Stakeholders in the cannabis industry know how important regulatory compliance can be. With high-profile cannabis cases making headlines, cannabis business owners and operators know that failing to maintain 100% regulatory compliance will result in severe consequences and possible criminal penalties.
In 2018, in the case of Denver vs. Sweet Leaf, Sweet Leaf stood accused of deliberately circumventing consumer purchase limits and resulting in more than a dozen arrests. Then in 2020, Harborside was ordered to pay $11 million in back taxes in IRS vs. Harborside.
The wild west of legal cannabis operations have quickly come to an end, and the shortsighted few who enter the market intending to game the system will find it unwelcoming. Maintaining regulatory compliance is good for business, and every legitimate cannabis company hoping to thrive makes compliance their top priority.
METRC (Marijuana Enforcement Tracking Reporting Compliance) is a software application used by regulatory agencies in more than 17 US territories to track and monitor cannabis operations to ensure regulatory compliance. Designed specifically for government agencies regulating the cannabis industry, METRC’s system allows cannabis industry operators to report required events and information while providing regulators oversight of licensee activities. The system functions by using RFID (Radio Frequency Identification) labels and tags to track cannabis products from seed to sale. With more areas signing up to utilize METRC’s system each quarter, how cannabis ERP software solutions integrate with METRC became smoother as they refocused on optimizing their compatibility.
METRC’s applications are developed for regulators, so the primary functions of the software are to track cannabis products, accumulate data, and generate reports. Tracking begins with cultivators, who receive RFID plant/package tags with unique identification (UID) codes from METRC and assign tags to particular plants. The associated tag will stay with the cannabis plant until it is harvested, at which time it will continue to be tracked through an assigned package tag. At any time in the supply chain, regulators can view events associated with the cannabis products in the METRC system using the UID codes, such as harvesting, packing, testing, location, and sales data.
Integration with METRC is determined by the type of license for the cannabis business. The API provided by METRC for ERP integration varies, depending on whether the cannabis license is for cultivation, processing, testing, or retail. Each API offers differing degrees of access and automation for businesses. Third-party cannabis ERP solutions are only permitted to communicate with METRC via its API. Prior to making a commitment to an ERP solution, cannabis business owners should ensure the solution is a Validated METRC Integrator by checking METRC’s state-specific confirmed integrators lists. ERP consultants should know the functionality provided by the API applicable to the cannabis licensee, how their solution optimizes bi-directional access/functionality for that API, and how the ERP system will remain compatible with METRC. License holders need top-quality cannabis ERP software partners that can evolve and adapt to changes in the regulatory sphere, with the continued support required to keep the ERP doing its job.
Keeping a cannabis business compliant involves effective operational planning, continuous effort, and the right tools for the job. Thorough understanding of local, state, and federal regulations is prerequisite – and augmenting a company’s ‘compliance toolkit’ with technological assistance certainly facilitates meeting compliance requirements.
METRC’s system provides regulators with the tools they need to monitor licensees and act quickly on compliance issues; likewise, licensees need cannabis ERP solutions that provide the integration capability. Cannabis business owners should ask questions about METRC compatibility and take advantage of product demonstrations as they research ERP solutions. In the end, the ERP that meets the specific needs of their operation while facilitating regulatory compliance procedures and METRC integration rises to the top.