Alleged ‘attack’ takes down MJ Freeway’s software, causing chaos for marijuana retailers

By Chris Walsh

MJ Freeway’s widely used software platform for cannabis businesses crashed over the weekend and remains down for most customers, creating ripples across the marijuana industry.

The outage has sent 1,000 marijuana retailers in 23 states scrambling to handle everything from sales and inventory management to regulatory compliance issues.

A number of dispensaries and recreational stores have had to close as a result. Others are dealing with lengthy lines and customer complaints, as it is taking them longer than usual to complete sales transactions.

MJ Freeway initially said on Sunday that it expected to restore service to the lion’s share of its customers by Monday and the rest on Tuesday.

But the company’s director of data and marketing, Jeannette Ward, revised the timeline Monday afternoon, saying that restoring the entire system will likely take longer than originally anticipated. She said the company is working on temporary solutions for customers.

Denver-based MJ Freeway told Marijuana Business Daily that it believes the outage was caused by a cyberattack of unknown origin.

“Our initial analysis indicates that this was a direct attack on MJ Freeway’s infrastructure,” Ward said.

The attack hit the company’s main databases as well as its backups, but Ward said no client data was stolen.

MJ Freeway has more than 1,000 retail cannabis clients and a presence in most states with active marijuana industries.

Dispensaries and rec shops use the system for facilitating sales transactions, managing patient records, tracking inventory, maintaining regulatory compliance, helping with marketing efforts and general business management.

Ward said the company has not yet brought in police but intends to take the necessary steps to pursue a criminal case if warranted.

Some businesses closed

Numerous cannabis retailers had to close Sunday and could have to again Monday because they don’t have an alternative to MJ Freeway’s system.

The Tucson, Arizona, dispensary Botanica is one of them.

On Sunday morning, the dispensary tweeted: “Our inventory system (@mjfreeway) is down & we are unable to process any transactions. We’ll post more updates as they become available!”

Other dispensaries and rec shops remained open Sunday but experienced longer-than-usual lines after switching to a slower manual process, which increased paperwork and customer wait times.

These businesses also might have to pay staff overtime to enter transactions into MJ Freeway’s system once the software is back online.

“We’re thankful we were able to remain open; most other people are closed,” said Frank Hawkins, owner of the Nevada Wellness Center, a dispensary in Las Vegas.

Hawkins estimated that only a handful of the dozens of dispensaries in and around Las Vegas were able to serve patients Sunday while MJ Freeway’s system was down.

Backup systems helpful

Nevada Wellness was able to continue handling patients because it designed a manual system as a backup before the company even launched.

“I knew from Day One that we could never be afforded to lose five days of business, or even one day of business,” he said.

Still, Hawkins said it took Nevada Wellness 10-20 minutes longer than usual on Sunday to handle patients from the time they walked in until they left.

The Clinic, which uses MJ Freeway’s system for its five dispensaries and rec stores in the Denver metro area, had a backup plan and process in place as well, which minimized the impact.

Ryan H. Smith, director of retail operations for The Clinic, said the company was able to more or less process customers “like normal,” though transaction times took a bit longer than usual.

“Certainly being down and having issues like this is not a good thing,” Smith said. “But we have a process in place to deal with times when the system goes down.”

Similar to what Nevada Wellness Center employed, the process involves having employees record orders by hand and then enter information into the system when it’s back up.

“This creates a labor impact and a customer service impact, as it slows transaction times,” he said.

The Clinic told patients and customers on Sunday about the technical issues, informing them that waits would be longer than usual.

“I’d say 98 out of 100 customers get it … though some are still unhappy,” he said.

Communication is plentiful

Reef Dispensaries, which has MMJ storefronts in Nevada and Arizona, warned its customers via Twitter of potential hiccups.

“MJFreeway system outage. Reef is open for business, but expect delays. We must collect new patient info from all visitors,” the company tweeted, adding that it isn’t able to give special deals to first-time patients while the system is down.

MJ Freeway has been flooded with phone calls but is trying to keep clients up to speed on social media, via email and through messages on the part of its system that customers can still access.

“We have spoken to many clients directly. We’ve got our support lines open,” Ward said. “We’ve also reached out to (some larger) clients proactively. We’re sending emails to all clients every couple of hours to update them.”

MJ Freeway experienced another technical issue in 2014 that lasted several days.

The company implemented backup systems and other strategies to avoid that specific problem again in the future.

