Seed-To-Sale Tracking Alone Won’t Stop Marijuana 'Leakage'

Dec 16, 2013

As Washington moves to legalize recreational pot, the U.S. Department of Justice is prioritizing preventing so-called “leakage” to other states like Oregon and Idaho.

Barcodes will help the state track marijuana from seed to sale. But technology alone won’t keep Washington pot in Washington. And some think the concern about leakage is overblown.

Tagging Every Plant With A Code

Last August, Gov. Jay Inslee pledged to enact a “disciplined” and “regulated” legal recreational marijuana marketplace.

“So we’re not going to allow distribution of this product in a way that has massive leakage outside of the state of Washington,” he said.

With that in mind, Washington’s Liquor Control Board has adopted strict traceability rules for marijuana businesses. The rules say licensees must track marijuana from seed to sale and report much of that information to the state. This is where a Florida-based company called BioTrackTHC comes in.

“Every single plant inside your production facility will be assigned its own unique, 16-digit, not-repeatable barcode number,” said Anthony Stevens, BioTrackTHC’s director of marketing, during a recent webinar.

The company was selected by the Liquor Control Board to customize a tracing system that will allow the state to monitor and track any marijuana plant at any time. BioTrackTHC wouldn’t talk about its work for the state, but the company is already marketing its off-the-shelf tracking software to would-be marijuana licensees in Washington.

“You know, people always ask me, ‘So Anthony, are you telling me that if an employee steals from me, I can find out on this report?’ Well, actually, yeah. You definitely could,” Stevens said.

Looking For Red Flags

Will it be that simple for the state? Colorado had grand plans for a seed-to-sale monitoring system of medical marijuana. But an audit earlier this year found that wasn’t happening, largely because of a lack of money to do the oversight. In Washington, Liquor Board deputy director Randy Simmons says his agency will get $5 million a year to administer the state’s new marijuana law.

“Fortunately the initiative writers gave us money to actually run the oversight of this business, [which] did not happen in Colorado. So I think we’re way ahead of where Colorado was,” Simmons said, adding the software system will be designed to look for red flags.

Simmons says the software system will be built to look for red flags. But it’s going to take investigators with real expertise to effectively analyze the state, according to Alex Cooley with Solstice Co-Op, a medical marijuana provider that already tracks it product from seed to sale.

“The people that they hire to do this inspection and enforcement need to be very intelligent and capable of easily determining if a license holder is being dishonest with them,” said Cooley.

'Not A Very Good Solution To A Mostly Non-Problem'

But is all this time, money and effort to prevent leakage really necessary? Washington’s former pot consultant Mark Kleiman of UCLA is skeptical.

“I think the tracking system is not a very a good solution to mostly a non-problem,” Kleiman said.

Kleiman predicts the marijuana that leaves Washington’s borders will be the black market variety, not the stuff that’s regulated and taxed.

“I mean, everybody’s fixated on whether the legal system leaks, and I understand that concern, but I just doubt that’s going to be the major source of exports,” he said.

Liquor Board’s Simmons tends to agree, but he says the state has to play it safe. After all, marijuana is still considered a Schedule 1 narcotic by the feds. 

“And I think to get the buy-in from Department of Justice that we needed and wanted, traceability system was part of that,” he said.

Even if leakage isn’t a big problem to start, it could be down the road as the black market shrinks and the price of legal pot comes down. Then there might be a financial incentive to let some product slip out the back door.