Identifying suspected inversion and diversion activities through data.
The NCS Risk Index (launched publicly on August 19, 2025) is a proprietary scoring feature within the NCS Analytics Platform. It is designed exclusively for cannabis regulators to turn overwhelming seed-to-sale data into simple, prioritized enforcement decisions.
Core Concept
It functions like a risk score for cannabis licensees (businesses or specific locations):
- Score range: 0 = minimal/no risk (fully compliant, normal operations)
- 100 = critical/high risk (severe potential violations or red flags)
- The score reflects the severity of potential issues such as diversion to the illicit market, tax underreporting, inventory discrepancies, or other compliance problems.
Higher scores flag licensees that regulators should investigate first, helping them move from reviewing thousands of records manually to focusing on the highest-priority cases.
How the Risk Index Works
- Data Ingestion: NCS Analytics pulls in millions of data points weekly from state-mandated seed-to-sale (track-and-trace) databases. This includes cultivation harvests, processing, inventory movements, sales, pricing, package details, cure ratios, and more.
- Predictive & Behavioral Analytics Engine: The platform’s patent-pending engine analyzes patterns in real time. It detects:
- Anomalies (e.g., below-average yields, harvest volatility, unusual price-per-unit, package quantity issues)
- Behavioral red flags across hundreds of alert categories
- Aggravating and mitigating factors (e.g., repeated issues vs. one-off events)
- Risk Scoring: All insights are combined into one overall Risk Index score per licensee. The system weighs severity and likelihood to produce a clear, actionable number.
- Prioritization Example:
- Start with ~40,000 licensees submitting data
- Narrow to ~1,000 with alerted/anomalous activity
- Prioritize down to ~100 for deeper review
- Focus enforcement on the top few highest-risk cases (e.g., 3 site visits)
This dramatically reduces “paralysis by analysis” while improving detection of real problems.
User Interface & Design
- The interface was developed in collaboration with the Wharton School Choice Architecture Lab to make it extremely intuitive for regulators.
- Regulators see a clean, prioritized dashboard view instead of raw data overload.
Key Benefits
- Efficiency: Regulators with limited resources can focus on the biggest threats to public safety, market integrity, and tax revenue.
- Proactive Oversight: Identifies issues early (e.g., potential diversion or fraud) before they escalate.
- Actionable Insights: Pairs with the full NCS Platform’s real-time alerts, dashboards, and reports.
- Scalability: Currently monitors nearly 18,000 cannabis licenses across the United States, including Alaska, California, Colorado, Delaware, Illinois, Oklahoma, Oregon, Maryland, Michigan, Minnesota, New Mexico, and West Virginia.
Background & Context
NCS Analytics (founded 2015, Denver-based) specializes in data-driven compliance tools for high-risk regulated industries, especially cannabis. CEO Adam Crabtree has stated: “The Risk Index transforms overwhelming data into actionable insights, allowing regulators to focus their limited resources on the most pressing threats to public health and safety.”
The Risk Index builds directly on the core NCS Platform (real-time data aggregation + anomaly detection).