A small Tacoma software firm is racing the clock to complete a computerized registry form for medical marijuana users.
Innovator cloudPWR was awarded the five-year, $2.4 million contract from the Department of Health in November, beating out two East Coast competitors, MicroPact and CITI, both of Virginia.
The new medical marijuana registry form goes live July 1 when new state regulations take effect for patients and stores.
The company isn’t a stranger to the marijuana industry. It created the forms that are used in the retail marijuana application process for the Liquor and Cannabis Board.
Shadrach White, cloudPWR CEO and president, moved the two-year-old company from Olympia to Tacoma in 2013. He was attracted to the city itself — his children were going to school there — and also by the burgeoning tech community and lower rents.
“Tacoma has transformed itself in the last 10 years and is on the upswing,” White said.
Eight employees work at the company’s Old Town Tacoma headquarters, but by the end of the year they hope to have 13 to 15, White said.
The company’s platform, Airlift, is a cloud product used primarily by government agencies. Aside from the DOH and LCB it’s also used by The Arc of Washington State, which aids people with intellectual and developmental disabilities.
The Arc uses cloudPWR forms for its clients to fill out before meeting with a case worker.
For the LCB, cloudPWR simplified the application process for marijuana producers, processors and retailers. The form also transfers data between the Department of Revenue and the LCB.
“Our objective is to transform the interaction between the customer and government — make it a more fluid transaction,” White said.
Traditionally, the timeline in a government application process was long. The process generally meant downloading and printing a PDF, filling out the form and then mailing it back to the agency.
“With marijuana, it was even more onerous,” said cloudPWR senior systems engineer Mathias Eichler. The state requires bank records, proof of identity, tax records and more for producers, processors and retailers.
“Literally hundreds of pages of documents,” Eichler said.
It’s all part of the state’s diligence to keep the criminal element out of marijuana production.
“They do an exhaustive search to make sure the money is not coming from illegal sources,” Eichler said.
The electronic application is available 24 hours a day and went online November 2014, dramatically reducing the application processing time, according to Eichler.
“We cut that down from what could be weeks to what could be minutes,” Eichler said. “If (applicants) had to do it by paper probably half the stores wouldn’t be open today.”
The new form will be used by store employees to enter a medical marijuana patient into the database and then issue the patient a card.
Although the DOH has oversight of the database, cloudPWR will be in possession of it.
The issuing process begins when a potential cardholder visits their health care provider, who can be an allopathic physician, osteopathic physician, naturopathic physician, medical doctor or advanced registered nurse practitioner.
Once a patient has a signed authorization from a provider, the patient will take it to a medically endorsed marijuana retailer.
At the store a trained employee will enter the patient’s information into the database, then a card is issued.
The process is done once a year and the card can be used at any medically endorsed store in the state.
Even though the new cards will not be issued until July 1, patients can get an authorization from their provider now.
The new card will include a photo of the patient.
“It will have security aspects that will make it hard to duplicate,” White said. cloudPWR is partnering with Seattle card security firm Decatur Industries to add security features.
Some details of the system are still being worked out but White said it will be ready to go July 1. The DOH agrees.
“We have a short timeline and we’ve been working hard with them on a weekly basis to move this project forward,” said DOH drug systems director Chris Baumgartner.
Baumgartner thinks the Airlift platform could be used for a variety of applications.
“Based on what we’ve seen so far I would think that cloudPWR’s platform could be modified to serve other DOH purposes,” Baumgartner said.
In a reminder of just how unusual the marijuana business is, cloudPWR is one of the few businesses that can legally deposit its money because it is paid for its work by the state.
Because marijuana is still illegal at the federal level, banks typically shun retailers and other marijuana-related businesses for fear of losing their bank charters over violations, including money laundering charges.
White is naturally bullish on the future of his platform.
“We need to take this process and go national,” White said. The company is monitoring and seeking opportunities in legal marijuana in other states as well as other products and services.
More information: cloudpwr.com
COOPERATIVES REPLACING COLLECTIVE GARDENS
On July 1, cooperatives will replace collective gardens under state law.
Currently, a collective garden allows patients to produce, process, transport and deliver marijuana for medical use. Each garden is limited to 10 patients. The gardens may contain no more than 15 plants per patient — up to a total of 45 plants. Only members of the garden can use the marijuana produced in it.
Under the new provisions, a cooperative allows qualifying patients age 21 and over or designated providers to produce and process marijuana. The marijuana can only be used for medical reasons and by the members of the cooperative. No more than four qualifying patients or designated providers may become members of a cooperative, and all members must hold valid recognition cards. Cooperative members can grow the amount of plants for which each participating member is authorized on their recognition cards, up to a maximum of 60 plants total allowed in the cooperative.
Members of the cooperative must register the location with the state liquor and cannabis board. Members must grow and process marijuana in only one location, which must be at the home of one of the participants. Cooperative members must provide nonmonetary resources and labor in growing plants.
NEW MEDICAL CARD, PRIVACY AND SECURITY
A reformation of Washington’s medical marijuana industry occurs July 1. Chief among the changes is a new certification process for patients.
“The whole concept … is to provide a recognition card to patients and, if they have one, a designated provider that will allow them a lot of benefits under (Senate bill) 5052 that was passed last year,” DOH drug systems director Chris Baumgartner said.
Come July 1, the new card will:
▪ Give arrest protection. It allows the purchase and possession of three times the recreational amount of marijuana.
▪ Void the sales tax that recreational buyers must pay. (All marijuana products have a 37 percent state excise tax included in the retail price.)
▪ Allow the holder to grow additional plants. Six plants are authorized but the patient’s health care practitioner may authorize up to 15 total.
▪ Be required if patient participates in a cooperative. Cooperatives are replacing collective gardens July 1. (See box for more information.)
Adults must be reevaluated every year for a new card. Patients under age 18 must be reevaluated every six months. “You have to get reevaluated to check that you still have a qualifying condition,” Baumgartner said.
Patients would then have to visit a store to get a new card after reevaluation. The card has a $1 fee when issued and renewed.
PRIVACY AND ACCESS
“As far as security goes, we are taking that incredibly seriously,” Baumgartner said. “cloudPWR is going to have to go through a security audit. We have also hired a cybersecurity firm to provide consultation during the development of the system.”
State security experts and a design review will add further levels of scrutiny, Baumgartner said.
The law specifically states who will have access to the database and a particular patient’s information. They are:
▪ Medically endorsed marijuana store employees who check the cards of customers.
▪ Health care practitioners when providing medical or pharmaceutical care to a card holder.
▪ Law enforcement, but only to confirm the validity of an individual card and only if they are investigating suspected marijuana-related activities which may be illegal under Washington law.
▪ DOH’s medical board to ensure that health care practitioners are not improperly issuing authorizations.
▪ The cardholders themselves will be able to access their own information. They also can check on who has reviewed their information in a method still to be determined.
▪ The list also is accessible to the Department of Revenue but only to audit the tax exemption status of retailers, not patients, Baumgartner said.
“These stores are allowed to make purchases tax-free, and DOR is allowed to review data in the system to make sure a sale was made to someone who it should have been made to,” Baumgartner said.