MJ Freeway still working on fixes, damage control as reputation takes hit

By John Schroyer

MJ Freeway continues to reel from a systems crash earlier this month that has affected a large swath of the cannabis industry, with its workers scrambling to retain longtime customers and mitigate damage to the company’s image.

The long-term fallout for the software firm is unclear.

It’s possible MJ Freeway can fully recover over time and instill trust in the marketplace.

But some of its customers have already jumped ship for other competing services – and the longer the problems continue, the more clients MJ Freeway is likely to lose.

So far, the company has seen a “minimal” loss of customers, said Jeannette Ward, MJ Freeway’s director of data and marketing.

“Obviously, we have very upset clients,” she said Tuesday, “but we also have clients who have been very patient and understanding. It runs the gamut there.”

Some of MJ Freeway’s competitors, however, believe more clients have fled than the company is letting on.

“It’s a lot. A lot, a lot,” Kyle Sherman, CEO of Denver-based Flowhub, said when asked how many new customers had switched to his cannabis software company after MJ Freeway’s system crashed on Jan. 8.

“We had people switch in under 12 hours to our platform … These are people who are hurting right now, who are down and out, because they’re out of compliance. And that’s a big deal.”

Ben Curren, the CEO of Green Bits – another business management software company – speculated that a significant number of MJ Freeway’s customers have left for other software providers, whether it’s Green Bits, Flowhub, BioTrackTHC or yet another company.

Ward declined in an email to specify how many customers had decided to leave for other software companies, but wrote, “The actual number of clients lost is a very small percentage of total clients.”

System repair ongoing 

MJ Freeway said recently that more than 1,000 dispensaries and recreational marijuana stores across the country use its software to process and record sales transactions, track inventory, stay in compliance with state regulations and handle other critical tasks for their businesses.

The company’s recent problems, which it pinned on a cyberattack, forced many of those retailers to close shop temporarily or revert to manual processes.

Meanwhile, MJ Freeway is nearing completion of “alternative sites” clients can use in lieu of the regular system while work continues to rebuild clients’ historical sales data.

“By (Wednesday) morning, we will have contacted all clients and set up sites for all clients that we reached. We do have clients who we don’t have their most up-to-date contact information,” Ward said. “If you have not heard from us, please call us. Our support lines are open.”

The alternate sites being provided by MJ Freeway have the same functionality as the breached system, she said, but historical data for medical cannabis patients is still being retrieved.

“That effort will continue for several weeks,” Ward said. “We’ve made progress, but people want to know when their data will be recovered, and we can’t give an exact time frame because we’re going client by client, one at a time.”

She said MJ Freeway staffers are working to recover historical patient data for more than 500 clients.

‘Not going anywhere’

Ward said she’s confident the company will recover and continue to serve those in the marijuana trade.

“We’re still solvent – no company layoffs at this time,” she said. “There are rumors that we’re in bankruptcy; that is not the case. We’re not going anywhere.”

Some industry observers aren’t so sure about that.

“Is this something they can recover from? I think so, but … this just hurt their credibility so badly that all of their other services are in question,” said Nic Easley, the CEO of 3C Consulting, another Denver-based marijuana company. “It’s more like ‘MJ Roadblock’ right now.”

Easley suggested that the lack of historical data for retailers isn’t as easy to gloss over as some observers may think.

That historical data, he pointed out, could become a serious issue in the event of, say, a product recall (Colorado has had many) or a lawsuit over contaminated cannabis.

“(Retailers) can’t go back and back up their data for their clients, to say, ‘This product was sold to this person on this day,’ so if those companies get sued in the future” they’re at risk because of the MJ Freeway episode, Easley said.

Tarnished reputation?

Green Bits’ Curren said many Nevada retailers went down during the crash because MJ Freeway built the entire seed-to-sale tracking system used by the state government.

“Even the whole state system, that got hacked. It’s down, the traceability system,” Curren said. “It’s pretty devastating. I’ve been in tech for 20 years, and I’ve never seen anything like this, ever. This will hurt their reputation forever. I don’t know how you recover from something like this.”

Moe Asnani, who runs the Downtown Dispensary in Tucson, Arizona, said he’s in the process of switching to Leaf Logix because there are various technical issues with most other providers.

He has soured on MJ Freeway because the Jan. 8 incident follows another technical glitch by the company in 2014.

“My biggest concern is, two years ago, when the interruption happened, they said they were migrating to Amazon Web Services, and they would have redundancies, that they’d have backups, and that it would be secure,” Asnani said. “I found out this time around that that was either not true or partially true.”

Ward said Tuesday that MJ Freeway is upgrading to Amazon Web Services, describing it as “the best security in cannabis” for the company and its clients.

But Asnani said MJ Freeway’s approach to solving the current crisis also rubbed him the wrong way.

“They put a lot of emphasis on getting ‘operational alternative sites,’ and they called our data ‘historical,’ but it’s our current data,” Asnani said. “That’s my patient from two days ago. Don’t call it ‘historical data.’ It’s operational data.”

He also thinks this could be enough to sink MJ Freeway.

“Nobody is like, ‘I’m going to stick with them regardless,’” Asnani said.

John Schroyer can be reached at [email protected]

24 comments on “MJ Freeway still working on fixes, damage control as reputation takes hit
  1. Barry Gainsburg on

    AGAIN THIS EXPOSES THE CYBER WARFARE THAT IS GOING ON. EVEN IN THE CANNABIS I INDUSTRY. HIW CAN ANY STATE EVER USE MJ FREEWAY AS ITS GOVERNMENT SOLUTION? INDUSTRY PARTICIPANTS FOR COMMERCIAL SOLUTIONS. I LIKE THE LADIES AS PEOPLE BUT BUSINESS WISE THIS IS THE DEATH ? SLIRAL. THEY NEED TO BE ACCOUNTABKE TO AN INDUSTRY WHY THE INFORMATION TRUSTED BY ALL TO THEM WAS HACKED AND NIT PROPERLY PROTECTED. SAD STORY TRULY. ??

