Cannabis to Cattle: Track and Trace Technologies Adding Agility to Supply ChainsThe use of track-and-trace technologies has elevated the industry as a whole, bringing agility to regulators and businesses alike.
The world’s supply chains, battered by the two-year COVID pandemic and related staffing and resourcing problems, continue to make headlines for a simple reason: they are still under dynamic stress. War in Europe, economic disruption, and dislocation are piling further uncertainty into an already volatile basket of risks to which there are no easy answers. One thing we do know, however, is that utilizing innovative technology and automation will be integral to helping solve our current supply chain woes – and lessons gleaned from the successful regulation of cannabis can help lead the way.
Over the last decade, track-and-trace tools have proven essential in effectively regulating cannabis. Given that cannabis legalization has been such a hotly contested issue, largely due to historical stigma surrounding the plant, there’s a heightened awareness around transparency and consumer safety in the industry – a factor necessary to its ultimate survival. And as the cannabis industry is still so new, states are coming online at a time when data tracking technologies are advancing at an unprecedented rate. Tech companies have been making major strides in track-and-trace technology, specifically in its application to cannabis. Current track-and-trace tools follow plants and cannabis products from viability to the point of sale, providing up-to-the-minute status and a transparent history to every product sold. From both a consumer health and safety perspective and an economic efficiency perspective, the track-and-trace tools used in cannabis can be deeply transformational when applied to other industries.
Building resilience in supply chains is a long-standing goal of both government regulators and business owners, and ultimately one that benefits consumers. Businesses want to move products; governments have an interest in protecting the health of consumers while safeguarding the flow of goods; consumers want and should expect that the products they buy are safe and effective. In cannabis, track-and-trace technologies help accomplish all of these objectives.
Typically, track-and-trace technologies use microchips embedded in radio-frequency identification (RFID) tags, which are then attached to each plant in the early stages of cultivation to store coded information that verifies the authenticity of the plant. Tags with the same information are then attached to end products, whether it be flower or any other cannabis CPG product. These tags help to secure markets against illicit products which carry a greater risk of being contaminated, thus protecting the health of consumers.
RFID Tags and Barcode Systems
Regulators armed with RFID readers can inspect cultivation facilities in a fraction of the time required by line-of-sight barcode systems. In addition, they can safeguard markets much more easily and comprehensively with the ability to conveniently pull up the full history of every product in real-time. Using similar tools, businesses can streamline inventory checks and maintenance with greater precision and insight - by extension, increasing sell-through rate, simplifying the fulfillment process, improving customer satisfaction by keeping the right products on hand and deterring theft. We’re now beginning to see non-cannabis companies adopt RFID tags for similar purposes, such as Walmart, which has made considerable inroads and expanded the technology beyond its apparel and footwear divisions into home goods and consumer electronics.
As of now, there aren’t other industries that have adopted this type of technology across the board to the extent that cannabis has. Yet, there are tremendous opportunities; RFID’s built-in efficiencies coupled with the scope, depth, and quality of data collected underscore the value of using similar approaches in other industries. By tracking individual products, companies and regulators can target and eliminate potential hazards before they bring harm to customers.
Addressing Product Recalls
Track-and-trace technologies have significantly reduced the risk of contaminated products reaching customers in the cannabis industry, as well as prevented major product recalls - but recalls, unfortunately, remain a very common occurrence across nearly every sector in our economy. In 2021 alone, FDA-regulated firms - which include food and cosmetic companies - reported 427 recalls. Products that reach the market before they’re recalled can seriously harm consumers, and even result in fatalities. Additionally, recalls can tarnish a company’s reputation and cause significant and unrecoverable economic losses. A recent joint study conducted by the Grocery Manufacturers Association, Covington & Burling LLP and Ernst & Young found that 77% of food, beverage and consumer product companies that experience a recall can lose $30 million in sales losses and direct recall costs. In the first half of 2020 alone, regulators recalled approximately 700,000 pounds of meat due to health concerns.
If companies were to implement RFID technology effectively in this sector, they would have the potential to trace a singular steak back to the processing facility, farm, and even the specific cow responsible for producing it. The power to trace health risks like salmonella outbreaks back to a singular source would allow producers and regulators to stamp them out quickly and effectively, keeping customers safe and minimizing financial losses.
Insight and Enlightenment
Regardless of the industry, to effectively analyze supply chains and improve them, businesses and governments need a rich quality of data. Where are the problems? Where are the obstacles? What are the pain points? Track-and-trace tools provide these answers from comprehensive data collected in the field in real-time. Not only do track-and-trace tools empower businesses and regulators to be resilient and quickly remediate problems, but they add agility throughout organizations, allowing them to use data to anticipate problems and develop solutions before problems start to bite.
Cannabis is essentially the first sector to be regulated on a basis of actual, serviceable data, which corresponds to its newness. The use of track-and-trace technologies has elevated the industry as a whole, bringing agility to regulators and businesses alike. Still, the truth remains that any industry can achieve this level of transparency; informed insight leads to better oversight and more enlightened policy – and that’s in everyone's best interest.