Medical marijuana dispensaries and cultivators told lawmakers Wednesday the state's software responsible for tracking their products is unreliable, has crashed their databases and has mislabeled inventory.
The software, known as ARStems, is the system the state uses to track the cultivation, transportation and sale of every gram of medical marijuana in the state. Developed by the Florida-based firm BioTrack, it helps the state trace marijuana in real time as it goes from seed to stem.
A cultivator or dispensary cannot sell or ship a cannabis product without cataloging it in ARStems, meaning a software malfunction could be costly. Failing to properly catalog a marijuana product with the state could also lead to fines from regulators.
During hearings, most marijuana businesses blame the software for their violations of state regulations, Doralee Chandler, director of the Arkansas Alcoholic Beverage Control Administration, said.
"At least 75% of our offers [of settlement] that go out, we get some indication or response or statement that they believe it is a software glitch or issue," Chandler told members of the Arkansas Legislative Council's Marijuana Oversight Subcommittee.
Medical marijuana business representatives said BioTrack's software glitches have changed the weights of products, caused "phantom sales" and crashed, losing customer data. Some medical marijuana dispensaries also directly contract with BioTrack for their point-of-sales system that helps track their inventory.
Robbin Rahman, executive director of Harvest Cannabis in Conway, said that although BioTrack is not always to blame, "If there is ever anything that's wrong, the only party that suffers are the operators."
Despite his complaints, Rahman asked lawmakers to not end the state's contract with the firm, saying it would only further complicate things.
"I don't think replacing it or seeking out a new provider would really improve the situation," Rahman said. "I think we have three years of institutional knowledge, and that's very valuable to us, and so switching to some other platform would be a step back."
In a statement responding to complaints from dispensaries, BioTrack said allegations its software is faulty are "misleading, and in many instances inaccurate," saying the problems can often be attributed to customer error or server problems.
Adam Maldonado, assistant manager of Delta Cannabis in West Memphis, said after a power surge his store lost its customer data, causing it a loss of $100,000 in revenue. Maldonado also blamed BioTrack for another incident causing several dispensaries to disconnect from ARStems.
"Because our files were corrupted and we couldn't get any help in how to proceed forward, we had to remain closed for the entirety of the weekend," Maldonado said.
Moe Afaneh, vice president of BioTrack, told members of the subcommittee that disruptions are caused by system maintenance, preapproved by Alcoholic Beverage Control, or the fact that ARStems is hosted on a government website. Afaneh denied there was any miscalculation of sales or incorrect inventory information.
"If something happens to that Arkansas dot gov website, it becomes [inaccessible]," Afaneh said. "That doesn't mean we don't have random outages or situations that occur."
State Rep. Jeff Wardlaw, R-Hermitage, said there was a "silo effect" between regulators at Alcoholic Beverage Control and the state Department of Health, which have different roles in regulating the state's medical marijuana industry. The Health Department uses ARStems to regulate the amount of medical marijuana a patient can purchase, while Alcoholic Beverage Control tracks cannabis from seed to sale.
The Department of Health awarded the contract for ARStems to BioTrack, which goes until November 2024. Chandler said Alcoholic Beverage Control will handle the next bidding process for the state's marijuana tracking software.