Tag Archives: website

The Dawn of Delivery: How This Oregon Company Launched During a Pandemic

By Aaron G. Biros
No Comments

Back in late 2016, the Oregon Liquor Control Commission (OLCC) legalized delivery for cannabis products. Since then, dispensaries could offer a delivery option for their customers to purchase cannabis products without leaving the comfort of their home. Up until quite recently, that market was dominated by a handful of dispensaries who also conduct business at their physical location, offering delivery as an option while conducting most sales in-person.

Enter Pot Mates. Founded in 2018 by Hammond Potter, the company embarked on the long regulatory road towards licensing and beginning operations. On April 20, 2020, Pot Mates opened for business, starting their engines to take on the fledgling cannabis delivery market in Portland.

Pot Mates is a tech startup through and through. The founders are former Apple employees. Hakon Khajavei, the chief marketing officer at Pot Mates, founded Blackline Collective, a business and marketing consultancy, which is where he joined the Pot Mates team. The other co-founder of Pot Mates and chief technology officer, Jason Hinson, joined after serving in the US Navy as an electronics technician maintaining satellite communications networks.

With the sheer amount of regulations for cannabis businesses, coupled with the new delivery-based business model, Pot Mates had to focus on technology and automation from the get-go.

Not Just an Online Dispensary

For the cannabis companies already offering delivery in the Portland metro area, their websites seem to mimic the in-person dispensary experience. They offer dozens of products for each category, like concentrates, edibles and flower, making a customer pour through options, all at different price points, which can get confusing for the average consumer.

The Pot Mates logo

Pot Mates does things a little differently. “Our start up process was thinking through how do we make this the best experience possible, how do we get rid of the unnecessary junk and how do we do things that only an online dispensary can do,” says Khajavei. They have flat pricing across the board. In each category, almost every product is priced the same, moving away from the common tiered-pricing model. This, Khajavei says, removes the decision barriers customers often face. Instead of choosing the right price point, they can choose the delivery mechanism and effect they desire uninhibited by a difference in cost.

It all comes back to focusing on the simplest way for someone to buy cannabis. “Shopping online is just very different,” says Khajavei. “Our process focuses on the customer journey and limits the number of products we offer. We have a mood system, where we tag our products from reviews to typify moods that you experience with different products.” All of that requires a lot of back-end technology built into their website.

The Long Regulatory Road

Technology has been a strong suit for Pot Mates since they opened their doors, and well before that too. Making the decision to be an online-only delivery cannabis company pushed them to pursue a very unique business model, but regulations dictate a lot of the same requirements that one might see in dispensaries.

Hakon Khajavei, Chief Marketing Officer

The same rules apply to them when Pot Mates submitted their license application. You need to have a signed lease, extreme security measures, detailed business plans, integrated seed-to-sale traceability software (Metrc in Oregon) and much more. “During the months leading up to getting our license, we were able to iron out a lot of the regulatory details ahead of time,” says Khajavei. A lot of that was about security and tracking their products, which is why technology plays such a huge role in their ongoing regulatory compliance efforts. “We built in a lot of automation in our system for regulatory compliance,” says Khajavei. “Because of our technology, we are a lot faster.”

In the end, their licensing process through the state of Oregon as well as the city of Portland took about nine months. Once they had the license, they could finally get down to business and begin the process of building their website, their POS system, their inventory and reaching out to partners, producers, distributors and growers.

For any cannabis company, there are a number of regulations unique to their business. “We need to report every product movement in house through Metrc,” says Khajavei. “Every time something is repackaged it needs to be reported. We focus so much on our technology and automation because these regulations force us to do so.” But delivery companies are required to report even more. Pot Mates needs to report every single movement a product makes until it reaches the customer. Before the delivery can leave the shop, it is reported to Metrc with an intended route, using turn-by-turn directions. It complicates things when you make two or more deliveries in one trip. Reporting a daisy chain of deliveries a vehicle makes with turn-by-turn directions to regulatory authorities can get very tedious.

As far as regulations go for delivery parameters, they can legally deliver anywhere inside Portland city limits. “It is our job to figure that out, not the customer’s job; so we don’t have any distance limits, as long as it is residential,” Khajavei says. “We programmed customized technology that allows us to handle really small orders.” Without a minimum order policy or a distance limit, Pot Mates can reach a much bigger group of consumers.

