Kevin Ellison: Metrc Counter-Point
Opinion
A few weeks ago Andrew Mullins, Executive Director of MoCannTrade, wrote an article in protest of Metrc’s requirement that each plant requires cultivators to purchase RFID tags for $.45 per plant and package tags for $.25 per package. BioTrack has sued on the basis that Metrc’s bid wasn’t accurate because it didn’t include the tag pricing. Greenway publisher Rachael Herndon Dunn wrote an excellent article that goes into detail about the lawsuits and the details.
If you haven’t read both of these articles yet, you should read them now before I muddy the waters even further. Go ahead, I will wait right here.
So now you are up to date and understand the three sides of the story, right? Well I am going to explain why that $.45 per plant is way cheaper than the alternative. Rachael pointed out in her article that Metrc relies on the afore mentioned RFID tags while BioTrack uses barcode labels for tracking. We have already established that the RFID tags cost $.45 per plant and $.25 per package under the Metrc system, but what about the barcode labels? They are just stickers, right? Nope.
Let’s focus on the cultivation area for this example. In the BioTrack ecosystem, the labels for plants are a special label type that is sticky on the end, but not the middle. It has to be able to be placed on the plant when it is a new sprout and it can’t stick to the plant or inhibit growth. If you have been on an airplane in the last decade, you have seen the labels they put on luggage handles that stick just at the end. The barcode labels used with BioTrack are very similar in design. These labels cost about $.1o per label (1,000 labels for $90 – $110). You also need a label printer to print the barcode on the label. These run about $250 and you will need at least two unless you want to risk shutting down your business because someone fed the labels into the printer wrong which makes a gummy nasty mess. At this point you are looking at around $.11 to $.13 in materials per plant for the barcode labels. Both solutions need some type of reader so we will call that equal.
This is where it gets interesting. If you dig deeper into the processes of Metrc and BioTrack you begin to understand the Metrc model. Every plant has to have a unique identifier so the plant and the products created from that plant can be tracked based on a plant number that will remain unique for years across all plants ever recorded in the US and ideally around the world. Metrc makes this easy because they code the unique number into the RFID tag so that the cultivation purchases tags that are pre-coded and the cultivation software records that the predefined tag number is assigned to a specific plant. With BioTrack, typically the cultivator tells the state they are going to plant x plants and need that number of ID numbers. The cultivator then prints tags with those numbers and then records which tag goes with which plant in the state system. The difference is the cost of labor for printing the tags, reprinting any that get jammed or torn and making sure that the numbers are all correct. With Metrc the cultivation receives the tags already with the numbers removing most of the human error. It doesn’t take too many human errors to cost way more than the $.33 per plant cost difference so far.
If you have read the Missouri regs lately, then you remember that the cultivation is responsible for keeping perfect inventory tracking records. What the state system says is in Grow Room 1 has to match what is actually in Grow Room 1. No extra plants and definitely no missing plants. Two years ago Washington State did a surprise inspection of cultivators using barcode tracking and found that 40% of them had an error in their inventory. 13% had significant enough errors that they were at risk for losing their license. Being the smart business person you are, lets say you decide to do a weekly inventory to avoid such compliance problems. With BioTrack that means taking a barcode scanner and scanning every single label on every single plant one at a time. How much do you think that labor costs?
Let’s take that same scenario in the Metrc world. If you are using a decent application for managing your cultivation and your technology company put readers in the right places, you already have real time inventory. That’s the magic, with RFID the cultivator has the ability to constantly see all tags in any given room constantly. You can even see when a pant moves and where it moves to. This same RFID magic works in manufacturing, vaults, dispensary shelves and transportation vehicles to name a few. If you used my company (CST Solutions) to help with your application, you already knew this and included the words “real time inventory” in your application. If you have a dispensary the same principle applies because you can see all of the inventory in your store at all times.
So going back to our cost comparison you now know that for $.45 per plant and a small investment in RFID readers you can guarantee that your inventory is always accurate. How much does the manual bar code scanning of 10,000 plants cost per week? How much does losing your license due to inventory inaccuracies cost?
Kevin Ellison is the CEO of CST Solutions Group. CST Solutions Group provides complete security and technology solutions to companies whom specialize in the cannabis industry. CST Solutions has multiple decades of combined real-world experience in industries with regulatory and security issues including: banking, casinos, retail, law enforcement, and government organizations.
