CBE caught up with Scott Denholm, Executive Director at Metrc, Franwell Corporation’s Marijuana Business Unit that supplies Radio Frequency ID (RFID) tracking technology to its state clients, the Colorado Marijuana Enforcement Division (MED), and the Oregon Liquor Control Commission (OLCC) and its licensees.
He was on a month-long tour providing small group training sessions for Oregon Liquor Control Commission licensees throughout February 2016 when we tracked him down.
Since winning the Colorado MED five (5) year, $1.2 million contract that was deployed in December 2013, Metrc has not only generated an annual cash flow of $240,000 annually, but also to date, the system has registered over 17,000 users and tracked well over 4 million plants and 3 million packages.
At $.45 cents a tag for plant and $.25 cents per tag for packages, Metrc has generated roughly $1.85 million in revenues from the RFID tags alone in the first two years of operation in the state.
The Oregon contract win adds another $1.7 million in revenues spread over five years and arguably as profitable a business for the tags as Colorado represents pending the amount of licenses Oregon awards and whether the technology is employed for the state’s Medical Marijuana program regulated by the Oregon Department of Health.
Dedlcated to developing leading edge products
According to their website, Franwell is a technology company dedicated to the development of leading edge products and services with a focus on supply chain solutions and RFID integration. Franwell sees RFID as the best technology currently available for improving track and trace visibility. One of their key areas of focus is on companies in the perishables business, like food and pharmaceuticals, but also to a wide variety of industries.
Based in Lakeland, Florida and run by CEO Jeff Wells, Franwell’s core business serves the traceability needs of multiple industries. The company mantra is to build Franwell around long-term, collaborative relationships with clients, and this philosophy played a key role in the Colorado Marijuana Enforcement Division seeking a solution provider and working with Metrc to trace and track cannabis in order to comply with state and in many ways federal expectations.
Metrc was founded on that premise, and Denholm and Wells led their efforts working with the state to design and build a winning platform for the MED. Their system does a variety of things for the state including:
- Capture and analyze data in real-time;
- Enhance business processes and intelligence through RFID;
- Integrate devices and data on the edge of the enterprise;
- Implement Service Oriented Architectures.
Denholm tells CBE that privately held Franwell is a 40+ person company and the Metrc division is smaller, with 15+ people overall and five in the Nashville area where he and Metrc are based. As CBE reported a few weeks back in Seed-to-Sale Competition Heated-up in 2015. Expect it to Intensify this Year, the battle for the state contracts has really become a three-horse race between Metrc, BioTrack THC, and MJ Freeway for the government issued contracts.
A focus on RFD technology
Metrc now positions itself as the first regulatory solution for cannabis since winning the first contract for bid in Colorado. This solution was specifically designed for government agencies in charge of legalized marijuana enforcement, and based on the business decision to avoid the free for all that has emerged for enterprise Point of Sale (POS) systems, with multiple players competing for this margin-thin enterprise revenue.
Unlike their primary competitors, the Metrc solution focuses on RFID technology based on individual and unique serial numbers assigned to every plant over 8 inches in height grown in a licensed facility and for packaging materials for any cannabis product sold at retail.The raw labels are manufactured in Nashville.Florida does the RFID tracking and barcoding required of their solution. They feel this is an advantage in that many RFP’s issued require a unique ID for each tag and best avoids diversion, the very issue that precipitated this opportunity. Metrc’s profit is in the tags.
As CBE noted before, competitive strife has resulted in lawsuits and countersuits being filed by both Franwell and Biotrack THC as they battle for the hearts, minds, and souls of the cannabis regulatory community that is spreading across the U.S. as prohibition ends on a state by state business. As of press time for this article, the BioTrack THC suit in Oregon has been dismissed.
With several wins under their belt to date and opportunities springing up domestically and abroad, Scott is confident that Metrc has a superior regulatory product and expects to see his team on the winning side of future bids for government contracts. We wish all of the competitors in the space good hunting and may the best players prevail.
Background Information
Company Name: Franwell
Year Founded: 1993
Ownership structure/operating entities: Florida Corporation
Owner/CEO E-mail address/Contact Information:
Management Team: Jeff Well President and CEO, Franwell; and Scott Denholm Executive Director Metrc, Marijuana Business Unit
Headquarters: Lakeland, Florida
Website: www.metrc.com
Industry Segment/Category: Traceability Software
Current Markets/States Served: U.S. and International
Current Number of employees: 50 plus
Market Strategy/Goal: Regulatory Marijuana Compliance
2014 Revenues: NA see above article
2015 Projected Revenues: NA see above article
Product/Revenue Mix: RFID tags for cannabis plants and packaged finished products
Expansion Plans: U.S. and Global regulatory compliance for the marijuana industry
Financing strategy: Self-financed
