Today, we are going to talk about cannabis compliance. Once you have your dispensary up and running, operating within the regulations of your specific state or county is paramount to staying compliant, and thus staying open.
This isn’t easy. The best way to tackle it is by developing a close relationship with your regulatory body. It is likely you will be assigned an agent or worker specifically to help you. Communicating often with them will help instill good faith, and set you up for a beneficial relationship.
But, there are plenty of cannabis compliance issues you need to be aware of. From store security, to how you get your inventory. We’re going to cover it all.
What is cannabis compliance?
Cannabis compliance is all about complying with the rules and regulations set forth by your regulatory board in your state.
In Washington State, we work with the LCB. They developed a regulatory framework for how businesses in the cannabis industry will operate. It’s up to us, the owners of dispensaries and delivery services, to live up to these regulations.
Why does cannabis compliance matter?
Unfortunately, the cannabis industry is scrutinized to a degree many other industries are not. Because of the nature of the products we sell in this industry, we get put under a microscope.
There is little room for error, so any cannabis compliance issues can truly be detrimental to your business. Even issues that may seem trivial to you can be a red flag to your regulatory board. The last thing you want is for them to have any reason to discipline you.
This industry is strict, and forfeiture of your license is a real possibility if you fail to meet the compliances set forth by your county or state.
Now, let’s quickly cover some of the most common compliance issues I see businesses run into.
The most common cannabis compliance issues dispensaries face in 2020
In all honesty, the cannabis industry is too complex to write an article summarizing each and every issue you may run into or mistake you may make.
This blog post would quickly turn into a 10,000 word document, and we still wouldn’t cover everything, because new issues are arising so often as this industry continues to evolve and find its place in the economy.
But, there are a few risks you face starting out that you need to be aware of from the jump. Here are some of the most common.
Issues with ID and security
The worst mistakes you can make involve ID’ing your customers and the security of your store.
Fake ID’s are a real thing, especially in adult-use cannabis stores that don’t require medical documentation. Because of this, you need to train your staff to spot fakes from a mile away.
In fact, cannabis compliance regulators often routinely visit and evaluate your ID process. In some cases, they may even send in someone with a fake ID to see how your security stands up to the test.
From a security standpoint, you need more than simply an alarm and video surveillance system. You need to closely read the language in which your security requirements are written!
There will be specifics about how long you need to keep security footage, how your inventory and shelves are monitored, and even whether or not you have a security guard out front.
Cannabis licensing and documentation
It should go without saying that having expired or improper cannabis licensing is an issue. Once you are awarded a license, you should already have a plan in place to renew it once it expires.
Continuing to operate your cooperation or delivery service with an expired license will ensure you do not have the ability to get it renewed!
This goes not just for cannabis licenses, but for business licenses in general, along with any insurance or other documentation you need for compliant operation.
This cannabis compliance issue should never come up. It is so simple to keep your stuff up to date. Don’t let this be the reason you get shut down.
Monitoring your customers daily purchase limits (looping)
The term looping is used to describe a customer which purchases their daily limit for cannabis goods (it varies by state, and even counties in some instances) and then return later in the same day to purchase more.
This is a huge no-no as you can probably imagine, as it usually is done by those trying to get legal cannabis out onto the streets in the hands of those who shouldn’t have it.
If caught serving to these types of customers, loopers as they are known, you risk losing your license and worse, jail time.
Violating the privacy of your customers & patients
Whether you operate a medical or adult-use storefront, the privacy of your customers should be of the utmost importance.
This includes credit card information obviously, but also names, occupations, and any other information about them. Whatever transactions occur in your dispensary need to be kept between you and the customer only, and regulatory bodies should they request them.
On that note, you also need to make sure you keep detailed transaction and inventory records. Having this on file is a huge step in remaining compliant.
Product packaging, safety, and labeling compliance issues
Another huge cannabis compliance issue has to do with the product itself. You need to make sure the packaging on your products doesn’t make any medical claims, as this got businesses in a ton of trouble back in 2019.
You need to make sure all products have childproof openings on them, so no young hands can access the goods inside. Make sure you are aware of which warnings and symbols need to be on each product.
A good cannabis vendor will ensure this is done for you and it won’t be an issue. But, its on you, the owner, to do your due diligence anyways.
Have questions on cannabis compliance?
If you have specific questions about cannabis compliance or need help dealing with a unique issue you’ve stumbled across, let’s chat.
