Metrc discontinues tag fees in Missouri

 

In what appears to be the conclusion of one of the longest ongoing sagas in Missouri’s medical marijuana industry, as of February 1, Metrc no longer requires tag fees for Missouri’s licensed marijuana businesses.

“At this time, Metrc and the state of Missouri have agreed that moving forward, licensees will not be charged the fees for individual tags. Metrc is contracted by state regulators to help create a secure and credible regulatory environment that supports businesses and protects consumers. While we do not comment on the details of these contracts, we do look forward to our continued partnership with the state and remain focused on ensuring the safety and security of Missouri’s legal cannabis market,” David Eagleson, Director of Program Management for Metrc, told Greenway in a statement.

In a support bulletin issued February 1, Metrc informed users that effective immediately, all tag orders will no longer have an associated tag charge per plant or product. Additionally, all current tag purchase agreements will be null, replaced by the updated language to the tag order process.

“This long-overdue decision is a win not just for Missouri operators but especially for the nearly 170,000 patients and caregivers who would likely have had to absorb the additional fees. It’s been over a year since the state Court of Appeals ruled that these hidden costs are legally indefensible,” said Andrew Mullins, MoCannTrade executive director.

As the appellate court wrote in its Jan. 26, 2021, decision,  ‘The plain and unambiguous language of the contract does not permit Metrc to charge industry participants for its proprietary RFID tags beyond the stated firm, fixed price contained in the contract.’”

Metrc will continue to charge a shipping and handling fee with each order and will implement a maximum tag order limit, per license, for operators in the state.

A Metrc tag used in seed to sale tracking hangs from a harvested marijuana plant in Missouri.

The new tag limits will apply as follows:

  • Cultivators 
    • Plant Tags: Max 7,500 
    • Package Tags: Max 2,000 
  • Product Manufacturers 
    • Package Tags: Max 2,500 
  • Testing 
    • Package Tags: Max 100 
  • Dispensary 
    • Package Tags: Max 150

 

Per the notice, “The max setting is intended to be calculated based on the formula – (Max – Available Unused Tags (on Hand) – Shipped (in transit) – On Order (all statuses except voided) = Amount Available to Order). In cases where there is a need for an increase in tag orders due to operating needs, Metrc and DHSS will have an approval process. This process will require licensees to first email into support@metrc.com with the subject “Increase Tag Limit Request” and outline the requested amount to increase. The intent is not to prohibit these orders, but rather assess them for reasonableness with DHSS.”

   

“The only significant change we expect under the new process is that there will no longer be fees for tags,” explained Lisa Cox, Communications Director at the Missouri Department of Health and Senior Services. “Shipping and handling charges should remain the same as they have always been, and if any facility does need more tags than what is designated as the maximum, we will work quickly to respond to that request. Licensees should experience very little difference in their normal ordering processes, other than the lack of a tag fee, but we will monitor the changes in the system to ensure facilities’ needs are being met.”

Read the document in full below.

The update comes after a more than two-year battle over the right for Metrc to charge tag fees. In September of 2019, Metrc sued the state of Missouri contending at the time that officials had provided conflicting information about what the company is, and is not, allowed to charge to a business.

The lawsuit resulted in Cole County Judge Dan Green rejecting Metrc’s motion, writing “under Contract No. CR191827001, Metrc is not entitled to request or receive compensation from non-state entities for the RFID tags.”

In February of 2020, Metrc filed an appeal of Judge Green’s decision, writing in the appeal, “After the contract was awarded and Metrc was performing it, the Office of Administration sought to rewrite the plain and unambiguous contract to impose a new obligation on Metrc to provide the RFID tags to the industry free of any charge.”

During that time Metrc continued to pursue tag purchase agreements from medical marijuana businesses in the state.

Metrc’s appeal was denied in January of 2021 with Judge Cynthia Martin writing the opinion. “We fail to see any connection between interpretation of Metrc’s contract, which was awarded by OA on April 5, 2019, and 19 C.S.R. 30-95.025, which was promulgated by DHSS as an emergency rule on May 24, 2019 with an effective date of June 3, 2019,” reads the opinion. “Metrc’s contract does not incorporate by reference DHSS rules addressing implementation of Article XIV, section 1 of the Missouri Constitution. And Metrc does not contend that its contract is ambiguous as to require resort to extraneous evidence to determine the parties’ intent. We thus agree with the trial court’s conclusion that 19 C.S.R. 30-95.025 is irrelevant to interpreting the parties’ contract.”

Despite the appeals decision, Metrc has continued to charge Missouri’s medical marijuana licensees plant and package tag fees to this point.

The end of tag fees will be a welcome relief for Missouri operators, with operators spending thousands of dollars per month in plant and package tag fees.

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