Launching in the Midst of a Global Pandemic

Chief Technology Officer, Jason Hinson

Luckily, the Pot Mates team received their license just in time. About two weeks after they submitted their application, Oregon put a moratorium on any new dispensaries.

They went forward with their launch on April 20 this year, despite the coronavirus pandemic impacting just about every business in the world, including their marketing efforts tremendously. With cannabis deemed essential by the state, they could operate business as usual, just with some extra precautions. What’s good for PotMates is that they don’t need to worry about keeping social distancing policies for customers or curbside pickup, given the lack of storefront.

They still need to keep their team safe though. The Pot Mates team began 3D printing washable and reusable face masks, getting more gloves for delivery drivers, cleaning their warehouse thoroughly, cleaning vehicles and making sure employees maintained distancing. Pot Mates is even 3D printing enough masks and donating them to local organizations that need access to masks. “As a cannabis company, we always have to handle things with gloves here and take necessary safety precautions anyway, so our response is more about how we can help than what we need to change.”

Advertising Cannabis in a Pandemic is No Easy Task

“The marketing aspect is where covid-19 really hurt us,” says Khajavei. “There are so many regulations for cannabis companies advertising already. Unlike other products, we can’t just put up advertisements anywhere. We have to follow very specific rules.” So, in addition to the normal marketing woes in the cannabis industry, the team then had to deal with a pandemic.

Pot Mates had to scrap their entire marketing strategy for 2020 and redo it. “We wanted to begin with a lot of face-to-face marketing at events, but that didn’t quite work out so well.” Without any concerts, industry events or large gatherings of any kind, Pot Mates had to pivot to digital marketing entirely. They started building their SEO, growing their following on social media, producing content in the form of blogs and education around cannabis and the local laws.

On an Upward Trajectory

Obviously, the short-term problem for a new cannabis company is reaching people, especially during the COVID-19 crisis. “We have a good trajectory though, we know we are growing our business, but we still have a ways to go,” says Khajavei. It doesn’t help that social media companies have nonsensical policies regarding cannabis. Their Facebook page was recently removed too.

Founder & CEO of Pot Mates, Hammond Potter

But the bigger issue here is kind of surprising when you first hear it: “It’s not even a matter of customer preference, a lot of people just have no idea that delivery is even legal.”

It’s pretty evident that cannabis delivery has not really gone mainstream yet. “We’ve told people about our business in the past and a common answer we get is, ‘Oh my gosh, I didn’t even know we could get cannabis delivered.’” It’s never crossed their mind that they can get cannabis delivered to their home. It’s an awareness problem. It’s a marketing problem. But it’s a good problem to have and the solution lies in outreach. Through educational content they post on social media and in their blog, Khajavei wants to spread the word: “Hey, this is a real thing, you can get cannabis delivered.”

As the market develops and as consumers begin to key in on cannabis delivery, there’s nowhere to go but up. Especially in the age of Amazon and COVID-19 where consumers can get literally anything they can dream of delivered to their front door.

Moving forward, Pot Mates has plans to expand as soon as they can. Right now, they’re limited to Portland city limits, but there’s a massive population just outside of Portland in towns like Beaverton, Tigard and Tualatin. “We are so close to these population centers but can’t deliver to them now because of the rules. We want to work with OLCC about this and hopefully change the rules to allow us to deliver outside of the city limits,” says Khajavei. In the long term, they plan to expand out of state, with Washington on their north border being first on the docket.

To the average person, one would think launching a delivery cannabis business in the midst of a global pandemic would be a walk in the park, but Pot Mates proved it’s no easy task. As the market develops and the health crisis continues, it seems the Oregon market will react positively to the nascent delivery market, but first they need to know it is even an option.

The Brand Marketing Byte

Basking in Sunshine: GrowHealthy

By Cannabis Industry Journal Staff
No Comments

The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

Here is a data-led, shallow dive on GrowHealthy:

GrowHealthy – Basking in Sunshine

Although Florida may only have a medical market and a relatively restrictive regulatory framework, a handful of companies are leading the pack in dominating the new market. Even though the medical cannabis market is fairly young and the state has not adopted adult use yet, the market’s growth trajectory is very encouraging.

GrowHealthy (GH) is one of those companies capitalizing on market growth with a number of expansion plans. They already have 16 dispensaries open for business throughout Florida and have plans to add to that considerably.

In the past few months, GH has taken a number of steps to enhance their web presence. Perhaps as a reaction to the COVID-19 crisis, GH, along with many other companies in the cannabis space, have started aggressively improving their websites.

