Dutchie Sues Akerna Over Access to Pennsylvania Market

Dutchie claims Akerna deliberately erected systemic barriers for competitors.

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.

Dutchie-Complaint-Akerna-PA

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.

John Schroyer


5 comments

  • Jamie L Pearson

    January 23, 2023 at 9:25 pm

    Really Dutchie? Sue first, follow instructions second? Cannabis companies need to stick together and not sue each other. These guys are real gems. 🤦‍♀️

    Reply

    • RJ

      January 24, 2023 at 5:20 pm

      Cope. Monopolistic practices should never be encouraged.

      Reply

      • Jamie L Pearson

        January 25, 2023 at 10:20 am

        Your comment misses the point. Akerna can’t make a decision and fix this problem for Dutchie – only the State can do that. The State should have been Dutchie’s target. If Dutchie had been granted the position Akerna is in, does anyone believe they would operate differently? 🤦‍♀️

        Reply

        • Delphon

          January 25, 2023 at 3:20 pm

          Actually Jamie, they would not operate the same way, since Dutchie is now both an E-comm and POS provider it still has not charged customers using competitors point of sale to integrate with bi-directional API’s and still keeps the same vantage points of API to all vendors including it’s own brands and product charters. Akerna did this exact same thing in Washington state and this was a major influence of why they dropped them.

          Reply

  • Angel

    January 25, 2023 at 5:00 pm

    They need to definitely stop with all the lawsuits. Especially this guy right here ((Kenneth Gay Variscite NY One, Inc)). Stopping the New York entire social equity program. Stay blessed everyone . Gratitude 🙏🏽

    Reply

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