One Software To Rule Them All

The Race for Superior Compliance Programs in Arizona

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For compliance officers working at farms and grows like Ana Ruben, inventory is an integral part of their job. Making sure every piece of the cannabis plant is accounted for from seed to sale and farm to dispensary is necessary and grows need to track inventory for financial reporting purchases. That’s where things get complicated.

Many grows use Quickbooks to reconcile their sales with the state. The problem is, Quickbooks doesn’t always interface directly or seamlessly with seed-to-sale software for grows like LeafLogix, BioTrackTHC, LeafLink or MJ Freeway. Reconciliation can be completed via exported CSV files, but that opens up room for error.

“[You] have to know what you’re looking for, what parameters to set. Once you know you’re pretty solid, but it needs to be taught,” says Ruben, who used MJ Freeway and then BioTrackTHC. Ruben has worked in the industry as a retail manager and since 2013 has maintained the role of grow compliance officer since 2015. But even the most tech-savvy are running into problems with SaaS (software as a service) solutions that aren’t quite customized enough to meet all Arizona’s reporting requirements.

“For a couple of years now, one of the state compliance things is to know whether the batch originated from a seed or a clone. When you actually do that process of putting in a new plant or seed, you indicate that at the inception, but there’s no report it has that will spit that information out to you later,” Ruben continues.

Active in 36 states and six countries, BioTrackTHC has over 2000 locations while tracking over $18 billion in sales so far. Arizona has no software requirements, so grows and dispensaries here are using BioTrackTHC by choice. Some cannabis grows are looking for more while currently getting less from other software vendors.

“There’s not a single software out there right now, that I’ve seen, that can do everything we need it to,” says Item 9 Labs CFO Bobby Mikkelsen about the need for a combined inventory and financial tracking software designed for grows that process cannabis products. “I believe LeafLogix, really all the cultivation software, are going to do a good enough job for the cultivation side. It’s the processing side that they’re not built for. That’s what we’re doing, we’re taking bits and pieces of all these different things, putting it together, adding processes, adding labor, packaging it and shipping it out.” Mikkelsen’s team performs inventory tasks daily by hand with monthly reporting, which informs his business. “Daily inventory tasks include counting materials used in the production process as well as inventory created that day,” Mikkelsen iterates. It’s imperative that the inventory reported in the system accurately represents the physical product available.

“Ideally, it would be an ERP [Enterprise Resource Planning] system, but we’re too early in the industry. It hasn’t gotten far enough away from the taboo that any real software company has come in and done something. It’s going to take that or somebody who specifically wants to write killer software, someone who’s really passionate about that kind of project,” continues Mikkelsen, who is planning to switch from Quickbooks to Sage Intacct. The latter can write integration plugins Mikkelsen needs to help run all of the entities under the control of Item 9 Labs Corporation, which has entities across the country.

Alex Hodder, general manager at Item 9 Labs, thinks Arizona should do more to at least cut down on options.

“I really wish the state would  just pick a seed-to-sale system, or two of them, so the state could train us on what exactly [it is] they want and what their requirements are. […] When they come out and start asking questions, they have no idea what system we’re using or any experience with it, so they’re asking us questions,” says Hodder. “It should be reversed, they should be the experts in the tracking systems and teaching us, not us teaching them.”

BioTrackTHC is working on a 2.0 version to be released in 2019. It will have Quickbooks integration already built in, as opposed to their current CSV export options built with Quickbooks in mind, according to Director of Marketing and Communications Jeff Gonring and VP of Sales Steve Flaks. Active in 36 states and six countries, BioTrackTHC, has over 2000 locations while tracking $18 billion in sales so far.

These issues aren’t limited to the cannabis industry — it would be challenging for any SaaS to create customized versions of their flagship software that adhere to so many different state regulations. Now that the demand is there, who will step up?

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