When building your cannabis banking program, it’s important to have a clear understanding of how cannabis-related businesses (CRBs) operate. While it’s necessary to understand the regulatory landscape that CRBs operate in, it’s also important to be aware of and familiar with the different tools and technologies that they choose - and sometimes are required to - use every day. Knowing how these tools work and how they’re being used will give you and your institution a better understanding of how to leverage them to implement effective controls.
Seed-to-Sale, also referred to as S2S or STS, is traceability technology that CRBs use to manage their production and inventory. Seed-to-sale tracking was designed to capture information about cannabis products as they move through every stage of the supply chain - literally from seed to sale - including cultivation, manufacturing, and distribution.
When required by state law, CRBs must capture specific data elements at each stage and report them to the state’s track and trace system. Even when not required by law, CRBs may choose to implement this technology in order to gain visibility and insight into data that can help them more effectively manage their product and operations.
How Does the Technology Work?
Seed-to-sale software is usually cloud-based and often integrates with hardware such as barcode scanners, scales, and label printers. The software is used by CRBs to track plant activity such as plant location, harvest dates, batch weights and test results.
- Helps cultivators, distributors, and retailers monitor every step of the production process from seed-to-sale
- Barcode-based tags and labels are used to track the cultivation, manufacturing, and distribution of plant product
- Some states require seed-to-sale data be reported to the state’s track and trace system
- Helps CRBs gain insight into their product and operations
- Can be used to track plant activity such as plant location, harvest dates, batch weights, and test results
Point of Sale
A Point of Sale (POS), is a system that helps retail CRBs track their sales and inventory data. It’s important to be cognizant of the fact that CRBs use POS systems that are specifically designed to support the distinct and unique needs of CRBs that span beyond just processing payments. Because they operate under strict laws, CRBs must maintain a high level of compliance with local and federal regulations, and they often use the data from their POS to help them do so. Key functions of POS systems include processing payments, tracking inventory and price information, and managing customer data.
What Kind of Data?
Point of Sale systems capture a large amount of data, including data about sales, customers, products, and inventory levels. CRBs use the reporting tools built into their POS systems to leverage this data to allow them to make informed decisions that help them scale. In states with Track and Trace programs, businesses may choose to integrate their POS with a S2S software to generate and deliver sales and inventory reports to their regulators. There are some vendors that have combined POS functionality with S2S tracking to deliver an all-in-one solution for payments processing and supply chain management.
How to Leverage this Data to Satisfy Your Own Requirements
As with any high-risk or cash intensive business accounts, your examiners will expect you to have a firm grasp on the source of funds being deposited by your cannabis accounts. Moreover, your BSA program must demonstrate effective controls to anticipate the expected activity levels of these accounts. Point of Sale and Seed-to-Sale data is a powerful tool to help your institution better understand the commercial activity of each CRB, which provides you with the data you need to maintain effective oversight.
At Green Check, we give our financial institution clients the ability to verify the source of funds entering the financial system by providing a direct feed from their CRBs’ POS and S2S systems. We know that transaction monitoring incorporates each CRBs’ sales and inventory data, along with a strong initial and ongoing due diligence program are the keys to satisfying examiners expectations - both now and in the future.
Schedule a demo to learn more about how Green Check helps you leverage data.