High-Tech: Exploring Reg-Tech for the Cannabis Industry in CA
This week our guest speaker, Chris Cruz, shared his experiences of being the Deputy Chief Intelligence Officer (CIO) of California. While most of his talk provided us an overview of the state’s priorities in modernizing their technology infrastructure, he did dedicate time to discuss the reg-tech (regulatory tech) approach to the burgeoning cannabis industry. More importantly, he spoke as to the urgency in needing to update the technology systems in place to deal with the massive growth of the industry. From a regulatory standpoint, it is important that the government be able to track and trace every ounce of THC to keep in line with the Cole memorandum – a Department of Justice memo that outlines points regarding federal prosecution of marijuana owners in states that have legalized it. (https://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf)
I got a chance to engage in deeper conversation with him and Scott Paterson, a senior advisor in the in the CA Department of Technology who was also in attendance. From their standpoint, the state having its eyes on the manufacture and distribution process is “vital to public safety but also for raising government revenue” via taxation of various companies in the supply chain. Here there is an opportunity for digital tracking solutions, database administrators and public health officials to engage in public-private partnerships and create a standardized solution which can track the drug from cultivation to retail stages. This would ease public health concerns and make auditing these institutions easier.
From my research, there are a few companies in this space. The most promising is called Bio-Track (https://www.biotrack.com/cannabis-software/). It brands itself as an “All-In-One Compliance-Focused Seed-to-Sale Tracking and Comprehensive Cannabis Software.” Not only can they conduct yield forecasting and monitor harvest data, the software tracks transport manifests for all derivable products from THC till the point of sale. They also promise data security and guaranteed uptime through their FedRAMP certification which is the data security clearance required by all sensitive government systems. This results in accurate information storage and retrieval for all stakeholders involved, keeping companies happy by providing powerful analytics and ensuring transparency and compliance with state and federal laws. Additionally, these systems are versatile enough to support the regulatory framework of “commercial cannabis activity” that the state legislature would like to implement in 2018. (http://www.calgrowersassociation.org/licenses)
All in all, it seems that Mr. Cruz was right in describing the vastness of opportunity in reg-tech and of California’s overwhelming commitment to use smart data driven solutions to unique problems of the next century. The only short-coming I can see from the proposals he spoke about and my own research is the unpredictability of the current Presidential administration which could play a factor as the cannabis industry matures nationwide. It also remains to be seen whether growth of demand for such items is sustainable or has peaked past the initial excitement. Yet, for now it appears that things are going full steam ahead in this new high-tech industry (mind the pun) with plenty of big-data and cloud applications hoping to make these businesses operate more efficiently.
Open to further this discussion on this and any other topic from the lecture. Leave your comments or write to me – firstname.lastname@example.org
— Farhan Farooqui
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