Deadline for New York Businesses to Comply with Seed-to-Sale Rules is Saturday
- The deadline for New York cannabis operators to use state-mandated seed-to-sale tracking systems is March 7, causing some products to be sent back from retailers to processors to comply, and creating challenges for smaller businesses that must now purchase labeling supplies.
- John Vavalo, president of the Association of New York Cannabis Processors, is investing $100,000 in a laser printer to develop technology to meet new labeling requirements, noting that no existing systems currently fulfill these needs.
- Damien Cornwell, president of the Cannabis Association of New York, highlighted financial struggles of smaller operators who face increased costs for digital IDs and physical labels, disrupting sales because stores cannot process untagged products.
- A lawsuit filed by Veterans Holdings challenges the seed-to-sale requirement, arguing it raises costs and causes harm; meanwhile, Metrc, the state vendor, claims about 90% of licensees have complied and millions of plants and packages are tracked, with the state providing 20 million free tags to ease implementation.
The deadline for New York cannabis industry operators to begin using state-mandated seed-to-sale systems is Saturday, March 7, and some products are having to be sent back from retailers to processors to comply with the new rules, the Times-Union reports. The changes are also causing concern among smaller businesses, who now have to buy supplies to affix the labels to their products.
John Vavalo, president of the Association of New York Cannabis Processors, told the Times-Union that he is buying a $100,000 laser printer to help with the process for labels required for his canned cannabis products.
“The technology doesn’t exist, so I have to develop it, because … no industry in the world does this. You get the sense that there are processors and-or retailers that just won’t be able to have products tagged and ready by (Saturday).” — Vavalo to the Times-Union
Damien Cornwell, president of the Cannabis Association of New York, told the Times-Union that he is “getting the calls from guys that are freaking out because they can’t pay their bills” but are required to comply with the system.
“If you’re the guy that barely had the money and you’re buying the digital IDs, and then now you have to physically get the paper, the ink, and you have to sticker every single one of those products, get them into the store, then the store gets them in but they can’t scan them or process them, the sales stop,” Cornwall told the Times-Union.
The seed-to-sale requirement is being challenged in a lawsuit filed in December in the state Supreme Court. The lawsuit, on behalf of Veterans Holdings, Inc, or Veterans Choice Creations, seeks a temporary restraining order and preliminary injunction prohibiting state regulators from implementing the new regulations, arguing that being forced to buy tags from Metrc Inc. – the state’s seed-to-sale vendor – will significantly increase the operating costs of licensees and cause irreparable harm. Metrc, responding to the lawsuit, has accused the plaintiffs of defamation and asserted that “approximately 90% of licensees, including cultivators, processors, and retailers, have completed” the process of tagging products, and “millions of plants and packages are currently being tracked in real time.”
In December, the state Office of Cannabis Management announced that Metrc would provide 20 million “retail item unique identifiers” tags to licensed processors for free, which regulators said would offset “the initial expenses of implementation and (help) ensure a smooth shift to Metrc’s seed-to-sales system.”