My name is Rob Hendrix, and I am the owner of Cannabis Consulting Nationwide. I started this consultancy because when I opened my retail storefront in Washington, I realized just how complex and difficult this industry is to get started in.
I have real world experience starting a licensed dispensary, and more importantly, have remained violation-free over the past 5 years of business!
Because of this, I know a thing or two about remaining compliant. You can contact me here, or email me directly at [email protected]. Looking forward to hearing from you!
If you are hoping to get a Rhode Island cannabis license or apply to open a dispensary, you have come to the right place. My name is Rob, and I am the owner of Cannabis Consulting Nationwide and Cannabis Central, my legal, violation-free retail cannabis storefront in Washington.
You are likely hearing about Rhode Island cannabis legalization, or maybe you’ve been watching this state from afar, awaiting your opportunity to jump in.
The time is now, as the Rhode Island Department of Business Regulation is looking for more dispensaries as of March 10, 2020. In the coming weeks, the state will reveal the application period for six new dispensaries in Rhode Island, also referred to as Compassion Centers. So, you need to be ready to act and submit your application in hopes of winning a license.
How to apply for a Rhode Island dispensary license
These compassion center licenses can be obtained by any not-for-profit operation. As we mentioned earlier, the cannabis operation in this state is run by the Rhode Island Department of Business Regulation. So, you’ll be working with them throughout the application process, and they’ll be the group to award 6 entrepreneurs a license.
Head over to their site for a detailed page of information on current openings,
Need help starting a cannabis business or dispensary in Rhode Island?
Reach out to me and I can answer any questions you have about starting a cannabis business, help write your application, or with any other aspect of this complex cannabis licensing process. The cannabis industry, especially in a relatively undeveloped market like Rhode Island, is not one you want to enter alone.
By having someone with real-world, grassroots experience starting a dispensary on your side, you can set yourself up for success and ensure the money you spend on your application has the best chance of resulting in an awarded license. Contact me here, or by email directly at [email protected]
A successful start-up in this industry begins with a thoughtful, well-written cannabis business plan. But, this doesn’t mean you can just scribble some ideas on a napkin and hit the ground running.
Sure, you can start with a casual plan just for your own sake. But investors, and more importantly, regulatory bodies, are going to want to see your business plan in a formal document in order to award you any funding or licensing.
This process doesn’t have to be complex or scary, however. I’ll walk you through the important steps in filling out your plan. But first, let’s cover what a business plan actually entails, and why it’s so crucial to your success.
What is a cannabis business plan?
A cannabis business plan is a document containing pertinent information on how you plan to start a successful business in the cannabis industry.
Think of it as a roadmap for your business – it takes you through every avenue of the process. When someone reads it, they should have a good idea of why you are starting the business. And, how you plan to get the job done.
Why you need a cannabis business plan for your dispensary
There are two main reasons you need a well-written cannabis dispensary business plan – for your own benefit, as a detailed guide, and so that regulatory bodies, aka those awarding you a license, can see that you mean business.
For your own sake
Putting together a formal document with all of the elements of your business plan will make it easy to follow as you start building the business.
A lot of decisions you’ll have to make can simply be determined by looking at your business plan. And once you’re in the process of putting the pieces together, you can simply check the plan for what’s next.
This written plan will be a huge asset in your entrepreneurial journey. But you also need it for another reason – the application process.
For the application & licensing process
Undoubtedly, the regulatory body in your respective state will want to see a formal, written business plan for your retail cannabis storefront.
This is to weed out the lazy people who will apply for a cannabis license just to do it. If you fill out your cannabis business plan before the application process, actually applying for your license will be way easier. But, if you are seeking financial support, investors will want to see this document too.
You will have considered many of the questions and addresses many of the aspects of the licensing application on your business plan, so it’s just a matter of referencing the plan throughout the application process.
But, how do you write a business plan that actually sets you up for success?
How to write a cannabis business plan actually works
Let’s go over the different parts of a business plan first. Not every single one of these sections needs to be on your plan at first, but eventually, you’ll want to touch on every one of these points.
Why you want to get into the cannabis industry
Start the plan with your “why”. Go at least a few levels deeper than “because the cannabis industry is a great opportunity”.
Do you want to make a positive impact in your community? For me, one of the reasons I started Cannabis Central was because if cannabis was coming to Ellensburg, I wanted to make sure I was a part of it, so I could make sure everything was being done legitimately.
At its most simple, the executive summary should include what you plan to accomplish. But, the different components of this section should touch on why you want to get into the cannabis industry again, but this time using more facts and figures, rather than emotions.
