The cannabis industry is one of the most tightly regulated industries in the country. Maintaining compliance with all local, state, and federal regulations is fundamental to a cannabis operation’s success, especially with non-compliant operations facing the possibility of hefty fines, business license revocation, and even criminal prosecution.
Compliance is no joke – if your cannabis business isn’t focused on maintaining compliance, you won’t need to worry about a cannabis business for long.
Created in 2013, The Marijuana Enforcement Tracking Reporting Compliance (METRC) is a cannabis supply chain technology and is currently the system of record for 11 states (including California and Colorado). METRC is required in some states for tracking purposes, but lacks the full scope of tracking functionality needed for most cannabis operations.
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Of the 18 states that currently have some form of legal cannabis, 15 of those states rely on METRC software systems to provide a comprehensive framework for monitoring the cannabis industry.
The METRC system is specifically designed for regulatory entities, and cannabis operators have no choice but to interact with the system to meet regulatory compliance requirements.
METRC software allows governmental regulators to track cannabis plants and products in real-time from seed to sale, in what boils down to a cloud-based reporting system. Through METRC, at any given time, regulators can monitor the paths of specific products, analyze licensee activities, and detect compliance issues. Often, cannabis operators are required to either utilize METRC software applications themselves, or to integrate their Enterprise Resource Planning (ERP) and Point of Sale (POS) systems with METRC software through an Application Programming Interface (API).
With so many acronyms thrown around, it’s easy to see how a cannabis operator might feel a little confused or overwhelmed while trying to do the right thing to meet compliance requirements.
Even though the METRC system is intended to serve regulators over operators, navigating the METRC system to ensure your cannabis business meets compliance requirements doesn’t have to be difficult.
First and foremost, for your cannabis business to gain access to METRC systems, all operation employees must be fully certified. The certification process involves team member training, focused on the proper use of METRC RFID tracking tags, industry terminology, and reporting procedures. Following training, employees are required to pass a 40 question exam to demonstrate their knowledge and competence.
While operators can access METRC systems directly to submit information, this process is time-consuming and carries the risk of data entry errors that can cause accidental non-compliance issues. Cannabis operators should incorporate an ERP system that can fully integrate with METRC software via an API, which allows them to set up automated reporting, provides easier access to METRC interfaces, and can help ensure that critical deadlines are never missed.
API integration with METRC software is determined by the type of license issued to the cannabis business integrating. The API type provided to operators is dependent on whether the cannabis operator’s license is for cultivation, processing, testing, or retail.
Each API also provides differing degrees of access and automation for businesses. Third-party cannabis ERP solutions are only permitted to communicate with METRC via its API.
Before committing to an ERP solution, cannabis business owners should ensure the solution is a Validated METRC Integrator by checking METRC’s state-specific confirmed integrators lists.
Pro-tip: To find the list of validated integrators from METRC’s homepage, users must first select their state under the ‘States’ tab, and then select ‘Integration & API’.
Most states require daily reports submitted into the METRC system by midnight every day. If you are reporting manually, this means you are responsible for logging into the METRC interface and manually entering all the data for every individual transaction. Not only will this be highly time-consuming, but the risk of a simple data entry error is high. In addition, the more a cannabis business grows, the more transactional information they will be required to report at the end of each day.
With automated reporting tools provided by API integration, this process is significantly streamlined, ensuring the accuracy of data reported and accommodating the growth that all cannabis operations strive for.
Cannabis businesses should consider their needs, research the specific METRC reporting requirements in their area, and consult their ERP and POS providers to discover the level of integration available to them.