Dutchie’s 4/20 outage has cannabis retailers reeling

posted on GreenMarketReport

Sales stalled for more than four hours on cannabis’ most important day of the year.

Dutchie is on damage control duties this week following yet another malfunction on the busiest cannabis sales day of the year.

The Bend, Oregon-based cannabis point-of-sale and e-commerce platform saw widespread outages on April 20 for the third in a row now.

The issue, which affected point-of-sale systems for retailers in a swath of U.S. states on Saturday – including IllinoisMarylandMassachusetts, Michigan, MissouriNew Jersey, and New Mexico – was traced back to the company’s Bluegate server, which is responsible for critical system functions.

CAURD dispensaries in New York state also are required to use the Dutchie platform, though significant issues weren’t publicly reported in that market.

The recent outage, which lasted until nearly 8 p.m. EST, left a wide swath of stores and customers frustrated.

According to Dutchie’s website, its Bluegate point-of-sale system started seeing rising latency issues around 12:36 p.m. EST, causing disruptions to register functionality and back office access. The engineering team tried to resolve the issue by reducing load on the server and disabling back office access, with register capabilities down by mid-afternoon.

By the evening, around 7 p.m., register services were restored, and back office access was limited but operational. The company said it was back to normal by around noon on Sunday.

Retailers reported huge losses and canceled pre-orders due to the outage. Bloom Brothers, a Massachusetts-based retailer, reported losses of around $25,000 during the four and a half hours that Dutchie’s system was down.

Co-owner and CEO Nathan Girard said that the shop pays Dutchie $1,500 per quarter for e-commerce services and another $1,500 per quarter for back-office services. The total annual cost for these services is $12,000, which equals the cost of two years of Dutchie’s services, he added.

While Dutchie offered credit to customers based on a formula for losses last year, some retailers, including Girard, are hesitant to accept the offer a second time, given the high annual costs of the platform.

“…even if Dutchie offered me the next 2 years for free, I would still have to go elsewhere because eff me once shame on you; eff me twice shame on me. The third time, and I’m the idiot for thinking they even give a crap about a partner who has been with them for over 4 years,” he wrote in a LinkedIn post.

Maryland-based Curio Wellness estimated a loss of approximately $80,000 in sales and nearly a thousand canceled pre-orders, its co-founder, Wendy Bronfein, said in an email statement.

In addition to lost online orders and lower revenue, a POS system failure on a Black Friday-like shopping day can be disastrous for everyone involved, causing long transaction times and wait times. Some online who work at dispensaries said they were manually recording transactions on scratches of paper.

That type of scene can damage a brand’s reputation and affects budtenders’ wages and tips, operators said, with long-lasting consequences on customer loyalty and word-of-mouth marketing.

“How many other budtenders missed out on hundreds in tips today due to Dutchie?” one anonymous worker posted on Reddit over the weekend.

According to the user, Dutchie’s system was down for more than six hours, forcing the dispensary to turn away hundreds of customers and limiting transactions to just two per hour.

The outage provided an opening for competing POS providers to attract Dutchie’s disgruntled customers. Dutchie makes up 34.5% of the market, with Biotrack/Alleaves and Flowhub following behind, according to Cannabiz Media.

“We had another smooth 420 here at Biotrack/Alleaves and are here to help people interested in alternative tech,” John Jacobs wrote in a soliciting LinkedIn post.

Questions also remain about the cause of the outage and whether Dutchie has addressed underlying issues from the previous year. Last year’s outage lasted around an hour and a half.

“This year’s 4/20 was a record setting day for the majority of Dutchie powered dispensaries. Our systems powered over 2 million transactions, representing $165 Million dollars in retail commerce – a 50% increase from 2023 4/20,” Dutchie CTO Chris Ostrowski said in an email statement to Talking Joints Memo.

“While Dutchie and our partners prepared extensively for this year’s 4/20, a group of customers local to a specific instance of our POS system experienced serious issues that impacted their ability to transact. Dutchie is committed to stability and will be continuing to invest heavily to provide a reliable platform for all customers,” Ostrowski said.

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