Metrc outages in California ‘causing a lot of heartburn’ for marijuana companies

metrc cannabis traceability

Problems with California’s seed-to-sale tracking system are causing cannabis companies to spend thousands of dollars in extra time and money to remain in compliance with state regulations.

The state pays Metrc, a Florida-based company with contracts in 15 states plus Washington DC, to handle the traceability system that tracks transactions and the movement of product through the commercial marijuana supply chain.

Industry officials in California, however, complain that over the past two months, Metrc has been down frequently, with outages lasting up to nine hours at a time.

The downtime prevents cannabis growers, distributors, retailers and other businesses from performing basic functions, such as invoicing and making product transfers to other companies.

“It’s definitely weighing on folks. Causing a lot of heartburn,” said Colton Griffin, CEO of Flourish Software, a software company based in Los Angeles.

“It’s a lot of extra hours and distraction and stress.”

License holders use Flourish to manage inventory and track purchasing, among other functions.

When the system is down, cannabis companies’ employees are forced to input traceability data manually – for example, a grower selling pounds of flower to an extractor.

That requires a dedicated worker who is specifically trained in data entry for Metrc software.

Griffin estimates the impact in the thousands of dollars per company, more or less depending on the amount of business a company does.

Regulator explanations

In December, Metrc Chief Operating Officer Lewis Koski told Marijuana Business Daily that the issues were largely resolved.

However, in an emailed statement, a spokesperson for the California Department of Food and Agriculture – speaking on behalf of Metrc as well as the state – confirmed that Metrc has experienced “intermittent performance issues” since Feb. 17, with the most severe issues occurring Feb. 25 and March 1.

“However, neither Metrc nor its API were ever offline,” the CDFA noted, referring to an application programming interface.

The root of the problem is third-party software used by cannabis companies for compliance can’t communicate with Metrc’s database through the API when the tracking system experiences issues.

The CDFA blames a small number of integrators for using the API in a way that affects Metrc’s overall performance.

“Specifically, the API is being impacted by the amount, method and time of the data requests being sent by these integrators, as many of the requests are redundant,” according to the CDFA.

The repeated requests consume Metrc’s technology resources and slow performance, according to the state.

And while Metrc has upped its system resources significantly to address the increase in API traffic, the issues persist.

The state has been working with Metrc since October to add tweaks to the system – such as data optimization and rate limiting – to moderate integrator traffic and alleviate any unnecessary stress on the system.

“These policies will allow integrators to continue reporting into the system while regulating their impact on other users and overall system performance,” according to the CDFA.

Lost efficiencies

At Oakland-based Nabis, a licensed distributor, CEO Vince Ning said his team has been forced at times to manually input orders into the Metrc website rather than using software that works with the API because the Metrc side has slowed so much.

The labor costs can vary, depending on the size of the order and the amount of time needed to input the data by hand.

According to Ning, manually adding so-called certificates of analysis and line items and other data entry can cause each order to take up to 15 minutes.

That “can bubble up pretty quickly” when Ning’s company is working with thousands of orders.

“When things do fall back to the manual processes, it does strain our operations,” he added.

Although the slowdowns with Metrc haven’t cost Nabis any material business, Ning imagines some orders were delayed since companies across the state are dealing with this problem.

Jennifer Gallerani, chair of the Cannabis Distributors Association and vice president of logistics at Nevada-based marijuana software and services firm Blackbird, pointed out that the problem isn’t with Metrc’s servers but the API.

In early March she said the API wasn’t working for two to nine hours every day.

Although she said it’s difficult to put a dollar amount on the lost revenue associated with the Metrc issues, Gallerani cited the time spent for employees to switch from using the API to paper logs and make direct entries.

“You’re losing efficiencies because you’re not using the software,” she added.

Gallerani also mentioned the time lost when workers are trying to shore up the inevitable discrepancies caused by human error.

“There’s no undo button,” she said.

Proposed solutions

Gallerani would like to see the state require Metrc to report the status of the API in real time on a website available to all licensed California cannabis companies.

“So the impetus would not fall on the operators to know when it’s not working,” she added.

Flourish’s Griffin agreed, saying “if there’s an outage, everyone should be notified. That’s pretty typical for every other system on the planet.”

Right now, his team must be on the lookout for slowdowns.

