Cannabis industry regulators in California have extended the state’s contract with Florida-based cannabis track-and-trace software company Metrc. According to the California Department of Cannabis Control, “the new contract went into effect on July 1, 2024 for a four year term with a state option to extend for up to two additional years.”
Metrc describes itself as “the most trusted and experienced provider of cannabis regulatory technology systems in the United States” and that their “solution combines advanced software, radio-frequency identification (RFID), a dedicated customer support team, and a secure database to track cannabis from growth, harvest, and processing to testing, transport, and sale.”
“Metrc is currently engaged in 25 government contracts and serves more than 400,000 users, including growers, testing facilities, dispensaries, state regulators, and law enforcement officials.” Metrc stated in a recent press release.
“Metrc holds exclusive government contracts in every region of the U.S., and has a particularly strong presence in the West, where it holds contracts with California, Colorado, Montana, Nevada, Oklahoma, Oregon and South Dakota.” Metrc also stated.
The state has an option to extend the contract another two years.” stated MJBizDaily in its original coverage regarding the contract extension in California. “The contract will not exceed $28.4 million annually, or $113.6 million for four years, the DCC confirmed to MJBizDaily on Friday afternoon.”
“California represents the largest regulated cannabis market in the United States, and we are proud to continue our contribution to its growth and success,” said Michael Johnson, CEO of Metrc, in a press release. “Working with the DCC, we ensure regulators can efficiently and securely manage millions of data points from operators statewide. Leveraging cutting-edge technology with a continued commitment to incorporate customer input, Metrc will continue to optimize system performance and cultivate an environment that promotes business success while safeguarding public health and safety.”
“As we move into the next term, Metrc will work closely with the Department of Cannabis Control (DCC) to further develop and enhance the current software’s functionality and design. The company’s focus will be building on and improving the system’s tools to increase the ability for swift action, increasing transparency and speed up data-driven responses to support regulation and protect consumers. This new contract will enable further advancements in track-and-trace technology as the market continues to grow and evolve.” the press release also stated.
California is considered by many cannabis enthusiasts to be the best state in the U.S. for cannabis. California was the first state to ever pass a medical cannabis legalization measure in 1996, and voters in California approved recreational cannabis legalization in 2016.
The state’s legal recreational cannabis industry has struggled since its inception, with many cannabis industry members and observers pointing to California’s overburdensome regulations and high tax rates as the reason for the industry’s struggles. That struggle is evident in the sales figures for the first quarter of 2024, in which legal cannabis sales in California have fallen compared to proceeding quarters.
Below is a table of historical California legal cannabis sales data from the California Department of Tax and Fee Administration:
The 2024 Q1 sales totals in California are the lowest since the second quarter of 2020 when total sales were roughly $1.1 billion. Sales totals peaked in California in 2021 Q2 when the state’s legal cannabis industry sold over $1.5 billion worth of products.