Traceability: Understanding Metrc and Cannabis Retail
When voters took to the polls over the last few years and demonstrated their support for a legal cannabis industry, they also demanded a solid accountability system be put in place.
For most states, this accountability solution takes the form of an integrated seed-to-sale traceability system that accounts for the entire cannabis market. It ensures that regulated, certified marijuana products make their way to consumers through legitimate enterprises.
Cannabis dispensaries in 12 states (plus the District of Columbia) use a system called Metrc, developed by a company named Franwell. Dispensary owners in any of these territories must become well-acquainted with using Metrc to avoid non-compliance.
What Metrc Is
Metrc stands for Marijuana Enforcement Tracking Reporting & Compliance. It is a cloud-based compliance management solution. Regulatory institutions in multiple states require cannabis industry organizations to submit data to the Metrc system in order to fulfill their legal seed-to-sale tracking obligations.
Metrc users interact with the platform through an online web portal. Users log on, report information, and confirm their data inside the cloud-based software application. There is no need to purchase additional hardware or other equipment to access Metrc, but it can be helpful.
Metrc’s primary focus is determining where cannabis plants and products are moving within a given state’s cannabis industry. This agricultural tracking software monitors the weight and location of every cannabis plant and product in the state and keeps a record of every transfer of ownership that occurs.
This is useful for state cannabis regulators because it provides a robust defense against product diversion towards the black market and extra-territorial sales. Metrc helps ensure that legitimately grown cannabis products aren’t sold to children or carried across state lines.
Metrc’s application ecosystem includes the web portal, a variety of browser-based web services, a mobile application used for on-site inspection, and a different mobile application for cannabis industry users. It also supports third-party vendors through API support.
What Metrc Isn’t
While Metrc is an impressive tool in many ways, it’s important that dispensary owners understand what it doesn’t do. Metrc’s main purpose is capturing and reporting transactional data to regulators – not offering data-driven insight and inventory control to dispensary owners.
Although Metrc gathers and reports business-critical data, it isn’t designed to streamline the process of obtaining value from that data. It does not replace a dispensary’s point-of-sale system, inventory tracking software, or customer relationship management solution.
Those business-critical systems complement Metrc – not the other way around. Dispensary owners who invest in state-of-the-art data infrastructure will enjoy secure, scalable growth while streamlining their compliance processes.
This makes sense because dispensary owners aren’t the ones who contract Franwell to create and deploy the Metrc system. Franwell’s customers are the state governments whose regulatory needs demand a comprehensive technology solution like Metrc, and its primary concern is serving its customers’ interests.
Metrc does not:
Capture or Centralize Business Data. Although Metrc captures important data for retail business intelligence, it doesn’t provide any visibility into that data. That simply is not its purpose. Dispensaries have to invest in complementary third-party solutions that offer this functionality and then connect those systems to Metrc.
Track Cash Flow, Customer Data, or Vendor Relationships. Metrc offers no overview concerning revenue, cash spent, tax liability, or customer preferences. There is no support whatsoever for non-cannabis inventory because regulators are not interested in non-cannabis products.
Validate Incoming Data to Protect Dispensary Owners. Metrc allows users to report faulty, discrepant data without warning. The only notification users receive will come from suspicious regulators announcing an audit or a surprise inspection.
Produce Comprehensive Reports for Users. Metrc gives regulators the ability to generate comprehensive reports, but not users. You cannot use it to produce a historical inventory valuation, which is problematic because that’s exactly what regulators would ask for in the event of an audit.
Metrc’s architecture and functionality serve one purpose – determining if dispensaries are compliant or not. Every state’s Metrc instance is unique, often because every state’s specific regulatory requirements differ from one another. Integrating Metrc into your dispensary’s workflow requires knowing what data your state is relying on the software to report.
Which States Does Metrc Cover?
Metrc covers thirteen American territories. Since the laws and regulations of each territory are different, Metric implementation is necessarily different at a state-to-state level. This fragmentation of the Metrc system can be confusing for first-time users, but ultimately helps maintain an organized compliance structure while reducing the risk of product traveling across state borders illegally.