MJ Freeway said this weekend’s attack affected its existing system, not the new, completely overhauled platform it is just starting to market and sell. The new software will likely be active later this month at cannabis retailers that have signed up to use it.

Chris Walsh can be reached at [email protected]

12 comments on “Alleged ‘attack’ takes down MJ Freeway’s software, causing chaos for marijuana retailers
  1. Ean Seeb on

    As with any computer system, it is essential to have a manual process in place due to loss of service, power, etc. Any of the businesses that had to close should learn from this unfortunate circumstance so they don’t have to close again in the future. Inability to use your point of sale system WILL happen again.
    We’re happy to help companies create a manual, back-up process. We were MJ Freeway’s first clients when they went live on August 9, 2010 and were able to put processes in place when we had problems accessing the software over the years. It didn’t happen often, but we were prepared when it did. There’s no reason not to be!

    Reply
    • Andrew Collier on

      You’d think the clients would have learned this lesson already, with MJFs multiple outages last year and prior, and claims that client sites would be migrated to AWS. These points are especially important with a cloud solution. The Clinic knows, and is prepared, though it is still a pain for BTs/Managers. Been through MJFArgmageddon in 2014 and many outages since. If we’re all lucky, more long-termism and competition is on the way in many aspects of this industry, we need it. Then the companies that try to grow way too fast for their resources and capabilities will have to improve, or go away. GreenBits Founder Ben Curren made a good point while describing their strategy, in an interview I saw. When you take investment capital in this environment you are then pressured to grow at any expense, including your well earned reputation. Once clients go sour on your offerings and service they are very hard to get back, that is in any industry. Wise.

      “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett

      Reply
  2. Morgan Glenn on

    So MJ Freewy takes a lot of money from us and my experience so far has not been great. They botched the labeling in OR the way they spaced things and they haven’t been there with enough dispensary support. They should’ve had their systems protected. This is the cannabis industry and there is no room for opportunistic amateurs. We need protections. Now they need to forensically find out who did this. I know democraticunderground.com was taken down in Election Day and out for over a week and that was suspected due to Trump allies. Who are our enemies?

    Reply
    • Andrew Collier on

      Being free to choose is the solution to many of the industries’ issues. We have a generational opportunity to build an industry, community and culture from scratch. This is not a dress rehearsal. Business success matters, but long-term, culture matters too. I submit DaVita here in Denver as an interesting business case study for the cannabis industry to look at. We have a lot of baggage to deal with as an industry, but we also have an incredibly clean slate in many ways. We should start with the end in mind and build firms that last. North America can be the global mecca for cannabis, and we’ll get rich doing it. Long-term self interest is better for humanity than short-term good intentions.
      https://www.youtube.com/watch?v=9CN85CFllME

      Reply
  3. Patrick on

    They are making a huge mistake not getting authorities involved and they should know that. So it leads me to think this is more like some internal failure of the database perhaps.

    Reply
  4. Bruce Ryan on

    After surveying MJFreeway, the decision was to stay away from the platform. Far more robust, customizable and stable sales packages are perfectly capable of handling detailed product transactions and reporting. Without the cloud dependence.

    Reply
  5. David Meshach on

    What they need is to have there databases on a Microsoft Always on Clustered fail over system. In this scenario there is always a Hot Database running operations and if anything happens to the hot database it immediately fails over to the secondary database. in less than 5 seconds. http://www.dispensaryexchange.com is working on a new solution right now for this type of infrastructure.

    Reply
    • Jack on

      MSSQL solutions with 99.9% guaranteed uptime SLAs are already available. Running on NCR retail backbone, load splitters, fail overs, multiple layers of redundancy. I know Retail Control Systems in NH and CO has developed one such solution.

      Reply
  6. Patrick on

    You ask who did it? Those against Hillary went ahead and hacked, in effort to bring her down. It was obviously an opponent of Cannabis and the intention was to bring injure the sale of medical cannabis. The completed process of successful hacking, alteration/revision is expensive. Who else would have paid for this?

    It’s interesting that this large scale system failure took place just 15 days before Trump and his team take over. I need not remind you how angry the conservatives are about this issue. This is only the beginning.

    Reply
  7. Tlee on

    And NOW MJ Freeway is down again! Not sure when the issue will be Solved…………… I can not believe that Washington State is allowing this Company to be in charge of the States DATA!!!!!!!!

    Reply

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