How to Stay Metrc Compliant in Massachusetts

Massachusetts is a leading state in legalizing and regulating cannabis. As the industry grows, cannabis businesses need to comply with the state’s Marijuana Enforcement Tracking and Reporting System (Metrc) and the Massachusetts Cannabis Control Commission’s (CCC) strict regulations. This blog provides guidance on meeting Metrc requirements, including supply chain management, seed-to-sale tracking, and inventory control.

The Massachusetts cannabis industry has seen significant growth since the legalization of adult-use cannabis in 2016. As of January 28, 2024, aggregate data recorded in Metrc by marijuana retailers and delivery businesses that have commenced operations statewide showed more than $5.65 billion in gross sales has been generated.

This blog will discuss the Metrc compliance requirements, the types of licenses issued by the CCC, and the importance of inventory tracking and Metrc training. Whether you are a dispensary owner, cultivator, or manufacturer, understanding these compliance requirements is essential for operating within Massachusetts’ legal framework.

Understanding Metrc Compliance

Compliance with Metrc is vital for the integrity of the cannabis industry, and failure to comply can lead to severe consequences for businesses, including financial penalties and license loss. By adhering to Metrc requirements, cannabis businesses can ensure product safety, prevent illegal activities, and contribute to the industry’s credibility. Massachusetts requires each licensed cannabis business to have at least one certified Metrc administrator, although additional staff can be trained if needed.

IndicaOnline offers an RFID tracking system, which is particularly useful for cannabis growers because tags can be read without a direct line of sight, which allows plants to be monitored and analyzed in all rooms without physical contact. RFID also enables the identification and tracking of a single ID number within a group, making it easier to locate misplaced or misallocated inventory.

Additionally, Metrc generates unique identification numbers, known as tag IDs, automatically for each plant. The system stores this information, along with plant details and facility information. 

Metrc tracks two types of cannabis inventory using tags: plants and packages.

• Plants: There are two stages: immature and flowering. Immature plants, up to 100 per group, are entered into the system as a single “immature plant lot.” Each lot is assigned a unique ID tag, and all plants within the lot share this ID. When flowering begins, each plant receives its own unique plant tag. The cost of plant tags is $0.45 each.
• Packages: These are created from various sources, including immature plants, harvested batches, lab samples, and other packages. The cost of package tags is $0.25 each.
  

Key Components of Metrc Compliance in Massachusetts

1. Inventory Tracking

Accurate inventory tracking is essential for Metrc compliance. Cannabis businesses must maintain detailed records of all products in their inventory, including quantities, weights, and batch numbers. This helps prevent discrepancies and ensures all products are accounted for at all times​​. 

2. Reporting Requirements

Massachusetts requires cannabis businesses to submit regular reports to the CCC via the Metrc system. These reports include information on production, sales, transfers, and inventory levels. Timely and accurate reporting is crucial to maintaining compliance and avoiding penalties​​.

3. Metrc Training

Proper training ensures all employees understand Metrc requirements and can use the system effectively. Metrc offers training programs to help businesses stay up to date with the latest regulations and best practices. Regular training sessions can help prevent errors and ensure smooth operations.

Steps to Stay Metrc Compliant

1. Understand the Regulations

Familiarize yourself with the CCC’s regulations and Metrc requirements, and stay informed about any updates or changes to the compliance guidelines. The Massachusetts Cannabis Control Commission’s website is an excellent resource for up-to-date information​​.

2. Conduct Regular Audits

Perform regular internal audits to ensure your compliance processes are functioning correctly. This includes verifying inventory levels, checking for discrepancies, and reviewing all Metrc entries. Regular audits can help identify and resolve issues before they become major problems​​.

3. Stay Connected with the CCC

Maintain open communication with the CCC and participate in any compliance workshops or training sessions they offer. This will help you stay informed about regulatory changes and ensure you are always aware of the latest compliance requirements.​

Taxes and Fees for Cannabis Sales in Massachusetts

• State Excise Tax

A 10.75% excise tax is applied to transfers of marijuana and marijuana products from retailers. There is no excise tax on medical marijuana sales.

• Standard Sales Tax

A 6.25% Massachusetts sales tax applies to all sales of cannabis and cannabis-infused products. Medical marijuana sales are exempt from this standard sales tax.

• Local Tax (Optional)

Cities or towns may impose a local tax of up to 3% on marijuana sales within their jurisdiction, which are returned to the localities at least quarterly. This local tax does not apply to medical marijuana sales.

• Community Impact Fees

Municipalities can impose a community impact fee to cover costs related to the operation of Marijuana Establishments or Medical Marijuana Treatment Centers. This fee cannot exceed 3% of the gross sales of the establishment and may only be in effect for a maximum of five years.

The Role of Technology in Compliance for Massachusetts Dispensaries

• Inventory Management

Accurate inventory management is essential for compliance. IndicaOnline offers a comprehensive POS system that is fully integrated with Metrc. This integration facilitates accurate record-keeping and streamlined compliance for dispensaries. Proper inventory management prevents discrepancies that could lead to regulatory violations and fines.

• Sales Reporting

Massachusetts requires detailed reporting of all cannabis sales transactions. IndicaOnline’s POS system automates this process, generating comprehensive sales reports that are compliant with CCC requirements. These reports include information on product sales, customer demographics, and transaction details, providing valuable insights for regulatory compliance and business analysis.

• Customer Verification

Ensuring cannabis products are sold only to eligible customers is a key compliance requirement. IndicaOnline’s POS system includes age verification features that validate customer identification, preventing unauthorized sales. This functionality is crucial for adhering to state laws and maintaining the integrity of the dispensary.

Additional Compliance Costs

• Annual License Fees

Besides Metrc-specific costs, dispensaries must also consider the application and license fees set by the CCC. For instance, the annual license fee for a marijuana retailer is $10,000. These fees are separate from the costs associated with Metrc but are crucial for operating legally within the state​.

• Fee Reductions for Certain Applicants

The CCC offers fee reductions for Certified Economic Empowerment applicants and Social Equity Program participants for Massachusetts residents. These include waived application fees and monthly Metrc program charges, and a 50% reduction in annual license fees.

• Importance of Budgeting for Metrc Compliance

Accurate budgeting for Metrc compliance is crucial for the financial planning of a dispensary. By accounting for the costs of tags, monthly program fees, and necessary training, dispensaries can ensure they remain compliant without unexpected financial strain. Proper budgeting also helps in maintaining smooth operations and avoiding penalties associated with non-compliance.

Secure Your Cannabis Business with Metrc Compliance

Staying Metrc compliant in Massachusetts is critical to operating a successful cannabis business. By understanding the regulations, implementing robust inventory management systems, training staff, conducting regular audits, and maintaining communication with the CCC, you can ensure your business remains compliant and contributes to the integrity of the cannabis industry.

Metrc tag purchases, monthly program fees, and employee training are compliance-related costs. The CCC provides fee reductions for Certified Economic Empowerment applicants and Social Equity Program participants, which can reduce the financial burden of compliance significantly.

Compliance is not just about following the rules; it also means ensuring the entire industry’s safety, transparency, and credibility. By adhering to Metrc requirements, you can help build a sustainable and reputable cannabis market in Massachusetts. IndicaOnline offers comprehensive solutions for day-to-day operations and reporting. Beyond its essential capabilities, Indica’s platform also includes features to elevate overall business outcomes.