Some of the important things you need to know about each state’s unique implementation of Metrc include:
Alaska’s Alcohol & Marijuana Control Office (AMCO) contracted Franwell to implement Metrc as its marijuana inventory tracking solution. The system was implemented in 2016. Metrc’s contract with AMCO is set to renew in 2021.
Alaska is the first state to officially license on-site cannabis consumption. For dispensary owners, this means that there are now new seed-to-sale tracing categories that Metrc must correspond to. Marijuana consumed on-premises must be accounted for in the Metrc system the same way all other cannabis products in the state are.
California’s Bureau of Cannabis Control (BCC) uses a modified version of Metrc to accommodate its complex cannabis ecosystem. It was launched in early 2019, with an extended rollout to capture and collect data on California’s temporary license-holders.
California is in a unique position when it comes to compliance and regulation – the fact that the state’s black market is three times the size of its legal market is a serious hurdle to overcome. The size of California’s cannabis market also presents challenges. Dispensary owners need to be put solutions in place for optimizing process efficiency, especially when dealing with large volumes of product.
A separate Metrc program exists (on a voluntary basis) for industrial hemp cultivators, who can use the system to submit samples to state-certified testing facilities. This costs $250 annually, plus the cost of individual RFID tags ($0.25 per tag), and it helps cultivators enter their products into the Metrc system outside of the Colorado Department of Agriculture’s regular testing schedule.
For dispensary owners, Colorado’s Metrc instance is the one-stop solution for reporting transactional data to state authorities. Comprehensive reporting allows dispensaries and regulators to make sure that the state’s buying limits are respected – as of January 1st, 2020, that is 28 grams of either marijuana or THC concentrate.
Also, Metrc is key to Colorado’s nascent marijuana hospitality industry. New licenses for hospitality-based cannabis organizations are being created, which will reflect new options in the state’s Metrc deployment concerning traceability, accountability, and compliance.
The Louisiana Department of Agriculture and Forestry (LDAF) has integrated its Louisiana Medical Marijuana Tracking System (LMMTS) services with Metrc. Business owners in the Louisiana cannabis industry must sign up for Metrc, take the required training, and comply with the state’s regulatory framework.
Louisiana dispensaries must report sales daily to Metrc. While many dispensaries start with manual reporting, this time-consuming process quickly interferes with regular business operations. The state’s Metrc instance also allows dispensaries to upload a spreadsheet file, or to allow streamlined point-of-sale integration that guarantees compliance.
Louisiana’s marijuana market is exclusively medical as of 2020. The state’s medical cannabis reporting system is compatible with point-of-sale integrations, including compliance-ready solutions like Green Bits.
The Massachusetts Cannabis Control Commission (CCC) uses Metrc to track all cannabis products in the state’s legal industry. This system has been in place since 2018. The CCC requires all cannabis licensees to report sales and transactional data to regulators. Importantly, it also requires cannabis dispensary managers and employees to undergo training.
As of January 1st, 2020, the state requires all of its licensed cannabis dispensary employees to have passed its Responsible Vendor Training Program. This program establishes statewide standards for compliant operations, tracking compliance, preventing product diversion to minors, and understanding the impact of marijuana on the human body.
The training program costs between $99 to $150 per person, which is far less than the hefty fines that non-compliance may result in. Importantly, this training introduces employees to the fundamental requirements of working with Metrc, offering employers peace of mind that many other state cannabis industry cannot replicate.
The state also has a unique Economic Empowerment program, which engages communities that have been disproportionately impacted by cannabis law enforcement in the past. One of the benefits of this program is access to free Metrc training.
The Maryland Medical Cannabis Commission (MMCC) requires cannabis cultivators, distributors, and retailers to report all transactions to them through the Metrc system. Obtaining a license in this state requires passing a knowledge-based test of the Metrc system.
Maryland’s state-licensed medical marijuana dispensaries serve approximately 100,000 residents throughout the state. For most of its history, the Maryland cannabis industry did not allow edibles, but this changed as of mid-2019. Now, Maryland cannabis dispensaries can sell edible cannabis products, subject to a strict set of regulatory conditions.
