If you’ve been in the cannabis industry for some time, you’re well aware of METRC, the regulatory cannabis inventory accounting software utilized by the Marijuana Enforcement Division (or MED). If you aren’t aware of METRC, well, you’ve stumbled upon the right article! METRC is a crucial component of compliance for marijuana businesses. It’s utilized in numerous states, including Colorado, to aid the MED in assessing and moderating compliance for all cannabis industry operations. Let’s delve into the details of METRC, including information surrounding the intentions of the METRC program, common METRC compliance violations, MED auditing, and how to remain compliant in the face of changing cannabis regulations.
What Is METRC?
METRC stands for Marijuana Enforcement Tracking Reporting Compliance. METRC is, as their site states, a “regulatory compliance system,” but that’s a bit vague. In short, it’s a rather elaborate tracking system that serves to monitor cannabis production from day one until its sale. METRC ensures compliance in the cannabis industry by identifying and tagging plants, cannabis, and cannabis products; it also serves as a unique point of sale (POS) platform that further serves to monitor the growth of marijuana, its transportation, and the sale of cannabis. So, what are the intentions behind METRC? What purpose does METRC monitoring serve?
What Are the Intentions Behind METRC?
According to Franwell, the makers of METRC systems, METRC was intended to aid in regulating cannabis growth, sales, and transportation. Franwell states, “only through the harvest and use of quality data can municipalities and the public at large feel confident to take the next steps on the road to complete and fair regulation industry wide.” In addition, Franwell states that “Metrc can be the primary tool for fighting against diversion and illegal use and purchase of cannabis.” So, to be brief, METRC provides a monitoring and live auditing system that is intended to ensure that cannabis is grown, transported, and sold within the constraints of the law. It is a regulation device. In addition, METRC provides all of the following functions:
- METRC Improves Safety & Reduces Illegal Behavior: Through weight and quality monitoring, METRC ensures that cannabis and cannabis products are safe for consumption. In addition, through strict monitoring of cannabis production, illegal cannabis growth and sales can be reduced.
- METRC Enables Central Control & Monitoring: Data retrieved through METRC devices are accumulated and assessed by MED authorities, which improves compliance across cannabis businesses throughout the industry.
- METRC Balances Privacy & Transparency: While data may be accessible to cannabis compliance enforcers and authorities, it is completely private from business to business. Transactions, sales, and other business operations are not shared from one individually owned and operated business to the next.
- METRC Collects Crucial Data: Since METRC collects cumulative economical and operational data, this program provides an overarching view of local and state cannabis industry operations and sales.
- METRC Is Online: Since METRC can be accessed through a protected online portal, METRC services are easily accessible for all cannabis businesses.
What Are Some Common METRC Violations?
Ron Sigman, an ex-law enforcement officer and recently hired criminal investigator for the MED, answered questions regarding METRC in an interview conducted by Marijuana Business Daily. In regards to METRC violations, Sigman stated, “[When it comes to METRC], it’s very common to find violations.” Most often, Sigman informs us, cannabis industry businesses fail to attain current licensing and properly train staff members. In addition, cannabis industry businesses often fail to assess their inventory properly, or they perform inaccurate accounting. Having too many plants or too much inventory are both violations. Sigman also informs us that some businesses face security issues… “they don’t have the proper camera coverage, things like that.” Businesses also neglected to have proper documentation and paperwork on site during MED audits.
A Bit About MED Audits
The Marijuana Enforcement Division has the authority to perform audits of cannabis industry businesses. To check compliance, an MED member may inspect the facilities, operations, and inventory of a business, and they may scrutinize their METRC account to audit for discrepancies between the recorded business proceedings and the actual operations within a given business. Now, when can a business be audited?
According to Ron Sigman from the aforementioned interview, the MED can conduct an audit at any point, and they’ll automatically conduct an audit for a flurry of reasons. First of all, the MED will always perform an audit if a business attains a license or renews an existing license. In addition, the MED will investigate any complaints, including those rendered by customers, employees, and other businesses. Employees are likely to complain to the MED if they “are disgruntled or they’ve been terminated,” according to Sigman. Meanwhile, customers may complain, as Sigman states, “if they’re not satisfied with the service or product they received.”
What does that mean for your business? While it’s good to keep customers satisfied, and to keep employees content, it’s best to stay compliant—which begs the question…
How Can I Avoid Non-Compliance?
Businesses need to stay active and aware to maintain their compliance. The cannabis industry is complex, and compliance rules and regulations are constantly changing (especially since recreational cannabis sales are only recently legal). Fortunately, resources are available.
First of all, Franwell and the MED (METRC’s operators) provide training to bring new cannabis industry professionals up to speed and to keep existing cannabis industry members up to date.
In addition, you can seek professional cannabis industry compliance consultation. Team up with Evolutionz to keep your operations above board.
Evolutionz’ Compliance Resources
Here at Evolutionz, it’s our business to cater to your business. We empower cannabis industry professionals by offering a suite of resources, including compliance education, consultation, and training. It’s our aim to help our clients to optimize their operations and grow their businesses, all while operating legally. Curious about what we do for cannabis industry businesses? Or ready to schedule a free consultation? Get started by partnering with Evolutionz. Also, if you’re looking to stay in the loop, take a moment to sign up for our cannabis compliance notifications!