With the pandemic wreaking havoc on the national economy, cannabis companies are not immune. However, in the early days of the health crisis, Florida deemed the medical cannabis market ‘essential.’ That proved to be a boon for cannabis companies in the state like GH, who pivoted to curbside pickup and delivery quickly.

In order to capitalize on curbside pickup and delivery, a strong web presence is very important. GH saw a solid rise in web traffic in the past few months, thanks in part to their continuing expansion of brick-and-mortar dispensaries. Adding to their boost in web traffic, GH saw increased strength in their backlinks profile, indicating further increases in future web traffic.

In May, GH shot up to the 20th hottest brand in the United States, up from the 38th slot in April, according to the Pioneer Index. We can attribute this jump to the brand’s performance in web-related activities. The trend continued into the first week of June, as GH’s web activities were the 2nd best nationwide, with the company becoming the 4th hottest brand in the Pioneer Index.

Here’s How to Run Compliant Digital Cannabis Ads

By Brett Konen
No Comments

Advertising your cannabis brand isn’t as easy as it should be—but then again, neither are most things about working in the modern cannabis industry. Here’s the good news: Today there are more avenues available for compliantly advertising your cannabis brand than ever before, particularly online.

So why don’t more cannabis brands run compliant digital ads? Generally speaking, it’s an issue of awareness. Since cannabis brands are currently disallowed from running their advertising campaigns through the modern digital advertising mainstays of Facebook, Instagram, and Google, most business owners believe that digital advertising as a whole is not allowed, and thus most cannabis companies are either underutilizing or completely overlooking their digital ad options.

In fact, the rules barring cannabis brands from advertising with Google and Facebook are specific to those platforms. While Facebook and Google—together known as “the Duopoly”—currently account for approximately half of digital advertising dollars spent in the U.S., the other half of the digital advertising pool—including sites like ESPN, HuffPost, Newsweek, Politico, Barstool Sports, and USA Today—is increasingly open to accepting ad buys from compliant digital cannabis and CBD advertisers. More publishers are opening their doors to cannabis ads every day, and many advertising professionals speculate that the COVID-19 pandemic may speed up the process, as publishers begin to look for new streams of ad revenue in order to weather the economic storm.

Where Can Cannabis Be Advertised?

Today, cannabis industry advertisers can easily run ads across hundreds of mainstream websites using programmatic advertising technology. This is true for both cannabis brands and CBD brands, though they use different programmatic platforms to do so: CBD brands (which we’ll address in more detail later) can use mainstream “demand-side platforms” (such as The Trade Desk) to run their ad campaigns, while cannabis brands can use new cannabis-specific platforms (such as Safe-Reach) created to address the unique compliance needs of the legal cannabis industry.

For those unfamiliar with the term, programmatic advertising refers to the automated buying and selling of online ad space using programmatic technology. In a nutshell, advertisers and their ad agencies use demand-side platforms (DSPs) to set the parameters of “bids” for certain ad impressions based on relevant attributes of the ad space and the viewer who will see it. Publishers put their ad space up for auction via supply-side platforms (SSPs), and ad exchanges play matchmaker to sell the ad impression to highest bidder in the time it takes the web page in question to load.

This CBD product ad can be found on Thesaurus.com

Cannabis-specific DSPs work with other cannabis industry leaders to develop sets of data relevant to cannabis advertisers; they then open these data sets within their platforms to help cannabis advertisers reach known cannabis consumers. These known consumers may be, for example, people who’ve downloaded apps like Leafly on their phones.

A key thing to note is that the cannabis ads themselves no longer need to be shown exclusively on these endemic cannabis sites and apps. In the past, digital cannabis advertisers were generally restricted to buying space on industry-specific sites like Leafly, High Times, and Weedmaps, which pushed prices up due to inventory limits and ran through ad budgets quickly. Ad networks like Mantis attempted to compile this inventory to make the buying process more scalable, but because cannabis has been (and remains) the fastest-growing industry in the United States since 2015, it’s no surprise that endemic cannabis ad inventory has been insufficient to meet demand.

Now, the data sets available through programmatic advertising technology allow ads to be shown to the same cannabis enthusiasts across any website, endemic or not. This makes digital advertising far more affordable for cannabis marketers, and allows for more advanced advertising techniques like building look-alike audiences, cross-device advertising, first-party data onboarding, and ad retargeting. These techniques can be used across all modern digital ad formats, including display, mobile, native, video and digital audio.

