The Colorado Department of Revenue Closely Monitoring Retail Marijuana Roll Out

Denver, CO – December 30, 2013 – The Department of Revenue, Marijuana Enforcement Division
(the “Division”) is closely monitoring all final activities and working with the industry to ensure
a smooth implementation on January 1, 2014. One such activity is the roll out of Marijuana
Inventory Tracking System (“MITS”) for Medical and Retail Marijuana, which relies upon the
use of Radio Frequency Identification (“RFID”) tags, which are printed and provisioned by our
vendor Franwell.
The Division and Franwell have made every effort to ensure that all retail and medical licensees
have the proper RFID tags provisioned to them to ensure a smooth transition into the MITS
system prior to roll out.
However, due to inclement weather and high shipping demand over the holidays, our shipping
company has experienced unprecedented delays in its ability to deliver shipments in a timely
fashion. The Division and Franwell have been working diligently to minimize any impact to the
industry as a result of these delays. Nonetheless, some licensees may not receive their delivery
of RFID tags prior to the implementation of Retail Marijuana and the required use of MITS
beginning on January 1, 2014.
As a result of these challenges, and recognizing the importance of providing every Medical and
Retail Licensee that has met all other requirements the opportunity to operate, the Division has
developed alternative procedures to allow qualifying Medical and Retail Licensees to move
forward on January 1, 2014. These procedures will ensure that Licensees maintain a full
accountability of their business operations without limiting the Division’s ability to effectively
regulate the industry during this transition period.
The Division will continue to work with our Licensees, Franwell and other stakeholders to
ensure that every licensed business that has demonstrated a good faith effort to meet the MITS
requirements has an opportunity to begin operations as scheduled.

To date, Franwell has shipped out more than 2 million RFID tags to medical and retail marijuana
licensees. More than 1.6 million tags have been delivered and many of the tags remaining to be
delivered are expected to arrive today or tomorrow. Licensees have activated nearly 1,400
facility accounts in MITS and literally thousands of inventory entries have already been made in
the system in advance of January 1, 2014. We believe this demonstrates the industry’s interest
and commitment to use the MITS system.