Dutchie admits ‘failures’ on 4/20, promises payout to marijuana retailers

Did you miss the webinar “Women Leaders in Cannabis: Shattering the Grass Ceiling?” Head to MJBiz YouTube to watch it now!


Image showing vector digital speed technology on an abstract background

(This story was updated on April 25 to reflect the status of a lawsuit filed against Dutchie by its co-founders.)

A “series of cascading failures” was responsible for Dutchie’s e-commerce platform outage that impacted marijuana retailers on 4/20, the company admitted.

As a make-good, Dutchie CEO Tim Barash promised to pay out retailers that use the Oregon-based cannabis tech platform “an amount equivalent to our estimate of your lost profits” during the Thursday interruptions.

After reporting “elevated error rates” on Tuesday and Wednesday, Dutchie’s e-commerce platforms went down for a part of Thursday, one of the busiest sales days of the year for U.S. marijuana retailers.

The company’s online status report noted at 8:23 p.m. ET on Thursday that “Dutchie E-Commerce is back to nominal operations.”

At 10:31 p.m. ET, Dutchie reported that “this incident has been resolved.”

In a LinkedIn post Friday, Barash blamed “an issue” with the company’s database provider for the failures during 4/20, the unofficial marijuana holiday.

“We do not have any indications that this outage was caused by increased traffic due to 4/20 and unfortunately could have occurred under normal usage,” he wrote.

“Let us be clear, regardless of root cause, we understand that Dutchie did not deliver for you, your time, and your customers on the biggest day of the year.”

Dutchie sent MJBizDaily the LinkedIn post after several attempts to reach the company for comment. Barash was not made available for an interview.

The company markets point-of-sale hardware as well as e-commerce software for managing inventory and complying with state-mandated track-and-trace requirements.

The point-of-sale (POS) kiosks “operated without disruption” on 4/20, according to Barash.

He added that Dutchie platforms recorded 1.2 million POS transactions and more than 250,000 e-commerce deals on what was still a “record-breaking day for our industry.”

One retail worker told MJBizDaily the outage “was a complete disaster.”

“Not only was our online menu down completely, none of our patients could place online orders,” the worker said via email.

“The biggest issue was that every single one of our programmed deals for the day were wiped out of the Dutchie program.”

Barash has served as Dutchie’s CEO since November, when the company’s co-founders, brothers Ross and Zachary Lipson, left under contentious circumstances.

The Lipson brothers later sued Barash and other company board members, alleging they were illegally removed.

According to Delaware Court of Chancery records, the case is closed.

The two parties agreed in February to dismiss the action “without any concession by either side as to the merits of any allegations or defenses” raised in the suit.

Dutchie boasts more than 6,000 clients nationwide and, the company says, processes more than $14 billion in annual transactions.