Colorado revises cannabis traceability rules to potentially open competition

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(This story was updated to reflect the state’s clarification of the intent of Colorado’s new rules regarding seed-to-sale tracking.)

Colorado recently passed rules intended to expand competition for cannabis seed-to-sale tracking contracts when the state’s current deal with traceability software provider Metrc expires in October 2026.

The new rules remove the acronym RFID (radio frequency identification) from the contract and replace it with “inventory tracking system.”

The requirements, which were adopted Nov. 9 and take effect Jan. January 8, do not necessarily eliminate RFID requirements – for now.

“The Inventory Tracking System is a web-based tool coupled with RFID technology that allows both the Inventory Tracking System User and the State Licensing Authority the ability to identify and account for all Regulated Marijuana,” the new rules note.

However, the state’s revision also leaves open the possibility that future “inventory tracking systems” might not include RFID technology:

“The State Licensing Authority will … engage the industry and provide training opportunities and continue to evaluate the Inventory Tracking System to promote an effective means for this industry to account for and monitor its Regulated Marijuana inventory, which may include reevaluating the benefits of and alternatives to certain aspects of the current Inventory Tracking System such as RFID technology requirements.”

Shannon Gray, a spokesperson for Colorado’s Marijuana Enforcement Division, emphasized that the new rules do not eliminate the RFID tag requirement, as was widely reported by news outlets, including MJBizDaily.

But Gray added that businesses that bid for the tracking software contract that follows the expiration of Metrc’s contract in October 2026 will not be required to have RFID technology as part of their service offer.

The intent of the rule change is to open the pool of bidders to companies that offer inventory tracking systems that don’t incorporate RFID technology.

Metrc says its RFID technology is proprietary.

“By removing the reference to RFID and replacing it with ‘inventory tracking system’ language throughout the rules, the Division is broadening the future competitive solicitation that would allow for other vendors that do not couple their inventory tracking system with RFID to be considered as part of that procurement process,” Gray told MJBizDaily via email.

“We hope that this initial step in rulemaking will allow for a more competitive contract process as we begin to prepare for an open, competitive solicitation leading up to October 2026 when the current vendor contract will expire.”

In a follow-up phone interview, Gray told MJBizDaily that “if a bidder for the inventory tracking system contract didn’t have RFID technology, that wouldn’t preclude them from winning a contract. RFID technology won’t be required for the new bid.”

While a different inventory tracking system company that doesn’t use RFID technology could replace Metrc as the state’s seed-to-sale provider, the Florida-based company could also be selected again, Gray said.