For example, Maryland cannabis edibles cannot take any shape or form designed to be attractive to children – that means no cannabis gummies or animal-shaped cookies, among many other things. The state’s new selection of medical marijuana edibles must benefit from the same traceability guidelines in effect for the rest of its cannabis products: seed-to-sale accountability in the state system, Metrc.
Michigan’s Marijuana Regulatory Agency (MRA) uses Metrc as its statewide monitoring system. It has been in place since the state began distributing medical marijuana licenses in 2018.
Michigan only accepts recreational marijuana retail applications from current medical marijuana operators. It requires all retailers to report sales and testing data to regulators through Metrc.
As of January 2020, the state issued its first total recall of a cannabis-related product. Four vape cartridge products were discovered to have failed laboratory testing due to high levels of vitamin E acetate. The state has identified the products under recall using their Metrc classification number.
Despite the state’s implementation of recreational marijuana legislation, its largest city – Detroit – remains underserved in comparison with the rest of the state. The city’s six pre-qualified, inspected marijuana dispensaries are pursuing litigation in order to pressure the MRA into letting them open their doors to the state’s largest cannabis market.
Missouri’s Medical Marijuana Regulatory Program (MMRP) requires all cannabis companies to report sales transactions and compliance data through Metrc. The state contracted Metrc in April 2019 and awarded 192 dispensary licenses in January 2020.
The Missouri Department of Health and Senior Services, which oversees the MMRP, plans to launch medical cannabis sales in Spring 2020. Although more than one thousand applicants have sent in, the state has calculated its medical marijuana industry’s sales volume to serve 25,000 medical cannabis cardholders.
Every transaction that occurs within the state’s borders must be reported to the MMRP through Metrc. Cannabis industry organizations that invest in streamlined process development through point-of-sale integration with the traceability system will be better suited to capitalize on the market’s growth.
The Department of Health and Human Services, Medical Marijuana Bureau integrated with Metrc after the state of Montana revised its cannabis laws in 2019. As one of the newest states to embrace medical marijuana legislation, the state’s budding cannabis dispensary owners have a clear incentive to streamline reporting processes in order to serve the 31,000 residents who have signed up for their medical marijuana card.
Unlike many other states, Montana has elected to make Metrc free for its cannabis industry organizations. The state pays all support fees and RFID tag costs on behalf of dispensaries, cultivators, and processors.
As of January 2020, Montana is in the process of enacting more detailed regulations, as described in Senate Bill 265. Until July 1st, 2020, patients are tethered to their current providers, and the state is not accepting changes to its cannabis industry until it reconfigured its regulatory infrastructure. After July 1st, 2020, Montana cannabis patients will be able to purchase medical marijuana products from any state-registered provider.
In Nevada, the regulatory authority that contracted Metrc is the Marijuana Enforcement Division of the Department of Taxation. Metrc integration has been the rule of law in Nevada since November 1st, 2017, when the state decided to switch from MJ Freeway – a Metrc competitor – to the current system.
The state’s deal with MJ Freeway was supposed to last from 2016 to 2021, but system outages and data security concerns convinced the state to implement Franwell’s Metrc system. All cannabis industry dispensaries, distributors, processors, and cultivators must migrate to the Metrc system.
Nevada Metrc users do not have to pay Metrc’s $40 per month program fee for the first year. This enabled Nevada dispensary owners to train their staff and become acquainted with the Metrc system for a full year before they have to take on additional financial responsibility. Nevada cannabis industry organizations still have to pay for their own RFID tags, however.
Since September 8th, 2018, Ohio’s Medical Marijuana Control Program (MMCP) has been working with Metrc to trace every cannabis transaction that occurs in the state. Ohio’s first sales began in January 2019, and the state has registered just under 75,000 medical marijuana patients since then.
