An interview with OpenTHC Founder David Busby

David Busby knows his stuff. OpenTHC had been a donor to Cannabis Observer where I’d summarized public meetings involving cannabis policy in Washington State before I heard him address the state’s cannabis regulators. He had complaints about the short notice given to traceability vendors and integrators before the implementation of a new traceability reporting system, along with suggestions for how to adapt with minimal disruption. It was clear he’d forgotten more about software engineering and integration than I’d ever know. The second thing to impress me was when he was back a few weeks later. He thanked agency staff for areas where they’d collaborated with OpenTHC and other integrators, while also identifying more bugs and advising more fixes.

Interviewing Busby about OpenTHC provided a chance to learn about what motivated him to start the company, how OpenTHC became a critical ancillary service to the cannabis sector, and their unique approach to cannabis industry software solutions. After growing up with a computer at home, “I played with database stuff there when I was a kid, dBase III and nerd stuff like this, and it was always fun,” he explained. By the early 2000s he’d already worked for three companies—including as a Software Test Lead for Microsoft—when he founded his consulting firm, Edoceo. “It's a Latin word. Which means to inform fully and instruct thoroughly.” Naming a server after the phrase in one of his early job, he’d thought, “that word is so cool, and then I bought the domain name…and started making a website there that told people I existed, and that I would help them with their computer problems in exchange for money.”

Edoceo formalized Busby’s freelance work in an early tech bubble, but once cannabis was legalized in Washington State and Colorado in 2012, he was in the first generation of technology experts to see the challenges and opportunities ahead. By 2014, both states were moving ahead with a commercial market for those 21+. “Colorado had a closed system: Metrc [which would] not have worked well…our software would produce a bunch of files” to upload to Metrc, and they had to “hope that it works.” Meanwhile, Washington State regulators had contracted with BioTrack, but their “free version was…absolute garbage,” and Busby knew there were licensees coming online in the state that wanted better options. He was “already enthusiastic about cannabis. I was already enthusiastic about software, and specifically line-of-business software,” which might’ve been looked at as “boring stuff” in a more established and conventional market. Licensees wanted to have “business data in one big ass piece of software… there [were] just loads of people complaining and they were also already ready to spend some money on solving their problems, and that's what opportunity smells like.”

OpenTHC gained clients by offering better value than BioTrack or Metric, which had both significant setup costs and monthly fees. “So we came out and said, ‘Hey, we're $4[2]0 a month,’” and plenty of cannabis businesses were interested. Busby shared the conventional business wisdom that “somebody else’s very high margins is another smaller business’s opportunity.” This was key to how OpenTHC differentiated itself in the cannabis tech space while at the same time being able to work with other traceability systems. Busby described how they took the time to respond to state requests for proposals (RFPs) on cannabis IT even when a state was likely to continue using their existing vendor. He highlighted how they challenged Metrc’s push for single-use RFID tagging, calling out the practice as dependent on more materials like metal, plastic, or paper, and overall wasteful. He also considered it “frustrating [since] there's reusable RFID tags which could have some information updated rather than disposing of a tag for each and every plant, “they don't do that with Metrc. They give you a tag that's fixed.”

Overall, “one of the things OpenTHC does different is we believe in…a distributed federated universe where the system should be able to generate their own identifiers,” Busby remarked. “And there's plenty of algorithmic ways to generate unique identifiers that will never ever, ever, collide with another one.” This approach could also allow for offline transaction reporting, with Busby arguing that larger firms require real-time internet connectivity to function. Busby related this to the Cannabis Central Reporting System (CCRS)---which Washington State deployed at the end of 2021—which enabled licensees to “make up their own numbers.” His concern was that since CCRS made no recommendations regarding “an algorithmic way to generate those numbers. They sort of just said, ‘Oh, make something up and we'll hope for the best.’” Busby contrasted this with Vermont’s in-house traceability platform, where officials had “given all of the providers some recommendations on, how to issue, serial numbers for things and also, how to chain those serial numbers together.” This helped “processors and retailers, [who could] create all their transactions and everything they need to do offline from that system and still be assured that they’re never gonna run into any conflicts.” With Metrc and BioTrack, “when you're doing something you need to communicate with that back end in real time. So if that system is offline, or if your Internet is down or other interruptions,” then a business’s information could “get blocked.”

