Cloud-based government software provider Accela is partnering with software development company cloudPWR in pursuit of an end-to-end cannabis regulatory solution for state and local governments.
By combining Accela’s track-and-trace and licensing software with cloudPWR’s HIPAA-compliant medical marijuana patient registry, the companies hope to not only stand out in the competitive world of government compliance software, but also help their clients maximize tax revenue and ensure the cannabis in their systems stays out of the black market.
“Accela’s approach in building out this ecosystem — and we are very pleased to be the first company to have moved forward and partnered with Accela — is to basically create an end to end ecosystem where the licensing and the permitting of the businesses, track and trace, law enforcement, and patient registry are all one system that state and local governments can rely on,” said Shadrach White, CEO and founder of cloudPWR.
Through the partnership, Accela will be taking on the role of marketing and selling cloudPWR’s AIRLIFT, as well as investing more into its own software. CloudPWR will reap the benefits of Accela’s broad network.
“It basically opens up the U.S. and Canada in terms of the pool of customers, states, local entities that will be exposed to AIRLIFT,” White said. “It’s an unprecedented opportunity for us as a company.”
As a leading provider of government software solutions for many categories beyond just cannabis, Accela has a presence in more than 2,000 jurisdictions across all 50 states in the U.S. Its emerging markets division offers regulatory software for edge industries, like scooters, drones, and marijuana. Accela has only been working on cannabis for about three years but already its software is at work on the local, state, or both levels in California, Colorado, Michigan, and Nevada.
By comparison, cloudPWR is smaller — but tested. The company won contracts with the state of Washington to transform the medical cannabis patient registry into the compliant system it is today. Its registry solution, AIRLIFT, streamlines the process of managing medical patient data by storing patient information in a HIPAA compliant system, enabling medical cannabis users to expediently get their ID cards, and also tracking purchases and usage to ensure no patient is exceeding their cannabis quota or doctor shopping.
As more legal cannabis markets come online across the U.S., compliance software systems are increasingly in demand. States like Illinois, for example, which is expected to be the 11th U.S. state to legalize recreational cannabis once Gov. J.B. Pritzker signs a bill that passed through state legislature last week into law, is essentially an open market — and one Accela is targeting.
“Illinois just recently legalized for full-blown recreational cannabis. Depending on what they’re going to do, there’s another opportunity added to our net new list of opportunities that we are pursuing,” Greg Felix, Accela vice president of strategic solution sales, said.
Felix said the company’s capacity to support the most important functions of government cannabis regulation — track-and-trace technology that monitors the cannabis plant’s passage from seed to sale; licensing applications and tracking for business owners; and now, with cloudPWR, patient registry — will set Accela apart in a crowded market.
“It’s a competitive market. We think the addition of cloudPWR in this highly prescriptive and very directional approach gives us a significant advantage,” Felix said.
Government software has made headlines in recent years, but not always for the right reasons. In California, for example, bottlenecks in licensing have slowed the process to get cannabis businesses online to sell, further exacerbating a stubborn black market. Charlie Wilson, chief revenue officer of Green Bits, a point of sale and compliance software company for retailers that interfaces government systems to automate compliance, said it’s not always easy to determine whether it’s the software or the policy in place that’s to blame for these types of slow downs.
“You could probably point holes or point fingers at limitations or things that the software could do better, but I would contend the software, whether it be a end-to-end system or a component-ized system, it’s only going to be as good and efficient as the rules that are imposed and the processes and agencies that are having to implement those systems,” Wilson said.
California’s Bureau of Cannabis Control declined to comment for this story.
Felix said part of what he appreciated about cloudPWR was how little it has been covered by the media, whether for issues like down time, or even something more high stakes, like a data breach.
“One thing that really caught our attention was that this company has not been in the news,” Felix said. “In fact, I was shocked by how few support calls they get despite the huge volume and the many many individuals banging on that system daily.”
For Accela’s part, it hasn’t always been totally smooth sailing. The company has been partnered with Colorado since 2009, providing various licensing and permitting solutions. In 2017, they built a customized permitting solution for the Denver’s nascent cannabis industry.
The technology, which Denver Excise and Licenses Operations manager Dominic Vaiana called “highly configurable to its credit and detriment,” has helped the city track and streamline its hugely complex licensing system — even if there is occasional down time.
“There is that risk and that risk exists with all types of systems, and we have had those challenges. Accela to their credit have been very good partners in helping us streamline and configure the back end nuts and bolts under the hood to have contingency plans in place to continue to operate even if the system is down,” Vaiana said.
Aside from Accela’s flexibility and willingness to work with local and state governments to find solutions in the case of a glitch, Green Bits’ Wilson said there can also be advantages to having an end-to-end system in place from a single provider to manage the entirety of a cannabis regulatory ecosystem.
“It makes accountability a heck of a lot easier,” Wilson said. “The license holders — they’re ultimately accountable for what they’re reporting to that system or systems — but if you have a single system that’s telling you something, there is only one software company or one technology provider that will be accountable for any discrepancies or anything that might go sideways.”
And ultimately, it’s accountability that matters most for a government — especially when looking to collect the appropriate tax revenue and to de-legitimize a black market that claims an estimated 70 percent or more of annual sales in states like California and Massachusetts.