When you take a look at the history of cannabis, it’s hard to believe that it’s been in operation for over 20 years since California citizens voted to legalize medical cannabis in November of 1996. For most of us, the industry is still a new and unfamiliar landscape with new states and new programs popping up regularly. Even California, the oldest running medical cannabis program in the country, is just now starting to form their recreational program, which will be the largest cannabis market in the world. There was a time in this budding industry when seed-to-sale tracking wasn’t even a thing, but over time, it has become the fundamental core of how businesses and states operate today’s regulated cannabis markets.
Back when it all began, the industry was largely unregulated and in many ways, it still is. There were some loose guidelines, but ultimately, everyone was operating in a huge grey area where businesses were getting raided by the DEA on a near-regular basis without much clarity on what was, and what was not, within the lines of “legal.” It created an inherent fear of regulation and authority for an entire industry, which resulted in operators doing whatever they were able in order to fly under the radar and avoid incriminating themselves. That meant avoiding normal business practices like banking, common tax write-offs, and recording standard business metrics and tracking your inventory.
As the industry continued to expand and grow, our company was operating as Bio-Tech Medical, Inc. and selling a software solution that tracked prescription opioids using biometric screening. Then in 2010, we were approached by cannabis business operators from Colorado who were seeking a cannabis software solution to meet the State’s recently enacted tracking and reporting requirements; necessity spawned ingenuity, that gave birth to the original development of the industry’s first true seed-to-sale cannabis traceability platform, BioTrackTHC. In most states up to that point, seed-to-sale tracking still wasn’t required, and thus was viewed as a luxury for larger businesses who could afford it; in other words, it wasn’t really being used. Most businesses in medicinal states still didn’t know what cannabis seed-to-sale even was, but all that was about to change.
Suddenly in 2013, states like Colorado and Washington moved to enact voter-approved adult-use legalization measures. This left the states in an odd position because cannabis was, and still is, a federally illegal Schedule I controlled substance. To avoid what would have been a historic clash of the will of the people and federal law, then-Attorney General, James M. Cole, sent out what became known as the “Cole Memo” to all US attorney’s general, basically stating, “If states enact strict regulatory and tracking systems to their voter-approved, adult-use cannabis markets, the federal government will feel no need to interfere.” Now it wasn’t a luxury, or just a state-level requirement, to be tracking and reporting on your cannabis inventory, but a requirement that when not met, is a fineable offense to an already-low bottom line business, or possibly worse.
Now that businesses are required to track and report on their entire cannabis inventory, they just implement a seed-to-sale tracking system and they’re good to go, right? Wrong. Cannabis workflows and how they interact with your seed-to-sale system could be an entire textbook, so let me sum this up as quickly as I can. Growing, processing and selling cannabis is not an exact science but an artform, and it is a very intricate process that is unique to every single licensee. Whatever processes a business uses, it has to sync up, at least to some extent, with your state seed-to-sale system. As you go through the cannabis product lifecycle, there are certain data points that are required to be tracked and reported to the state, so if your process does not match up to the workflows in your seed-to-sale system, you have to alter your workflow to make it match up and report properly, effectively changing your entire business process. BioTrackTHC incorporates highly flexible workflows that will allow you to alter the system to meet your reporting requirements, while maintaining your tried and true business workflows, but even then, it’s not perfect and certain practices that operators are used to will have to change in order to stay compliant to the state’s requirements.
To put that in perspective; it means you can’t change a single thing in your entire business operation without first considering how it will impact your seed-to-sale system and state reporting requirements. It makes your business operation a stiff and inflexible one, for a product life-cycle that often benefits from flexibility. On top of having limited flexibility in your processes, every state has rules and regulations that are constantly in flux, many of which directly impact your standard operating procedures and reporting requirements. Operators have to constantly stay atop the frequent legislative changes to ensure their business is in compliance, while altering their workflows and seed-to-sale tracking process to meet the needs of the new rules and regulations.
Only 7 years ago it was considered a per-state requirement and in some cases, a luxury, to have a seed-to-sale system, now we see an industry where the entire basis of its existence relies on seed-to-sale tracking systems and data reporting requirements. Seed-to-sale is no longer a luxurious tool in the cannabis industry, but instead, it has become the fundamental core of every single licensed business and each state’s regulated market. Without seed-to-sale tracking, our industry doesn’t meet the regulatory and reporting requirements set forth by the states and by the Cole Memo, leaving us vulnerable and noncompliant. In short, seed-to-sale tracking is the only reason we’re able to have an industry, so it’s no surprise that it has become imperative to how we do business and will remain the centerpiece of the cannabiz.
The most exciting part is where it’s taking us next. In all that tracking and reporting, there’s a little goldmine in there that we all know as “Big Data.” The data and information that these businesses are gathering will set the groundwork for the next stage of the cannabiz. The data that’s being uncovered today will bring clarity to a highly complex, but highly lucrative industry, by allowing outsiders to look in and understand exactly what they’re getting into. Data analysis can help us predict so much in business, so as more of it becomes available, we can expect a lot more outsiders and entrepreneurs to start getting involved because it gives them the clarity they need to jump in confidently. On the flipside, licensees who are putting in the work now are collecting information on their customers, their products, and the industry, that can be interpreted into more profit and bigger margins. They just need to harness the power of their data, which is exactly what seed-to-sale tracking systems like BioTrackTHC allow you to do.