When asked about the benefits of OpenTHC being open source, Busby indicated that it was part of “beating the drum about distributed federated universe…when you have these central systems and you and the other participants in the industry have data that…moves through that central system.” He offered the example of “lots and lots of extra data that Business A would like to communicate to Business B” which might not be able to be transmitted if a state’s reporting software was more limited. But, “using a system like the way that OpenTHC believes the universe could exist” meant that companies could communicate that data directly through common protocols, all they needed to do was “define a bunch of extended sets of data to carry between each other…it doesn't all have to be people, buying OpenTHC.” Busby viewed their platform as the best way to address problems through dedicated protocols so that “people following that spec[ification] would be compatible with each other.” This was akin to how “email on Microsoft can send email to Google because they're using email protocols.” This versatility was “the way that the universe should be…if you're using an open source platform and you want to extend it in some unique and special way” all it took was the coding skills to do so. Unsurprisingly, “we're also a service provider for that, but we are not the only people who know how,” added Busby.

Another aspect of open source technology Busby noted could be relevant to specific jurisdictions with their own systems was price point. “It is possible for them to acquire the software for zero dollars and deploy the software with the only requirement being, you have to have the skill set to be able to do that. or hire somebody.” He felt this system would be especially useful for regulators as “state agencies already have IT departments, and already have people in those IT departments that know how to manage and deploy other open source software.” Plus, officials could still contract with OpenTHC for additional support or troubleshooting if necessary. He specified that in Maryland, there was a local company bidding on the traceability contract with the state, and he was trying to arrange it so “if that company gets jammed up or needs some training, well, they could reach out to us [while also] keeping all the business in the state.” Making it more affordable to update open source systems could counter some of the rigidity applied by other technology vendors, with Busby explaining “that's the thing that's happened in these states that use BioTrack.” He pointed out the firm was “notorious in Washington. That's why BioTrack is not in Washington anymore because the state was like, ‘Hey, we want to make changes,’ and BioTrack said, ‘Oh, we can make those changes but you have to pay for changes because it's a change request.’” While changes to platforms did take staff time and money, Busby recognized these requests often meant “the state ha[d] to go through like a whole big cycle and allocate budget” to the problem instead of having their own IT personnel code a solution. He relayed that while Washington State’s CCRS system had started to take this approach, their habit of communicating updates left something to be desired. “They announce that the change is coming with a very short notice…one happened with the change happening over the two weeks, it included the Thanksgiving holiday.” Busby noted that between the announcement to “when they wanted it to be in production, it was like six business days, that's…not the way that professional software development does it. They generally have a longer period of time.”

Speaking broadly, Busby had found “homegrown” traceability systems “have a bunch
of problems and, and it feels like the agency has to learn these 20 year old lessons all on their own again.” He’d called out Washington State regulators for the “abrupt” nature of their updates, as well as how there was “very little feedback from the participants” before changes were foisted upon licensees and integrators like OpenTHC. These problems had even been documented by the state auditor’s office, but he lamented “there's been no material change to…the operational procedures or policies” at the agency. Traceability software also had to serve cannabis businesses, he argued, where transferring testing results and other specifics about cannabis products was key, “all information that people want to flow from one system to another regardless of who the service provider is.” Internet access had been more of a challenge in 2014, said Busby, with some more remote cannabis growers moving from satellite internet connections to cellular internet service which allowed for a “mobile phone to do the work and do real-time reporting because your connectivity is still good.” He believed cannabis was like other industries, and “most folks in most industries are not really focused on their tech stack at all, they just want something that works,” and be able to get support when it doesn't. OpenTHC could be hired as IT support to businesses or regulators, though depending on the job “it's not cheap, but if you're gonna try to take ownership of your business, take full control of what your business can do with your tech stack” it was important. Busby called this “something suitable for slightly larger businesses and definitely something suitable for” multi-state operators. “None of the other service providers are saying things like, ‘deploy our code on your infrastructure, and then change it in a way that is optimized for your business’...but we're definitely saying that.”

