CDFA Regulatory Compliance: Track-and-Trace

california cannabis track-and-trace

The California Cannabis Track-and-Trace System serves to ensure compliant supply chain management within all verticals of the cannabis industry. All three State regulatory agencies reference this system in their regulations. The California Department of Food and Agriculture (CDFA) CalCannabis division ensures public safety and environmental protection through licensing cultivators in California. CDFA also manages California’s cannabis track-and-trace system. This division is divided into three branches: licensing, compliance and enforcement, and system administration. Here’s what you need to know about cannabis waste, track-and-trace, and the CDFA.

Cannabis Waste and Track-and-Trace

The destruction and disposal of cannabis goods must be recorded into the California Cannabis Track-and-Trace system. There are 3 instances where a UID can be removed: the plant is either harvested, destroyed or disposed of. The UID can then be removed and retired. Upon destruction or disposal of any cannabis or nonmanufactured cannabis products, the applicable UIDs shall be retired in the track-and-trace system by the licensee within three (3) business days of the destruction or disposal and be performed in accordance with the licensee’s approved cannabis waste management plan.

CDFA Track-and-Trace Regulations (included below)

Full text of CDFA Regulations

Article 5. Records and Reporting

8400. Record Retention.
For the purposes of this Chapter, the term record includes all records, applications, reports or other supporting documents required by the department.

(a) Each licensee shall keep and maintain the records listed in subsection (d) for at least seven (7) years from the date the document was created.

(b) Records shall be kept in a manner that allows the records to be provided at the licensed premises or delivered to the department, upon request.

(c) All records are subject to review by the department during standard business hours, or at any other reasonable time, or as otherwise mutually agreed to by the department and the licensee. For the purposes of this section, standard business hours are deemed to be 8:00am – 5:00pm (Pacific Standard Time). Prior notice by the department to review records is not required.

(d) Each licensee shall maintain all of the following records on the licensed premises, including but not limited to:

(1) Department issued cultivation license(s);

(2) Cultivation plan;

(3) All records evidencing compliance with the environmental protection measures pursuant to sections 8304, 8305,

8306 and 8307 of this Chapter;

(4) All supporting documentation for data or information input into the track-and-trace system;

(5) All UIDs assigned to product in inventory and all unassigned UIDs. UIDs associated with product that has been retired from the track-and-trace system must be retained for six (6) months after the date the tags were retired;

(6) Financial records, including but not limited to, bank statements, tax records, sales invoices, and sales receipts;

(7) Personnel records, including each employee’s full name, social security, or individual tax payer identification number, date of beginning employment, and date of termination of employment if applicable;

(8) Records related to employee training for the track-and-track system or other requirements of this Chapter. Records shall include, but are not limited to, the date(s) training occurred, description of the training provided, and the names of the employees that received the training;

(9) Contracts with other state licensed cannabis businesses;

(10) Permits, licenses, and other local authorizations to conduct the licensee’s commercial cannabis activity;

(11) Security records; and

(12) Records associated with composting or disposal of cannabis waste.

(13) Documentation associated with loss of access to the track-and-trace system prepared pursuant to section 8402 (d) of this Chapter.

(e) All required records shall be prepared and retained in accordance with the following conditions:

(1) Records shall be legible; and

(2) Records shall be stored in a secured area where the records are protected from debris, moisture, contamination, hazardous waste, fire and theft.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26013, 26055, 26060, 26060.1, 26067, 26069, 26160, and 26161, Business and Professions Code.

8401. Sales Invoice or Receipt Requirements.
The licensee shall prepare a sales invoice or receipt for every sale or transport of cannabis or nonmanufactured cannabis product to another licensee. Sales invoices and receipts may be retained electronically but must be readily accessible for examination by the department, other state licensing authorities, any state or local law enforcement authority, and the California Department of Tax and Fee Administration. Each sales invoice or receipt shall include all the following:

(a) Name, business address, and department issued license number of the seller;

(b) Name, business address, and department issued license number of the purchaser;

(c) Date of sale or transfer (month, day and year). The date of any sale or transfer of cannabis and nonmanufactured cannabis products shall be the date of transfer to the licensee receiving it;

(d) Invoice or receipt number;

(e) Weight or quantity of cannabis and nonmanufactured cannabis products sold;

(1) Weight. For the purposes of this section a licensee must use wet weight or net weight. Wet weight and net weight shall be measured, recorded and reported in U.S. Customary units (e.g., ounce or pound); or International System units (e.g., kilograms, grams, or milligrams).

