Studies show that legal cannabis is a booming business and there is no sign of it slowing down anytime soon. As recreational marijuana is rolled out in states across the country, local governments are grappling with the challenge of how to regulate and track cannabis seeds, plants and sales. While track and trace requirements may seem like a lot of red tape to cannabis companies, the value of accurate reporting has big benefits for the industry.  

Why is it so important to track and trace cannabis products?  

  1. Taxation. For the government to properly tax legal cannabis sales, it must be able to gain a clear picture of what is being grown, processed and distributed. If plants are not properly accounted for from seed to sale it increases the risk of marijuana being sold into the black market, which is bad news for legitimate cannabis companies and citizens. When cannabis is legalized, tax revenue is part of the deal. Citizens want to see that the system is working.
  2. Quality Control. Like food, cannabis is a consumable product that requires quality control. Tracking the source and distribution of cannabis enables the ability to initiate a product recall if quality is compromised. It also ensures the public has accurate information about the type of product they are purchasing and what they can expect from it. This protects the public from health hazards and makes cannabis safer for everyone. 
  3. Inventory Insights and Sales Trends. Data from cannabis tracking systems provides insight for cannabis growers, processors and retailers about how what is being grown and sold. It helps them recognize patterns and identify which products are most popular, so they can plan for future growth and develop new products.
  4. Investment. One major problem in the cannabis industry is funding. Serious investors and banks base their investment decisions on data. Investors are unlikely to risk their money in an industry without accurate data on its performance and growth. It may be a challenge for cannabis companies to find investors willing to take those risks. With solid data, investors and banks will be more likely to lend financial support to the industry. 

As of January 1, 2019, cannabis companies in California will be required to report cannabis data from “seed to sale” using the METRC system. METRC uses RFID tags to trace cannabis plants. The track and trace system is designed to track cannabis essentially from conception to consumption and every step along the way using tags and unique numeric identifiers. This system is like those used in Colorado, Oregon, Alaska and Nevada 

Other states utilize QR codes to track cannabis products. In Indiana, CBD products are labeled with QR codes that direct consumers to websites with information including ingredients and manufacturing information as required by state law.  

As cannabis labeling requirements evolve, it is important to have a trusted partner who can adapt packaging and labeling on the fly.