How compliance software helps cannabis business grow
By Sergio Barrueta
Photos by Zach Lathouris
Humboldt’s history of cultivation spans decades but adapting to state regulations and tracking and tracing every plant from dirt to dispensary is relatively new. “Humboldt has been ahead of the game on developing cannabis,” says Dylan Livingearth, solutions engineer at Backbone IQ software. “The problem was they had no computer data while manufacturing. We had a blind period in Humboldt County where [the system] was built on trust.”
While trust is good, efficiency requires details and transparency. In the case of cannabis manufacturing, that used to mean calling on partners and farms to see how the batches are doing and sharing the updates over the phone. “Then we started sharing Google Sheets and decided we needed to grow up and we needed software,” Livingearth said.
That’s where Backbone IQ, cooked up four years ago in 2016 by Rajesh Chaudry engineers from Silicon Valley with the input of Southern Humboldt industry locals Livingearth and Peter Huson, comes in. It’s a supply chain compliance software system for the cannabis industry that helps farms and manufacturers keep tabs on their product from purchase orders to extraction to sales. Launched in 2018, it allows users to follow the visual tracker to go beyond the spreadsheets and help better manage supplies going in and coming out, and what is ready for use in real time. It also allows users to sync lab test results to share it with other partners within the industry and organize compliance paperwork.
“I call it a spreadsheet assassin. It replaces a series of spreadsheets with one centralized database,” Livingearth said. The software is independent with some third-party integration. It connects to Intuit’s Quickbooks as well as Leaf Links’ marketplace in order to find specific strains through farms and suppliers.
“That combination of cannabis expertise and computer expertise seems to be a beautiful match. We didn’t look at the competitors; we looked at the problems. No other software does what we can do,” Livingearth said.
Backbone’s software helps power the supply management of some well-known farms and resources in Humboldt, including Humboldt’s Finest, Redwood Roots and ArcataX. Roger Harrell, director of distribution at Redwood Roots, enjoys how Backbone both connects to Metrc, California’s chosen “seed-to-sale” system for tracking and tracing commercial cannabis, and picks up where it falters.
“Metrc doesn’t let me search by farm and packages,” Harrell said. “Metrc I can search for strains but it doesn’t let me search for specific farms with those strains.” Before Backbone, he said, “There was nothing. All it was, was Mtrc and spreadsheets. Backbone has helped me get out of spreadsheet land. It’s a love-hate relationship with spreadsheets as it’s remarkable for business, but it is a lot of garbage in, garbage out.”
Jahn Nicoll, director of production at ArcataX, a botanical essential oil extraction company in Humboldt, has been working alongside Backbone to develop ArcataX’s own system utilizing the software. “We went through six months of customizing and prepping for our setup,” Nicoll said. “It’s been great working with the team of developers and software engineers. They are very knowledgeable and it feels like part of a team I was involved in creating a blueprint for it.”
Before shifting to Backbone, ArcataX was relying on Google Sheets and Microsoft Excel. However, they outgrew it. “Our growth got so big we needed processional tracking,” Nicoll said. “We make a handful of different products, so we have different processes all going on at once. We work with 50 different clients here on our side. So having this tracking system and organizational system became a necessity once we reached a certain size,” Nicoll said.
Supporting that growth is what Livingearth said the aptly named Backbone aims to do. “I like to see us as there when you need us,” he said.