Colorado Edibles Company Sues Over Costly, Confusing Cannabis Seed-To-Sale Tracking Requirements

Lifestyle Foods Inc., operating as Ripple, a Colorado-based cannabis edibles company, has filed a lawsuit against the state Marijuana Enforcement Division (MED) due to the enforcement of Radio Frequency Identification (RFID) tracking policies. The company contends that the current tag requirements are both costly and confusing.

Expensive Compliance

Ripple’s appeal criticizes the requirement that cannabis businesses use RFID tags for tracking from seed to sale, a mandate that reportedly costs the company over $1,400 monthly. Despite a petition filed in 2023 requesting the removal of this requirement, MED’s actions have led to what Ripple describes as a “confusing outcome,” reports Denver7.

The state agency initially seemed to comply by removing the RFID requirement from its rules, only to later assert that these tags would still be necessary, pending agreement from Metrc, the Florida-based vendor contracted to supply the RFID technology. “Metrc is so entwined with MED that in 2023, a Colorado District Court… granted Metrc state-actor qualified immunity from Colorado antitrust claims,” Ripple wrote in filings, according to Green Market Report.

Legal Grounds

Several arguments are laid out in Ripple's suit against the continued RFID mandate, including its unnecessary nature and the assertion that the contract between MED and Metrc was enacted without due process. The company also argues that the contract violates Colorado law by directing industry fees to Metrc instead of MED. It accuses MED of failing to provide clear notice about the ongoing requirement for the RFID tags.

State’s Stance And Implications For Cannabis Industry

While the MED has refrained from commenting on the pending litigation, the situation has ignited discussions on the clarity, fairness and cost-effectiveness of cannabis product tracking regulations in Colorado.

Meanwhile, cannabis industry stakeholders are closely watching as the case could set an important precedent for regulatory practices and the use of tracking technology in the sector.