Still, even those marketers who are already aware that they can advertise digitally outside of Facebook, Google and endemic cannabis sites may struggle with knowing what they can say and show in their digital ads, particularly if they intend to run those ads in multiple locations or across multiple channels. The broadly applicable rules for running compliant digital cannabis ads are what we’ll discuss now.

Rules for Cannabis Ad Compliance

Thanks to cannabis’s continued federal classification as a Schedule I drug, current digital advertising regulations are governed by state cannabis laws, so they vary depending on where your business operates. This can become particularly confusing if you want to run digital advertisements visible to customers across multiple states (which some states allow—for those who don’t, cannabis ad tech will let you keep your ads within state or local borders too).

Both Ivyside and Weedmaps are featured on this page

Luckily, most cannabis bills are crafted to resemble those that have been passed successfully before them, which means that state laws can be boiled down to a handful of broadly applicable guidelines no matter where you intend to show your ads. The current best practices for advertising cannabis are as follow:

  • No claims of health or medical benefits
  • No elements that could appeal to children (cartoon characters, etc.)
  • No false or misleading statements, including those made about competitors’ products
  • No testimonials or endorsements (e.g. recommendations from doctors)
  • No depiction of product consumption
  • No pricing information, potency statements, or promotional offers
  • Ads for infused products must state “For Adult Use Only”

Using these guidelines, cannabis marketers can more easily create ads to be approved for use in a variety of settings. A few states have their own additional rules: In Florida, a state approval process for ad creative also applies. In Alaska, Arkansas, California, Maryland, Massachusetts, Nevada, Ohio, Oregon and Washington, additional state-specific copy is required in the ad creative.

Note that it’s always important to double-check your state’s most recent requirements, as local rules may change over time. If you’re working with an advertising agency that specializes in the cannabis industry, they can help you with this process; cannabis-specific programmatic platforms like Safe-Reach will also check your ad creative against local requirements as part of their approval process.

Why Advertise Cannabis Digitally?

Prior to the advent of modern, cannabis-specific digital advertising technology, cannabis marketers were light years behind their mainstream industry counterparts in terms of the advertising channels they leveraged to get their message out. Traditional advertising tactics like billboards and print ad buys were popular among cannabis businesses early on due to the lack of digital ad publishers willing to work with them.

The problem with these traditional tactics is one of targeting, measurement, and reporting: It’s impossible to know who has seen your ads, how many of those viewers went to your website or dispensary after seeing them, and what your return on ad spend (ROAS) was. The fact that you can neither know nor control who will see your ad in a print newspaper or on a billboard is why most states have treaded cautiously with their advertising restrictions to avoid ads being seen by minors. In Washington state, for instance, no advertisement is allowed “within one thousand feet of the perimeter of a school grounds, playground, recreation center or facility, child care center, public park, library, or a game arcade admission to which it is not restricted to persons aged twenty-one years or older; on or in a public transit vehicle or public transit shelter; or on or in a publicly owned or operated property.”

This dispensary ad appeared on Variety.com

With programmatic advertising, digital identity data allows advertisers to show their ads exclusively to an appropriate audience—for instance, adults ages 21 and over who live within state borders. Digital advertising also addresses the issues of measurement and reporting, which is why mainstream brands have already shifted en masse to choosing digital over physical ads: You can learn, down to the cent, the return on your digital ad investment, which makes the choice of continuing to advertise an easy one as long as ROAS remains positive. As of 2019, digital ad spending surpassed traditional (TV, radio, print, etc.) for the first time in history, and in 2020, eMarketer estimates that $151 billion will be spent on digital marketing versus $107 billion on traditional. By 2021, 70 percent of all digital ads—and 88 percent of display ads—will be bought and sold using programmatic technology.

As the fastest-growing industry in the United States, cannabis should also be one of the fastest-growing segments in digital advertising, but so far cannabis advertising efforts have been far off pace with the industry’s progress as a whole. However, that is beginning to change as savvy cannabis brands begin to understand and leverage their digital marketing options.

What About CBD Advertising?

The 2018 Farm Bill legalized hemp-derived CBD products in the United States, but did not offer guidance on selling, marketing or advertising them. Most CBD products are thus sold and marketed in a legal gray area, which is only made more confusing by Facebook’s and Google’s policies of rejecting these as “illegal drug” ads (a policy both platforms enforce irregularly). Although CBD brands should still try for approval, and some ads (especially those for hemp-derived CBD topicals) may be approved, CBD advertisers cannot rely on Facebook and Google for ongoing traffic, and ads may be taken down after initial approval regardless of legality.

