Tag Archives: diversion

PlantTag

The Importance of Traceability

By Aaron G. Biros
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PlantTag

With the news of Pennsylvania’s medical cannabis legalization measure passing, lawmakers are clamoring for strict regulatory oversight in the form of traceability to prevent diversion and misuse. State Senator Daylin Leach (D- Montgomery/Delaware) introduced the bill and believes it will have the most intensive protections for safety in the country. “Our goal was to create a system that helps as many patients as possible, as soon as possible and as safely as possible,” says Steve Hoenstine, spokesperson for State Senator Leach. “The seed-to-sale tracking system and the bill’s other protections do just that.”

At the recent Cannabis Labs Conference, Cody Stiffler, vice president of government affairs at BioTrackTHC, discussed why traceability is so important. Stiffler previously served as the chief executive officer of the American Medical Management Association, where he fought the Florida prescription drug abuse epidemic. “We originally started tracking prescription medications and methamphetamine precursors to combat the prescription drug abuse and meth epidemic in Florida,” says Stiffler. He focused on providing accountability and traceability, making sure every prescription was legitimate and keeping drugs off the black market. Implementing tracking protocols allowed for the accountability of pharmacists, physicians and patients.

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Cody Stiffler presenting at the Cannabis Labs Conference

The primary goals of a traceability system, according to Stiffler, are to prevent diversion and promote public safety. “We want to advance the cannabis industry with respect to traceability and regulatory compliance by integrating laboratory testing with traceability,” says Stiffler. “Our software helps get safe products to patients and consumers in a responsible manner.”

Stiffler’s role at BioTrackTHC is to provide industry insights to states looking to legalize cannabis and support them with identifying the best practices that meet requirements in their state. Traceability is commonly defined as the ability to verify history, location and application of a product from source to distribution. BioTrackTHC’s tracking software covers everything from seed to sale, involving regulatory bodies in oversight. In the beginning of cultivation, each plant is assigned a bar code or sixteen-digit identifier. According to Stiffler, Colorado’s system uses radio-frequency identification (RFID) tags while Washington’s system gives the business a choice because the software can work with any type of identifier, whether it is a barcode, QR code or RFID tag. “Our system generates those numbers and prevents diversion with a closed loop system,” says Stiffler.

PlantTag
A plant tagged with a barcode and date for tracking

Washington, Illinois, New York, New Mexico and Hawaii are the five states that use BioTrackTHC’s software. “If the state wants to see the chain-of-custody, they can go back in the system and see every touch point and the full life cycle of the product in real time,” says Stiffler. “Our system also incorporates lab testing to ensure no product reaches shelves unless test values are associated with it.”

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A flowchart showing tracking from seed to sale.

For many states, problems lie not in diversion, but inversion, where black market growers bring their products into the legal market. “A lot of people growing black market product are inverting it into the regulated market,” notes Stiffler. This kind of black market activity can flood the legal market with un-tested cannabis.

Product recalls are examples of when traceability software can be very useful. Pesticides, microbiological contaminants, heavy metals and other contaminants are at issue. Stiffler invokes an example from a company in Washington making THC-infused drinks. “Because of an issue in the manufacturing process, the bottles were exploding in refrigerators and on shelves,” says Stiffler. “Because the product’s lineage was completely tracked, we could isolate all of the products in that specific batch from that specific manufacturer and then forward trace to every retailer that had it in inventory,” he adds. “Whenever someone who did not get the recall notice would attempt to scan that barcode at point of sale, a message appeared noting its recall status and that it is not for sale.” The software’s financial data analytics can provide real time visibility for profit margins or losses resulting from recalls.

According to Stiffler, these kinds of protections in place give law enforcement and government agencies piece of mind that they are helping to prevent diversion and promote public safety. Traceability software is one of the very important safeguards protecting food safety and product safety.

Supreme Court Denies Challenge to Colorado’s Cannabis Laws: Industry Outlooks

By Aaron G. Biros
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The Supreme Court shut down a lawsuit on Monday brought by two states against Colorado for its recreational cannabis laws. Nebraska and Oklahoma brought the case to the Supreme Court, claiming that the recreational cannabis industry in Colorado is responsible for the illegal exportation of cannabis outside of Colorado. “Colorado has facilitated purchase of marijuana by residents of neighboring states by issuing licenses to an unusually high number of marijuana retailers perched on Colorado’s borders,” the two states told the court in a supplemental brief.

In that brief, the two states argue that Colorado’s cannabis industry led to more cannabis illegally crossing state lines. They argue because of that influx of cannabis, they spend more on law enforcement and state resources, which is a detriment to their citizens. The Supreme Court did not provide an explanation for why they refused to hear the case.

Many view this as a big win for the legal cannabis industry. “The Supreme Court has protected the will of the people today and I believe the court has demonstrated that it understands legal cannabis is a fundamental right,” says Andy Williams, president of Medicine Man, the largest cannabis dispensary in Denver.

Still others see this simply as business as usual. “While I’m pleased to see the Court reject the challenge to Colorado’s cannabis law, this decision isn’t really a win for cannabis advocates- it only maintains the status quo,” says Aaron Herzberg, partner and general counsel at CalCann Holdings, a medical cannabis holding company specializing in real estate and licensing. “We are struggling with diversion in California, so hopefully states will continue to be on track to create a more regulated and taxed environment where cannabis can be manufactured and sold through channels where it is safe and tested,” continues Herzberg.

Adam Koh, chief cultivation officer at Comprehensive Cannabis Consulting (3C), warns that the Court’s denial to hear the case is not necessarily an affirmation of state’s cannabis programs. “It is evident that some diversion is taking place, which of course is against the provisions of the Cole Memorandum,” says Koh. “In order to avoid being implicated in such activities, legally licensed cannabis businesses in Colorado should not take the SCOTUS decision as a signal to relax, but should instead work to make sure that inventory control and record-keeping protocols are in place and even exceed the standards required in state regulations.”

The fact alone that Nebraska and Oklahoma even brought the case to the Supreme Court means that diversion is a major issue facing the cannabis industry. “Only by going above and beyond in terms of compliance will this controversial industry make itself credible in the eyes of its detractors,” says Koh. Some cannabis industry leaders take it upon themselves to help guide rule makers in crafting standards.

Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), believes the Cole Memo is currently the best guidance for states and business owners to follow by the federal government in regards to cannabis. “Gaping holes in cannabis regulations are glaringly identified via the pesticide issues and recalls recently,” says Engelking. “These issues showcase each state being in violation of the Cole Memo’s expectation that they will implement strong and effective regulatory and enforcement systems that address the threat to public safety, public health, and other law enforcement interests.”

The Supreme Court’s denial of the two states’ challenge to Colorado’s cannabis legislation suggests the federal government’s intentional avoidance of involvement in current state cannabis issues. The government’s inaction does not, however, indicate their support.