Both Humboldt County and the state want to keep a watchful eye on how their cannabis moves throughout the state, but discrepancies between the two governments’ methods had local farmers facing the possibility of having to pay for and comply with two distinct tracking systems.
However, local farmers and regulators are breathing a temporary sigh of relief after it was announced last week that the county and state’s tracking software would be able to mesh together, at least to a certain extent.
Humboldt County’s track-and-trace system — run through the Swiss company SICPA, which also tracks the state’s cigarette sales — has been in place for close to two years. The county was the first government entity in the state to start a pot tracking program in 2016. The program works to track cannabis from when it is being grown all the way to when it hits retailer’s shelves by using coded stamps that can be scanned by regulators and customers.
Humboldt County Agricultural Commissioner Jeff Dolf’s office is responsible for overseeing the county’s tracking program. Until the state actually launches its own system, which could occur as soon as July, Dolf said questions remain as to whether the state’s track-and-trace program — known as METRC — will meet the full needs and goals of the county.
“Until there is actually an industry that is signing up and using this system and until my office and the county is receiving the data from that system, it’s premature to say and to speculate,” he said.
Cannabis farmer Nathan Whittington of Ladybug Herbal Sanctuary in outer Ferndale has been participating in the county tracking system since it was launched as a pilot program in 2016. Regardless of whether one system wins out over another, he said the track-and-trace program has given local farmers a leg up in learning how to operate in the regulated market, which he said can help give small farmers a better chance in a much larger market.
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“If nothing else, that proves we are really coming of age as an industry and able to demonstrate compliance on all levels,” Whittington said.
Humboldt County’s tracking program not only serves to ensure product isn’t moving from the legal market to the black market and vice versa. It also includes a “proof-of-origin” feature to verify that the product is indeed from Humboldt County and not falsely advertised by people seeking to cash in on the county’s reputation in the cannabis world.
Humboldt Growers Alliance Executive Director Terra Carver said that similar to Napa Valley or French wines, the tracking program works to promote and protect the county’s brand in a now competitive statewide market.
“In the short term, this offers the consumer the validation and verification that the product is compliant. In the long term, if we can add value through a consumer awareness with the stamp, then we will be able to add value to your product,” Carver said.
These stamps can be placed on the final packaging and allows customers to scan it to tell them information such as who produced it, what kind of strain it is, where it was grown and when it was produced.
More than 47,500 pounds of cannabis and 178,800 plants from about 330 sites are being tracked by the county as of Wednesday, according to Dolf.
The state’s METRC tracking system also uses tags to track cannabis, but they do not include the “proof of origin” feature because they are only used to tag plants and track batches of products rather than the individual packages found in dispensaries, according to SICPA Vice President of Business Affairs Alex Spelman. Spelman said that SICPA stamps also contain bank note security that prevents them from being copied or counterfeited.
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Dolf said one of the questions this discrepancy brings up is whether the county will just defer to the state system for tracking and continue using SICPA to provide “proof of origin” stamps.
The big change announced last week is that SICPA’s software is able to integrate with the state’s METRC system. This was good news for Whittington because he uses his own inventory management system, which he can then patch through to SICPA’s software for easy data entry. Where before cannabis farmers didn’t have to keep records of anything, the new laws require them to declare how much square-footage of crop they grow, record harvest times and their yields.
Through SICPA, Whittington said he was able to input and pull up all that information with relative ease when his annual county inspection occurred recently.
“I can increase my business savvy within my own farm,” Whittington said.
The state’s track and trace system isn’t expected to launch until it begins issuing its first annual licenses to cannabis businesses. Currently, California marijuana businesses are operating under temporary licenses until they are able to gather information to get their full license.
As it stands, cannabiz owners will still be operating under two systems once those state licenses are issued, but only for certain instances along the production line.
Farmers will have to order METRC tags for their plants, which have to be tagged when they are immature and again when they begin to flower. Spelman said farmers must obtain their tags through the METRC system, but said SICPA’s software, known as CalOrigin, can still be used by farmers once those tags are in place and activated.
One of the major changes that will occur is that farmers and other businesses cannot use SICPA when they want to transfer their product from one business to another, such as to a retailer or concentrate manufacturer. In those situations, the business must log that through the state system, but Spelman said that SICPA’s software will be able to record that information as well after the fact.
“I think it’s a very positive development for the operations in the county to ensure that the CalOrigin system can not only communicate seamlessly with their software, but the state system to assist in helping to mitigate the compliance burdens on the operators,” Spelman said.
Dolf said any changes that will be made to the county’s tracking program will be made through a public process where the industry can provide input.
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