That said, CBD business owners already have an even more extensive range of digital advertising options available outside of search and social than cannabis brands do. Some websites that do not yet accept cannabis ads will accept CBD ads, and mainstream ad tech platforms like The Trade Desk allow CBD ad buys as long as ad creative meets their internal guidelines for approval. Thus, the de-facto rules and regulations governing CBD advertising today are made by the platforms and publishers running their advertisements. To ensure ad approval on programmatic platforms like The Trade Desk, CBD brands should follow the same guidelines listed for cannabis brands above.

To sum up the current state of digital advertising compliance in the cannabis industry, cannabis and CBD brands should know that there are far more digital advertising options out there than most people realize, and that creating compliant ads is relatively straightforward as detailed above. That said, brands considering an investment in digital advertising should also keep in mind that the current window of opportunity for getting a head start on the competition is already closing day by day as brands begin to realize all the ways they can run compliant cannabis digital ads.


 Suggested Readings 

Programmatic Advertising: A Close Look at Cannabis (IAB)

White Paper: Digital Ads for Cannabis & CBD (PrograMetrix) 

The Brand Marketing Byte

The Hottest Edibles Brands in the United States Right Now

By Cannabis Industry Journal Staff
2 Comments

The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the top edibles companies in the country. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

For April 2020, here are the top 25 hottest U.S. edibles brands:

  1. Kiva Connections
  2. Wyld
  3. Tyson Ranch
  4. Wana Brands
  5. Serra
  6. STIIIZY
  7. 1906
  8. Kushy Punch
  9. Coda Signature
  10. Kush Queen
  11. PLUS
  12. Theory Wellness
  13. Incredibles
  14. Kikoko
  15. Dixie Elixirs
  16. Fairwinds
  17. Deep Roots Harvest
  18. Willie’s Reserve
  19. Chalice Farms
  20. Care By Design
  21. Beboe
  22. District Edibles
  23. Bhang
  24. Satori
  25. Betty’s Eddies
The Brand Marketing Byte

Pioneer Intelligence Increases Transparency, Expands Data Set

By Cannabis Industry Journal Staff
No Comments

Editor’s Note: While CIJ and Pioneer Intelligence do not have any financial relationship to disclose, it is important to note that we feature Pioneer Intelligence’s data in The Brand Marketing Byte, a column that showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.


Pioneer Intelligence, a marketing analytics company, is known for their marketing performance benchmarks of consumer-facing cannabis brands in the United States. They use data to analyze business activity across three areas: social media, earned media and web-related activities.

Today, Pioneer Intelligence announced they released a list of their data partners on their website. The group of partners includes well-known companies like Ahrefs, Instagram, SEMRush, Meltwater and SimilarWeb.

Ben Walters, Founder of Pioneer Intelligence

At present, Pioneer takes in over 80,000 data points each week. The company’s team of marketers and data scientists share findings through weekly generated Performance Scorecard reports as well as Brand Marketing Snapshots. Pioneer Intelligence offers reports on more than 500 U.S. cannabis brands. Ben Walters, founder of Pioneer Intelligence, says their mission is “to help cannabis industry stakeholders better understand how marketing strategies & tactics resonate with audiences.”

According to Walters, their goal was to partner with best-in-class companies. “So, alongside the fact that these names are trusted by marketing professionals worldwide, our team of marketers and data scientists researched, tested and validated a sizable number of sources before eventually selecting this group of partners,” says Walters. “We feel we’re well positioned to support the industry with valuable, data-led insights.”

Along with the release of their partner organizations, Pioneer Intelligence also announced they have expanded the total input data set to 80,000 relevant data points per week. That’s up from 26,000 data points at the beginning of this year.

According to Walters, the company is actively growing their product offering and looking for new ways to engage with cannabis industry stakeholders. “The feedback received on the first version of our Brand Marketing Performance Scorecard has been super encouraging,” says Walters. “That said, as customers told us they’re looking for more actionable data, we’re building an expanded suite of reports that include, amongst other things, more granular metrics.”

