• Shannon Anderson

Black Market a threat to ALL Legal Industry Players: DATA is key

CAT analysts have identified several avenues in which black/gray market trafficking occur directly within, and around, existing Hemp and MJ legislation, regulation, data collection standards, and compliance requirements. This black/grey market activity contributes to loss of industry AND tax revenue and results in increased opportunity for criminal activity at both state level and nation-wide. Fortunately, there’s steps that can be taken to combat this monetary loss.

Data Plan Development Recommendation: With extensive experience in all aspects of collecting, processing, fusing, analyzing, and reporting location and tracking data, Computer Access Technologies (CAT) recommends that industry initiatives moving forward include concrete, established data standards, interface protocols, and periodic update requirements to a consolidated database. A proposed conceptual approach is outlined as follows:

  • Database consolidation; track data from all producers, vendors and suppliers

  • CAT recommends a 3rd party data-focus, cloud-service company such as AWS, Google, Azure, etc. to provide an open framework and house the data. We have found “data-focused" companies have no incentive to convert the data into proprietary formats and engineer others out of access, their business models support the opposite: more access, more integration, more developers.

  • A commercial cloud-based database is recommended, so as to not impose unnecessary direct infrastructure procurement, sustainment, cybersecurity, and administration costs

  • Data standards and interface protocol requirements are added to the legislation to ensure tracking data is compatible with the established consolidated database.

  • Periodic update requirements are added to legislation to ensure State of Colorado Database remains current and relevant (hourly, daily, weekly, etc.)

  • Automated algorithms are implemented within the established database to ensure Hemp and/or MJ producers/transporters are compliant with all laws and regulated location tracking requirements.

Additional Benefits: In addition to ensuring compliance with all regulations and policies, a consolidated database also facilitates the following functions:

  • Incident response

  • Forensic investigation of incidences and criminal black/gray market activity

  • Automated algorithms to detect indicators of black/gray market activity

  • Trending and “pattern of life” analysis of the CO cannabis industry

Project Goals:

  • Make Better Use of all available data

  • Remain consistent with current privacy laws and data policies

  • Provide real-time situational awareness of indicators and warning signs of emerging black market incidents / trends

Valued Functions:

  • Early notifications of illegal activity

  • Accurate geo-location supply chain information

  • Mobility of needed capability

  • Broad reach for all impacted parties/agencies

  • Access to historical data

  • Construction of Analytic algorithms

CAT understands the current state sanctioned THC data collection system (METRC) does provide a framework for monitoring much of the Cannabis industry. Unfortunately, this system does not provide the interested parties with a way to ensure THC supply chain and transportation data can be used for whole-scale black market, and other valuable industry analysis. The current system appears to engineer industry data away from the state, which significantly limits the ways in which the state can access and use the data. Frankly, we think this is an outdated approach and not what's best for municipalities where marijuana and Hemp industries are legal OR the legitimate markets these municipalities are attempting to support and grow.

Drafting and Implementation of data standards, protocols: CAT can advise and/or implement a common, searchable, usable database with open interfaces which accepts tracking data from third-party tracking software packages. CAT can also implement automated algorithms to support regulatory compliance and detect indicators of criminal black/gray market activity. Implementing data standards now will significantly help the industry, as a whole, with all requirements and initiatives moving forward.

For further information and details, please don’t hesitate to reach out to Shannon Anderson, COO of Computer Access Technologies. CAT would be happy to provide a presentation or answer any questions you may have.

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