As you may know, California has contracted with Metrc (Marijuana Enforcement Tracking Reporting Compliance) as the state's track-and-trace system for purposes of tracking commercial cannabis activity from "seed-to-sale". Since contracting with Metrc in 2017, the State and its operators have been struggling to understand and comply with Metrc regulations. In reality, the slow rollout of this software is another regulatory hindrance for operators that highlights the challenges they face in the Legal Weed era.
California is not the only State using Metrc to track-and-trace cannabis. Alaska, Colorado, DC, Louisiana, Maryland, Massachusetts, Michigan, Montana, Nevada, Ohio, and Oregon have contracted with Metrc as well. Once fully operational, for the first time ever, the State would know how much legal cannabis is grown, produced, and sold. But in the meantime, this transitional period is proving frustrating for operators doing business with licensees who may not be fully transitioned to Metrc yet. In fact, as equally as challenging - it's reported that there are no testing labs in California that are fully onboarded to Metrc yet in California.
A word to the wise - Metrc is built for the regulators, not for businesses. Metrc is not a system to run your business, manage inventory, make sure you're purchasing the right things, or track accounting & reporting. Below we discuss specific requirements for operators, the challenges they face and the state requirements for integrating Metrc into your business.
How It Works:
The California Cannabis Track and Trace (“CCTT”) system must be used by cannabis businesses with an annual or a provisional license. The Metrc system is not available for temporary licenses. Temporary licensees are not required to use the system, nor will they be provided access to it. Under the applicable regulations of the respective licensing authority, all state-issued annual licensees and provisional licensees are required to use the CCTT-Metrc system to record, track, and maintain information about their cannabis and cannabis product inventories and activities. Once an annual license is approved and the license holder/designated account manager completes the CCTT-Metrc training, they will be able to access the CCTT-Metrc system.
Metrc Onboarding Timeline
Once a licensee receives a provisional/annual license, they have 5 days to schedule and complete the Metrc training webinar. Upon completion - licensees must email email@example.com to request their login credentials. Pro tip - make sure that the credentialing request email is sent from the email address used on the licensee's State license application. After credentialing, licensees have to head back to the licensing agency (BCC, CDFA, or CDPH) to order Metrc tags. Tags must be ordered for each license that the licensees hold. The tags will be issued to the licensed premises. All licensees are required to obtain CCTT credentials and order tags regardless of operational status - meaning, even if you are not operational and don't plan to be for some time. However, there isn't a set minimum amount of tags required to place an order. The only requirement is that you place a tag order within five (5) calendar days of receiving access to the system - regardless if there is cannabis or cannabis products on site. (This can even be an order of one tag.) The State agency may request a complete current inventory (item names, product type, quantity) so they know how many SKUs you have (and how many package tags you need). The BCC will also provide a Metrc "Beginning Inventory" instruction sheet. After tag ordering is enabled in Metrc and you order and receive your tags, you can assign tags and enter your inventory into Metrc.
Licensees must upload their inventory to Metrc within 30 days from the completion of the webinar.
Tags and Tracking:
Cannabis inventory is tagged in two types- “Plants” and “Packages.” Plant tags are UIDs assigned to lots of immature or individual flowering plants. All plants must be accounted for during the immature phase (up to 100 plants per lot). Package tags are UIDs assigned to all cannabis material and products from harvest onward. Packages can contain cannabis material or product(s). Every package is associated with a single tag (UID). Licensees can split or combine their packages, but only whole, intact packages can be transferred between licensees.
Transfers are created when one or more Metrc packages is moved from one licensee to another. There are two types of transfers: licensed transfers and external transfers. Licensed transfers occur when both parties are on Metrc - these are the easier transfers. External transfers are transfers between a licensee on Metrc and one that is not - this is how operators without Metrc can sell to licensees with Metrc. In this case, the Metrc user has to provide UID tags for the product received from the non-Metrc user and has to enter the other licensees product into the Metrc system. The non-Metric licensee isn't off the hook though. If your not fully integrated into Metrc, licensees must use a paper manifest to track the transfer.
Issues with Metrc:
Even though many states believe that Metrc will make cannabis tracking more accurate, like every new system implemented, cannabis businesses using Metrc are finding a myriad of issues with transitioning. The biggest issue with Metrc, therefore, is the confusion surrounding it.
Founder and CEO of Meadow, David Hua, put it best when he said “Metrc is being rolled out across California's supply chain, requiring operators to report products within their inventory to the state track and trace system. However, besides a 2 hour webinar, there is little support or guidance in helping the industry with the Metrc learning curve, and it's essential that we all collectively understand how to navigate these new state requirements.”
Survival of the Fittest:
While the State is giving cannabis businesses time to catch up with Metrc, Licensees shouldn't procrastinate. The State's Metrc implementation has had a slow start, but it is necessary to remain competitive moving forward. Most importantly, businesses that aren't in compliance with Metrc will not allowed to conduct business with those that are. For more information on Metrc and its requirements visit some of the resources below.
Resources to Learn more about Metrc:
To sign up for Metrc training: https://franwell.quickbase.com/db/bnafuvqi9?a=dbpage&pageID=2