The backbone of the cannabis industry. One critical piece of the cannabis legalization puzzle that is often overlooked, is technology. Michael Johnson the CEO of Metrc joins Dan Humiston to explain the key role their Track and Trace software has played in cannabis legalization. He discusses how local, state and federal agencies and regulators depend on their platform's verifiable data to ensure transparency throughout the plant's life cycle. Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Metrc - https://www.metrc.com/ Michael Johnson - https://podconx.com/guests/michael-johnson Recorded on Squadcast
The backbone of the cannabis industry.
One critical piece of the cannabis legalization puzzle that is often overlooked, is technology. Michael Johnson the CEO of Metrc joins Dan Humiston to explain the key role their Track and Trace software has played in cannabis legalization. He discusses how local, state and federal agencies and regulators depend on their platform's verifiable data to ensure transparency throughout the plant's life cycle.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Metrc - https://www.metrc.com/
Michael Johnson - https://podconx.com/guests/michael-johnson
Dan Humiston: [00:00:00] Today at MJ bulls, we are joined by Michael Johnson, the CEO of Venter, Michael, welcome to the show.
Michael Johnson: I think so much. I appreciate you having me on.
Dan Humiston: Well, I have to say I've been really looking forward to our conversation. We have so many pioneers and organizations to thank for the pro cannabis regulations that we enjoy today. But one often overlooked legalization. Is technology. And I'm certain that lawmakers would never have supported pro cannabis legislation without being confident that every plan and every cannabis product could be accounted for.
And that's kind of where I want to start off to. For our listeners to have never been in a facility before I thought maybe it'd be good way for us to start this by Michael, if you could sort of explain as one of the most trusted experience provided of , cannabis, regulatory systems, walk us through how you monitor each plant from seed to [00:01:00] sale.
Michael Johnson: Yeah, it's a really exciting kind of a viewpoint , and really interesting. That's unique. Really to the cannabis space as, as one of the more heavily regulated industries in the world cannabis is afforded the level of visibility and transparency into the supply chain. That we don't have anywhere else in the world.
And I don't think we would be in the same position where it at from a macro economic perspective. If everybody was afforded the same level of visibility, that that metric is able to prove. Essentially you, you see a lot of different types of businesses and I'm sure your listeners that are, that are getting involved in trying to start something or already involved in the cannabis space.
See a number of different providers of seed to sale or track and trace solutions. , we put ourselves in the bucket of, of the track and trace solution, and that really is a mechanism that. That provides visibility for the entire closed loop regulatory supply chain as it relates to cannabis.
And so in the very beginning of of the life cycle of cannabis you began January with the equipping. [00:02:00] And as that matures, you're going to identify that. And you would identify that as an operator. Anyways, if you want to know how many plants you've got and kind of where they're at and what their stages are, and, and, you know, make sure that you've applied the right nutrients and watered them and all of that from a regulatory perspective, , it's helpful.
And, and frankly, an imperative to be able to provide that visibility, starting at the front end as well. And so are technology or software, it allows for you to identify all of the steps along the way, in terms of growing a plant Treme plant harvesting, a plant on sometimes plants are destroyed to after the harvest,
weighing the plan when it's dried out packaging transferring the package to distributors, to wholesalers, to producers. You it's sometimes transferred more than one time and then, you know, ultimately transferred to a retailer and then sold to a consumer.
And so our software will track every step of the process there. And as many as 350 discreet. In that life cycle. It's pretty exciting. our differentiator, or I [00:03:00] guess one of our more unique elements, which is really exciting is the use of proprietary and patented RFID, tagging methodology.
And so. Our business model really is based on on the individual plant identification. And we have unique tags that have an RFIB inlay. That's attached , to every plant in different states have different regulations that will require tags to be attached at different Heights or different levels in the charity.
And. RFID , is the gold standard in every agricultural supply chain in the developed world. And, , even beyond the agricultural supply chain, you look at the largest retailer in the country, Walmart, and in January, they issued a mandate that every single package in their supply chain. has to have an RFID tag so that it's readable wirelessly.
You can identify where like your whole inventory at any point in time is able to be done on perpetual basis. And in certain situations, depending on the structure of the cultivation or the distributor had been a retailer, [00:04:00] there are some folks that employ constant measurement of RFID.
So , you can get your up-to-date. At that second inventory at any point in time. And some folks are kind of checking it in a more periodic sense. If you're a regulator and you imagine heading out to a farm where there's thousands and thousands of plans and trying to kind of. Spot check and get a good sense of how everything's going from an inventory perspective and how accurate the numbers are that are being provided to the regulator.
That's a lot easier to be able to walk through that farm with an RFID reader and do a 100% inventory. It's also important for folks that are starting out as cultivators that are trying to get loans from banks. So we've worked with a number of different banks. It's, it's not the easiest thing to underwrite loans in the cannabis world.
And so we would certainly certainly been able to support. Growers in being able to help them share their data and provide insight into the rigorous process that they go through to ensure that they're both compliant and also being really effective in terms of growth and profitability perspective.
You [00:05:00] see similar conversations in the insurance world as well.
Dan Humiston: wow. I'm just listening right now. And I'm saying from a business standpoint, especially a lot of startups. This is great for them because. They're forced to have good business systems, which is, I mean, that's something that most businesses , don't graduate to until they get to another level.