Nevertheless, the MMCP is still struggling to get its license-holders operational. The state’s process is multi-tiered. First, the state’s Department of Commerce or its Board of Pharmacy (not the MMCP) awards a provisional license to prospective dispensary owners. Then, the dispensary owners have to work towards receiving a Certificate of Operation, which requires demonstrating a compliant workflow and attending state-sponsored Metrc training classes.
In Ohio, the Department of Commerce covers the first year of Metrc fees for cannabis industry license holders. As of January 2020, Ohio does not yet have a robust roadmap to full Metrc integration in place for all of its cannabis businesses.
Oregon’s Liquor Control Commission contracted Metrc in 2013 before state voters approved measures legalizing recreational marijuana sales. The state administers Metrc tests to cannabis industry cultivators, distributors, and retailers.
Unlike other states, Oregon actually has a comprehensive Metrc Wiki website for training and support. This website is a one-stop solution for almost every bit of information an Oregon license holder may need to access. The state also offers initial setup, transfer recording, and ongoing tracking guides on its official Oregon.gov website.
Cannabis industry businesses in Washington DC must report to the District of Columbia Department of Health's Division of Medical Marijuana and Integrative Therapy. The District of Columbia’s 13-member council awarded Franwell the contract for Metrc in 2018.
As of January 1st, 2020, marijuana is legal for recreational use in Washington, DC. However, the legal cannabis industry is still stuck in a bureaucratic quagmire due to the district’s ban on cannabis sales. Cannabis products may only be “gifted” between consumers, and the district retains its grow-friendly personal use plant regulations.
Medical marijuana cultivators, distributors, and dispensaries in the District of Columbia can sign up for Metrc training directly from the Department of Health. The website will ask for new users’ facility license number, company name, phone number, and badge number before allowing access to Metrc’s training materials.
How Much Does Metrc Cost?
Metrc LLC charges users $40 per month per license for access to the system. This includes ongoing training, comprehensive user support, and system maintenance fees. While this is the norm in most states, certain states like Montana and Nevada have elected to bear some of the financial burden on behalf of their cannabis industry partners.
Metrc also sells RFID tags, which it uses to identify and track transactions through each state’s cannabis industry system. Plant tags cost $0.45 each, and package tags cost $0.25 each. Some states (CA, for example) will handle the purchasing and distribution of package tags rather than having licensees purchase them directly. Metrc also supports barcode reading technology but is designed for integration with RFID technology to improve the security and robustness of the system.
RFID tags are not reusable. Since the Metrc system uses the RFIDs as unique identifiers, they cannot be reintroduced to the supply chain. Dispensary owners will have to continually purchase new RFID tags in order to streamline their compliance processes optimally.
How to Get Started Using Metrc
Since Metrc is not designed to provide comprehensive resource management to dispensary owners, every cannabis retailer has to incorporate its own solution for Metrc integration.
The simplest way to start using Metrc is manually, but it is a risky and time-consuming task. The process will involve countless hours of data entry, as well as time-consuming auditing and reconciliation processes to deal with the errors that inevitably pop up.
Dispensary owners who don’t have a sophisticated inventory management solution place will have a challenging time integrating Metrc to their day-to-day operations.
The best way to begin Metrc implementation is by automating as much of the process as possible. Metrc supports a wide variety of third-party integrations, including RFID-powered point-of-sale solutions.
Investing in a comprehensive point-of-sale solution can help ensure compliance with state regulations while reducing the time it takes to input an individual transaction record into the Metrc system. Simply scan a product as it is sold to report that sale to the state authorities – it’s that simple.
Dispensary owners who take the time to implement automated processes like this will find it much easier to work with Metrc. They will spend less time resolving complicated inventory discrepancies and more time developing high-impact strategies to improve their business.
How Can I Get a Metrc Certification?
Most states require cannabis dispensary license holders to obtain certification using Metrc. Every state’s rules are different because the Metrc implementation in each state is unique.
Check with your state’s cannabis industry regulatory authority to find out what the prerequisites are for Metrc certification. If you are having trouble with any of the steps you need to take to achieve compliance, reach out to our team at Green Bits and let us help you navigate your state’s traceability system requirements.