Cannabis retailers say they need more from track-and-trace software

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(This story is part of the cover package in the January -February issue of MJBizMagazine.)

Marijuana industry veterans who have dealt with track-and-trace systems generally have found that these programs can meet their expectations on the cultivation and production side of the business with little to no extra help from additional software.

Retailers, however, often need more functionality from either point-of-sale (POS) or enterprise resource planning (ERP) systems.

“On the cultivation side, Metrc has actually done a good job of building out a software tool that can track the plant inventory and the finished-goods inventory of a cultivation facility without necessarily needing a lot of extra software, unlike the retail,” said Matt Gamble, chief operating officer of Native Sun, a vertically integrated cannabis company in Massachusetts.

How it works

Track-and-trace systems start with scannable RFID tags.

Every time a cultivation facility sows a seed or receives plants from nurseries, each seed or plant will receive an RFID tag with a unique, scannable code.

“As soon as it goes there, you’re either putting a Metrc tag on it or you’re putting a BioTrack tag on it,” said John Mueller, CEO of Greenlight Dispensary, which operates in four states where Metrc is the mandated track-and-trace software and in two markets where BioTrack is compulsory.

Tags are distinguished as either plant tags or package tags, and another designation exists between medical tags and recreational tags: Medical tags are yellow; recreational tags are blue.

Plant tags also say “medical” or “recreational” and include the facility name, license number, tag order date and a unique 24-digit plant-identification number.

Instead of having a unique plant-identification number, package tags have a unique package-identification number that is also 24 digits. Each tag has an RFID chip that can be tracked through Metrc software.

That way, physical plant tags can be matched with their digital counterparts.

Greenlight has the benefit of being based in Missouri, the one state that pays the costs for companies’ RFID tags.

In other states, RFID tags for plants grown in cultivation facilities are 25 cents per tag, while retail product tags are 45 cents each.

Mueller estimated that Greenlight spends roughly $5,000 per month on RFID tags in the five other markets where it operates.

The same tag will not follow a plant all the way through its final retail form – whether that be packaged flower, concentrates or edibles.

Instead, operators use a process of tag consolidation, Mueller said.

For example, when a 100-plant room is harvested, the flower is put into 15-pound lots.

The flower in each lot will be designated for a certain use, such as packaged flower, concentrates or oil in edibles.

The track-and-trace system – whether BioTrack, Metrc or MJ Freeway – notes which plants went into which lots. From there, each lot gets its own new RFID tag.

“All those plant tags are merged into one package tag. And that package tag says that those 100 plants are merged into that one package tag. And then, later on, that package tag is broken down into so many jars (of flower). You can always track that jar label all the way back to the package tag, which tracks back to the plant tag,” Mueller explained.

Gamble of Native Sun took a similar view.

“When we create a new plant, we log that plant with a unique identifier in Metrc. And that unique identifier tracks all the way through to the point where, even if I sold that product to someone who sold it to someone who made it into something who sold it to someone else, we could still trace that back to the exact date that I created that plant, potentially a year prior,” Gamble said.

Mueller noted that, in his experience with BioTrack and Metrc, there is little difference between the two track-and-trace systems.

“It’s pretty much apples to apples,” Mueller said. “All of that functionality is identical. And the way we tag plants is almost identical. We’re producing relatively the exact same products in all markets, depending on their regs. But those tags and the seed-to-sale tracking is 99% the same.”

Mueller noted, however, that many of his employees prefer one system over the other because of a more user-friendly interface or better and faster customer service, which can be important.

Weighing solutions

Gamble said Metrc does a good job tracking plants, their growth, harvests and so on.

It doesn’t, however, have a wholesale module or a financial module or any “ERP type of functionalities that manufacturing companies typically want.”

Rather than buying an ERP system to fill those holes, Native Sun built its own ERP tools that it integrated with Metrc and that “interact with the Metrc data.”

Native Sun takes the data generated by Metrc and feeds it into its custom-built ERP tools.

Those tools analyze the data and provide reports that help Native Sun plan production, manage logistics, sell products wholesale, transfer products to their own stores or analyze the cost of manufacturing.

“The information about the plants, the inventory, the products, all of that is stored and manipulated in Metrc,” Gamble explained.

He believes it was better to build an internal ERP solution than buy one.

“The more full-scale-production ERPs are very expensive … and they require significant implementation costs and challenges of training staff on complicated data procedures. The (process) to get an entire organization of people to start accurately working on a much more complicated piece of software can be very challenging. The industry is very tough right now. Keeping things simple sometimes has positive benefits for us,” Gamble said.

Deep Roots Harvest, a vertically integrated cannabis company in Nevada, takes a similarly light approach to what software it integrates with Metrc on the cultivation side of the business.

“We’ve chosen not to do direct integration. Ours is a fairly manual process, at least in the back of the house,” said Jon Marshall, chief operating officer at Deep Roots.

“What Metrc doesn’t do is costing (forecasting the cost of a product or service). It’s a very off-the-shelf solution to inventory tracking, but it doesn’t give you all the detail you need for a business,” he said.

To fill those holes, Deep Roots looked at ERP solutions from various companies – including BioTrack and MJFreeway, which also offer those types of solutions.

Ultimately, the company went with a tailor-made solution that included creating and developing its own internal database and then purchasing software from Colorado-based app-building platform TrackVia.

“It’s basically like a citizen-development (created by non-IT experts) software package that allows you to build these super-comprehensive databases.

“What it allowed us to do is not only handle the cultivation and production, inventory tracking and all those tasks and all those different things, but it also allowed us to do things like facility management and transport requests – and it became this much more powerful ERP. Then, we could really solve a lot of other non-marijuana-related problems in addition to the inventory-tracking side.”

Omar Sacirbey can be reached at omar.sacirbey@mjbizdaily.com.