But I'm going to jump ahead here because I wanted to get a few more things to talk about. You started in Colorado and now you're working with, I think over 20 states district of Columbia Guam, and you have over 300,000 users. , I guess one question that I've always had . And your business model, who are your customers? Do you get paid by the state? Do you get paid by the users? Do you get paid by both?
Michael Johnson: it's going to depend , on the way the state structured frequently . We are brought to a state via a state contract. So government , makes us selection on the system.
They would use just like a a city might make a selection on the vendor. They want to use to manage their on-street parking. And so we, we tend to get into states [00:06:00] that way. Depending on how they want to structure the, the costs and how they want to have oversight over the individual cultivators and, and licensed any kind of licensee.
Sometimes there's costs , that are passed directly to, , the grower, the distributor licensee of any kind. And sometimes the state covers all of it. And a lot of times there's this there's a split between the two. I think in the past historically, the government has been our customer and that's been our primary focus.
And that's certainly still is the case. We, we are here to help facilitate and support a really strong regulated market. But we also recognize that very large number of users you mentioned are made up of folks that are not the government, not regularly. So we want to do what we can to make the tool and to make our process as efficient, as effective as possible for them such that they're able to maximize profitability on.
They're able to have the best experience possible using the system, such that it's easy for them to stay compliant. Some. And they find themselves in situations where , [00:07:00] they look at the level of compliance and they look at that as something that's a little bit of a higher barrier in difficult to overcome.
We aim , to bring that barrier down, to make it such that on being compliant as part of their process, not something that they need to go above and beyond on , in terms of the different hoops that they need to jump through.
Dan Humiston: I gotcha. Yeah. I can see where you can probably find yourself. A lot of times is, is a, is an advocate for the, for the licensee, because this is too complicated, or I can see where the other way around, where you explain why the state needs something to a licensee. So I could see where that makes a big difference.
Now you mentioned a minute ago about the events I saw on your website that since you've started, you've had over. 5 billion events of over $31 billion in total dollars that have gone through. And I'm saying to myself now there is a ton of data. There that's a ton of information now is that available to agencies like law enforcement agencies and [00:08:00] tax authorities.
And just to give them that transparency that they need.
Michael Johnson: Yes, it's actually the state's data. We're the state system on that facilitates it, but safe data. The states are we're able to help them facilitate and analyze that data in ways that can help them be more efficient, more effective. We have a number of folks , that are actual licenses that use on third party integrators, which are another segment of what I refer to as customers, consumers, probably a number of folks , that have been on the show here that integrate into.
And are able to bring data into metric are also able to bring data out of metric for for the individual licensees purpose. And , I think a really special part of what metric does , as that backbone to the overall ecosystem in the cannabis space. And I would certainly encourage your listeners and anybody that's trying to get into the cannabis space, trying to be started to evaluate areas where they can be.
And , they can find efficiencies and something truly valuable to the overall cannabis ecosystem. And , we're very excited about our ability to partner with folks that want to get [00:09:00] engaged. We're actually in the midst of, of beta testing a more robust API interface and then that platform will allow for folks, I think, to have even better accessibility.
And I would also encourage people to, to leverage the power and the magic of RFID. There are a number of cannabis, specific businesses out there that leverage the tags that are already on every plant and are able to provide significant efficiencies. From weighing perspective, to real-time inventory, to even matching up the data, that's able to be derived from metric and picked up directly on the RFID tags to marry into temperature, humidity, and light based sensors.
Dan Humiston: That's that's great. I mean, you described it as the backbone, which really is, you're integrated throughout the system in , just about every possible manner. And you mentioned that you're going to expand on or build a more robust API. What else , is in the works , in the immediate future?
Michael Johnson: Well, we, I mean, being to be [00:10:00] through the partner and to help you , that primary backbone, that facility, that the legal ecosystem we are definitely, you know, in involved in committed to facilitating the regulatory supply chain. We recognize the benefit of that. I don't think you're going to see us coming out with a point of sale system or an ERP system or anything like that.
But to the extent we can continue to provide meaningful insight, meaningful support to folks that are developing new products. Folks , that are growing, that are selling is as retailers, folks that are , putting together a new CPG organizations, whatever we can be doing to help make sure that the experience.
And the buyability of cannabis is supported in the most credible way is, is our core focus. And we're going to continue to innovate in that way. I would say, in the near term, what I'm most worried about and what I'm most what I think we're most passionate about is ensuring that we've done everything possible to create the, the best experience for folks to be compliant, stay compliant, and find value out of [00:11:00] that compliance.
Dan Humiston: Yeah, . So you've done a great job so far, so I don't expect anything less than now. Will you be raising any capital to help you through this next, the next phases?
Michael Johnson: we're, , we are growing, we are getting into a position where I I'm hopefully able to fund internally our continued growth. Just like any other company we certainly would like to go more profitable to the extent there's opportunities out there.
The extent somebody's looking to get involved in metric we're, we're not in a formal round right now, but I'm certainly happy to have conversations and identify opportunities for meaningful ways that we can partner with anybody that's interested in advancing the strength of the regulatory supply chain and interested in supporting.
Dan Humiston: what we're going to have links to your few, everything on your, your company and your links in the show notes. So if anybody has any questions or if you want to maybe talk to them about participating in their growth, I'm sure. Michael or somebody from his team would be happy to speak with you, Michael let's.
This is a lot of fun. I'm glad we finally had you on the show. [00:12:00] I'm sure we'll have you on again, but good luck with everything you're doing. Keep it going and keep growing the industry. Thank you,
Michael Johnson: Excellent. Thank you so much. I really appreciate.