KERN - Dutchie Sues Akerna Over Access to Pennsylvania Market

Oregon-based cannabis tech company Dutchie has filed suit against one of its competitors, Colorado-based Akerna Corp., for alleged unfair business practices in Pennsylvania.

Dutchie claims that Akerna, which won the Pennsylvania state contract for its seed-to-sale marijuana inventory tracking program, deliberately erected systemic barriers for competitors like Dutchie so that medical marijuana companies in the state are more likely to use Akerna’s software.

The suit, filed Jan. 19 in the Dauphin County Court of Common Pleas, asserts that while Dutchie already works with roughly 100 MMJ companies in Pennsylvania, it’s been harmed by Akerna’s refusal to set up a two-way interface so that dispensaries can seamlessly use Dutchie software in conjunction with the state’s inventory tracking program. The tracking program is run by MJ Freeway, one of Akerna’s subsidiaries.

State law requires that Akerna make the state inventory tracking system available to “two-way communication, automation and API,” the lawsuit maintains, which Akerna has failed to do.

“Instead, medical marijuana organizations in Pennsylvania that wish to utilize a POS software other than Akerna’s must pay for access to Akerna’s own POS software, and also pay an additional fee to integrate that software into their own preferred POS system,” the lawsuit claims. “Any medical marijuana organization utilizing a different POS system than that provided by Akerna, and its affiliated companies, must pay for and enter data in both systems.”

“Akerna has used its position as the state’s contracted vendor for MJ Freeway to block two-way integration with POS software solutions like those offered by Dutchie, in favor of software solutions that Akerna and its affiliated companies provide,” the suit alleges.

“We are disappointed that Dutchie feels the need to pursue this baseless claim in court,” Akerna CEO Jessica Billingsley said in a statement to Green Market Report. “Dutchie is currently an approved integration partner with the Commonwealth’s cannabis traceability system and will remain one through the length of our recently renewed contract.

“Akerna has facilitated conversations between Dutchie and the Commonwealth regarding this claim,” she added. “In these conversations, it has been made clear to Dutchie that Leaf Data Systems is contractually unable to unilaterally make changes to its product, as changes can only be made through written change requests from the Department of Health. No such change request has been submitted.”

The suit requests a jury trial and monetary damages, along with a permanent injunction to force Akerna to adjust its seed-to-sale tracking system so that it works with software from other companies.