November​ ​13,​ ​2017

To​ ​Whom​ ​It​ ​May​ ​Concern,

As you may be aware, the BioTrackTHC cannabis traceability software contract with the Washington
State Liquor and Cannabis Board (WSLCB) expired at midnight on October 31, 2017. This was a
planned event and was prepared for by the WSLCB with what they acknowledged was "an aggressive
timeline." WSLCB and MJ Freeway, (the new traceability contract vendor) worked hard to make the
deadline,​ ​nonetheless,​ ​the​ ​new​ ​system​ ​will​ ​not​ ​be​ ​ready​ ​until​ ​January​ ​2,​ ​2018​ ​(at​ ​the​ ​earliest).

WSLCB notified cannabis businesses on Thursday, October 17th at 4:09pm of the delay and informed
licensees that a "contingency plan" would be executed on November 1. In accordance with this contingency
plan, licensees were provided spreadsheet templates and instructed to upload daily and weekly transactions to
an internet location controlled by the WSLCB. These "spreadsheet drops" have now become the sole reporting
system​ ​by​ ​which​ ​Washington​ ​state​ ​maintains​ ​its​ ​cannabis​ ​traceability​ ​obligations.

Given the implications of ​seed-to-sale traceability ​to multiple directives listed in the Cole Memorandum, (the
Cole Memo offers the only guidelines issued by the federal government to states with legal marijuana laws) the
WSLCB is keen to avoid a catastrophic loss of traceability software. For over three years, the seed-to-sale
traceability system has acted as ​de facto communication channel between licensees and the WSLCB, and has
been repeatedly cited as the state's primary mechanism for maintaining a robustly regulated cannabis
marketplace. ​This infrastructure collapse was both dangerous and damaging to Washington’s
two-billion-dollar aggregate industry that employs many thousands of Washingtonians, bringing in over
300​ ​million​ ​dollars​ ​to​ ​the​ ​state​ ​in​ ​taxes​ ​annually,​ ​and​ ​operating​ ​according​ ​to​ ​law.

In an unprecedented effort, the Washington State cannabis industry collectively took action to repair the
inadequacy of the ​patchwork system. Third-party traceability providers such as BioTrackTHC, Dope Plow,
Grow Flow, LeafLink, Mister Kraken, S2solutions, and WeedTraQR worked in concert to develop ​the
"Unified​ ​Contingency​ ​Plan."​ ​Private​ ​businesses​ ​united​ ​to​ ​save​ ​the​ ​integrity​ ​of​ ​the​ ​system.

The Unified Contingency Plan made sure that transactions between cannabis businesses could continue without
loss of transparency and accountability. It made sure that tax revenue would continue flowing to the State's
coffers.

3233​ ​S.​ ​Hanford​ ​St. Copyright©​ ​2017

Seattle,​ ​WA​ ​98014 The​ ​Cannabis​ ​Alliance
Email:​ ​info@thecannabisalliance.us Page​ ​1​ ​of​ ​2
Particular thanks needs to go to the work of BioTrackTHC and WeedTraQR. ​Both provided means of
lossless business-to-business inventory and Q.A. transfer, despite the disruption. All of our third-party software
providers have worked hard to facilitate timely and accurate spreadsheet uploads to the WSLCB so that
licensees are not burdened by the ​extra time, risk, and error that comes along with reporting a complex
inventory​ ​system​ ​via​ ​daily​ ​spreadsheet​ ​upload​ ​to​ ​an​ ​online​ ​drive​ ​lacking​ ​read-access.

What many had dubbed "Y502K", turned out to be a fluid transition due to the self-regulation of the
industry.

The state legislature passed SB5130 in 2017 increasing annual fee assessment for marijuana licensees by 48%
this year, and 30% for years to come. The purpose of the increase was to pay for a new traceability system.
Considering that MJ Freeway will not be active for at least 41% of their year long contract, it begs
consideration if this bill was necessary. The industry came up with our own solution, using existing software.
The Cannabis Alliance has demonstrated its ability to drive effective self-regulation. ​The desire for a 3rd
party​ ​contractor​ ​can​ ​be​ ​supplanted​ ​by​ ​the​ ​model​ ​currently​ ​proving​ ​itself​ ​effective.

We value our relationship with the WSLCB and want to proactively and collaboratively make the agency and
the industry successful. Inventory management of cannabis production, processing, testing, transfer, and sale is
best when designed and managed by the farmer, manufacturer, lab, transporter, and retailer. The cannabis
industry is remarkably transparent, and our information technology is of 21st century design, by necessity.
Inventory management need not be controlled by a WSLCB software vendor, when licensees can maintain
accurate and compliant inventory controls on the back-end. Through a co-regulatory approach between
canna-business and government, we can more effectively execute a robustly regulated cannabis industry and
save​ ​the​ ​State​ ​several​ ​million​ ​dollars​ ​in​ ​the​ ​process.

We are asking that record keeping become an internalized yet fully auditable process. Specifically, we are
asking for legislation to allow us to assign our own inventory identifiers, using a standardized framework.
We will continue to work diligently to uphold the requirements of the Cole Memoranda in partnership
with the WSLCB; reporting our inventory data to them in whatever format and frequency they prescribe
within reason, but we no longer find it necessary or appropriate to rely entirely or in part on a software
system​ ​under​ ​WSLCB​ ​control​ ​at​ ​an​ ​unnecessary​ ​cost​ ​to​ ​taxpayers.

Sincerely,

Lara​ ​Kaminsky,​ ​Executive​ ​Director
Danielle​ ​Rosellison,​ ​President
AC​ ​Braddock,​ ​Vice​ ​President
Morgan​ ​Kristine,​ ​Secretary/Adjunct
Alejandro​ ​Ditolla,​ ​Board​ ​Member
Nick​ ​Mosley,​ ​Board​ ​Member
John​ ​Davis,​ ​Board​ ​Member
Bob​ ​Smart,​ ​Board​ ​Member
Norm​ ​Ives,​ ​Board​ ​Member
Alen​ ​Nguyen,​ ​Board​ ​Member
Caitlein​ ​Ryan,​ ​Adjunct
Myles​ ​Kahn,​ ​Adjunct
Oscar​ ​Velasco-Schmitz,​ ​Adjunct
Todd​ ​Arkley,​ ​Adjunct
Keith​ ​Boyce,​ ​Adjunct

3233​ ​S.​ ​Hanford​ ​St. Copyright​ ​©​ ​2017

Seattle,​ ​WA​ ​98014 The​ ​Cannabis​ ​Alliance
Email:​ ​info@thecannabisalliance.us Page​ ​2​ ​of​ ​2