California’s Cannabis Track-and-Trace Hindered by Licensing Delays

California’s transition into a regulated recreational marijuana market has been a bumpy ride for cultivators, manufacturers, and retailers. The State was confident that they would be able to able to establish a framework that was capable of tracking every gram of cannabis grown and sold using software designed for this very purpose. However, it’s been more than a year and only nine licensed dispensaries out of an estimated 627 stores are actually reporting using the cannabis track-and-trace system.

California Invests in Metrc

These are staggeringly low numbers considering the state has entered into a $60 million contract with Franwell for the use of their cannabis track-and-trace software. Similarly are the underwhelming number of manufacturers and cultivators who are using Franwell’s Metrc to report their inventory. Just 93 out of 1000 extract companies are utilizing the platform and a mere 7% of state licensed cultivators.

The major disparity is not in the functionality of the software but rather the lack of marijuana businesses that have not been issued their annual business license. The California Bureau of Cannabis Control decided to issue temporary licenses to the large number of applicants while they worked to establish the permanent regulations.

Annual Business License

This decision has caused a logjam of applications and resulted in long delays for annual license applicants. Only businesses with annual licenses can access their Metrc account and only after they’ve completed the online training.

Spokeswoman for the state Department of Food and Agriculture, Rebecca Foree explained that it wasn't possible to train thousands of temporary license holders to use the Metrc tracking system "without causing significant disruption" to the emerging regulated cannabis industry in California. Many of the temporary licenses are due to expire very soon and licensees will have to apply for a provisional license just to keep their doors open.

Seed to Sale

The vast majority of cannabis retailers and cultivators are now forced to keep track of all of their inventory and sales the old fashioned way, a paper trail. While they are able to use cannabis software to log their records, it is a very tedious and cumbersome process. Additionally this way of keeping track of product can be potentially altered or falsified. This is exactly why California invested so much into a cannabis track-and-trace system that was designed to be fool-proof.

In short, state regulators must begin issuing annual licenses as quickly as possible if they truly want transparency from seed to sale. Josh Drayton of the California Cannabis Industry Association pointed out that,  “Track-and-trace was definitely supposed to be one of those tools to define who is operating in the legal market and who is not. We clearly are not getting the results we were hoping for.”