Colorado Cannabis Company Challenges RFID Tag Requirement

A Colorado cannabis company has filed an appeal to challenge the Marijuana Enforcement Division’s (MED) policy of requiring Radio Frequency Identification (RFID) tags on cannabis plants and packages. The company, Lifestyle Foods, Inc., also known as Ripple, claims that the RFID tags are unnecessary, expensive, and illegal. The appeal is the latest development in the ongoing debate over the regulation and oversight of the cannabis industry in Colorado.

RFID tags are small devices that emit radio signals that can be read by scanners. RFID tags are used to track and trace the movement and location of items, such as products, animals, or people. RFID tags are widely used in various industries, such as retail, logistics, and health care.

In Colorado, RFID tags are used to track and trace the cannabis plants and packages from seed to sale, as part of the state’s inventory tracking system. The inventory tracking system is designed to ensure the compliance and accountability of the cannabis industry, and to prevent the diversion and abuse of cannabis products.

The inventory tracking system is operated by Metrc, a company that provides track-and-trace software for many state-legal cannabis programs. Metrc has a contract with MED to provide the RFID tags and the software for the inventory tracking system. The contract expires in 2026.

According to Metrc’s website, the RFID tags cost an average of 45 cents per tag, and each cannabis plant and package must have a tag. The tags are purchased by the cannabis businesses from Metrc, and the revenue goes to Metrc, not to MED.

RFID Tags: Why They Are Challenged

Ripple, a Colorado cannabis company that produces cannabis-infused beverages, has filed an appeal to challenge the MED’s policy of requiring RFID tags on cannabis plants and packages. Ripple claims that the RFID tags are unnecessary, expensive, and illegal.

Ripple argues that the RFID tags are unnecessary, because they do not provide any additional information or security that cannot be obtained by other means, such as barcodes, QR codes, or serial numbers. Ripple also argues that the RFID tags are expensive, because they impose a significant financial burden on the cannabis businesses, especially the small and medium-sized ones. Ripple estimates that it spends more than $1,400 per month on the RFID tags.

Ripple also argues that the RFID tags are illegal, because they violate several laws and regulations, such as:

• The Colorado Administrative Procedures Act, which requires due process and public input for the adoption of rules and regulations by state agencies. Ripple claims that the MED did not follow the proper procedures when it entered into the contract with Metrc for the RFID tags, and that the contract is void.
• The Colorado Marijuana Code, which requires all fees collected from the cannabis industry to go to MED, not to a private contractor. Ripple claims that the RFID tags are fees, not costs, and that Metrc is unlawfully profiting from the RFID tags.
• The Colorado Constitution, which grants the right to privacy and the right to due process to the citizens of Colorado. Ripple claims that the RFID tags infringe on the privacy and due process rights of the cannabis businesses and their customers, by allowing the government and Metrc to access and monitor their personal and business information.

Ripple filed a petition in 2023 asking MED to remove the requirement for RFID tags from its rules. MED responded by removing the reference to “RFID” from its rules, and replacing it with a general reference to “inventory tracking system”. However, MED later asserted that RFID tags would remain a requirement unless and until Metrc voluntarily agreed to provide non-RFID tags. Ripple claims that this decision led to a “confusing outcome”, and that MED failed to provide adequate notice and explanation to the stakeholders.

RFID Tags: What Happens Next

Ripple’s appeal is the first to challenge the MED’s policy of requiring RFID tags on cannabis plants and packages. The appeal is the latest development in the ongoing debate over the regulation and oversight of the cannabis industry in Colorado.

MED has issued a press release to clarify its policy on RFID tags, and to correct the inaccuracies that have been reported. MED stated that the RFID tags are still required for the inventory tracking system, and that any changes to the RFID tag requirement will only occur after MED concludes the procurement process for the state’s inventory tracking system. MED also stated that it has initiated and will continue the open, competitive solicitation process for the inventory tracking system throughout 2024.

Metrc has also issued a statement to affirm its service offering and its obligation to the state in accordance with its contract. Metrc stated that the recent rule change does not alter its service offering or its current obligation to the state in accordance with its contract.

Denver7 has reached out to MED and Metrc for comment, but has not received a response. Denver7 has also contacted Ripple for comment, but has not received a response.

The appeal is expected to be heard by an administrative law judge, who will make a recommendation to the MED director. The MED director will then make a final decision on the appeal. The appeal process may take several months to complete.

For more information on Ripple’s appeal and the RFID tag requirement, visit denver7.com.