A Tedious Track

With new laws come new regulatory efforts and the introduction to one of the most talked about provisions of Medical Adult Use Cannabis Regulation and Safety Act (MAUCRSA)—the track-and-trace system. The idea that cannabis will be tracked from seed to sale, from farm to consumer is quite a baffling concept to cannabis businesses who are coming from a completely unregulated market. California is gearing up to deploy the teeth of its regulatory system, Marijuana Enforcement Tacking Reporting Compliance (METRC), providing real-time visibility for regulators.

“Unlike any other agricultural product, the state will require the implementation of a tagging system in which every single individual cannabis plant must be tagged with a unique identifier.”

What’s the Deal?

Designed to prevent diversion of cannabis—California requires track-and-trace to give state taxing agencies, public health officials and law enforcement the ability to follow a cannabis plant. With the ability to follow cannabis from seed to sale, the government can keep tabs on activity for tax purposes, businesses gain an essential tool to help with compliance, monitoring and reporting on inventory and California can play “Big Brother” to oversee quality control and enforcement of regulations.

So here’s the down and dirty of it. Unlike any other agricultural product, the state will require the implementation of a tagging system in which every single individual cannabis plant must be tagged with a unique identifier. This Radio Frequency Identification (RFID) will stick with every portion of the plant all the way until point of sale. Don’t know how it works? The track-and-trace program has a training requirement in which applicants must complete a training session for the system within 10 days of receiving notice that their complete application has been received and approved by the California Department of Food and Agriculture (CDFA).

Why METRC?

Following a competitive bidding process, against vendors such as BioTrackTHC and MJ Freeway, California selected cannabis track-and-trace vendor METRC. METRC software is already the track-and-trace software of choice in Alaska, Colorado, Maryland, Michigan, Nevada, Ohio and Oregon. The experience of the software company was a major bonus in their bid for the contract, especially considering California’s rush to have the software ready by January 2018.

METRC uses a RFID technology combined with serialized tracking, through unique IDs, which acts as a “surveillance system” accessible through a database. The unique IDs provide details of the state-licensed cannabis source, the destination and the transaction date. Throughout a plant’s lifecycle, each event will be time stamped, and a movement manifest will be generated for regulators to monitor, just like tracking a package through FedEx.

How Does it Work?

Once a plant is tagged with the RFID, that tag will accompany the cannabis plant/product for the duration of its existence. Cultivators would utilize CDFA’s tracking system and report required information, including any movement of cannabis or cannabis products throughout the distribution chain between other licensees. Licensees who are receiving cannabis products also have to comply with the reporting requirements. Licensees have to report required information 24 hours before moving cannabis plants or products. Even prior to destruction of the tagged product, the RFID would be retired by the track-and-trace system.

California May Be Following Bad Track and Trace Examples

Because California is venturing into unchartered territory—learning from example is most likely the best way to go. Enter Colorado, the cannabis industry’s favorite comparison. The METRC track and trace system in Colorado has a reported 11,000+ registered users, more than three million plants and two million products. Now California is expected to replicate this for over 22 million plants and? an estimated 50,000 farmers plus all the manufacturers, distributors, retailers and delivery services that are eagerly awaiting the licensing application process.

But no so fast, even in the smaller Colorado market RFID tracking of cannabis has proven to be ineffective, inexact and when operated in a dirty and wet environment, like a cannabis grow, the failure rate only increases.

What does the future look like for the track and trace program in California? We will soon find out.