Inside California's System for Tracking and Tracing Marijuana

The new software will monitor a cannabis plant's every move, assuring officials it isn't leaving state borders.

by Lisa M. Krieger, The Mercury News / April 25, 2018
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(TNS) —  SOQUEL, CALIF. — With a fruity fragrance derived from generations of careful breeding, the tall and voluptuous cannabis plant at Utopia Farms is worthy of its strain name: “C. Banana.”

But to state regulators, it’s #S0411180010-01.

From birth to death — and beyond, when added to foods and extracts — plants like this will soon enter California’s elaborate new “Track and Trace” program, providing the same information you’d find on a pack of gum or box of copy paper. Like other consumer items that are scanned billions of times a day around the world, cannabis is joining the world of cold efficiency, identification and control that defines the mundane minutiae of modern life.

For the first time, the state will know where and how much licensed marijuana is being grown, sold and produced. Software will monitor a plant’s every move — and measure its weight along the way until it’s sold — assuring officials that licensed crops of cannabis grown for dispensaries aren’t crossing state lines or going into the black market. What happens in California stays in California.

“It’s tracking cannabis as if it were uranium,” said Mark McMillan, director of systems at Harborside, a large marijuana grower and dispensary business. “There will be ‘Track and Trace’ stickers on everything.”

The program, to be launched in July, strengthens the case against federal intervention by taking steps to ensure that California’s licensed pot isn’t sold to other states. It does other things as well. It tells tax collectors how much money they should be collecting. It tells local police whether a business has 50 or 5,000 plants. And if there’s a product defect, it tells health officials where to do recalls.

It’s a big and expensive change for a culture of Birkenstock-wearing botanists who over decades have crafted a Mendelian cornucopia of pot — from C. Banana to Purple Monkey Balls and Alaskan Thunderf*** — to assist with anxiety, sleep or just a chill time at a Phish jam.

Think of it as Big Data meets The Man, as big a buzz kill as flashing lights in your rear view mirror.

The growing regulation of cannabis mandated under Prop. 64, passed in 2016, requires technical expertise for growers seeking to come out of the shadows — and who are already struggling to comply with other new rules.

Under the program created and mandated by the state Department of Food and Agriculture, serial numbers and RFID (Radio Frequency Identification) tags will be assigned to each batch of seedlings, called “clones.” Individual plants are tagged later in the process.

A scanner reads the encoded information, and translates it to a database, giving the state real-time visibility into the inventory at all locations.

Each number holds product information. It is linked to an online file that contains information such as strain, propagation method, location, intended use and number of plants at each stage of its lifestyle — nursery, vegetation, flower, harvest and sold.

Every plant that dies must be counted, then subtracted. Diversion is detected if what is measured at harvest doesn’t match what was expected at planting.

“They know exactly how many plants you have. They know exactly what the yield is,” said Kaiya Bercow, co-founder of Utopia Farms.

Also included in the track and trace system are the product purity results from testing labs, which screen for pesticides and toxins.

The main thing the new tracking and tracing system won’t do is measure and monitor the vast acreage grown by unlicensed growers. Although dispensaries cannot control what retail customers do with their cannabis products once they buy them, industry insiders say the real diversion problem is created by black market growers who supply the majority of cannabis shipped out of state.

After four months of searching, California recently selected a Florida-based cannabis track-and-trace vendor called Franwell METRC (Marijuana Enforcement Tracking Reporting Compliance), which already has contracts in Nevada, Colorado and Alaska.

Already, many growers such as Utopia Farms are using commercial software for internal purposes, with serial numbers and barcodes, to track their products, train their staff and work out the bugs before a computer-based system becomes mandatory. Both big and small tech companies have jumped into the business. Hewlett-Packard offers FlowHub; Microsoft, Kind; SAP, Viridian Science.

The two systems — the state’s METRC and the grower’s internal software — will work together in a hybrid fashion, with the grower’s data flowing into the state’s central reporting system. This allows the state to manage a large amount of information, but also enables suppliers to use the tools of their choice. At any point, the state can visit farms or manufacturing facilities to do audits.

“We are trying to comply now, so there won’t be such a huge learning curve,” said Bercow. It has taken months for the company to implement it.

Licensed growers like Utopia and Harborside welcome the new era of compliance but say the system creates additional expense and work.

Monthly licensing fees for internal software range from $250 to $20,000 a month, depending on the size of the facility. Each METRC tag costs about 80 cents per plant.

Labor is expensive, too. Staffers must be trained in how to use the software, and someone must be licensed as a “weighmaster,” so cannabis is weighed properly.

“Every step of the way involves computer entry, scanning and weighing,” said Utopia’s cultivation manager Sean Cashman.

He must apply a code to each batch of clones, then scan their codes as the plants mature from seedlings to flowering adults. If a plant dies, he marks it in the system, then measures its precise weight. A third party disposal company picks up the waste, so the state knows the product wasn’t sent elsewhere.

Plants must be weighed when they’re wet, then weighed again when they’re dry. They’re weighed before and after leaves are stripped. During harvesting, buds are weighed. They’re weighed again during trimming. When they’re put into jars as a finished product, their code goes with them. But growers are skeptical of how well the system will account for products such as edibles, oils or other products that are derived from multiple plants.

“There is a lot of pressure here,” said Harborside’s McMillan, a 25-year software veteran with experience at Oracle and other tech companies. “Errors can happen by accident, by one person sneezing.”

In a world of horticultural techniques long cherished for their art, not science, “it requires a level of operational precision and attention to detail that, if not right,” he said, “can get ugly really fast.”

©2018 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.