Cannabis production is regulated in a track and trace regulatory framework by the jurisdictional regulator. Track and trace refer to the monitoring of the production of cannabis from the initial state to a desired state before allowing non-licensed customer access.
The track and trace regulatory framework reduces product diversion and inversion, maintains the quality of the cannabis product, ensures public safety, and reduces public harm.
This section focuses on the major commercial cannabis sectors within the track and trace regulatory framework. A sector refers to a portion of the commercial cannabis industry that is normally issued the same license type for their cannabis activity. Commercial cannabis businesses may be vertically or horizontally scaled across multiple licenses or regulatory regimes. Vertical integration refers to holding multiple types of licenses in the same jurisdiction. Horizontal integration refers to holding the same type of licenses in multiple jurisdictions.
Vertical Integration
Commercial cannabis businesses are considered vertically integrated when they own and control different types of commercial cannabis licenses within their jurisdictions. Vertical integration changes the risk profile of the commercial cannabis business by increasing and reducing different risk areas, primarily driven by the activity for which they are responsible.
Horizontal Integration
Commercial cannabis businesses are considered horizontally integrated when they own and control similar types of commercial cannabis licenses across multiple jurisdictions. Horizontal integration changes the risk profile of the commercial cannabis business by increasing and reducing different risk areas, primarily driven by the new jurisdictional regulations to which they are held accountable.