How to Stay Metrc Compliant in California 2024

California has employed Metrc as its statewide track-and-trace system since 2017. The California Department of Cannabis Control (DCC) is the state agency with the authority to issue licenses and oversee all commercial cannabis operations within California. In 1996, voters passed Proposition 215, also known as the Compassionate Use Act, making it the first state to legalize medical marijuana use.

Metrc ensures that cannabis products are tracked from seed to sale, providing a transparent and accountable system to prevent diversion and ensure product safety. Following Metrc regulations goes beyond just meeting legal requirements. It’s vital for a cannabis business’s long-term success. By meticulously tracking products from start to finish, businesses comply with state law and build a transparent, safe, and responsible market. This blog outlines the steps and best practices for staying Metrc compliant in California in 2024.

Licensing and Certification

Before engaging with Metrc, cannabis businesses must obtain the appropriate licenses from the DCC. This includes cultivation, manufacturing, distribution, retail, and testing licenses. California-licensed businesses must register with Metrc and undergo training provided by Metrc or authorized third parties to ensure they understand the system’s functionalities and compliance requirements.

Key Compliance Requirements: 

1. Metrc uses tags to track two types of cannabis inventory: plants and packages.
2. Plants: They come in two stages: immature and flowering. All immature plants (up to 100 per group) enter the system as a single “immature plant lot.” Each lot receives a unique ID tag, and each immature plant within the lot is labeled with this same ID. Once flowering begins, individual plants get their own unique plant tag. The cost of plant tags is $0.45 each.
3. Packages: These are created from various sources, such as immature plants, harvested batches, lab samples, and other packages. The cost of package tags is $0.25 each.

Source: Metrc

Ordering Tags License holders order their tags directly through Metrc. The cost of these tags is included in their license fees.

The track-and-trace system involves using technology to follow their movement. This can be done with a combination of equipment and computer programs. This information helps businesses better manage their supply chains, prevent losses like theft, and identify areas for improvement.

Metrc uses a specific tracking and tracing system that relies on radio tags. These tags emit a signal that can be read by special scanners, allowing for accurate tracking of cannabis products throughout the supply chain.

• Inventory Management:

Businesses in California must maintain accurate and up-to-date inventory records in Metrc. This includes documenting all stages of the plant’s lifecycle, from cultivation to sale.

Regular audits and reconciliations are required to ensure that the physical inventory matches the records in Metrc.

• Reporting:

All transactions must be reported in Metrc within 24 hours, such as receipt of cannabis or cannabis products, rejection of transferred cannabis or cannabis products, manufacturing of cannabis or cannabis products, use of cannabis or cannabis products for internal quality control testing or product research and development, destruction or disposal of cannabis or cannabis products, packaging or repackaging of cannabis or cannabis products, laboratory testing including testing results, and sale or donation of cannabis or cannabis products.

• Security Measures:

Cannabis businesses must implement robust security measures to prevent theft or diversion. These measures include secure storage, surveillance systems, and access controls. Any security breaches or losses must be reported to the DCC and documented in Metrc.

Best Practices for Metrc Compliance

Since the Metrc system tracks your cannabis inventory, it’s crucial to pick a point-of-sale system that works well with it. The best POS partners will offer tools for managing and checking your Metrc account clearly and entirely under your control. For instance, IndicaOnline provides a robust POS system that is fully integrated with Metrc. This integration helps dispensaries maintain accurate records and stay compliant with ease. Furthermore, implementing these practices helps ensure compliance with regulations:

• Training and Education:

Businesses must register with Metrc to begin using the system. This registration process grants them access. Following registration, mandatory training sessions are required. These training modules are designed to familiarize users with the Metrc interface and teach them the proper methods for reporting activities and ensuring compliance with regulations. It is crucial to complete this training, as it guarantees that all activities, from cultivation to sale, are accurately documented within the Metrc system.

Metrc provides a free training program for marijuana industry employees. This program is available to businesses that have a valid license and are current with their fees. Ensure all employees involved in the handling of cannabis products are trained in Metrc usage and compliance requirements. Regular refresher courses and updates on regulatory changes are essential.

• Standard Operating Procedures (SOPs):

Develop and implement comprehensive SOPs for all operations involving Metrc. This includes tagging, inventory management, reporting, and security protocols.

