California is the most developed cannabis market in the United States. The cannabis sales in California reached $4.4 billion in 2020, and it is well on track to become United States’ largest legal cannabis market. However, its landscape is evolving at a fast pace.
Unfortunately, the illegal market in California has gotten a lot of traction and it is now bigger than the legal market. To keep a check on this trend the government has introduced and insists that all cannabis businesses must be aligned with California Track and Trace which is based on Metrc (seed-to-sale tracking system).
Cannabis business owners and operators are familiar with the words “track-and-trace” and “Metrc,” and frequently use them interchangeably. To trace cultivation, inventory, and transportation of cannabis and its sub-products across the commercial cannabis supply chain, all state-issued annual licensees must use the California Cannabis Track-and-Trace system (CCTT). Learn more below.
Metrc Compliance in California
Every cannabis business in California is required by law to document sales and distribution data to the state’s official seed-to-sale tracking system, METRC. Ever since medical marijuana was legalized decades ago, the state has been grappling with non-compliant dispensary trends.
In fact, according to the United Cannabis Business Association, the state’s black market for cannabis is three times larger than its legal industry, which is a matter of concern for marijuana patients and enthusiasts who want to ensure a safe and consistent supply within the state.
The state’s crackdown on non-compliant dispensaries is just the first step toward establishing and enforcing a legal industry. The state’s leaders have been chastised by legitimate marijuana dispensary owners for not doing more to prevent the growth of unlicensed dispensaries.
As part of this crusade, legitimate dispensaries must adhere to a higher standard of conduct. Dispensary owners must take clear steps to comply with the state’s Metrc compliance rules in order for the state’s cannabis industry to survive.
What Makes The Cannabis California Market Unique?
- California is the biggest cannabis market in the United States that is projected to be valued at 7.7 billion U.S. dollars by the year 2022.
- According to a study, the state produces up to three times as much cannabis as it consumes.
- The legal cannabis market is just one-quarter of the illicit cannabis market in California. California has around 10000 cannabis dispensaries, out of which only 700 have become fully legal and regulated.
- There are over 1.26 million marijuana patients in California.
- In the first year after marijuana was legalized in California, tourists spent roughly $98 million on canna-tourism.
- The major obstacle in getting a license in California is that it can take up to two years, and the initial expenses of opening a regulated dispensary start at around $250,000.
What is the Cannabis Track-and-Trace System?
From cultivation to sale, the California Cannabis Track-and-Trace system is designed to keep a track of all commercial cannabis and cannabis products. The California Department of Food and Agriculture’s CalCannabis Cultivation Licensing division runs the CCTT, which covers cannabis tracing in three branches: Licensing, Compliance and Enforcement, and Administration.
CCTT is run on a system called Metrc, which is a cloud-based online reporting tool that you can use to keep track of your cannabis products as they progress from seed to sale.
What is Metrc?
Metrc is a software firm that many states in the United States have joined hands with to handle their seed-to-sale tracking. Cultivators, distributors, and merchants may track the progress of their cannabis plants using Metrc’s online interface and API (from planting seeds to sales receipt). Each plant and ‘package’ are allocated a unique RFID tag under the Metrc system, which is disseminated directly by Metrc. This one-of-a-kind RFID tag follows the plant as it moves through the system.
Why is Track-and-Trace important?
- Provides data, unique identification, and credibility to items.
- Detailed inventory management.
- Better analytics and reporting.
- Encourages regulatory compliance.
An Insight Into Track and Trace Reporting (all license types)
The CDPH and CDFA have outlined the process of track and trace reporting. Here is a brief insight into it:
In the track and trace system, a licensee must document all commercial cannabis activity, including:
- Packaging of cannabis goods
- Sale of cannabis goods
- Shipping of cannabis goods to a license holder
- Receipt of cannabis goods
- Return of cannabis goods
- Destruction and disposal of cannabis goods
- Laboratory testing and results
For each activity submitted into the track and trace system, the following information must be recorded:
- Name and type of cannabis goods.
- Unique identifier of the cannabis goods.
- The weight or count of cannabis products.
- The activity or transaction’s date and time.
- List the number of other licensees involved in the activity or transaction and their license numbers.
Process followed when cannabis goods are being transported
The licensee is responsible for transporting goods in accordance with a shipping manifest provided by the track and trace system. It has to include:
- The originating licensee’s name, license number, and business address.