    Reply
  2. RAM on

    lessons learned: 1) cloud computing is for companies with deep pockets, substantial resources and know how, I managed data centers in the 80s and know this stuff well 2) cloud computing is not for the cannabis industry because the vendors will eventually be disrupted by Sessions and the RICO act, they will be papered to death….aiding and abetting 3) Stick with a client server closed loop POS system that is local

    Reply
    • Charles on

      There is no hype, they got our first store up in 24 hours and our budtenders and other staff picked up the software almost immediately. Very intuitive and automates almost everything.

      Reply
  3. Joan on

    I’m a budtender, and we just switched our system to Flowhub and LOVE using it compared to MJ. Not sure what “hype” the person above is referring to, we hadn’t even heard of them but their system is great to use as a budtender.

    Reply
  4. Wattster47 on

    MJ Freeway is DEAD. Personal experience… being in the weed-industry… do NOT “ask too many questions” about MJFreeway being down. The next day you’ll be fired unjustly!

    Reply
  5. Dave on

    I have a grow in Colorado, and I used to use Freeway. Thankfully, I switched to Biotrack before they had this issue. I like knowing that I am in running on a local server as opposed to a cloud system. Personally, I think its kinda messed up how the sales guys at Flowhub and Greenbits like to trash talk their competition. It’s kinda ridiculous really. It just shows their maturity level and their lack of professionalism. That’s what turned me on to Biotrack. They have been there for my company since day one of our switch and regardless of what happens in the mainstream, they’ve stayed pretty classy about things. Some of you guys might wanna take a page out of their playbook at some point. Just a thought.

    Reply
  6. Erik Schultz on

    UNBELIEVABLE that this could happen.
    I am an IT professional and we follow specific best practices to minimize or mitigate the chance of failure. I don’t know the details and MJ Freeway has not been forthcoming. This leads me to speculate that they have done little strategic planning and testing. To be clear, this is a failure at a basic level of planning. The lesson is to find a competent IT partner to work with, discuss the infrastructure plan thoroughly and test it. These services are getting better, faster and cheaper every day. You can often refresh your IT services and reduce costs.

    Would I switch away from MJ Freeway because of the outage? Here are a few thoughts.

    • Most MJ Freeway users have a large investment in the product, mobile applications, processes and your employees know how to use it.
    • Your customer’s interact with it.
    • Typically, an application evaluation takes time to make sure it meets your needs and you understand what you are investing in.
    • If MJ Freeway failed to plan for this outage, what else is wrong and do they have the right people and partners to fix it.

    • If I was going to make a POS or total Seed-to-Sale change, I would look at MMJMenu or other free solution. That way you can try it with minimal investment. At a minimum, have the new vendor provide a satisfaction guarantee with a 30-day out clause because of the quick decision. No long term contracts. Erik Schultz, 420 Technical Solutions

    Reply
  7. Highview Technology Solutions on

    Unbelievable that there was no true backup solution in place. That is one of the most basic and critical IT tasks. We usually find our clients get antsy after 15 minutes of down time, can’t imagine dealing with clients after 12 days of downtime. That is why at Highview Technology Solutions we implement solid and tested backups for every client and are trying to get the industry serious about real IT solutions. We cannot continue running these businesses as mom and pop operations if we want to be taken seriously as an industry.

    Reply
  8. Lindsey on

    I am a sales “guy” at Flowhub and I take offense to Daves comment above. We do not trash talk our competitors, there is no need and our software speaks for itself. We have been working day and night to help those dispensaries that have been effected and need immediate help to get back up. We feel for MJ, are helping those in our industry that need our help. It’s called business. We started out in the industry, love the industry, and it’s what we care about. If that is what lead you to a different company then I hope you are enjoying it.

    Reply
  9. BriAnne R. on

    If anyone has constructive criticism against FlowHub I would really like to hear it! We currently migrated 3 retail dispensaries and 3 dual licenses facilities from MJF to FlowHub. Personally, all the benefits I see from this platform are…
    – “Company Management” section to ensure all product names, MSRP, and cost are consistent for the entire enterprise. I personally centralized 3 stores we had at the time through MJF, and it was a nightmare.
    – The NUG device is incredible, and has multiple different functions from checking customers in, uploading medical paperwork, and most importantly manage, audit, and adjust your inventory. This handy little thing will save my auditors extensive amount of time auditing stores. Also, I have never seen any POS within the cannabis market give this type of option.
    – Diverse reporting function; essentially anything and everything you would ever need is pulled from FlowHub. Including a report that will let the user know which RFIDs are in METRC and which are in FlowHub.
    – Budtenders have a lot more control searching for their inventory and products that are sellable to the customer
    – Promotions are automatically applied
    – Blind reconciles when closing down registers to ensure there is no theft
    – CSV file to upload all of your data for an easy transition from the old POS to FlowHub

    Reply
    • Milton on

      I will give you constructive criticism about Flowhub. I am in the process of opening a dispensary and they refuse to return emails or deal with me because they think I am trying to compete with them after looking at a basic temporary page I have set up. Initially, everything was fine but after going on my page I was told that they did not want to deal with me because I was competing with them – not the case. I was then asked to contact the owner directly which I emailed but received no reply. This is all very confusing to me but has definitely made me realize not to deal with flowhub.

      Reply

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