from states to implement a similar state-monitoring system,” he says.
The company is currently in negotiations with three states, which it can't disclose.
Interestingly, BioTrackTHC didn't start out tracking pot. Its parent company is BioTech and was founded about ten years ago by Dr. Steven Siegel, a medical center entrepreneur who noticed there was a problem in how painkiller prescriptions are tracked.
“I started seeing people come in from Kentucky, and I knew instantly what they were there for,” says Siegel, referring to what would later be termed "doctor shopping," the illegal but hard-to-prevent practice of getting a single prescription filled multiple times by different doctors.
So Siegel looked for a way to prevent people from getting prescriptions they weren't given by a doctor. And with the help of a business incubator at the University of Central Florida, Siegel developed a biometric program designed to prevent people from using single prescriptions multiple times by using their fingerprint to get meds.
By collecting biometric data from individuals prescribed oft-abused narcotics such as oxycodone, the program would eventually be used to combat the pill-mill problem, which became a blight on Florida's national reputation in recent years and resulted in a massive crackdown.
Impressed by the efficacy of the software, the DEA called Siegel and said it wanted to model a tracking system around BioTech's model to give doctors the option to e-prescribe instead of relying solely on handwritten prescriptions.
“Because we're the ones the DEA wrote the rule changes around, we secured patents around it really quick,” Siegel explains.
By 2010, they caught the eye of budding medical marijuana businesses in Colorado that wanted a modern way of keeping track of their products. And because Bio-Tech had previously been given something of a seal of approval from the DEA, they seemed like a good company to team up with if you're a marijuana dispensary abiding by state laws but under scrutiny by the feds, since marijuana is still illegal under federal law. This led to a change in BioTech's business model and paved the way for BioTrackTHC.
“Using the pharmaceutical software as the foundation, we pivoted from pharmaceutical tracking to marijuana tracking,” Vo says. “We created a tailored solution for medical marijuana businesses that addresses the challenges that are unique to cannabis production.”
In many ways, BioTrackTHC is a Florida creation: It was born out of an FCU business incubator by Siegel, who was born and raised in South Florida. It's also kept running by more than 30 employees in Fort Lauderdale, including coders, tech support, and sales people. So it's too bad the Sunshine State isn't reaping more local economic benefits that BioTech is helping to create around the country.
But if Florida does legalize marijuana, Siegel is confident BioTrackTHC will be tracking the sales. And if it does, the BioTech founder predicts his company will have a lot of work to do. Florida's senior-citizen population and fun-seeking tourists will provide a gigantic client base.
“According to what I hear, the market here in Florida will be bigger than Colorado and Washington combined,” says Siegel.
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