- The licensee transporting the cannabis goods’ name, license number, and business address.
- Name of the licensee receiving the products, license number, and address.
- The date and time of departure and arrival at each licensed premises.
- The employees conveying the cannabis goods’ driver’s license number, as well as the vehicle’s make, model, and license plate number.
When picking up or receiving cannabis items for transit, storage, or inventory, the licensee must ensure that the cannabis goods received match the shipping manifest and must record acceptance and acknowledgment in the track and trace system.
If the type or quantity listed in the shipping manifest does not match the type or amount received by the licensee, the discrepancy must be documented and recorded in the track and trace system, as well as any other relevant business record.
Tracking Destruction and Disposal of Cannabis
If cannabis goods are destroyed or disposed of, the licensee must record the following extra information in the track and trace system:
- The name of the employee who is destroying or disposing of the item.
- The cause for the destruction or disposal of the item.
- The name of the organization in charge of collecting and processing cannabis waste.
Record of any changes made to the track and trace system, including but not limited to:
- Degeneration or fouling of cannabis products.
- Any occurrence resulting in exposure or compromise of the cannabis goods.
Do I need any extra hardware to use the CCTT-Metrc system?
No, because CCTT-Metrc is a web-hosted system, all access to the system is through the Internet. Only a web browser (such as Google Chrome, Apple Safari, Internet Explorer, or Mozilla Firefox) and an Internet connection (through an Internet service provider) are necessary. There is no need to purchase any additional hardware or software. A computer, tablet, or smartphone may usually provide easy access to the Internet and a web browser.
What do you need to do now?
Follow these steps to get started with Metrc:
- Begin by completing the needed training and submitting your annual cultivation license application. The CalCannabis Licensing Site is where you can submit your license application. To acquire access to the Metrc system, you must finish the training.
- Once you’ve completed the program, apply for an annual license. To acquire confirmation of your annual license and training completion, call or email Metrc Support.
- After getting a welcome email, complete your login credentials:
- Open the “Welcome to Metrc” email and click the first link. This will take you to the page where you can register for an account.
- Now agree to State Attestation and Metrc terms and conditions.
- Create a user profile and learn more about the CCTT. Read this CDFA presentation for information on how to set up your account.
Top Cannabis Software in California
Blaze is a seed-to-sale Enterprise Resource Planning (ERP) system for the cannabis business. Cannabis Business owners can use the platform to manage their inventory, comply with regulations, as well as use a Point-of-Sale system if they have a retail license.
Cova is the most compliant point-of-sale system for cannabis stores and delivery services. Through automated compliance, inventory management, and a quick check-out app, Cova helps retailers simplify compliance, decrease operating costs, and enhance revenue.
Meadow‘s mobile app connects users with marijuana dispensaries and subsequently facilitates order delivery. People who don’t have medical marijuana cards can receive prescriptions right away via HIPAA-compliant video chat and then browse the current menus at nearby dispensaries.
In addition, the company has developed specific marijuana sales software that dispensaries can use instead of normal point-of-sale systems (which aren’t always consistent with industry standards). Meadow charges a ten percent delivery fee to dispensaries. Almost 40% of California’s zip codes are covered by the Meadow’s delivery service.
Canix is a simple and easy software to be compliant with the cannabis state regulations. It was created from the ground up for cannabis, including offline mode, barcode scanning, and an intuitive UI to allow you to focus on your business rather than compliance. The seed-to-sale cannabis Canix Software is specially designed for cultivators, manufacturers, and dealers.
The software scans RFID tags on packages in a fraction of a second using an RFID scanner. Enterprises can track inventories in real-time and make decisions based on the information accessible in the Canix database. For each of the created inventory, the application may also provide detailed pricing. Canix provides customer service even when the system is offline, in addition to the functionality.
Bolstering Cannabis Tracking Program – Metrc
The trace and track system was initiated in 2019 and still has a long way to go. In California, out of almost 10,000 dispensaries, only 700 have adopted the Metrc system. California’s Bureau of Cannabis Control is suspending licensed businesses that are not enrolling into Metrc. It is being done to crack down on the illicit cannabis market. Only time will tell how successful this approach is to shut down the illegal cannabis market in California. But one thing is for sure is that businesses enrolling into the Metrc system will not only be more compliant but profitable, as well.