(2) Weighing Devices. A licensee shall follow weighing device requirements pursuant to section 8213 of this Chapter.

(3) Count. For the purposes of this section count means the numerical count of the individual plants or units.

(f) Cost to the purchaser, including any discount applied to the total price, shall be recorded on the invoice.

(g) Description for each item including strain or cultivar, and all of the applicable information below:

(1) Plant;

(2) Flower;

(3) Leaf;

(4) Shake;

(5) Kief; and

(6) Pre-rolls.

(h) Signature of the seller, or designated representative of the seller, acknowledging accuracy of the cannabis and nonmanufactured cannabis products being shipped.

(i) Signature of the purchaser, or designated representative of the purchaser, acknowledging receipt or rejection of the cannabis or nonmanufactured cannabis products.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Section 26161, Business and Professions Code.

8402. Track-and-Trace System.
Except as provided in section 8405 (e) of this Chapter, each licensee shall report in the department’s track-and-trace system the disposition of immature and mature plants, nonmanufactured cannabis products on the licensed premises, any transfers associated with commercial cannabis activity between licensees, and any cannabis waste pursuant to this Chapter.

(a) The licensee is responsible for the accuracy and completeness of all data and information entered into the track-and trace system. Data entered into the track-and-trace system is assumed to be accurate and can be used to take enforcement action against the licensee if not corrected.

(b) Each licensee shall use the track-and-trace system for recording all applicable commercial cannabis activities. Each licensee shall:

(1) Designate an owner or other party(ies) in the licensee’s organization that can legally represent the licensee, to be the licensee’s track-and-trace account manager(s);

(2) Require the track-and-trace account manager to complete track-and-trace system training as required by the department. If the designated account manager did not complete department required track-and-trace training prior to receiving their annual license, the account manager will be required to register for state mandated system training, as prescribed by the department, within five (5) business days of license issuance;

(3) Designate track-and-trace system users, as needed, and require the users to be trained by the licensee’s track-and-trace account manager in the proper and lawful use of the track-and-trace system before the users are permitted to access the track-and-trace system;

(4) Require the track-and-trace account manager to maintain an accurate and complete list of all track-and-trace system account managers and users and update the list immediately when changes occur;

(5) Cancel any track-and-trace users from the licensee’s track-and-trace system account if that individual is no longer a licensee representative; and

(6) Correct any data that is entered into the track-and-trace system in error within three (3) business days of discovery of the error.

(c) The licensee is responsible for all actions any licensee representatives take while logged into the track-and-trace system or otherwise conducting commercial cannabis activities.

(d) If a licensee loses access to the track-and-trace system for any reason, the licensee shall prepare and maintain comprehensive records detailing all required inventory tracking activities conducted during the loss of access.

(1) Once access to the track-and-trace system is restored all inventory tracking activities that occurred during the loss of access shall be entered into the track-and-trace system within three (3) business days.

(2) A licensee shall document the date and time when access to the track-and-trace system was lost and when it was restored and the cause for each loss of access.

(3) A licensee shall not transfer cannabis or nonmanufactured cannabis products to a distributor until such time as access to the system is restored and all information is recorded into the track-and-trace system.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26160, 26067, 26069 and 26070, Business and Professions Code.

8403. Track-and-Trace System Unique Identifiers (UID).
(a) Within five (5) business days of the date the licensee’s designated account manager(s) was credentialed by the department to use the track-and-trace system, the licensee shall request UIDs using the track-and-trace system as prescribed by the department.

(1) The licensee shall only use UIDs provisioned and distributed by the department, or the department’s designee.

(2) The licensee shall maintain a sufficient supply of UIDs in inventory to support tagging in accordance with this section.

(3) The licensee shall use the track-and-trace system to document receipt of provisioned and distributed UIDs within three (3) business days of physical receipt of the UIDs by the licensee.

(4) Except as provided in section 8407 of this Chapter, all cannabis shall be entered into the track-and-trace system by the licensee starting with seed, clone propagated onsite or purchased from a licensed nursery, or seedling purchased from a licensed nursery pursuant to this Chapter.

