Metrc files appeal, claims track-and-trace contract did not include industry costs

Metrc, the state’s chosen track-and-trace provider for the medical marijuana program, has filed their appellant’s brief in the Western District Court of Appeals over the ongoing debate over a private industry cost for RFID tags.

The conflict stems back to 2019, when the state accepted bidders for their request for proposal for information technology services, including track-and-trace and a facility and patient application platform.

State contracts are managed by the Office of Administration, not the Department of Health and Senior Services.

The state made the case that the contract did not allow for variable costs, asking for a flat rate for services. Metrc’s appeal makes the position that tag fees are not variable costs as far as the state is concerned because the cost of the tags is paid by the facilities, not the state.

“After the contract was awarded and Metrc was performing it, the Office of Administration sought to rewrite the plain and unambiguous contract to impose a new obligation on Metrc to provide the RFID tags to the industry free of any charge,” reads the appeal, embedded below.

“This use of the State’s purchasing authority to benefit a private party has no basis in the law. Moreover, it is inconsistent with both the contract’s terms and a validly-promulgated state regulation. The trial court endorsed this ultra vires action. Accordingly, the Judgment of the trial court should be reversed.”

Notice of appeal was originally filed in February, shortly after Cole County Judge Dan Green sided with the state on January 10, 2020.

In recent weeks, Metrc has provided a contract directly to facility operators for the RFID tags, raising controversy of being in conflict with Judge Green’s order.

“The trial court concludes that the requirement that contracts be awarded to the ‘lowest and best’ bidder permits DPMM to take into account costs and value to private entities, not just the State,” rebuts the appeal. “This is incorrect both as a matter of law and policy.”

Finally, Metrc contends that if the state contract was going to include private industry costs, it should have explicitly included that to begin with.

“Finally, even if the State could lawfully consider costs incurred by private industry, those costs must be outlined in the RFP itself, as Lee’s Summit License plainly says. Again, the RFP here contains no reference whatsoever to costs incurred by the medical marijuana industry. If such costs were important to the State, it should have included them in the RFP. The State herein tries to have it both ways by (1) not including private industry costs in the RFP and (2) subsequently arguing that Metrc is precluded – by virtue of the silent RFP – from charging the industry for RFID tags.”

Metrc is represented by Lowell Pearson and Ryan Harding of Husch Blackwell Sanders.

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Greenway will continue to monitor the status of the state’s tag systems.