Operating a cannabis business is challenging, relying on local, state, and federal laws that change all the time. Licensing requirements depend on where your business is located, and what kind of business you’re conducting. Is it medical? Is it recreational? Both have their own rules and regulations.
According to the report Cannabis in the US 2021 Mid-Year Market Update, they predict that by 2025:
- 42 percent of total annual US cannabis demand will be met by legal purchases
- 2.4 percent of US adults will be registered patients in medical cannabis states
The top reason regulators revoke licenses is due to a lack of business compliance. In many cases, a business owner may not even realize they aren’t complying, yet that doesn’t change the impact. Punishment will be swift, and in some cases, severe.
What does non-compliance look like?
With so many other things on your plate, navigating the differences between compliance and non-compliance may be challenging. Paying attention to recent violations can be a good education.
A Southern Nevada dispensary was recently fined over a self-reported violation. An employee sold more than the legally allowable one ounce of marijuana, and management reported it to the Cannabis Compliance Board three days later.
A California grower was fined for Fish and Game Code violations for removing vegetation, grading a road, and constructing hoop houses in a stream. They also polluted the water with diesel fuel, pesticides, herbicides, and more.
If you are a cannabis grower, manufacturer, retailer, or wholesaler, it’s important to know and understand every side of the compliance issue. It’s a process that should never be ignored. Here are a few things you can do to ensure cannabis compliance is a part of your company culture, and will further protect your business license.
Catching errors and non-compliance issues may result in fines, but being aware of discrepancies or faults, and self-reporting can protect against license revocation. This involves understanding what compliance is, and self-checking your policies and procedures along the way. Self-auditing ensures you meet guidelines and take action when things go awry.
Have a solid operating procedure
Standard operating procedures provide you and your team with a roadmap for handling daily business activities. It allows any team member to step in and get the job done, while ensuring you deal with problems and inconsistencies swiftly and according to the rules. This is a living, growing document you should add to as you become more aware of operating practices.
Create a paper trail with everything you do. Unlike other businesses, cannabis businesses have specific rules about keeping source documentation. If you run a medical facility, keeping data on record is even more critical.
Cannabis business regulations and policies are still in their infancy, with changes happening all the time. It’s difficult enough staying on track if you do keep up with the changes; it’s even more challenging if you don’t. Several businesses in California allege their licenses were revoked unfairly, without due process being a part of the process. Only time will tell who is right and who is wrong.
Avoiding compliance issues is a much easier route. Rather than risk your business efforts through miscommunication with government officials, it’s easier to do all you can up front to ensure you’re in compliance.
Do you have a plan in place?
For IT Strategy, Security and Compliance, or Help Desk Services, reach out to us at Cannabis Technology Partners 360-450-4759.