December 7, 2023

Cannabis rule change could help Colorado businesses save money

Starting in January, Colorado cannabis licensees will no longer have to use tracking tags that feature RFID chips.


Starting in January, Colorado cannabis licensees will no longer have to use tracking tags that feature RFID chips.

By: Jessica Crawford

Posted at 6:24 AM, Dec 07, 2023

and last updated 6:24 AM, Dec 07, 2023

DENVER โ€” 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, Colorado cannabis licensees will no longer have to use tags with RFID chips inside of them beginning January 8, 2024

Cannabis cultivator Jon Spadafora of Veritas Fine Cannabis said removing the RFID chips from inside the tag could help his business's bottom line.

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"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, itโ€™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 for the next six months. After that, business owners are hoping to save money on new tags that don't contain RFID chips.

METRC tags

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 on 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 it will start making tags without RFID chips and how much the new tags would cost Colorado cannabis businesses, but have not received a response as of publication.


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