Beyond being open sourced, the structure of OpenTHC and their use of lean product development are other beneficial factors. In manufacturing such development would be focused on reducing material waste, but for Busby’s company, that meant avoiding wasting staff or client time, “building the wrong feature is wasteful, working on things that customers don't want is wasteful.” Another aspect that “really helps us out with this is th[at OpenTHC] is small, privately owned. So we don't have shareholders…we don't have a board, we don't have mid-level management who [were] focused on what they can accomplish to acquire a quarterly bonus.” Keeping client needs centered in their regular operations meant OpenTHC wasn’t “chasing fads,” he said, noting the recent popularity in incorporating artificial intelligence (AI) into online services. “There's hundreds of companies that are doing AI hype train stuff to keep shareholders, to keep people excited,” explained Busby. But he also saw this as jumping on a bandwagon, with heavy risks that “it doesn't actually create a lot of customer value and it ends up being sort of wasteful because you have a poorly implemented feature..” Mollifying stockholders or letting middle management spend company time on unneeded products wasn’t how he wanted to do business. The goal of the company was to “grow naturally” and gradually, though this meant foregoing outside capital which could raise their profile or improve the brand. He felt this was the business approach of “Step One: have a million dollars. Step two is: turn it into more money,” and instead his business was “sort of a boring straight line, instead of a big pop.”

Whether it was dealing with inefficient traceability systems like Washington, or the “slow and stable” reporting processes in places like New Mexico and Vermont, Busby favored a gradual expansion to new markets, despite the juggle of different standards and regulations that entailed. “Cannabis deployment is very messy and we're about to watch it happen in New York,” he said. The Empire State was “using a newer flavor of BioTrack [and officials had] just told folks, sometime in January, is when…all of the licenses have to be plugged in, you don't have to use BioTrack but you have to have your data reported into that system, so, there's going to be…a lot of urgency” for traceability solutions there.

Looking to the future of cannabis policy, Busby believed that rescheduling was a necessary precursor to any interstate trade, whether that was a national legalization, or the interstate commerce laws which states including California and Washington had passed. “Earlier I had said something about a distributed federated type of system with algorithmic identifiers…So now farms and licenses in California and Oregon in Washington, and everywhere else, they could be generating their data” with common protocols and reference systems. Communicating information would be much smoother with a unified reporting and identifier practices, he noted, “if the states all had a compatible API, Then when I do stuff in my state, I could use that same data blob that the system generates” for any other jurisdiction. This way, “I can send that to the licensee who's buying my material, in a different state, and I can send that same data blob over to my regulatory agency. And then the recipient license sends their data.” Protocols would primarily be the data formatting used, “whether that's the popular format on the Internet, these days called JSON or whether that's a CSV file.” Eventually, this could include using existing inventory tracking software common in other sectors, he acknowledged.

Busby concluded that the OpenTHC team remained focused on clients while advocating to “have a good mechanism for electronic interchange…you turn the tedious process into a few button clicks” and save your clients time. Because “if it's something that has to happen a bunch of times in a day—especially things like inventory control—saving a few minutes means at the end of a day, you saved an hour.” Turning tedious oversight into something that could be done with a few buttons on someone's phone meant “businesses get to move slightly faster with, with less errors,” Busby argued. Aside from the business potential, he reflected that cannabis legalization was also a moral imperative, as people shouldn’t be incarcerated over the plant, “I feel like it could right a lot of systemic problems.”