Marijuana Software Companies Seek to Cash In

California was the first state in the U.S. to legalize marijuana as medicine, and currently has the largest legal market for marijuana in the nation. However, it does not yet have a system in place for the government to track the drug. This is standard protocol for other types of pharmaceuticals and other states with legal marijuana have adopted similar protocols. 

For example, in Colorado, there is a system in place called the Radio-Frequency Identification, which uses microchips to follow plants from the time they are grown to the dispensary and sale. It is noted whether the plant is processed into an oil or edible or whether it is distributed as medicine. Having this type of a system ensures plants are legally grown and sold according to the law.

Beginning in February, a number of software companies will begin submitting proposals to the state, vying to be chosen as the company tapped to track California marijuana. 

The goal is for marijuana businesses to be run like any other above-board, legitimate operation, as opposed to a clandestine one. Companies will have to bid on the state contract, which is expected to be a lucrative one.

Although many of these are smaller technology software firms and start-ups, there is evidence that some larger companies are looking to get some skin in the game. For example, last year, Microsoft teamed up with Kind Financial, an L.A.-based firm that is planning to submit its own bid for the state tracking system. The agreement involved Microsoft helping to market Kind’s Agrisoft software to a number of state government agencies. That partnership wasn’t just significant for Kind; it also was a good indicator that a lot of larger companies are testing the waters. They are likely to want to get into the “green rush” once they know the legal climate to do so is stable.

Software and technology firms are ancillary to the marijuana industry, which means they may prove vital to the operations, but they don’t involve actually growing, processing or selling the plant. As our L.A. marijuana attorneys know, ancillary companies are generally at lesser legal risks than those that work directly with the plant. Still, it’s telling that Microsoft agreed only to go so far as marketing the smaller tech firm’s services to the government – and not directly to the marijuana dispensaries that are going to need it. Plus, that decision came prior to the announcement that Donald Trump wanted to appoint Sen. Jeff Sessions as his U.S. attorney general. It’s well-known among those in the marijuana industry that Sessions holds a strong anti-marijuana stance.

Recently, Gov. Jerry Brown revealed his plan to budget more than $50 million for the regulation of marijuana, and a good portion of that is probably going toward that tracking system. The company that is ultimately awarded that contract is also going to be in a strong position to branch out those services to other states, so this is a big deal.

The regulation of marijuana is something that is likely to take some time to get right, but with a thorough plan and adequate investment, the goal is for an uneventful roll-out.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Cannabis Software Companies Seek to Legitimize the Marijuana Industry and Cash In, Jan. 16,2017, By Alex Halperin, L.A. Weekly

More Blog Entries:

Report: Legal Marijuana Sales Could be Delayed Until 2019, Jan. 12, 2017, L.A. Marijuana Business Lawyer Blog