Editor's note: In a statement, the Colorado Marijuana Enforcement Division (MED) said inventory tracking tags will still be required, but the rule change will allow for "broader consideration of options beyond the RFID-based technology that has been historically required." The state has a partnership with Metrc until 2026, so any changes to RFID-tag requirements "will only occur after the MED concludes the procurement process for the state's inventory tracking system."
"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."
DENVER — Cannabis companies in Colorado just got a little more control over how their products are regulated.
Current Colorado law states cannabis licensees are required to use tags with Radio Frequency Identification (RFID) chips to track everything from when the seed is first planted to when the good is packaged for sale. Under new rules adopted by the state in November, MED stuck "RFID" language, replacing it with "Inventory Tracking System."
Cannabis cultivator Jon Spadafora of Veritas Fine Cannabis said 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."
That's why Ripple, a Colorado-based edibles brand co-founded by Missy Bradley, proposed the rule changes.
"We could be producing more product," said Bradley. "We could be paying employees more. There are all sorts of ways that we could put that money to use should we not have to spend it on RFID tags."
Shannon Donnelly, a cannabis professor at Metropolitan State University of Denver and cannabis operations consultant, explained RFID tags were first introduced to help with regulation.
"We do it for consumer safety," said Donnelly. "So if there is an issue at a grow... RFID tracking allows us to actually go to the dispensary level, and show these amounts of people purchased this much product."
Donnelly said there are several other ways for regulators to track cannabis in Colorado that are used much more frequently than RFID chips. Cannabis companies like Veritas argue consumer safety won't be affected by the new rules because RFID technology has been used infrequently in Colorado.
Donnelly said cannabis businesses can continue to use the tags they have with RFID chips inside of them, as some businesses make RFID purchases six months ahead of us. After that, business owners are hoping to save money on new tags that don't contain RFID chips.
Metrc, which creates the tags with the RFID chips inside, has a no-bid contract with Colorado's Marijuana Enforcement Division. For that reason, Colorado cannabis licensees will have to deal with Metrc indefinitely, even with the rule change.
"Hopefully the next time they purchase tags, they would be at a lower price because there's no RFID tracking requirement. But it depends on when Metrc begins developing tags for the Colorado market that do not have the RFID tracking with them," said Donnelly.
In a statement, the Florida-based company touted the benefits of RFID technology.
"RFID technology stands at the forefront of revolutionizing supply chains. By offering RFID-enabled tags, Metrc empowers regulatory agencies and industry licensees alike. For regulators, RFID signifies efficiency, enabling faster audits, automating compliance monitoring, and ultimately reducing the time spent ensuring compliance in facilities. For the operators, RFID can be a cornerstone technology, streamlining inventory management, enhancing asset tracking, and automating compliance processes. In a recent interview conducted by Trym, a Colorado cultivator reduced data and reporting times by over 80% through RFID implementation.
RFID doesn't just benefit regulators and businesses; it's a lifeline for consumer safety. Accurate product tracking ensures that consumers have access to safe, legitimate cannabis products. The unique identifiers on RFID tags authenticate products, assuring consumers that they are purchasing genuine, quality-tested items from licensed sources. Rapid response to recalls, deterrence of theft, and stringent quality control are all made possible through the unique identification capabilities of RFID tags. It's a shield, ensuring that consumers can trust the products they purchase.
At its core, the purpose of RFID is to help shape an industry that's efficient, compliant, and ready for the future. As technology advances, RFID keeps pace, integrating seamlessly with AI innovations and other untapped potentials. Metrc stands by RFID as the catalyst for this transformative journey, driving the sector toward a future defined by efficiency, precision, innovation, and sustainable growth."
Denver7 reached out to Metrc to ask when if it will start making tags without RFID chips and how much the new tags would cost Colorado cannabis businesses. In a statement, Metrc said its system is "configured to work optimally with RFID tags, and as such, we will currently maintain an RFID tag solution."
"The recent rule change does not alter Metrc's service offering. 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."
In an additional statement, Metrc said "there has been no communication to licensees that the cost would change."
"Metrc will maintain our service offering as it currently stands. There has been no communication to licensees that the cost would change. We will continue to partner with the state agency and adapt alongside the Colorado industry to ensure regulatory compliance needs are met for all parties."
