As the Canadian Senate discusses the legalization of the cannabis plant for summer 2018, there is an increasing need to discuss traceability and labeling solutions for the benefit of a whole new industry. Take the US state of Colorado for instance – with a sizeable retail cannabis industry worth a billion dollars, the state implemented an expansive regulatory traceability system to protect hundreds of thousands of tax dollars. The move is acknowledged to be a great success. In fact, the state of California – the largest producer of cannabis in the US – is considering following the Colorado model. With retail sales of anywhere between 16 and 32 billion dollars, there is a lot at stake, and the move could potentially represent a watershed movement for the future of the infamous cash-crop.
The question is: why are these states moving towards traceability solutions and what are these labeling systems capable of achieving? Read on to find out the answer as we list down the importance of tracking the cannabis plant.
The Question of Legitimacy
Although the use of medical marijuana has increased in Canada and beyond, those in the cannabis production and distribution business continue to suffer as a result of uncertainty and mixed sentiments around its legalization. Banks are unsure of engaging with those in the business and the industry faces a funding problem due to this uncertainty. However, these are roadblocks that could be somewhat addressed by intensive tracking and labeling systems. To ensure legitimacy, the industry seeks to track these plants to document each plant’s history from seed-to-sale.
The intensive seed-to-sale tracking system puts tags on the plants and assigns a number to each of them. This even includes the many stems and leaves in a single plant. The system is currently used by multiple participants in the chain of distribution. The cultivators, the medical dispensaries authorized to distribute the product, and the provincial governments all use and reference these records.
The Existing Problems
The industry and the government authorities have already outlined issues that need to be addressed. Primary of these issues is the constant loss of tax dollars, which occurs due to illicit trade in the black market. It could be argued, however, that the lack of legalization is responsible for this. Secondarily, there is also the issue of the contaminated plants, and the lack of a solid mechanism through which such contaminated batches could be potentially recalled. The issue of contaminated batches is by no means unique to the cannabis industry, and the food industry regularly deals with this operational problem too. Instances of recalling contaminated food are common in the fresh foods sector. And, despite the sheer scale of the industry, the majority of the food industry has successfully implemented traceability solutions powered by barcode scanners and RFID solutions.
The Possible Solution
With a workable yet foolproof regulatory system in place, the traders no longer need the black market to run their operations. However, if the regulatory system is too stern, it would again encourage reliance on the black market, purely for the sake of operational ease. Here are a couple of the labeling & tracking systems that could be considered for cannabis traceability:
The State of Colorado, which already has a successful regulatory system in place, has adopted the use of Radio Frequency Identification traceability (RFID) tags. These tags can be scanned by RFID guns. The system is known as Marijuana Enforcement Tracking Reporting Compliance (Metrc). The use of RFID tags has allowed the implementation of the highly comprehensive Seed to Sale Tracking System.
The RFID tags contain relevant information, such as the license number of the medical marijuana retail facility, the serial number of the product, along with a secure identification chip. All of this information is available with the state authorities along with the respective marijuana businesses. The RFID system acts as a safeguard against the ‘suspicious’ loss of product in transit as the entity would know even if a single package of marijuana goes missing.
For all its advantages, traceability by the use of RFID has its limitations (namely: cost). While RFID solutions are implemented successfully by many industries, there is a more cost-effective alternative – barcodes. With a significantly lower cost-per-piece rate, opting for barcode solutions may make more sense to certain producers, especially when you consider the several thousands of pieces that are needed on a regular basis. Tracking and traceability systems have come a long way in recent times, and here’s how good traceability solutions ensure the growth of your cannabis business.
The Bright Future
The presence of an effective regulatory system encourages investments in the industry, even if the use of the cannabis plant is limited to prescription medical purposes. Considering that the Medical marijuana industry is set to grow at breakneck speed, an investment made for quality labeling solutions is sure to reap dividends. In fact, the Canadian cannabis industry could experience a huge and rapid expansion depending on the conclusion of its senate discussion on the legalization of recreational marijuana. If recreational marijuana is legalized, the industry could expect to grow at a record rate. With this brisk growth of the cannabis sector, there will be definite pressure on the inventory and warehousing departments to manage large stockpiles of the plants and move them quickly through the supply lines. For effective coordination and batching of the product, advanced barcode labeling systems or RFID traceability systems could quickly become a necessity.
At Jet Marking, we offer an extensive range of products and services designed to provide long-term solutions for your traceability requirements. Contact our experts to learn more about how end-to-end traceability solutions can transform the working of your marijuana business.