MJ Biz report…Here’s what you need to know about the situation:
- Of the six states with operational adult-use industries – Alaska, California, Colorado, Nevada, Oregon and Washington – the latter is the only one that doesn’t use Franwell’s Metrc system. Franwell was initially tapped by Washington state as well after BioTrackTHC decided not to renew its contract, but the company subsequently withdrew its bid. MJ Freeway currently provides Washington state with seed-to-sale tracking.
- The value of seed-to-sale contracts can vary dramatically from state to state. For example, MJ Freeway was awarded a $10 million contract in April 2017 to provide services in Pennsylvania, while North Dakota’s contract with BioTrackTHC was valued at $589,000. The value of each contract depends on a number of factors and may include costly expenditures, such as upgrades to a state’s information technology infrastructure. Furthermore, seed-to-sale providers often generate additional revenue outside the scope of the state contract by charging marijuana business owners for the tags used to trace plants and/or software licensing fees.
- California’s seed-to-sale tracking contract with Franwell is the largest ever awarded, with the potential to generate nearly $60 million in revenue for Franwell over a two-year period.
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