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Guest editorial: Utah Medical Cannabis Act requires accurate inventory tracking and management

December 8, 2018 GMT

During a special legislative session called by Gov. Gary Herbert on Dec. 3, the Utah Legislature passed the Utah Medical Cannabis Act. The act will allow the cultivation, harvest and processing of cannabis plants in Utah for cannabis-based medicine. The new highly regulated industry requires strict tracking and inventory management throughout the process — from tagged eight-inch plants to monitoring of medication to patients.

The purpose of stringent and efficient inventory management is to make sure the principle of supply and demand for medical cannabis is met for patients as prescribed by a medical professional. It is also necessary to avoid abuse and inappropriate or unauthorized use of cannabis.

Inventory management can be a smooth and functional process, but there are challenges, which necessitate a system that can keep track of every detail. It must also provide continuity and accuracy at crucial times, such as the handoff from cultivators to processors, from processors to labs, pharmacies, and the state central fill pharmacy, and from there to local health departments and ultimately to medical cannabis cardholders.

Developing an inventory system for medical cannabis isn’t much different from one for any product. It has to handle manufacturing, warehousing and asset tracking. The main difference is ensuring the state-mandated regulations are met and the appropriate documentation is available for examination and audit by state agencies.

Asset tracking

As it relates to the cultivation of cannabis, asset tracking of the plants is crucial. According to the bill, an inventory system must establish a unique identifier for every cannabis plant with a root ball that is 8 inches high and then tracks the plant in real time. It must be able to do this for every batch and lot of plants as they are planted and harvested. Cultivators and processors will need to be able to monitor asset levels in multiple locations and transfer items between locations with accurate manifests.

The ability to pick products and assets, pack them and ship them with complete accuracy will be crucial. As processors manufacture their cannabis products, they will need to track serial numbers, batch and lot numbers, expiration dates and more.

During cannabis plant processing, the inventory system will need to track “shake,” which is the waste product of processing, and it includes stems, cuttings, water from the drying process, spoilage and other items that can’t be used or sold in the process, but must be disposed of properly as hazardous waste material.

As in any business, the inventory system will help cut down on overstocks and shortages to ensure a healthy balance of medicinal cannabis products on hand. Each entity along the medical cannabis route will require inventory management within its facilities to account for the cannabis possession they manage. Each of their systems will need to create transportation manifests and accept and generate compatible tracking data from one to the other.

Manufacturing

It almost sounds strange to refer to the development of medicinal cannabis as a manufacturing process, but that’s precisely what it is. Once cannabis growing begins, it becomes part of the medicinal manufacturing process. The inventory system will be able to not only track the cannabis plants, but generate work orders for processing and waste management. It can also reduce steps in the process to save time and money. Moreover, it can help avoid making too many or too few products while tracking cannabis inventory across every phase of operations, from planting and harvesting to ordering to delivery.

Once harvesting is complete, a hand-off occurs between cultivator and processor. The tracking system must be compatible between the two facilities to account for every plant and where it resides while in the possession of the processing facility, which includes manufacturing materials, product development, packaging, warehouse or shelf location, product batches, and even dosing. The complexity arises when considering all of the different medicinal cannabis products. They include tablets and capsules, concentrated oil, sublingual preparation, topical preparation and flower burst packaging. Each product will need to be tracked by product, batch, lot and in some cases by the plant.

Warehousing

Once produced, cannabis products will be stored as needed in each facility. The inventory system will provide not only real-time reports needed for state agencies, but real-time inventory updates, so a pharmacy, lab or state central fill pharmacy will know how much inventory they have on hand. It also allows them to arrange automatic reorder points on all materials needed at every step of the process to avoid stockouts.Additionally, an accounting and elimination of “shake” becomes part of the inventory management process. In other states, this has been one of the most vulnerable steps where theft or unauthorized usage has occurred. Waste management is as essential as inventory management.

After manufacturing, the medicinal cannabis products or medicine go to either independent test laboratories, medical cannabis pharmacies, or the Utah State Central Fill Pharmacy. Each of these facilities must also develop inventory management systems and processes to account for the handoff from one facility to another.

The goal of Utah’s Medical Cannabis Act is to create a triad consisting of a doctor, pharmacist and patient to help those with chronic pain and ailments. Reliable inventory management and tracking implemented adequately at each step in the process will ensure supply is readily available, assure quality, save time and money wherever possible, and most importantly provide the triad with the cannabis medication it needs to heal and comfort the people of Utah.