“Simple communication would go a long way,” Griffin added. “Why would they want five thousand businesses to open a support ticket when they could just send an email out with an update?”

Gallerani would also like to see California provide more training to employees on how to manually enter data into the system.

The CDFA contends extensive training has been offered,.

“To date, Metrc has supported 750 trainings in California and continues to offer virtual training on a weekly basis,” the department said in a statement.

Each cannabis company is required to have a dedicated Metrc account manager who completes the California Cannabis Track-and-Trace Metrc system-user training within five days of receiving a license.

“We encourage these account managers to be proactive and train their staff so there is always someone available to work directly within the Metrc application,” a CDFA spokesperson said.

Bart Schaneman can be reached at [email protected].

12 comments on “Metrc outages in California ‘causing a lot of heartburn’ for marijuana companies
  1. Max Esdale on

    This statement is inaccurate:

    “’However, neither Metrc nor its API were ever offline,’ the CDFA noted, referring to an application programming interface. The root of the problem is third-party software used by cannabis companies for compliance can’t communicate with Metrc’s database through the API when the tracking system experiences issues.”

    Metrc’s API was not functioning for hours at a time over a period of weeks. Why is CDFA covering for them?

    Maybe it’s because CDFA chose a track and trace system without a functional API, in violation of California Business and Professions Code SEC. 51. Section 26068, which mandates a functional API for licensees to report all commercial cannabis activity as required by regulations. Metrc frequently doesn’t meet this legal requirement.

    California’s government wants cannabis taxes but our industry’s ability to generate tax revenues for the state is severely disrupted when the track and trace system mandated for licensees does not work as required by law.

    Reply
    • Darren Story on

      You are correct Max, outright lies and cover ups. This was a HUGE contract awarded based on special interests and posh hand-outs. Now the chickens are coming home to roost.

      First there will be cover ups, then they will loft accusations at each other, next will be dismissals, potential bankruptcies, and hopefully eventually some indictments.

      We must keep the pressure on. These people have taken millions out of the pockets of California operators AND taxpayers. They defrauded the tax payer which is the worst part. There should be jobs lost and indictments made!

      Cue the Grand Jury please!

      Reply
    • Metrc User on

      An API they demonstrably do NOT use internally. Integrating with that monstrosity is a nightmare. The API reports one thing, the web interface another – while Metrc admins gaslight users that the issue is third parties. Zero documentation, indifferent support and shabby software – gotta blame somebody.

      Reply
      • Tony Reese on

        I am very familiary with METRC. In fact, I was a user when it was first introduced as MITS (Marijuana Inventory Tracking System), but they received a cease and desist letter from the MIT University and they changed their name. METRC was purposefully designed as a “stand alone system”, meaning manual entry was the only method of putting ANY information into the system. I fought for years on special state commissions to force them to develop an API. They’ve produced one, but I think it’s deliberately dysfunctional.
        Here’s the deal. METRC is a tracking system, not a management system. People manipulate the tracking system to show how many items of a specific SKU they have on hand, but that does not make it an inventory control system (ICS). An ICS is much more functionally complex because it involves various costing methodologies, such as FIFO, LIFO, Weighted Average, and Standard Costing. Does METRC tell you how much a SKU cost? No. Also, METRC is a huge pain in the neck for anyone who is subject to PCAOB audits. For example, they do not have historic inventory reports.
        METRC was originally created as a state tracking system in response to the Cole Memorandum, thus giving the State of Colorado some degree of oversight of product and supply in an effort to avoid federal interference. The concept that RFIDs can track plants was a viable alternative to the State’s original desire to have gaming-level surveillance in every premise (Grow, MIP, Dispensary), so they could remotely see every detail of every operation from every angle. The community of licensees accepted the use of RFIDs as a alternative to big brother being in the grow. Also, we finally convinced the regulators that the cameras in the grow room was a really bad idea for the health of the plants. However, RFIDs DONT WORK for surveillance purposes. In my opinion, the RFIDs have just ended up being a tax on the industry.
        Most operators use METRC because it’s the state’s compliance system, but these same operators (especially those that have hopes of being acquired or going public) don’t understand the significant disadvantages of not using a traditional ICS. Those operators that value strong information management systems MUST lean on the very traditional method of Application Program Interface (API) methodology.
        They question becomes: why has METRCs API efforts failed? Could it be that they hope enough licensees will demand that METRC simply converts from being an inventory tracking system into a fully functional inventory management system? When marijuana eventually becomes federally legal, where does that leave METRC? They will be a useless relic unless they change.
        So many other systems have API’s that dwarf METRC’s usage. A great example of a core system designed for open APIs is QuickBooks Online. That software has thousands of robust third-party software companies that seamlessly sends massive amounts of traffic over a well-designed API. What’s the difference between QuickBooks Online and METRC? QuickBooks Online benefits from third party applications and METRC fears irrelevance.
        If METRC’s API was designed correctly and functioned normally, not a single user would need to be trained how to use the METRC system. No one would have to log in. Any discrepancies would need to be reconciled on a developer level rather than on a user level.
        It’s all a sham. METRC is a state system, not a functional system for licensees. RFIDs are absolutely useless – especially package RFID’s. Last time I checked, METRC still did not have functional scanning machines that would read the RFID and integrate with the METRC software even though that was an initial design feature when it was released in Colorado. Keep up the pressure. Demand better performance for YOUR needs. After all, between licensing fees, monthly management fees, and RFID tag fees, you are paying for the software. Find a good inventory management system, leverage the API capabilities, and demand better performance.

