Wrong Results – METRC What’s Next?

Wrong Results – METRC What’s Next?

Wrong Results - METRC What's Next?
Wrong Results – METRC What’s Next?

Wrong Results – METRC What’s Next? – we ran across a fascinating article – Software to Regulate Legal Marijuana Is Just as Error-Prone as Other Government Software – the problem was Maryland’s mandatory cannabis-tracking Metrc software, which checks a patient’s prescription and purchase history at every sale. Metrc was repeatedly bogged down with user traffic, sometimes for hours. Patients sat waiting, and some who traveled some distance drove home empty-handed.

Maryland is among 30 states so far that have legalized recreational or medical marijuana, and the vast majority of them require close tracking—known as “seed to sale”—of the plant. Maryland is also one of 10 states (plus D.C.) that are using Metrc, a product of Franwell. Seven others use software from Florida-based BioTrackTHC, and two, Pennsylvania and Washington, have signed up with MJ Freeway, software made by Denver-based Leaf Data Systems.

Each company helps regulators trace the cannabis moving through their borders—everything from microchipped pot plants to concentrates and buds sold at dispensaries. Retailers can generally use different software to ring customers up, but it’s on them to share the sales and inventory data with regulators to show they’re complying with state law. States have adopted the seed-to-sale model to ensure product safety and show they can keep their weed away from the larger, more entrenched black market.

But when the software doesn’t perform, the industry and its customers suffer. In 2018, in addition to rejecting patients, glitches caused by high levels of user traffic left dispensaries in Maryland unable to make transactions, costing them significant amounts of money, retail managers said. In 2017, Oregon’s marijuana growers and distributors complained of spending valuable man-hours updating inventory in Metrc and dealing with slow connections during peak harvest season. MJ Freeway’s glitches in Pennsylvania and Washington have halted commerce for dispensaries, and the company has suffered multiple hacks and securitybreaches, plus a troubled, months-delayed launch in Washington earlier this year. Before inking a deal with MJ Freeway, Washington worked with BioTrackTHC for four years, but growers bemoaned performance issues and lacking functionality.

You can read the rest of the article here.  However, this is the point where the “bells went off”. If a cannabis business suspects that the seed to sale tracking platform is:

Wrong Results – METRC What’s Next?
  • Creating bottlenecks in operations.
  • Not functioning according to the way is was intended to as described in the guidelines from the regulator or
  • Not producing accurate and repeatable results.

The cannabis would benefit from the expertise of a professional that has recognized credentials to review the system, understands how it works and can make a credible presentation advocating for the business…and that would be a certified public accountant [“CPA”], the ONLY professional that is permitted to certify the results of a review of internal accounting controls [compliance and substantive testing, perform agreed-upon procedures, and actually audit financial information.

The Slate article set off some alarm bells, and we are going to need to research the procedures in California for challenging the results and operations of METRC. However, this is an area where a CPA with the proper skills could be incredibly valuable to a cannabis business.

Wrong Results – METRC What’s Next?

Author: abizcannabis

Managing Director & CEO of integrated transactional financial advisory, tax, and technology consulting firm - aBIZinaBOX Inc New York, Chicago, and OaklandCPA.CITP.CISM.CGEIT.CGMAExpertise with: Alt. Investments/Private Equity, Real Estate, Professional Services, CA Cannabis, Tech Start-Ups and Distressed Assets/DebtTechnology Certifications including:Advanced & High Complexity Cloud Integrator AICPA PCPS, CAQ,, IMTA, CITP ISACA CGEIT, CISMState CPA Societies in California, Florida, Illinois, New York and TexasExpertise with Regulatory Compliance - US - HIPAA, FINRA, SEC Rule 17(a)(3)/(4), eDiscovery, FINCEN - EU- EBA, ESMA, EIOPA UK - BoE, PRA, FCA