The Colorado Marijuana Enforcement Division (MED) is a governmental agency responsible for regulating the state’s marijuana industry. Since the legalization of recreational marijuana in 2012, the MED has been instrumental in ensuring compliance with regulations and maintaining safety standards within the industry.
As an integral part of their regulatory efforts, the MED requires all licensed cannabis businesses to use RFID (Radio Frequency Identification) METRC tags for inventory tracking. These tags are attached to every plant, allowing for precise monitoring and traceability throughout the entire supply chain.
Recently, the MED has announced potential changes to their use of RFID tags in inventory tracking, in anticipation of the Department’s next solicitation process for the statewide inventory tracking system.
In January 2024, the MED will implement new rule changes for inventory tracking. These changes have caused some confusion among industry members and media outlets, with some reporting that the MED is completely eliminating the use of RFID tags.
However, the MED has clarified in a press release that these changes do not eliminate RFID tags entirely. Rather, they remove specific references to RFID technology and open up the possibility for other inventory tracking solutions to be considered in the statewide system solicitation process.
While newly adopted rules removed the reference to “RFID” and replaced it with a general reference to “inventory tracking system” language, these changes do not eliminate requirements for licensees to use inventory tracking tags in January 2024.
Rather, this rule change is in anticipation of the Department’s next solicitation process for the statewide inventory tracking system and specifically allows for broader consideration of options beyond the RFID-based technology that has been historically required. Importantly, the MED’s existing vendor contract does not expire until 2026.
Therefore, any changes to RFID-tag requirements will only occur after the MED concludes the procurement process for the state’s inventory tracking system. The Department’s preparation for this open, competitive solicitation process has been initiated and will continue throughout 2024.
“Through this update, the Division is deliberately enhancing the competitive nature of its solicitation, where our options will no longer be limited to vendors that couple their inventory tracking systems with RFID technology,” said Dominique Mendiola, Senior Director of the Marijuana Enforcement Division. “Inventory tracking with RFID-tags has been a requirement since the inception of Colorado’s adult-use program and we want to ensure regulations evolve where opportunities exist. With one of the most mature adult-use cannabis markets in the nation, this is a critical opportunity to reflect on what we have learned and how our regulatory needs could still be met by the variety of inventory tracking solutions available today. We look forward to engaging licensees throughout this process.”
RFID tags can be quite expensive for cannabis businesses, for a facility with a large number of plants, this cost can quickly add up to a significant expense.
Cannabis cultivator Jon Spadafora of Veritas Fine Cannabis told Denver 7 that removing the RFID chips from inside the tag could help his business’s bottom line.
“Depending on where they’re at in the plant’s life cycle, they’re 25 to 45 cents per tag,” said Spadafora. “A facility like this, it’s in the low six figures on an annual basis.”
Does This Mean End Of METRC In Colorado?
The MED’s existing vendor contract for the statewide inventory tracking system is set to expire in 2026. This has raised questions about the future of METRC (Marijuana Enforcement Tracking Reporting Compliance), the current inventory tracking system used by Colorado’s cannabis industry.
However, it should be noted that the expiration of the vendor contract does not necessarily mean the end of METRC in Colorado. The MED is currently preparing for the next solicitation process, which will determine the new statewide inventory tracking system.
While the use of RFID tags may no longer be a requirement in this new system, it is possible that METRC technology could still be utilized. This decision will ultimately depend on the outcome of the competitive solicitation process and input from industry stakeholders.
Per Cannabis Business Times, Metrc released a statement that the recent rule change “does not alter Metrc’s service offering or our current obligation to the state in accordance with our contract. Our system is configured to work optimally with RFID tags, and as such, we will currently maintain an RFID tag solution for plant and package tracking. As industry needs evolve, we consistently evaluate alternative options to best service all stakeholders (for example, we are currently piloting a new iteration of a more sustainable tag, among other offerings). Metrc will continue to partner with the state agency and adapt alongside the Colorado industry to ensure regulatory compliance needs are met for all parties.”
It is clear that METRC is willing to work with the state of Colorado and find a solution that meets regulatory compliance needs for all parties involved. As mentioned in their statement, they are currently evaluating alternative options to RFID tags and have even piloted a more sustainable tag.
The use of RFID tags has been a costly requirement for cannabis businesses, leading to financial burdens for some. With the potential removal of this requirement in the future statewide inventory tracking system, there may be more cost-effective options available. This not only benefits businesses financially but could also improve overall efficiency in tracking and inventory management.
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