MJ Freeway raises $10M to improve marijuana tracking software, expand operations

The problem-plagued software that forms the backbone of the medical marijuana industry in Pennsylvania may soon be getting a serious tune-up.

MJ Freeway, the Denver-based company that provides the state's mandatory seed-to-sale software, announced Thursday that it had completed a $10 million Series C financing round. A company spokeswoman said the financing would go to improving MJ Freeway's Leaf Data Systems software to handle increased complexity, functionality, and data security.

The company was awarded a five-year, $10.4 million contract by the Pennsylvania Department of Health in 2017 to trace all of the state's medical cannabis commerce. The software tracks every plant that is grown, every sale that is recorded, and every patient and medical practitioner who participates in the program. MJ Freeway operates a similar system in Washington state, and provides enterprise software for cannabis transactions in dozens of other states and 11 countries.

The Pennsylvania and Washington systems have been hobbled by hacks, hiccups, and grinding slowdowns. MJ Freeway, which was first on the market with the tracking software in 2010, has several competitors, which also have been similarly hit with chronic and debilitating glitches. With the funding, MJ Freeway plans to regain market dominance.

As the marijuana industry catches fire on stock markets, and Canada approaches full legalization on Oct. 17, cannabis companies in the United States are gearing up for rapid expansion. Every state requires seed-to-sale software as a rampart against illegal diversion. Adult recreational use is allowed in nine states and medical marijuana is available in some form in 30 states.

MJ Freeway's latest fund-raising round was led by Batu Capital Investments and Cresco Capital Partners. A previous Series B investment round in 2015 raised $8 million, according to a news release.