Colorado discontinues traceability tags with RFID chips for cannabis operators

Recently, Colorado passed new rules that could save cannabis operators tens of thousands or even hundreds of thousands of dollars in track-and-trace compliance costs and might also lead to the replacement of Metrc as the state’s traceability provider.

According to Denver TV station KMGH, the rules adopted on November 9 and effective from January 8, 2024, eliminate the requirement for RFID tags in seed-to-sale tracking. However, cannabis companies are still required to use an inventory tracking system1.

The RFID tags previously required by Colorado regulators cost 25-45 cents each, depending on the type of tag1. Different tags are used for different phases in the plant or product life cycle. For example, according to data from Colorado’s Marijuana Enforcement Division (MED), there were 1,029,683 plants in the state in September, which would translate into RFID tag costs of $257,420-$463,3571.

It is unclear if or when Metrc will start producing new, less expensive, chip-free RFID tags. Colorado, like most markets with a regulated marijuana industry, requires operators to use a state-mandated seed-to-sale traceability system for cannabis plants to guard against diversion and facilitate recalls1.