What is Seed to Sale?

Whether you have been in the legal cannabis industry for years or whether you are on the outskirts looking in, there is no escaping this phrase: “Seed-to-sale.” Though it has a nice little ring to it, it has been completely abused by the burgeoning cannabis industry. It pops up absolutely everywhere and, to be fair, it is essential for the industry to thrive given marijuana’s federal scheduling. What does it mean? Why should you care? And how can you use it to your advantage?

Seed-to-Sale refers to a system, generally software, that tracks marijuana products and its bi-products from their inception (seed) until it reaches the hands of the consumer (sale).

Though this catchy phrase seems to be pretty intuitive, it can also be a little misleading. In most industrial facilities, marijuana products begin as clones (NOT seeds), which are leaf cuttings from other plants as opposed to propagating seedlings.

The second call-out to keep in mind, often times product is sold wholesale to other producer/manufacturers, other cultivation facilities or to dispensaries and these are of course “sales” between licenses facilities. Seed-to-Sale systems must track product all the way to sales to the consumer. Because of some of these ambiguities in the phrase, it is also common to hear Seed-to-Sale replaced with Track-and-Trace.

Seed-to-Sale, or Track-and-Trace, systems exist so that governing entities can confidently regulate the industry. Since Marijuana is federally prohibited, regulation is up to the states and often times more regulation is applied at the city or county level. Some cities and counties in legal cannabis states forbid production and sales of cannabis altogether. To understand how a federally illegal substance can be sold in states check out this post.

Each state has the option to decide which system to use to track the growth and distribution of cannabis product. In most cases, states decide between a few different software vendors. Though historically there have been a handful of companies to apply for the vendor contracts, in practice, only a few companies get these deals. Out of the states in the US that have legal cannabis programs Franwell’s METRC, Biotrack & MJ Freeway’s Leaf Data Systems.

Each solution is a little bit different and each state has different requirements. But fundamentally each solution is responsible for the same thing: providing transparency to all transactions and inventory in their respective state. Colorado, for example, uses METRC and tracks every plant by using RFID tags. Licensed facilities are required to report their data at the end of the day. Whereas Maryland, though they use METRC as well, requires reporting to happen in real-time because patients cannot exceed their prescribed quantity each month.

So why should you care?

Whether you are thinking of investing, you are working at an operational facility or you want to provide a service or product to licensed (“plant touching”) operation, it is imperative to understand how these requirements affect your business model.

In licensed facilities, for instance, they need to plan for the amount of time it takes to keep these Seed-to-Sale solutions up to date. A business in Colorado could be fined $5000 or more just for “fat fingering” data incorrectly into METRC. Inventory is a really big deal and if for any reason, the information in METRC does not accurately describe your operation the punishment may not stop at just fines— you could get shut down just for (not caring about) your METRC data.

Software vendors that are building or have a solution to solve an industry problem for operators may want to consider how Seed-to-Sale tracking requirements affect their clients. If the software or service requires additional effort, double entry or for clients to exert extra resources to use that are separate to those already being exhausted to keep the Seed-to-sale solution up to date, the business may get a lot of pushback from clients.

In an industry that is already operating on tight margins (Thanks a lot 280E), any additional resources spent need to have an obvious return on investment (ROI) before a canna-business is going to engage. That leads me to the next piece of the puzzle, integration.

Integration

Integration”, like “Seed-to-Sale,” is also a term that has popped up everywhere in the cannabis industry. The act of integrating software is, to put it simply, the tech way to say the software platforms talk to each other. Integration has been around ever since we’ve had a “tech” industry, but in the last 10 years, with so many new apps, tools, tech, and startups in our day-to-day lives, it has become essential.

Here’s an example of how this looks in my life: This morning, I checked my calendar on my iPhone Cal app, scheduled a meeting in my google calendar app from an email in my gmail account. In my meeting, I took notes in my Evernote app, my team and I put our action items in our Trello account, then we logged our conversation in Hubspot. I have all of these tools set to “talk to each other” or integrate because A. it saves me a substantial amount of time and B. Since computers are transferring the information to the other platforms, I can be confident that the data is accurate.

So back to cannabis and Seed-to-Sale, in most states, there is now an API (Application Programming Interface) available to access the Seed-to-Sale data. Keeping with our earlier analogy, if integrating is “talking together” than an API would be the language in which they do so. This functionality opens HUGE doors for operators and third-party software providers (Like Jade Insights). Now instead of updating the Track-and-Trace software AND a Point-of-Sale (POS) software, if the two platforms are integrated the POS transfers data directly to the state system saving businesses time and decreasing the room for error.

With an accessible API, there has been a flood of new software solutions arriving for industry operators. Some companies provide Point-of-Sale solutions that help companies remain compliant at the store level like Blaze retail, Greenbits, Flowhub and Others. Other software providers work with cultivation data to help optimize the workflow of reporting at an indoor facility, greenhouse or outdoor farm. Some solutions try to replace every interaction with the METRC User interface all together like Flowhub, Trellis and MJ Freeway (Though, at the time of this writing that is impossible to do 100% though companies get very close). There are also other solutions for Customer Resource Management, Online ordering for customers, Digital menus and signage and many other problem-solving companies.

Jade Insights is an example of one of these METRC integrated platforms. We connect the dots between Seed-to-Sale data and everything else. Obviously, Seed-to-Sale data is essential to run a business compliantly, these platforms also hold vital information to help your business make the right decisions moving forward. Though it’s main use is reporting to the state, there is rich information in your Seed-to-Sale platform like the number of plants in a room, amount of weight harvested of each strain, transaction times and much, much more. At Jade Insights, we aggregate all of that data to show our clients opportunities for improvements, projections based on historical numbers and more. The second piece that we provide is connecting all of that Seed-to-Sale data to other important data sources i.e. Human resources data, product testing data, accounting data and more. This means our clients have all relevant information in front of them in an actionable format so they can make decisions with confidence.

To learn more about Jade Insights or to see if we would be a good fit for your business feel free to contact us at hello@jadeinsights.com