Dutchie - the technology platform powering cannabis commerce, filed a lawsuit against Akerna Corporation,(NASDAQ:KERN) a cannabis traceability provider, to ensure a fair playing field for technology platforms that support the cannabis industry in the Commonwealth of Pennsylvania. Dutchie is suing Akerna for unfair competition and tortious interference as a result of its refusal to open up its state traceability system for integration with Pennsylvania cannabis retailers’ technology partners of choice, including point-of-sale systems, despite a state law requiring open integration with any provider.

While Akerna stated in its initial state contracting proposal that it would provide an open traceability system, Akerna has run its system in a way that only allows retailers to integrate with the company’s point of sale system. As a result, Pennsylvania legislators passed a new law in 2021 that requires the state, and Akerna as their agent, to open up the state traceability system for integration with any technology provider to increase competition and choice. Akerna has refused to follow the law for over a year. After numerous formal emails, letters, and meetings with Akerna, Dutchie is taking legal action to ensure the Pennsylvania market has access to true choice.

Akerna was hired by the state to provide software that keeps an accurate record of cannabis sales. But, by preventing technology partners from truly integrating, Akerna’s traceability software reduces the accuracy of those records by forcing retailers to rely on manual entry of their sales and inventory data for all information in a system other than Akerna’s own platform. Pennsylvania is one of only two states that don’t allow for open integration with their traceability system out of the 37 states where medical cannabis can be legally sold. Akerna provides traceability services in both of those states.