(b) The UID shall accompany the cannabis products through all phases of the growing cycle, as follows:

(1) Licensees with immature plants shall assign a UID to each established lot respectively. The lot UID shall be placed in a position so it is visible and within clear view of an individual standing next to the immature lot to which the UID was assigned, and all UIDs shall be kept free from dirt and debris. For the purposes of this subsection, each lot of immature plants shall not have more than one-hundred (100) immature plants, at any one time. All immature plants in a lot shall be labelled with the corresponding UID number assigned to the lot and shall be contiguous to one another in order to facilitate identification by the department.

(2) Immature plants transferred from a licensed nursery, via a distributor, to a licensed cultivator shall meet requirements of subsection (b)(1) above. Each immature plant intended for retail sale shall have a UID affixed, or be labeled with the corresponding UID number of the lot, and be recorded in the track-and-trace system prior to transfer from the licensed nursery.

(3) The licensee shall apply a UID to all individual plants at the time any plant is moved to the designated canopy area or when an individual plant begins flowering, as defined in Section 8000 (l).

(4) UIDs are required for each mature plant. UIDS shall be attached to the main stem, at the base of each plant. The

UID shall be attached to the plant using a tamper evident strap or zip tie and placed in a position so it is visible and within clear view of an individual standing next to the mature plant to which the UID was assigned and UIDs shall be kept free from dirt and debris. Licensees are prohibited from removing the UID from the mature plant to which it was attached and assigned until the plant is harvested, destroyed or disposed.

(c) Each harvest batch shall be assigned a unique harvest batch name which will be associated with all UIDs for each individual plant, or portion thereof, contained in the harvest batch.

(d) UIDs are required for all cannabis and nonmanufactured cannabis products and shall be associated with the corresponding harvest batch name from which the cannabis and nonmanufactured cannabis products were derived.

(e) Upon destruction or disposal of any cannabis or nonmanufactured cannabis products, the applicable UIDs shall be retired in the track-and-trace system by the licensee within three (3) business days of the destruction or disposal and be performed in accordance with the licensee’s approved cannabis waste management plan.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26160, 26067, 26069 and 26070, Business and Professions Code.

8404. Track-and-Trace System User Requirements.
(a) All track-and-trace account managers or users, as identified by the licensee pursuant to section 8402 of this Chapter, shall enter all commercial cannabis activities in the track-and-trace system.

(b) Each track-and-trace account manager and user shall have a unique log-on, consisting of a username and password, which shall not be used by or shared with any other person.

(c) No track-and-trace account manager, user, or other licensee representative shall intentionally misrepresent or falsify information entered into the track-and-trace system.

(d) The account manager shall monitor all notifications from the track-and-trace system and resolve all issues included in the notification in the timeframe specified in the notification. An account manager shall not dismiss a notification from the track-and-trace system until the issue(s) included in the notification has been resolved.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26012, 26067, and 26069, Business and Professions Code.

8405. Track-and-Trace System Reporting Requirements.
(a) Except as provided in section 8405 (e) below, the track-and-trace account manager or users shall report in the trackand-trace system any and all transfers of cannabis or nonmanufactured cannabis products to another licensed entity prior to the movement of the cannabis or nonmanufactured cannabis product off the licensed premises.

(b) The track-and-trace account manager or users shall report in the track-and-trace system, any and all cannabis or nonmanufactured cannabis products physically received or rejected from another licensed within twenty-four (24) hours of receipt or rejection of the products.

(c) The track-and-trace account manager or users shall report in the track-and-trace system any change in the disposition of cannabis plants, as applicable, on the licensed premises. All changes in disposition shall be made within three (3) business days of the change in disposition of the cannabis plants. Changes in disposition of cannabis plants include but are not limited to:

(1) Flowering;

(2) Destruction or disposal;

(3) Harvest;

(4) Processing;

(5) Storage; and

(6) Packaging.

(d) The account manager or user shall be required to record information for each transfer of cannabis or nonmanufactured cannabis products to, or cannabis or nonmanufactured cannabis products received from, other licensed premises.

Required information to be entered includes, but is not limited to:

(1) Name, business address, and department issued license number of the seller;

(2) Name, business address, and department issued license number of the purchaser;

(3) Name and department issued license number of the distributor;

(4) Date of sale, transfer or receipt (month, day and year). The date of any sale, transfer or receipt of cannabis or nonmanufactured cannabis products shall be the date of transfer to the licensee receiving it;

(5) Weight or count of individual units of cannabis or nonmanufactured cannabis products sold, transferred or received;

(A) Weight. For the purposes of this section a licensee must use wet weight or net weight. Wet weight and net weight shall be measured, recorded and reported in U.S. Customary units (e.g., ounce or pound); or International System units (e.g., kilograms, grams, or milligrams).

