Good to see the perfect Metrc has proved not to be perfect after all .
I think we all knew that.
Remember they got into the NY market by killing off the competition Bio Trac first.
Hopefully they bit off more they can chew this time
Cultivated report
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More than a dozen New York cannabis operators and vendors are lining up to join a lawsuit challenging the state’s Metrc track-and-trace rollout, arguing the new requirements are unlawful, costly, and disrupting the supply chain.
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Licensees say Metrc integration glitches, mandatory item-level tagging, and a New York–only 10-cent per tag surcharge have led to inventory backlogs, missed payroll, delayed product launches, and millions in added costs.
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While regulators and Metrc defend the system as necessary for consumer safety and market integrity, attorneys warn ongoing legal challenges are fueling uncertainty and pushing some operators toward a “wait and see” compliance approach.
This story is 1,654 words.
More than a dozen companies are expected to join a lawsuit aiming to halt new track-and-trace requirements in New York’s growing regulated cannabis market, Cultivated has learned.
Meanwhile, the rollout of Metrc’s required seed-to-sale software is causing several license holders operational headaches, from integration glitches and inventory backlogs to added payroll and widespread delays in product availability, according to first-hand accounts.
Groversville-based Veterans Holdings Inc., which filed the lawsuit last month against several New York regulatory agencies, estimates the added processes and resources dedicated to Metrc implementation and upkeep, as well as product fulfillment challenges will cost the processor upwards of $2 million this year alone.
“It isn’t even so much the cost of the tags, even though it’s a tremendous cost,” Veterans founder and CEO Jason Ambrosino told Cultivated. “The labor and the workflows are really where it gets nasty.”
Companies line up to join the lawsuit
Brooklyn-based Lucid Green, which sells QR tags and labels for cannabis products in 12 states, plans to join the lawsuit to contest Metrc’s new requirement to charge manufacturers and other suppliers 10 cents per tag on every single packaged item, a surcharge implemented solely in New York.
“I’ve chosen to be more proactive in this now because I think it’s worth it,” CEO Larry Levy told Cultivated. “The regulations are very clear that there is no requirement to do item level tracking the way that the OCM has mandated this retail ID.”
Beyond Metrc and the state’s Office of Cannabis Management (OCM), other defendants in the lawsuit include:
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OCM chief administrative officer Susan Filburn.
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New York State Cannabis Control Board.
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New York State Liquor Authority, division of alcoholic beverage control.
Levy on Nov. 1 sent a letter to then acting OCM director Felicia Reid objecting to the mandatory QR code labeling that creates an “impenetrable technical barrier to entry” for other service providers.
“This action actively shuts out technology providers, including New York-headquartered Lucid Green, who have invested years and significant resources into developing open, multi-state compliant solutions that are superior in functionality,” the letter reads.
Levy and other critics also argue that the state’s original tracking software contract which was awarded to BioTrack before Metrc acquired its government business in August on undisclosed terms, allowed licensees to use any labeling or tracking platform, as long as required data was reported through their point-of-sale (POS) system.
Track-and-trace is a lucrative business for Metrc
Metrc’s contracts with states can be lucrative but each is structured differently.
In California, for example, a four-year contract extension that took effect in July 2024 tops out at $113.6 million, with an annual ceiling of $28.4 million.
BioTrack’s five-year contract inked with New York in November 2022 tops out at $1,199,900 for the duration of the deal. The 10 cent surcharge could potentially add millions to the agreement annually.
“All we want the OCM to do is to take away the mandatory requirement and let the market decide what players they want to use and how much they want to pay. Plain and simple,” Levy added.
Lucid Green has provided non-mandatory QR tags on millions of units of cannabis products, working with over 450 manufacturers and thousands of retailers. More than 300,000 consumers have downloaded its app, which links QR codes to certificates of analysis (COAs), loyalty programs and other product details, like terpenes and THC percentages.
The company charges customers 2 cents per tag generated in its system and 30 cents per tag for brands and others to use for loyalty and discount programs.
A few trade groups and several other New York licensees are expected to join the lawsuit as early as this week, according to sources.
Read more of the detail here