        Reply
        • Sam G on

          Tony, you are right, the ability to query the METRC API right from the RFID scanner is what makes the RFIDs useful.

          There is a company called Brytemap that has developed an RFID scanner gun integration with the METRC API to solve that problem. The product is called Brytemap Scout.

          Reply
          • Tony Reese on

            I am glad to hear that update! The best functionality for the RFID gun is the sonar seek and find, where it can ping a specific RFID tag in your facility to help you find the location via the sound and frequency of the sonar ping. However, the RFID technology was originally sold to the State as a solution for counting tags in a specific room, which works well in small rooms, but simply cannot work in large rooms. First, they have distance limitations. Second, there is a lot of interference with most grow houses. For example, there is a lot of radiation from the lights as well as reflection from water and metal surfaces. This kind of interference significantly reduces the scanning range capability of the gun, which nullifies the original intent.

          • Dan on

            That makes sense since, the COO of Brytemap was the former primary POC and Director for METRC. But this sounds much better in theory. An integration where the API itself constantly times out, only covers certain endpoints seems like a coin toss everyday. I’ve no doubt Brytemap has some cool stuff though, Scott is a smart dude.

          • Tony Reese on

            Please remember it was 11 years ago that the state made the decision. Technology has changed a lot in 11 years. Two very simple answers to your question. 1) They wanted cameras in every phase of growth, including flower. The lights from the cameras would interfere with the plants sleep cycle, thus inducing seeds and reducing THC content. 2) the necessary bandwidth required to facilitate the state having on-demand remote access to every camera was a technological stumbling block. Many grow houses did not, and could not, receive sufficient internet service to accommodate the bandwidth requirement.

            I hope that helps!

            Again, the RFID technology in place now is not a functional solution for many reasons, and amounts to an unnecessary functional industry tax. I advocate abolishing the requirement for the RFID as it has been implemented.

  2. Lawrence Siskind on

    In Oregon we haven’t had problems as bad as Cali’s, but we have plenty. At a meeting i attended a few years ago in Eugene, put together by The Oregon Liquor Control Commission’s Marijuana Division, on a complaint/suggestion board on which participants with licenses from all parts of the industry, wrote out their input on post-its, Metrc issues dwarfed all other subjects of complaint and suggestion. It’s ridiculous that the states don’t create one seed to sale system that includes a retail POS system that all businesses can use, rather than one system for seed to sale and multiple POS systems, none of them made by the contracted seed to sale company. The OLCC’s reasoning is ideological rather than practical. They want to offer choice, capitalism and free enterprise you know, for POS systems rather than have one functioning system. And, if it didn’t function, at least only one company would be responsible, instead of each pointing the finger at each other.

    Reply
  3. Darren Story on

    WE BROKE THEM. KEEP THE PRESSURE ON. TROUBLE TICKETS, CALLS, KEEP GOING FOLKS.

    THE END OF METRC IS NEAR!

    THEIR ENTIRE DATABASE IS CORRUPTED.

    Reply
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