METRC, or Marijuana Enforcement Tracking Reporting Compliance, is a program deployed by the Marijuana Enforcement Division (MED) to track cannabis growth, transportation, and sales. It’s a program that has been put in place to regulate marijuana production and enforce state cannabis laws. While that intent is ideal for bureaucrats that monitor marijuana state by state, it’s actually helpful in reducing federal interest in state cannabis legalization. After all, while states have local laws allowing medical and/or recreational marijuana sales, the federal government still considers cannabis illegal. Under the Controlled Substances Act (CSA) (21 U.S.C. § 811), the federal government is explicit in stating that cannabis is an illegal drug, in the same way that cocaine and heroin are illegal. The federal government doesn’t even recognize a difference between medical and recreational uses of the drug. So why aren’t dispensaries being shut down by the DEA (the Drug Enforcement Administration, the federal government’s drug enforcement agency)? And how does METRC play a role?
The DOJ & DEA
The Department of Justice (DOJ) funds the DEA, so in effect, the DOJ is the federal bureaucracy behind federal drug law enforcement. Currently, the Justice Department is rather docile, even as cannabis businesses crop up all over the nation. Why? Well, there’s no steadfast rule on how the DOJ and DEA will act; the federal government could invoke a crackdown on the state-legal cannabis industry at any point. However, they likely won’t—for a number of reasons. First of all, the DEA has limited funding. A Marijuana Business Daily article lends us some insight into that. In an interview with Jodi Avergun, an ex-federal prosecutor and recent chief of staff for the DEA, Avergun mentions, “The threat [of cannabis enforcement] comes from federal enforcement of the Controlled Substances Act, and that is very much a matter of resources.” The Justice Department simply can’t fund the thousands of raids that would be required to shut down cannabis businesses nationwide. Secondly, the DOJ shouldn’t request raids. Avergun continues, “(In) the vast majority of states that have legal medical marijuana, there’s enough popular support and public support for the notion of medical that I don’t think the DOJ is going to undo that.” At this point, it would be radically unpopular to enforce a prohibition on medical cannabis. And, it seems that recreational cannabis isn’t too far behind…
Another article, published by Motherboard, mentions that the DEA is showing more interest in researching cannabis than shutting it down. The article’s author, Joel Warner, offers up this important bit of insight: “The DEA’s announcement that it will be expanding marijuana research access is one more example of how, bit by bit, cannabis prohibition is coming to an end…” Under the Obama administration, the DEA allowed university research surrounding the benefits of cannabis consumption. As federal agencies like the DEA and Food and Drug Administration (FDA) begin to become active participants in cannabis research, it’s no stretch to infer that marijuana prohibition is truly reversing.
Now, how does local regulation play a role in bureaucratic enforcement? Let’s take a look at METRC (several states’ regulation system), and its effect on federal action (or inaction).
METRC & Federal Law
METRC is, as their site states, a “regulatory compliance system.” It is a system set in place by the MED to ensure that the cannabis market is regulated. As Franwell (the makers of METRC) puts it, “Metrc provides the necessary visibility for adherence to rules, regulations and statues [sic].” Now, according to Franwell, local regulation actually diverts federal interest in state legalization. They state that “[METRC] creates a vertically integrated “closed-loop” medical marijuana regulatory scheme which stems, in part, from the landmark 2005 California case, Gonzales vs. Raich (If you can demonstrate a closed loop, in which no marijuana crosses state borders, it strengthens against federal intervention).” That last phrase is crucial: METRC creates a closed loop that “strengthens against federal intervention.” So, what is a closed loop? How is METRC a closed loop? And how does METRC deter federal intervention as a closed loop?
What Is a Closed Loop?
A closed loop is, as Merriam-Webster defines it, “an automatic control system in which an operation, process, or mechanism is regulated by feedback.” Interestingly, Dictionary.com offers up a second definition; a closed loop is “the complete path followed by a signal as it is fed back from the output of a circuit, device, or system to the input and then back to the output,” but we’ll stick to the former definition. So, METRC, as a closed-loop system, provides automated control by obtaining feedback (or data) from operations, processes, and mechanisms. That’s actually quite accurate.
METRC Creates a Closed Loop
METRC tracks cannabis production automatically through RFID tags (identification tags that are paired with radio technology), and tracking software. From the moment a seed is planted, to the moment a customer purchases a cannabis product, METRC provides the MED with information. Ideally, every plant is tracked and the amount of produce is measured; no plants or products are lost in transportation; every business is held accountable; every business operates within state law.
Keeping the DEA at Bay
As Franwell mentioned, METRC “strengthens against federal intervention.” Since every aspect of cannabis business is monitored and reported to the MED, cannabis industry operations are transparent and regulated. If illegal operations come to light, either due to an MED audit or METRC reporting, the MED will take action to resolve the issue. The MED can issue fines, take legal action, and/or revoke licenses. That provides some assurance to the DEA and DOJ that operations are above board. It’s this assurance that Franwell believes will “strengthens against federal intervention.”
Now, METRC provides a closed-loop system that ensures that cannabis doesn’t cross state borders in business-to-business transactions—it ensures that cannabis industry businesses operate within the law. However, METRC does little to moderate the movement of marijuana after consumers buy a product. Citizens can travel across the state lines with relative ease. Even this threat doesn’t appear to concern the DEA. With states like Texas decriminalizing marijuana, it appears that cannabis simply isn’t a concern for most states, especially small-time use, and the DEA is following suit.
So, Does METRC Protect State Rights?
Well, in short, kinda. While METRC and the MED are helpful in keeping business operations legal, there’s little done to deter illegal activity once a cannabis product reaches consumers. Regardless, the DEA doesn’t seem concerned—after all, they have bigger things on their plate, like opiate control. METRC does seem to alleviate some of the concern that the Justice Department may have, but it’s just as likely that the laws are laxed because the general public is making a real, observable shift to accept cannabis as a relatively harmless, and sometimes helpful, drug.
If you’re a cannabis business owner, you understand the importance of compliance. Without METRC compliance, you could find yourself in a legal battle on top of fines, fees, and a loss of licensing. Cannabis laws are complex, and METRC compliance is complicated as well as strict. Fortunately, there are resources available. Take a moment to subscribe to our cannabis compliance newsletter, and learn more about our cannabis consultation services. If you’re ready to get started, get in touch with us to schedule a free consultation. Take your business to its full potential with Evolutionz!