Touch on who your business is (yourself, location, business name), what you will offer to customers, who your ideal customer is (create an avatar), info on competing dispensaries, your team, and finally, a financial summary.
In this section of your business, you can take a deep dive on the analytics behind the cannabis industry, particularly in your state, county, etc.
Look at market size, industry trends, growth potential, identify customer segments, and include some information on the regulatory board and legal landscape you’ll be working with.
Another thing you can cover in this section is the problem-solution your business is taking on. Go over which market you plan on serving, and explain the problem they face that you have the ability to solve. For example, if your city only has one dispensary and it’s not conveniently located for a majority of residents, you can solve that problem with a closer storefront.
Marketing & Positioning
The marketing & positioning section of your cannabis business plan should be a comprehensive section going over how you are going to get people in your doors. Cover these five things:
- Positioning – Who is your product for? How is your brand unique?
- Product – What products are you serving to the market?
- Price – Where are you on the pricing scale? Loss-leader, high-price, somewhere in the middle?
- Promotion – How are you going to make people aware of your products?
- Place – Where will you be located? Are you a retail storefront or delivery service?
The operations plan should cover how you plan to get things done. Here, you’ll talk about your location, any POS technology you’ll be implementing, where you’ll be sourcing inventory, how you’ll hire people, and any security measures you’ll have in place.
This isn’t necessarily a required section, but having a section dedicated to compliance will help ensure you remain violation-free, and it will show your regulatory board you mean business.
Here, you can talk about how you’ll create a culture that meets the compliance requirements for operation in your respective state.
In this section, you want to mention any advisory members, part-owners, and staff that are going to help you accomplish your cannabis business plan. Include biographies on each key member. These should highlight why they’re a valuable member of your team.
If you already have investors, you can mention them here as well. This will serve as social proof to other potential investors.
This is one of the most important aspects of your cannabis business plan. This is where you’ll talk about where you’ll get the money to accomplish the things you’re setting out to do, and how quickly you’ll become profitable.
You’ll need to focus on profit and cash flow, as these are two separate metrics that investors and your regulatory agency want to see. Include revenue forecasts, financing, operating costs, budget, and P/L statements.
Need help writing your retail cannabis business plan?
If you are thinking of writing your business plan, or are stuck on a certain aspect, get in touch with me and I can help you out. I have real-life experience writing business plans that work, as my retail storefront Cannabis Central is still operating violation-free over 5 years later.
This is an incredibly important starting point, and can really make or break your success in this industry. The whole reason I started Cannabis Consulting Nationwide was to help people just like you with these crucial steps.
The first hour of my time is always free, and I am happy to help.
The owner of Cannabis Central in Washington state and Cannabis Consulting Nationwide has put together some video resources to give you some insight into common aspects of the cannabis industry.
If you are thinking about applying for an Illinois cannabis license, you are in the right place. I have helped a number of businesses with the application process for adult-use cannabis in the great state of Illinois.
As many of you know by now, January 1, 2020, was the first day of adult-use cannabis retail sales in Illinois. The sales numbers were staggering, no surprise there, and Illinois is just getting started.
The stores which are open now, effective January 1, were themselves fast-tracked as they were previously and currently medical marijuana stores and much like Colorado, they flipped a switch on 35 medical outlets and began the sale of “recreational cannabis”.
I despise the term “recreational” as it pertains to legal cannabis, but that’s a story for another day. Now, here is a quick summary of the work I’ve been doing recently with three different businesses in Illinois.
If this is a path you are interested in following, there are a few things you should consider. I’ll outline them below. If after reading these considerations you are still set on venturing into this complicated industry, let’s chat.
What you need to consider before applying for an Illinois cannabis license
As it currently stands, the window for adult-use cannabis applications in Illinois is open. Many early applicants have already filed all their paperwork, so you may be a bit behind the curve. But it is not too late, as the winners won’t be released until May of this year. Before you start filling out your application, consider these points:
Do you qualify for Illinois’ cannabis social equity program?
The cannabis industry has a bit of an ugly past when it comes to how people who possessed or consumed the plant were treated. Specifically, communities of color were disproportionately affected by the war on drugs.
Because of this, the state of Illinois is doing their part to right previous wrongs with their social equity program. 20% of available points are based on social equity status! Here are the qualifications:
- 51% of owners must live or have lived in a disproportionately affected area.
