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The Cannabis Surveillance Industry Is Keeping a Close Watch on Legal Marijuana

“This will be a heavily regulated industry for a very long time.”

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One of the fastest-growing offshoots of the country's burgeoning cannabis industry is cannabis surveillance, a new multi-million dollar industry that aims to keep track of states' legal marijuana crops from seed to sale. The purpose of this surveillance is to protect states that have legalized pot, since the drug remains illegal on a federal level. By keeping track of every plant and bud grown, state officials can prove that their crop is not being shipped to black market sellers in a state where pot is still illegal.

In 2011, Colorado passed a law requiring cannabis surveillance, becoming the first state to mandate seed-to-sale tracking. The state now uses a compliance system called the Marijuana Enforcement Tracking Reporting and Compliance (METRC). Every marijuana plant carries a tag, which is planted in its soil or tied to its stalk. The tags are blue for recreational and yellow for medicinal, and each has a barcode and a Radio Frequency ID (RFID) chip. Grow operations and their employees are under constant video surveillance.

“I believe we've taken the pharmaceutical and alcohol industry's approach to [cannabis compliance software] because we had law enforcement in mind when we made this product,” said David Dinenberg, CEO of Kind Financial, a company that has partnered with Microsoft to create their own seed-to-sale compliance software. “You can't divert product from our software—anytime you're logged in, whether that's through your thumbprint or a password, we have recordings of it. We don't even delete it. It lasts forever.”

“There is an absolute stigma to this industry,” Dinenberg said. “The only way we'll get taken seriously is when we can act more like a traditional business, and the only way that's going to happen is compliance and technology. I don't think there is anything wrong with having strict compliance. This will be a heavily regulated industry for a very long time.”

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