What is cannabis traceability?
Cannabis traceability is a system that is used to track cannabis plants from the time they reach a viable height all the way through final sale at a retail facility or dispensary, and every step in between. This system gives state regulators a transparent view of the supply chain, and for licensed businesses, creates operational efficiencies and streamlines regulatory reporting.
In states with regulated cannabis sales, licensed businesses are required to account for all inventory at every stage of its development and production through end sale. The preferred technology uses unique identifiers (UID) and advanced radio-frequency identification (RFID), which is the most secure and efficient system for tracking regulated products at an individual and granular level. Maintaining a safe, secure, and compliant cannabis supply chain is possible through traceability.
What are the steps of cannabis traceability?
1. Cultivation
Cannabis traceability may involve tracking cannabis plants from as early as seeds or clones, however, the majority of states with regulated cannabis begin tracking plants once they reach a viable height and continue to the harvest phase. During this growth phase, cultivators give plants an RFID tag with unique identifiers for tracking in the regulatory compliance system. Growers will record details like plant trimming, movement, and waste, prior to harvest.
2. Harvest
Once a cannabis plant reaches the mature phase, they are harvested and the process of tracing them begins. This includes tracking the weight, type (strain), and quantity harvested from each plant, as well as when and where it was harvested.
Growers then record every time product is transported, and in most regulated states, harvested plants must go through QA testing prior to the manufacturing and processing phase. Also during this phase, and all subsequent phases, package tags with the same unique identifiers are used for tracking in the regulatory compliance system.
3. Manufacturing and processing
The manufacturing process is where cannabis products, like edibles, tinctures, or concentrates, are made. This process includes extraction of cannabinoids, post-processing (refinement) of cannabis extract, infusion of extract or plant material with other ingredients or additives, and packaging and labeling of cannabis products. Manufacturers record all of this information, plus waste and other required data, such as when and where the products are made.
4. QA Testing
Quality Assurance (QA) testing is a critical step in ensuring that cannabis products meet the necessary safety standards before reaching consumers. Licensed cannabis testing laboratories play a pivotal role in this process, conducting thorough examinations for potency, and contaminants such as mold, bacteria, fungus, pesticides, and other harmful compounds. Upon passing these tests, a product is awarded a Certificate of Analysis (COA), a key document that attests to its safety and compliance, reinforcing the integrity of a legal, transparent cannabis market.
However, the QA testing process is complex, primarily due to the divergent testing standards across different markets. These variations can pose challenges for producers and testing facilities alike, necessitating a nuanced understanding of local regulations and compliance requirements. The intricacies of navigating these differing standards underscore the need for a comprehensive approach to cannabis testing and compliance.
5. Transportation
After products pass QA testing, they are then transported to wholesalers, dispensaries, or other retail locations. Traceability during this process involves tracking the products by their package tag UID, which includes a batch number, as well as when and where they are delivered.
6. Dispensary
Products are then sold to medical patients or consumers at dispensaries, through delivery services, or other retail locations, depending on station regulations. Traceability at this stage involves tracking the products by their batch number, as well as when, there, and to whom, they are sold.
And, in medical market, patient allotments, or limits on the quantity of product types they can purchase in a given amount of time, must also be tracked for compliance purposes.
7. Recalls
If there is ever a problem with a cannabis product, traceability information is used to identify, isolate, and recall all of the products that are affected. In the cannabis supply chain, incorrect labeling or packaging, allergens and microbiological contamination, or chemical contaminants can present challenges if identified as potentially harmful.
Through real-time access to data, regulators can trace a product back to where, when, and how it was manufactured, transported, and even cultivated – allowing them to quickly investigate and determine where an issue arose. Once the source has been located, traceability systems allow regulators to understand how many derivative products are in the supply chain so other products are allowed to continue through the supply chain – unlike blanket recalls.
8. Data Analysis
Traceability system data is used to ease compliance reporting burdens and allows for the generation of various reports that produce up-to-the-minute information for licensed businesses and regulators alike. For the industry, licensed businesses can use their own data to track business trends and identify problems that may need to be addressed. And, for government oversight, these systems provide regulators with information on every cannabis product sold in the state, including growth, production, and transport details. It also empowers agencies with data to track market performance, sales growth, tax revenue, and enforcement needs.
Why is cannabis traceability important?
Cannabis legalization immediately tasks state governments with a host of challenging demands, including protecting public health, establishing new testing and tracking protocols, and securing the regulated market against illicit products. Licensed businesses are also met with unique challenges when navigating compliance in their day-to-day operations, meaning cannabis traceability is important for a number of reasons.
Public health and safety: First, it can help to ensure the safety of cannabis products. By tracking products from seed-to-sale, regulators and businesses can more easily identify and recall products that may be contaminated or otherwise unsafe.
This is especially important in the wake of recent product recalls in the cannabis industry, which have negative impacts such as product waste, financial loss, product shortages, and decreased market confidence. By having a traceability system in place, these products can be more easily identified and isolated, saving valuable time and money.
Market security: Second, cannabis traceability can help to prevent counterfeits, discourage illicit market activity, and protect against fraud. Counterfeit products are a problem in many industries, and the cannabis industry is no exception. By tracking products throughout the supply chain, regulators and businesses can more easily identify and, and subsequently remove, these products from the market. Similarly, traceability can also help to prevent the diversion, or transfer, of cannabis products into the illicit market or inversion of illicit products within a legal operation.
Expanded visibility for improved compliance outcomes: Finally, cannabis traceability enables efficient regulatory compliance. Through access to information on every cannabis plant and product sold in a legal market, traceability systems can help businesses keep track of their inventory and can enhance policymaking through supply chain transparency.
How can Metrc help with cannabis traceability?
The Metrc cannabis traceability system offers a comprehensive regulatory compliance solution which acts as a single source of truth by offering real-time visibility across the entire legal cannabis supply chain.
The advanced cloud-based software platform securely tracks, stores, and retrieves millions of data points input from thousands of different sources and was built to be nimble, scalable, and responsive to changes in a dynamic market.
In addition, the platform works in tandem with radio-frequency identification (RFID) technology, which carries unique identifiers to drive audit and inspection efficiencies, and help streamline inventory management and regulatory reporting. The security features of RFID, coupled with the system’s superior auditing and data-collection capabilities, have proven to be ideally suited to cannabis regulation, especially when compared to systems that rely on barcode, QR code, or manual entry methods.Metrc’s cannabis traceability system is designed to meet cannabis market needs, with flexibility and responsiveness at its core. To learn more about Metrc and traceability, visit metrc.com.