One of the biggest compliance issues most dispensaries face is seed-to-sale tracking. This means that every seed planted needs to be tracked until the flower or extract resulting from that seed is sold in a dispensary. Because cannabis is still illegal at the federal level, it’s up to each state to create their seed-to-sale tracking laws, resulting in a patchwork of requirements throughout the country. While it might seem like overkill to require the industry to track every gram of cannabis sold, it’s one of the best tools for enforcing cannabis laws and preventing legal cannabis from making it to the illicit street trade.
This type of detailed compliance isn’t exclusive to the cannabis industry, the pharmaceutical industry has been using similar tracking software for years. In fact, one of the largest seed-to-sale tracking companies in the country, BioTrackTHC, has its roots in tracking prescription drugs. The company currently holds contracts with multiple states.
How Does Seed-To-Sale Tracking Work?
Tracking your cannabis from the time it’s planted to when you buy it at the dispensary isn’t as simple as just attaching a unique number to the plant and hope for the best. While an identification number is assigned to each plant, the tracking system is very detailed and includes information about the plant, employee interaction, additives (fertilizer and any other chemicals), and so forth. This helps keep everyone who touches the plant accountable. Also, seed-to-sale tracking ensures the cannabis plants are being grown in compliance with state laws.
Once the plant is harvested, it gets divided up into components that include the flower and any oil extracts. Each of those components is also tagged with a unique identification number that is connected to the plant’s history. Even the edibles you eat are part of the tracking system. So if you buy a brownie from your local dispensary, the cannabis oil in that brownie can be traced back through the system to a specific plant and along with all the details about that plant.
After the cannabis plant has been separated into various products, those products are sent off for testing before the cannabis is transported to its final destination. There’s a lot of paperwork involved in the legal transportation of cannabis. This includes all the information about the cannabis being transported, the driver’s credentials, destination, and the entire chain of custody for every cannabis product. All these records are made available to law enforcement at the time of transport.
The cannabis makes it to the shelf of your local dispensary.
Once the cannabis product is sold, it’s linked to either the patient or customer, depending on the type of dispensary. If the customer is a patient at a medical dispensary, the sale is linked to the patient’s ID number, making it easy for employees to see what kind of cannabis a patient bought, when they bought it, and how much they purchased.
This completes the seed-to-sale tracking process from start to finish. All of those records are kept for inspection by state and local governments and law enforcement agencies on a secure online system that is accessible at any time. For example, Biotrack THC and MJ Freeway utilize a highly secure version of Amazon Web Services (AWS) that is partitioned from the rest of their websites. This allows everyone from grow operation employees to law enforcement and government regulators to access the system.
How Seed-To-Sale Tracking Benefits Consumers
One of the benefits of having a regulated legal cannabis market is that it protects consumers. For example, let’s say you and many other customers get sick after consuming a cannabis tincture bought at a specific dispensary. Employees up and down the supply chain and government investigators can trace the cannabis back to the producer. The company that cultivated the cannabis plant can then pull the records for that plant and see its history, what fertilizers were used on it, and so forth. Further, all products that were derived from that single plant can be pulled from the shelves of dispensaries to prevent more people from getting sick. Food products and prescription drugs are tracked in a similar fashion.
Who Are The Big Seed-To-Sale Software Companies?
Several software companies have emerged as leaders in the seed-to-sale tracking market over the last several years. Aside from BioTrackTHC, mentioned earlier, other companies include MJ Freeway, Metrc LLC (formally Franwell), and finally, Kind Agrisoft. It’s important to note that because the cannabis industry is so fragmented, there can be a wide disparity in the price of each contract awarded to these companies. Contract prices can range from several hundred thousand dollars to well over ten million dollars, depending on state requirements. The software companies also earn revenue through licensing and other fees. For example, a dispensary will buy a license to use the tracking software, then pay a monthly fee to keep using it. Because the software is highly customized, the fee amount can vary greatly from one cannabis company to another.
Keeping The Industry Honest, Or Regulatory Overreach?
The tracking system keeps the industry honest and transparent. The cannabis industry is still very new and still has a lot of critics. Some argue that seed-to-sale tracking is overcompensating for a problem that might not exist. One of their biggest arguments against cannabis is that more weed will flood the market. Seed-to-sale tracking makes this much less likely to happen. As the industry matures, the regulatory landscape will change. We might see some easing back on the tracking requirements, but just like with food and prescription drugs, tracking in one form or another will be a part of the industry for years to come.