Untracked by Track and Trace

In the U.S. cannabis industry, a seed‑to‑sale tracking system is (supposed to be) the backbone of a safe, legal market. For more than 20 states, that backbone is Metrc (Marijuana Enforcement Tracking Reporting Compliance). Yet in New York—one of the nation’s largest markets—the rollout has been plagued by delays, technical breakdowns, and a lawsuit that threatens the entire system.

While it has more than its fair share of detractors, many other states implemented and integrated Metrc relatively smoothly, what happened in New York?

What is Metrc and Why Does it Matter?

Metrc is a state‑mandated track‑and‑trace solution using RFID tags and strict data protocols to give regulators real‑time supply chain visibility. It aims to prevent diversion into (or inversion from) the black market, ensure product safety via rapid recalls, and – let’s be honest – guarantee tax compliance. When implemented well, it can provide a transparent framework that protects consumers, supports businesses, and secures state revenue.

Metrc is currently the most widely adopted compliance platform, used in over 20 states including Colorado and Michigan. In many markets, transitions were completed with minimal disruption, demonstrating that a functional system is achievable when regulators and vendors work in tandem.

New York’s Troubled Rollout

New York’s path has been anything but smooth. The state’s Office of Cannabis Management (OCM) initially selected BioTrack in late 2022 but missed repeated deadlines. In August 2025, BioTrack partnered with Metrc, prompting an abrupt platform switch. The transition has been marred by technical flaws.

The most glaring problem is the RetailID requirement. Instead of tracking at the batch level—the industry standard—New York forces retailers to generate a unique RetailID for every individual package. This “patch” adds unnecessary steps, confusion, and expense, yet arguably offering no additional compliance value. For small businesses, the extra costs for tags, scanners, and significantly – labor are a significant burden.

The situation grew so dire that a lawsuit was filed in December 2025 by processor Veterans Holdings Inc., seeking to halt the rollout. The suit argues the OCM overstepped by imposing item‑level tagging, multiplying required tags by “hundreds, or even thousands.” More companies are expected to join, warning of “supply‑chain chaos” and millions in added costs.

The Real‑World Consequences: Inversion and Instability

Without functioning tracking, New York cannot curb “inversion”—the flow of illicit, out‑of‑state cannabis into licensed stores. An unknown but significant portion of 2024’s $1 billion in adult‑use sales originated elsewhere, undermining licensed in‑state growers. As one farmer said, “The failure to implement a functioning track‑and‑trace system is a catastrophic betrayal.”

This inversion distorts prices, hurts legitimate businesses, and jeopardizes product safety. It also frustrates the state’s social‑equity goals, saddling operators with higher costs and unfair competition. The OCM created a Trade Practices Bureau, but without reliable tracking, enforcement remains toothless.

Why Has New York Struggled Where Others Succeeded?

Two main factors jump out.

1 – Timeframe for implementation and 2 – RetailID.

Bureaucratic delays and shifting leadership have played a role; the OCM has seen multiple changes in direction. Poor technical planning is evident in the RetailID workaround, suggesting the state’s contract failed to deliver a proper lot‑level solution. New York’s complex regulatory landscape may have complicated integration. Ultimately, the state’s reactive approach has left businesses paying for its missteps.

What Needs to Happen Now?

The solution is clear.

First, the OCM must eliminate the RetailID requirement and enforce Metrc at the batch level. Second, the state should absorb integration costs rather than passing them to licensees. Third, regulators must provide clear, stable leadership and collaborate with industry.

Universal Lessons from a Botched Rollout for Leaders

New York’s struggle is a masterclass in how not to execute a critical implementation.

1. Do not let perfect be the enemy of functional. New York’s attempt to engineer a unique, item-level system on top of a proven platform created a Rube Goldberg machine—complex, costly, and fragile. Implement proven technology first, then iterate.

2. Technical implementation cannot be divorced from business impact. The OCM treated the rollout as a regulatory checkbox, not an operational lifeline. The result imposed unsustainable costs. Regulations must not cripple the businesses the market needs.

3. Clear, consistent communication is non-negotiable. Shifting timelines and opaque mandates created uncertainty and distrust. Transparency builds coalition; opacity builds litigation.

4. View compliance infrastructure as strategic investment. A functioning track-and-trace system is the central nervous system of a legal market. New York’s dysfunction has directly fueled the illicit market and jeopardized its equity goals.

For New York, the path forward is clear: simplify the system, absorb transition costs, and stabilize the platform. For leaders elsewhere, the lesson is equally clear: technology rollouts in new regulatory frontiers are tests of leadership. They require pragmatic planning, stakeholder empathy, and the humility to deploy solutions that actually work. When you get the infrastructure wrong, even the most promising market cannot thrive.

Peter is a banking executive with 20+ years of experience across the banking and financial services spectrum. He has spearheaded 4 separate cannabis banking programs as team lead at commercial banks and has acted as a consultant to dozens of other financial institutions banking cannabis across the country.

Peter is a frequent guest speaker at institutions such as Medgar Evers, Hofstra Law, Rutgers Law, Wake Forest Law and others. His thoughts about the cannabis industry have been featured in NY Times, Forbes, Bloomberg and others.

An active member of the cannabis industry, Peter is currently an advisory board member to CTrust. Additionally, he writes about the cannabis industry for media outlets including Fat Nugs Magazine, Beard Bros, Franchise wires, Insurance Journal, Rolling Stone and others.