FDAlogo

FDA Sends Warning Letters to Curaleaf

By Aaron G. Biros
No Comments
FDAlogo

Curaleaf Hemp, a well-known and publicly traded cannabis company, made headlines this week for all the wrong reasons. The US Food & Drug Administration (FDA) sent a warning letter to Curaleaf President Joseph Lusardi for making unsubstantiated health claims and for misbranding their products as drugs.

FDAThe health claims in question appear to be removed from their website and social media accounts. In the warning letter, the FDA cites numerous claims made on Curaleaf’s website, Twitter and Facebook accounts. You can check out the health claims they found here, but it’s essentially a list of instances where Curaleaf said their products can be used to treat specific conditions. They claimed their CBD vape pen can be used for chronic pain and said another one of their products is a “[S]oothing tincture for chronic pain.”

For most of the health claims the FDA cited, it appeared they were articles or blog posts on Curaleaf’s website. Take a look at some examples of statements that should not be posted on a CBD products website (taken from the warning letter found here):

  • “CBD has also been shown to be effective in treating Parkinson’s disease.”
  • “CBD has been linked to the effective treatment of Alzheimer’s disease . . ..”
  • “CBD is being adopted more and more as a natural alternative to pharmaceutical-grade treatments for depression and anxiety.”
  • “CBD can also be used in conjunction with opioid medications, and a number of studies have demonstrated that CBD can in fact reduce the severity of opioid-related withdrawal and lessen the buildup of tolerance.”
  • “CBD has been demonstrated to have properties that counteract the growth of spread of cancer.”
  • “CBD was effective in killing human breast cancer cells.”
  • “Heart disease is one of the leading causes of death in the United States each year, and CBD does a number of things to deter it. The two most important of these are the ability to lower blood pressure, and the ability to promote good cholesterol and lower bad cholesterol.”

While the FDA is expediting their push to roll out hemp and CBD regulations, companies should still be cautious when marketing their products for interstate commerce. Dr. Amy Abernathy, Principal Deputy Commissioner and Acting CIO, said in a series of tweets earlier this month that the FDA is eager to get to work and plans to report on their progress by the end of summer. The public hearing they held back in May helped jumpstart their efforts to begin investigating regulation of the market.

Still, companies need to be careful when marketing CBD products. The FDA has made it abundantly clear in a lot of warning letters that drug claims are not allowed. Here are two articles that give advice on how companies should proceed with marketing and how to go about properly labeling their products.

MJ Freeway Hardships Linger

By Aaron G. Biros
1 Comment

MJ Freeway, a seed-to-sale traceability software company with a number of government contracts, has been making headlines this year for all the wrong reasons. A series of security breaches, website crashes and implementation delays have beleaguered the software company throughout 2017.

Just this morning, the Philadelphia Inquirer reported the company’s services crashed Saturday night and Monday afternoon. That article also mentions an anonymous hacker tried to sell sensitive information from the Washington and Nevada hacks in September. Back in April, when Pennsylvania awarded the state’s contract to MJ Freeway for its tracking system, Amy Poinsett, co-founder and chief executive officer of MJ Freeway told reporters “I think I can confidently say we are the most secure cannabis company in this particular industry.” It is safe to say this is now being called into question.

Earlier this week, New Cannabis Venture’s Alan Brochstein reported that MJ Freeway is unable to meet Washington’s October 31st deadline to integrate their software with the state, forcing customers to manually report data.

Roughly a month ago, Nevada suddenly cancelled their contract with MJ Freeway, just two years into their five-year deal. Back in June, the company’s source code was stolen and published online. And back in January of this year, the company’s sales and inventory system was the target of a cyber attack.

According to an email we obtained, all of MJFreeway’s clients in Spain experienced an online outage, but that services were restored within 24 hours. In an email sent to clients in Spain, the company told customers that the problems were the result of a system failure. “Our initial analysis indicates that this was a system failure and unfortunately none of the data was able to be successfully retrieved from the backup archive due to an error but we can assure you that none of your data was extracted or viewed at any moment,” reads the email. “We are extremely distressed regarding the event that occurred with the system and the service interruption that occurred yesterday. We recognize that this is a situation that is very serious and negatively impacts your club.” The email says that MJ Freeway is addressing those problems in a few ways, one of which being ongoing audits of their data backups. “The event has led us to reconstruct our “hosting environment” in Europe to use the latest technology from Amazon Web Services with the best redundancy, flexibility and security, using the highest stability measures in the AWS environment,” reads the email. While the site will be restored fully, according the email, historical data is lost. The company is working with their clients to help them get data back into the system.