• Regular Audits and Reconciliations:

Conduct regular internal audits to verify that all Metrc records match the physical inventory. This helps identify and address discrepancies promptly.

• Stay Informed on Regulatory Changes:

You can stay informed about changes in California’s cannabis regulations and Metrc requirements through regular updates from the DCC, industry associations, and compliance consultants.

The Role of Technology in Compliance

Leveraging technology is vital for maintaining Metrc compliance. Modern POS systems, inventory management software, and compliance tools can automate many aspects of Metrc reporting, reducing the risk of human error and ensuring real-time accuracy. These technologies can also provide valuable insights into business operations, helping to optimize processes and improve efficiency. IndicaOnline’s POS system, integrated with Metrc, is an excellent example of how technology can simplify compliance efforts and streamline operations for cannabis businesses.

Metrc Costs for Dispensaries

• Annual License Fee: Retail-only cannabis businesses pay approximately $40 per year (usually included in state licensing fees for California).
• Inventory and Data Upload Fees: Dispensaries pay additional fees based on the amount of cannabis they have and the data they submit to Metrc. These fees increase as the amount of inventory and data uploads increase.
• Metrc Tag Fees (indirect cost): Growers and processors pay for Metrc tags, which are factored into the wholesale price of cannabis products that dispensaries purchase.

Common Compliance Challenges and Solutions

• Data Entry Errors

Manual data entry can lead to errors and inconsistencies, which can jeopardize compliance efforts. These errors may arise from simple typographical mistakes, misinterpretation of data, or oversight during data entry processes. Such inaccuracies can result in discrepancies between physical inventory and Metrc records, potentially triggering compliance violations and penalties.

• Solution:

1. Utilize Integrated Systems: Integrating Metrc with your Point of Sale (POS) system and other inventory management tools can significantly reduce manual data entry. Businesses should adopt rigorous inventory management practices, such as IndicaOnline’s state-of-the-art RFID inventory scanner, which ensures precise and efficient stock control.
2. Double-Check Entries: Implement a process for regularly reviewing and validating data entries. Assigning dedicated personnel to cross-check entries can help catch errors early.

• Inventory Discrepancies

Inventory discrepancies occur when there is a mismatch between physical inventory and the records maintained in Metrc. These discrepancies can arise from theft, product loss, data entry errors, or mismanagement of inventory processes. Consistent discrepancies can lead to audits and penalties from regulatory authorities.

• Solution:

1. Regular Audits and Reconciliations: Conducting regular internal audits and reconciliations helps identify and address discrepancies promptly. Establish a routine for weekly or monthly inventory checks to ensure that physical inventory aligns with Metrc records.
2. Investigation and Resolution: When discrepancies are identified, promptly investigate the root cause and take corrective action. Document all findings and actions taken to maintain a clear audit trail.

• Training Gaps

Training gaps can lead to non-compliance if employees are not adequately trained on Metrc usage and regulatory requirements. Inconsistent training or lack of ongoing education can result in mistakes and non-compliance issues.

• Solution:

1. Structured Training Programs: Implement comprehensive training programs for all employees involved in handling cannabis products. Ensure that the training covers all aspects of Metrc, including data entry, reporting, and compliance protocols.
2. Continuous Education: Regularly update training materials and provide refresher courses to keep employees informed about changes in regulations and Metrc functionalities.

• Regulatory Changes

The cannabis industry is highly dynamic, with frequent changes in regulations and compliance requirements. Staying updated with these changes is crucial for maintaining compliance and avoiding potential penalties.

• Solution:

1. Stay Informed: Monitor updates from the California Department of Cannabis Control (DCC) and other regulatory bodies regularly. Subscribing to industry newsletters, joining cannabis industry associations, and attending relevant workshops and webinars can help you stay informed.
2. Adapt Processes: Adapt your business processes and compliance strategies to align with new regulations. This may involve updating SOPs, retraining staff, or integrating new compliance tools.

California Cannabis: Keeping Up with Metrc

Staying Metrc compliant in California is essential for the success and legality of cannabis businesses. By understanding the system’s requirements, implementing best practices, and leveraging technology, businesses can ensure they remain compliant with state regulations. Continuous education and adaptation to regulatory changes will further support compliance efforts, enabling businesses to operate smoothly and transparently in the evolving cannabis industry.

For more detailed information and official guidelines, visit the California Department of Cannabis Control website.