Marijuana industry questions development of tracking system

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DENVER | Despite a clear rejection by the Colorado Legislature, the state’s only cannabis research center is going ahead with developing a seed-to-sale marijuana-tracking system that no one in the industry says they want.

The Institute for Cannabis Research at the Colorado State University-Pueblo campus that was created by the Legislature in 2016 is using taxpayer money to develop a tracking system that would use an additive — a chemical or compound — designed to monitor where a marijuana plant was grown and where it ends up.

FILE- This Sept. 11, 2018, file photo shows a marijuana plant in San Luis Obispo, Calif. Curiosity from one the world’s largest tobacco companies about the marijuana business sent shares of a Canadian cannabis company higher at the opening bell Tuesday, Dec. 4. Cronos Group confirmed talks late Monday with Marlboro maker Altria about a possible investment. (AP Photo/Richard Vogel, File)

That tracking system was the mandate of a bill introduced into the Legislature during last year’s session that lawmakers rejected twice, primarily because the state’s marijuana industry loudly told them they don’t want to add a foreign substance to their product.

Those rejected bills also would have called on the Colorado Department of Revenue, which oversees the marijuana industry, to use whatever new system the institute came up with despite the viable alternative tracking systems that already exist.

“I just don’t think it makes any sense at all because then you’re basically doing research for a private company,” said Glenn McClellan, chief executive officer of the Grand Junction-based Source Certain International, a subsidiary of an Australian company that has long employed a process for tracking agricultural and mineral products from source to sale.

I think it’s a good idea to get technology to work for us, but if the university system is going to do research they ought to open up the doors and let everybody come in,” he said. “They should publish criteria, ‘This is what we’re looking for,’ and then select the best one.”

The Daily Sentinel tried to obtain detailed information about the research and the reasons why the institute was going ahead with it, but the school rejected a Colorado Open Records Act request, saying that information was part of an ongoing research project, an exception allowed under the law. The Sentinel tried to narrow its CORA request to simply ask for the institute’s operating budget, but that, too, was declined.

In an email statement, the institute said it was not looking into tracking in general, but at a specific tracking system that would use some form of isotope that could be added to a marijuana or hemp plant at birth. Theoretically, that isotope would then be embedded into the plant, allowing products stemming from it to be tracked to the source.

“Researchers at the institute are conducting research to develop and validate a possible technology that could be applied in a variety of ways for tracking/source identification of plant material,” institute spokesman Greg Hoye said in an email. “The expectation of the research is to develop and validate a potential tracking technology that is versatile enough to be used in several applications. The technology can potentially be used in a variety of industries.”

Hoye said if a technology is developed, the institute would file for a patent and submit a study on it to a peer-reviewed scientific journal.

People outside the institute, however, including some in the Legislature, the marijuana industry and two of the institute’s founders, said they don’t understand why the institute is trying to develop a technology that no one wants, and one that would compete with existing technologies.

“Cannabis tax dollars should be spent on researching the efficacy of cannabis, not on research and development for the private sector to profit,” said Peter Marcus, spokesman for the Boulder-based Terrapin Care Station, a recreational and medical marijuana chain.

“Colorado already has a robust seed-to-sale system for tracking cannabis,” Marcus said. “There is no need to risk consumer health and safety by spraying cannabis with an unknown substance for a tracking technology that won’t ever gain traction. This is why the Colorado Legislature twice rejected proposals to use taxpayer dollars to fund private research for a cannabis technology that will never be practical.”

Currently, the state has a contract with a Florida-based company, Franwell Inc., to use a system called Metrc, a software program that tracks marijuana using a paper tag with a bar code attached to pot plants.

Early in last year’s legislative session, then Sen. Kent Lambert, R-Colorado Springs, introduced a bill that called on the institute to develop a marijuana tracking system that added some sort of additive. After widespread objections, Lambert withdrew the bill when it reached its first committee hearing, only to reintroduce it later in the 2018 session. That measure also garnered outrage, forcing Lambert to again withdraw the measure.

Many in the marijuana industry said they believed that bill was tied to a British company known as PhytoTrack, which only existed in Colorado on paper. It was registered with the Secretary of State’s Office in October 2017 as a business, but its address was listed as 1624 Market St., which is the law office of its registered agents, former Colorado Secretary of State Scott Gessler and former Deputy Attorney General Geoffrey Blue.

Blue filed paperwork in January to dissolve that company.

Two people who helped found the institute say they were shocked to learn the facility had gone ahead with their research.

Former state representative and Pueblo County Commissioner Sal Pace and Dr. Malik Hasan, founder and chief executive officer of NuVue Pharma, a Pueblo-based pharmaceutical company, said their intention was for the institute to be a national center of cannabis research, but now they fear that what it’s been doing won’t earn it that kind of respect.

Hasan said he has long seen a future for cannabinoid-based pharmaceuticals and looked to see if there was adequate research going on around the nation about it. Finding little to none, he turned to Colorado State University-Pueblo, a school he had long been affiliated with. (Years ago, Hasan donated money to the school to create a business program, now called the Hasan School of Business.)

After a long struggle to get the cannabis institute open and funded by the Legislature — it initially received $800,000 to start and another $1.8 million last year — Hasan said he now fears the institute’s reputation is tarnished.

Like the business school, the initial concept was to create a curriculum and enroll students, but none of that has happened.

They’ve got all this money coming in, they’re hiring people and giving themselves salaries, but no syllabus, no attempt at enrollment,” said Hasan, who donated $250,000 of his own money to the project. “An institute without any education and without any research students or any students there is a hollow institution.”

The institute lists five “faculty” members, one of whom is its office manager. The others are two directors, a data analyst and a senior scientist.

With the marijuana and hemp industries taking off not just in Colorado, but nationwide, Hasan said he believes there would have been a large amount of potential students to enroll and pay tuition, and an endless number of legitimate things to research.

As a result of this research, Hasan said he now fears the institute will lose state backing. Without that money, the institute won’t be eligible for federal research grants. Those grants, which can amount to hundreds of millions of dollars, would substantially boost the institute’s reputation and truly make it a world-class cannabis research center, Hasan said.

The two men said Pueblo County also kicked in $260,000 toward the effort, in part because the county has a tremendous amount of marijuana and hemp growers and is fast becoming a production leader in the industry.