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Pennsylvania’s medical cannabis market generated more than $1.3 billion in sales in 2023, despite numerous issues and outages with the state’s mandated track-and-trace software. Operators claim these problems could be avoided if the software provided by MJ Freeway functioned correctly.
Although MJ Freeway recently merged with BioTrack to form Alleaves, it remains the sole provider under a contract established in 2017. Industry operators and a few legislators have voiced frustrations regarding MJ Freeway’s lack of a two-way Application Programming Interface (API) with other approved software used for sales and inventory management. This means businesses must manually input data, such as lab results and POS information, into MJ Freeway, which is both prone to errors and is time consuming. Additionally, when MJ Freeway experiences an outage, such as one that occurred last September, all operations are forced to halt.
Software providers, such as I Heart Jane and Dutchie, have confirmed that the API connection with MJ Freeway is nonfunctional, further complicating matters for businesses.
The situation is exacerbated by the state health department’s delay in implementing a fully integrated API system as mandated by a 2021 rule. State Representative Joe McAndrew expressed his confusion over the monopoly held by MJ Freeway in the state’s cannabis industry. McAndrew presented a resolution to the state legislature in May that would mandate that the health department integrate the required API technology per state law and review its contract with MJ Freeway within a month.
At the moment, medical marijuana enterprises can employ seven software providers certified by the health department; however, not all of them can interface with MJ Freeway. The ambiguity surrounding which platforms can communicate with the mandated software adds to the confusion.
Neil Ruhland, a spokesman for the health department, emphasized the organization’s dedication to safeguarding patient data while also looking for ways to enhance the current setup. Ruhland acknowledged that Pennsylvania already employs a seed-to-sale solution with some API capabilities, but he did not specify which vendors have a functional two-way API with MJ.
Moreover, the state is exploring alternatives to MJ Freeway, as indicated by a public notice posted last November, though the current status of that search remains unclear.
The $10.3 million, five-year contract with MJ Freeway was extended in April 2022. Grown In, a cannabis-related newsletter, said that MJ Freeway can charge medical cannabis licensees an extra $80,000 a year for assistance because of the deal.
As state lawmakers consider three different proposals for legalizing adult-use marijuana, the importance of a reliable seed-to-sale platform becomes more evident. Legalization PA, an advocacy group, estimates that legalizing recreational cannabis could potentially boost the state’s cannabis market to $2.8 billion in yearly sales.
Cannabis advocates thus emphasize the necessity of an effective and interactive software system to prevent the problems encountered in the past few years.
The concerns of industry players in Pennsylvania need to be addressed so that they don’t have to grapple with more challenges than they already face. This will enable them to have a chance at thriving in the same way industry companies such as Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) are thriving in other legal markets.
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