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April 23, 2024 |  By: Rebecca Rivas - Missouri Independent

Tech glitch on 4/20 caused Missouri cannabis businesses to lose sales

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By Rebecca Rivas - Missouri Independent

April 20 is a day recognized globally for celebrating cannabis culture, but it’s also like the cannabis industry’s Black Friday. 

Dispensaries offer deals designed to inspire people to flood their stores to stock up. 

However on Saturday, dispensaries across the state using an inventory platform called Dutchie were hamstrung for hours by technical challenges, which caused many of their registers to go down or move at snail pace. 

It was the second year in a row that a 4/20 sales surge caused the system to crash.

“Imagine running a restaurant where you have one burner working and you normally have 20 stoves operating,” said Nick Rinella, CEO of Hippos Cannabis dispensaries. “We had one burner going.” 

Each Hippos location went from selling around 500 items per hour to less than 100 because of the issues the outages were causing, he said.

Dutchie is similar to the platforms major stores, such as Home Depot and Walmart, use to scan items at check out. However, Dutchie also has the special function of communicating with the state’s seed-to-sale tracking system called Metrc. 

It keeps the stores compliant with the state’s stringent tracking requirements of marijuana products. 

Rinella said all three Hippos dispensaries in Springfield, Chesterfield and Columbia faced delays all day — causing them to lose an estimated $200,000. 

Mark Hendren, president of Flora Farms, also said his six stores across the state faced delays up to five hours. He’s not sure what kind of loss Flora Farms experienced, he said, because the company extended their deals through Monday to make it up to their customers.

“It seems to be working,” he said.

John Mueller, CEO of Greenlight cannabis company, said his 15 stores were not impacted, nor were any of the company’s 32 stores across the country. Greenlight stores experienced some outages last year, he said, so they were expecting the same this year. 

“We prepared and trained for the outage that never came,” Mueller said. “But I’ve heard from a number of my peers that they had outages and somehow we did not.”

Dispensaries that are on certain servers faced more difficulties, Rinella said, but it’s the luck of the draw which servers companies are put on. Companies can’t pay more to get on the “good server,” he said.

Missouri was not alone. Dispensaries across the country experienced delays on Dutchie.

“This year’s 4/20 was a record setting day for the majority of Dutchie powered dispensaries,” Chris Ostrowski, chief technology officer of Dutchie, said in a statement emailed to The Independent. 

Ostowski said the systems powered more than two million transactions, representing $165 Million dollars in retail commerce — which was a 50% increase from last year’s 4/20. 

“While Dutchie and our partners prepared extensively for this year’s 4/20, a group of customers local to a specific instance of our POS system experienced serious issues that impacted their ability to transact,” Ostrowski said. 

The difficulties impacted less than 20% of Dutchie customers, he said.

Rinella said Dutchie’s statement just made the incident sting even more. 

“Hearing that is just painful to me,” Rinella said. “So they had a 50% increase. That means I probably would have had a 50% increase had they not jacked my entire system for the day.”

It’s unclear if Missouri’s cannabis industry had record-breaking sales this past weekend. April’s sales numbers won’t be available on the state’s website until early May.

However, Rinella said the sales were likely record-breaking, which is why the bandwidth on Dutchie’s server couldn’t handle the volume that was coming through. 

Lisa Cox, spokeswoman for the Division of Cannabis Regulation, said the Dutchie malfunctions did not interfere with the division’s tracking operations. 

“While licensees are permitted to use these [point of sale] systems, it is their responsibility to ensure each day’s transactions and inventory are recorded accurately in the statewide track and trace system,” Cox said, “no matter what happens with the POS system.”  

Rinella said the staff and customers were very understanding, and hopes any new customers that came to the stores on 4/20 aren’t discouraged to come back. 

“We kind of want to do more of an apology,” he said. “Obviously, this wasn’t something that we could control, but we do want to be able to make sure that customers get the greatest experience they can possibly get when coming to a dispensary.”