July 11, 2025

The phrase “track and trace” or “seed-to-sale tracking” has become a regulatory buzzword in cannabis legislation. Lawmakers often argue it's a necessary tool to prevent money laundering and ensure consumer safety. But for hemp businesses operating legally under the 2018 Farm Bill, this level of scrutiny is overkill — and rooted more in the legacy of prohibition than in present-day realities.

Let’s break down what’s really going on.

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Why Does the Government Push Track and Trace Systems?

Leftover Fears from the War on Drugs

For decades, cannabis was criminalized, and anyone operating in the space was labeled a criminal. Now, even though hemp is federally legal, regulators still carry that baggage — treating hemp businesses like potential bad actors instead of lawful entrepreneurs.

Money Laundering Concerns

Cannabis has long been associated with cash-heavy transactions due to its former illegal status. Even though hemp is legal, the fear persists that without tight tracking systems, funds could be misused or hidden. But that argument doesn’t hold up — thousands of other industries operate without track-and-trace systems and don’t attract the same suspicion.

Public Safety Theater

Track-and-trace systems are often sold to lawmakers as public safety tools, but they don’t guarantee product safety. Real consumer protection comes from requiring third-party lab testing, accurate labeling, and age gating — not from government databases tracking every gram from seed to shelf.

Control and Consolidation

Large corporations and cannabis boards often use seed-to-sale as a gatekeeping tool. The systems are expensive, complicated, and create bureaucratic red tape that small businesses struggle to comply with. This benefits the biggest players while squeezing out competition.

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Track and Trace Doesn’t Stop Cheating

Seed-to-sale tracking systems like METRC and BioTrack are marketed as the gold standard for cannabis accountability. But these systems are only as reliable as the people entering the data. Where there’s money, there are workarounds. Here are just a few:

• Ghost Plants and Unregistered Clones: Growers start more plants than they officially tag and mix them into legal harvests — making yields look inflated but “compliant” on paper.

• Yield Inflation & Substitution: Low-yield plants are falsely logged as high-yield, or illegal cannabis is relabeled as legal during extraction and packaging.

• Lab Shopping and Reused COAs: Some operators use the same certificate of analysis (COA) on multiple batches — even if they weren’t tested.

• Batch Merging and Data Fudging: Legal and illegal biomass is blended, obscuring origin.

• Point-of-Sale Diversion: Fake returns or destruction logs let retailers sell inventory off the books.

• Shadow Inventory: Some companies keep a secret “burn book” that records untracked transactions outside of METRC or BioTrack.

In states like California, Michigan, and Oklahoma, regulators have uncovered widespread cheating despite track-and-trace systems. In Oklahoma, it was estimated that up to 75% of the marijuana grown wasn't properly tracked.

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What If Cannabis Was Descheduled?

If cannabis were removed from the Controlled Substances Act, the entire foundation for federal surveillance-style tracking would collapse. In a descheduled world, cannabis — including THCA hemp — would be treated like any other agricultural product. Compliance would revolve around safety, not suspicion.

We already have the tools for effective consumer protection:

• Age gating (21+)

• Labeling transparency

• Contaminant testing

That’s what matters. Not data logs and surveillance software.

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The Bottom Line

Track and trace is a holdover from prohibition — not a forward-thinking solution. It’s vulnerable to manipulation, burdens small businesses, and creates the illusion of safety without guaranteeing it. What we need is a shift in the conversation:

👉 Hemp businesses aren’t the problem.
👉 Seed-to-sale tracking isn’t the solution.
👉 Let smart, targeted regulation — not legacy fear — lead the way.

 

Disclaimer:

The information in this post is provided for general informational and educational purposes only and should not be construed as legal advice. Laws and regulations surrounding hemp and cannabis are constantly evolving. Readers should consult qualified legal counsel or regulatory authorities for guidance specific to their situation.