(B) Weighing Devices. A licensee shall follow weighing device requirements pursuant to section 8213 of this

Chapter.

(C) Count. For the purposes of this section count means the numerical count of the individual plants or units.

(6) Estimated departure and arrival time;

(7) Actual departure time;

(8) Description for each item including strain or cultivar, and all of the applicable information below:

(A) Plant;

(B) Flower;

(C) Leaf;

(D) Shake;

(E) Kief; and

(F) Pre-rolls.

(9) UID(s).

(e) Temporary Licensees. A licensee operating under a temporary license, issued by the department pursuant to section

8100 of this Chapter, is not required to record commercial cannabis activity in the track-and-trace system as otherwise required by this Chapter. Temporary licensees shall record all commercial cannabis activity in accordance with section

8401 of this Chapter.

(f) Annual licensees may continue to conduct commercial cannabis activities with temporary licensees pursuant to section

8401 of this Chapter.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26067 and 26160, Business and Professions Code.

8406. Track-and-Trace System Inventory Requirements.
Licensees shall use the track-and-trace system for all inventory tracking activities at a licensed premises, including, but not limited to all the following:

(a) Reconcile all on-premises and in-transit cannabis or nonmanufactured cannabis products inventories pursuant to the time frames defined by the department; and

(b) Record the net weight of all harvested cannabis once the majority of drying, trimming and curing activities have been completed, or within sixty (60) calendar days from the initial harvest date, whichever is sooner.

(c) Licensee’s shall close-out their physical inventory of all cannabis and nonmanufactured cannabis products, and UIDs, if applicable prior to the effective date of any of the following changes to their license:

(1) Voluntary surrender of a temporary license or annual license.

(2) Expiration of an annual license.

(3) Revocation of a license.

(d) Close-out of physical inventory includes, but is not limited to, all of the following items:

(1) Immature plants and their corresponding lot UID(s);

(2) Mature plants and their corresponding plant UID(s);

(3) Harvest batches and their corresponding UID(s);

(4) Nonmanufactured cannabis products and their corresponding UID(s); and

(5) UIDs in the licensee’s possession which have not been assigned in the track-and-trace system.

(e) All transfers and sales shall be documented pursuant to sections 8401 and 8405 of this Chapter.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Section 26067, Business and Professions Code.

8407. Track-and-Trace System Requirements for Product in Licensee Possession at the Time of Annual License Issuance.
(a) Within thirty (30) business days of receipt of the UIDs ordered pursuant to section 8403 of this Chapter, the licensee shall enter into the track-and-trace system and assign and apply a UID to each existing immature plant lot, each individual mature plant, and all nonmanufactured cannabis products physically located on the licensed premises.

(b) After the thirty (30) day time frame referenced in subsection (a) above expires, all cannabis at the licensed premises shall be entered into the track-and-trace system starting with seed, clone propagated onsite or purchased from a licensed nursery, or seedling purchased from a licensed nursery pursuant to this Chapter. This section shall remain in effect until July 1, 2019.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Section 26067, Business and Professions Code.

8408. Inventory Audits.
The department may perform an audit of the physical inventory and inventory as reported in the track-and-trace system of any licensee at the department’s discretion. Audits of the licensee shall be conducted during standard business hours or at other reasonable time, or as otherwise mutually agreed to by the department and the licensee. For the purposes of this section standard business hours are 8:00am – 5:00pm (Pacific Standard Time). Prior notice of audit is not required.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26015 and 26067, Business and Professions Code.

8409. Notification of Diversion, Theft, Loss, or Criminal Activity.
Licensees shall notify the department and law enforcement authorities, within three (3) business days of discovery of any diversion, theft, loss of, or criminal activity related to licensee’s cannabis or nonmanufactured cannabis products.

Authority: Sections 26012 and 26013, Business and Professions Code. Reference: Sections 26013 and 26015, Business and Professions Code

If you’re interested in learning more about Track-and-Trace and CDPH and BCC, check out these posts:

BCC Regulatory Compliance: Track-and-Trace

CDPH Regulatory Compliance: Track-and-Trace

Track-and-Trace