Clark Howell Provide Detailed 101 On METRC Compliance

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Earlier this month, we told you about inspections and enforcement. Today we focus on an important component of your compliance program: proper use of the seed-to-sale tracking system. 

“Metrc,” short for “Marijuana Enforcement Tracking, Reporting, and Compliance,” (aka “California Cannabis Track-and-Trace” or “CCTT”) tracks cannabis throughout the supply chain and allows authorities and operators to trace the origin of cannabis (say, in the case of a recall). After a confusing rollout and staggered onboarding as licensees graduated from temporary to provisional licenses, Metrc became a must-use for all operators in early 2020. By the end of the year, there were 9,397 users in the California Metrc system.
“Using” Metrc means tracking the movement of cannabis, but that’s not all. You’ll also conduct frequent checks, reporting, and record-keeping requirements. It is a costly and time-consuming ongoing obligation. Unfortunately, non-compliance can be extremely expensive. Keep reading to learn about common mistakes, examples of penalties associated with Metrc non-compliance, and tips to stay in the authorities’ good graces.
  • Waited more than 24 hours to report any commercial cannabis activity — such as sale, testing, or transportation — in Metrc?
  • Kept flowering plants outside the canopy area and/or without tags?
  • Produced seeds from plants not tagged with UIDs?
  • Skipped a monthly inventory reconciliation?
  • Left a Metrc entry uncorrected?
  • Logged something in Metrc without having supporting documentation?
  • Changed your CCTT account manager without notifying your licensing authority?
  • Added new CCTT users without updating the written user list?
  • Shared your Metrc login information for use by another person in the meanwhile?
  • Forgotten to cancel a former employee’s CCTT account?
If you answered “yes” to any of the questions above, it’s probably time for an internal Metrc compliance audit.
You may think you’re in the clear because you passed a recent inspection, but poor Metrc practices can catch up with you later. CDFA, for example, has 5 years from discovery of the violation to take administrative action.
While we have a general sense of how expensive Metrc non-compliance can be, know that the licensing authorities have significant discretion when it comes to issuing fines (and may exercise authority to exceed the maximum fine amounts). CDPH does not publish detailed disciplinary guidelines, but CDFA and BCC do. The information we provide below is drawn from the guidance that is available.
Here are a few examples of potential fines:
  • $1,000-$5,000 per plant, per day for each plant that is not tagged in Metrc.
  • $501-$1,000 per plant, per day for failing to properly tag mature plants in the R&D area.
  • $501-$1,000 for transferring cannabis to a distributor during a period when the licensee has lost access to Metrc.
In addition to financial penalties, some violations trigger suspension and even revocation.
In addition to the Metrc-related violations we highlighted above, it’s wise for you to be familiar with all the different violations that could lead to fines, suspension, or revocation. Once you’re aware, build preventative measures into your operations. The tips below will help you get started.
Learn
  • Review BPC Section 26160, which allows fines of up to $30,000 per individual violation for failing to maintain or provide records. Remember: Everything you enter in CCTT must be supported by records.
Document
  • Make sure your current SOPs and checklists accurately capture the Metrc reporting requirements of your license type(s).
  • Are you missing some SOPs and checklists? Write them. For example, write a Metrc Audit SOP if you don’t already have one.
  • Build other compliance requirements into your checklists and systems.
  • When is the last time your personnel reviewed SOPs? Personnel should be trained and retrained in all relevant aspects of compliance, including Metrc reporting requirements. Well-written SOPs can be helpful reference documents to make sure steps aren’t missed.
  • Does personnel consistently implement SOPs? If not, find out why.
Delegate
  • Designate and train a qualified person who is responsible for Metrc compliance. This individual should stay on top of new Metrc bulletins and ensure that the business is in compliance. It’s preferable to have a dedicated expert on-staff; at a minimum, work with a consultant who specializes in Metrc compliance.
  • Assign a qualified person to oversee Metrc data entry and audits.
Check
  • Go through your Metrc account with a fine-toothed comb. Reach out to us if you aren’t sure how to do a comprehensive audit.
  • Schedule audits into your calendar as recurring events and follow a comprehensive audit SOP.
  • Correct issues immediately (and don’t forget to update the related SOPs!)

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