Getting Ready for Track and Trace

15 April 2018

Ok. You’ve jumped through all the flaming hoops, scaled the mossy rock walls, swum the icy rivers of bureaucracy and survived. You have a county cultivation permit and a state temporary license. You’re putting seeds into flats or clones into pots and starting your first season as a permitted cannabis cultivator. What now? You must set yourself up with the track and trace programs and enter your data.

After all you’ve been through, you haven’t paid much attention to this detail but it’s time. These posts will help you do that. Disclaimer–I am not offering legal advice or speaking as a government employee or a representative of the software vendors involved. I am passing on what I know from helping others get started with the system. As you’ve learned from getting this far, all rules are subject to change and interpretation from all directions. Work directly with the agencies involved and make use of the help lines offered from the horses’ mouths. This is meant to be a guide to help you on your journey but a map may not reflect current reality. This article is written for Mendocino County, California as of April 2018 so the rules for your locale and timeframe may differ.

First, a little philosophy.

You’re angry at the cost and complexity of compliance. You’re resisting extra paperwork and being under the state’s microscope. You don’t want to change how you grow to make bean-counters happy. Well you have to get over these feelings if you are going to succeed. Yes, keeping pushing politically to make the system fairer for the small farmer but, if you’ve signed up, you need to go all in and see if this bet pays off in a couple of years. Make lemonade and green smoothies and smile. You’ve been given a license to do what has been illegal for a long time so try to make the system work for you. You get to spend a lot of time outdoors with plants that you love unlike the bureaucrats you’re dealing with who are chained to a desk 40 hours a week, 50 weeks a year.

The days of pouring money into making plants grow bigger are over. The key to success is going to be keeping tight control of costs and doing more for less. This is where keeping good data pays off. When you track carefully all your costs and measure which plants in which locations with what inputs produce the best results, you can make informed decisions on how to improve your operation. This is key to any business and you are in business now.

Realize that this is not the goal the government has for the track ‘n trace program. Their goals are to keep track of all cannabis so that legally grown cannabis does not get diverted to the black market and that black market cannabis does not sneak into the legal market and that all taxes are paid. Also so that law enforcement can quickly tell if product being tansported is legal or subject to seizure. Oh, and so if someone gets sick from ingesting a product, it can be traced back to its source and that lot can be recalled from the market. Since there will be so many producers and so few inspectors, they will use the track and trace program to quickly spot inconsistencies and raise red flags that will trigger audits and inspections. The rules are written so that if you fail an inspection, your license can be revoked, you’ll be fined, and all your products removed from the market.

So this is why you need to stay on top of your data collection for track and trace. You’re betting the farm on it.

You need to make it accurate and keep it up to date to avoid trouble and to give yourself- useful data to make your operation more efficient. As with most chores, it is less onerous if you incorporate data entry into your routine and keep it real-time and not get behind.

Dealing with State and Local Track and Trace

As regulation approached, some counties(Humboldt, Mendocino, Yolo) signed contracts with software vendor SICPA to provide track and trace software. The State of California opened bidding for a statewide program. SICPA was one bidder but did not win. Software company Franwell’s program METRC won. So somehow we are stuck with two programs which are incompatible with each other but cultivators must enter their data into both of them to comply. The SICPA contract with Mendocino County is in effect until June 2019. It may or may not be renewed then. The two programs cover the same ground but slightly differently and don’t talk to each other at this point. METRC, the state program, has an API which allows other software to talk to it. (An API is an Application Programming Interface that allows two programs to exchange data securely over the internet. More about that later.) SICPA has an API in the works but it is not available yet. So at this point, cultivators must enter data in both programs and keep them both up to date. Neither program is full business software so they don’t handle sales, taxes, purchases, equipment, or payroll. They don’t necessarily keep track of what the farmer needs to know to improve their operation. There are numerous programs being marketed which do all these functions and claim to interact with SICPA and METRC. Buyer beware. Be sure to test drive software to be sure it will work for you. Most are subscription based and not cheap. Many small cultivators will not need a full business software suite but need to keep accurate records for their business.

Enough talk, we’re burning daylight.

As of April 2018, holders of a state Temporary License do not have to enter data in the state METRC program. You must however keep careful handwritten transfer manifests for anything moved off the premises either using the state’s form or your own with all required information. Once you apply for your Annual State License, you should get registered and started with METRC. Once you have your annual license, you must use the METRC program. METRC fees are covered in your state license fees so you will not have to pay extra to buy tags or use the program.

First Steps

In Mendocino County in 2018, under a county permit, you must use the SICPA program. Once you receive your county permit, do these things to get started:

1. pay the annual license fee to use SICPA
2. create an account on the SICPA website following the instructions provided
3. attend a training session
4. order your first batch of stamps

Okay. That is enough for now. Next time I’ll talk about equipment you will need and how to set up your system. Future posts will cover what you need to do throughout the growing cycle and beyond into distribution and sales.

About me

I have lived on a homestead in Mendocino County for 40 years. I’ve grown some weed during that time but I never really believed it would last so I did a lot of other things too. Like shear sheep, develop software, manage databases for small businesses, help build a school, become a volunteer firefighter and EMT. As regulation approached, my wife and I looked carefully at compliance and decided that we were too close to retirement to invest the time and money necessary to run a cannabis business under the new world order. We’ll grow our six plants the old way and see if the world ever comes to its senses and returns to a simpler way. Not holding my breath. What I can do is use my business and software skills to help people who are building cannabis businesses navigate the muddy waters of track n’ trace. I am available for a range of client work from helping you get set up to doing your data entry to developing custom software for your specialized business. Give me a call.

Will Emerson
wemerson@livelihoodtech.com
707-489-1882

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