Deadline for New York Businesses to Comply with Seed-to-Sale Rules is Saturday

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.”