- 51% of owners must have an expugnable cannabis offense
- At least 10 employees must satisfy the previous two qualifications
If you are entering this industry, it’s on you to do your part to create opportunities for families, communities, and regions that were harmed by the war on drugs. But, if you or your team were affected negatively, you may have a leg up on the competition.
Can you get financing for your dispensary?
One of the toughest parts about starting a retail cannabis storefront is finding financing. We have an entire article talking about ways to acquire banking for your cannabis business.
If you don’t have access to startup funds, or even a way to store your cash and pay your bills, you shouldn’t consider applying for an Illinois cannabis license. You can reach out to me, Rob, if this is a particular area of your business plan you are struggling with, as I went through this myself.
Do you have any experience in the cannabis or retail industry?
Illinois is going to choose applicants that have the best chance of success. So, if you have any experience in the cannabis industry, or even with a successful retail business in general, that is going to go a long ways.
If you don’t have any experience, don’t worry. I was the exact opposite of the type of person that you would think would want to open an adult-use cannabis store, yet here I am, more than 5 years later.
It won’t make or break your success, as long as you check the last box of our considerations – passion.
Do you have passion to start a cannabis business?
At the end of the day, this will be one of your most trying, difficult ventures yet. This industry is still figuring itself out, and it won’t be easy.
Your “why” for getting into this industry needs to be big enough to help you get through the tough days. Because they will come.
But if you have true passion for helping people in your community, then you should definitely apply for an Illinois cannabis license.
Now, here is some of the work I’ve done in Illinois.
CCN Lends A Helping Hand To 3 Retail Cannabis Applicants In Illinois
The deadline for new applicants in the newly formed adult-use cannabis system was January 2, 2020. I had the great fortune to work alongside three (3) clients all vying for one of 75 new licenses to be decided upon by the State of Illinois sometime in May of this year.
In two (2) of these situations, I applied as a Principal Officer. This was an honor to be sure but it came with an enormous amount of responsibility and, given our lawsuit crazy society we currently live in, an extra measure of exposure as well. It means I am applying along with the applicants/owners themselves.
I have no ownership in said companies nor will I have any fiduciary rights or responsibilities but nevertheless, the real applicants are trying to present the most appealing package possible to the State of Illinois.
By having an individual thoroughly experienced in the world of legal retail cannabis operation, they are saying to the state in effect, “we are endeavoring to do the right thing”.
If these two applicants are fortunate enough to be chosen, then contractually I have insisted on being named as Compliance Officer in the companies going forward.
This is necessary in my view to protect myself and my company, Cannabis Consulting Nationwide. If they follow my counsel and heed my advice in the never-ending effort(s) to stay compliant, then I will stay on as their Compliance Officer.
If not, I have an exit strategy to legally extricate myself from a situation I am uncomfortable with moving ahead with and being a part of.
I also was asked by the above-referenced applicants to help by reviewing and in a few cases, actually writing elements of the application, known as Exhibits.
The range and scope of information and plans the State of Illinois was inquiring about was amazing. I felt I was a tremendous help in the tone as well as the content of the required writings contained with the many exhibits, all required elements of the entire application.
In the third application, I was not asked to be a Principal Officer applicant, but I was much more involved in the writing(s) required as part of the application. I wrote in their entirety or very nearly all of the following Exhibits:
- Floor Plan
- Community Engagement
- Diversity Plan
- Operating Plan
- Business Plan
I contributed in other areas pf the application but the above were my purview and frankly, they were right in my “wheelhouse”.
Are You Thinking About Applying For A Retail Cannabis License In Your State?
If you are applying in your state to garner a license to retail cannabis, please contact a qualified consultant to help. I have been licensed and open and operating in Washington State since August 2014.
I have been successful and very proudly, infraction and violation-free. I have the boots on the ground, relevant experience many states are looking for when applying for cannabis retail licenses.
There is much value being placed on the presence of experienced cannabis operators, operators that is who have been in operating in a legal, compliance-driven regulatory framework.
There are very few individuals in the entire US who can claim the length of legal, violation-free operation in the heavily regulated retail cannabis industry that I possess and present via CCN.
So, do not be fooled, and do not rush to hire someone for the sheer sake of having experience in your corner. Hire someone who can help you in a real sense. Vet any cannabis consultant you encounter thoroughly.
My clients will attest to the fact I am a roll your sleeves up kinda guy who is the real deal and knows the ins and outs, the good and bad, the ups and downs of this still controversial and misunderstood business world that is legal cannabis.
If you want someone with actual, useable experience on your side to help you obtain a retail cannabis license or any phase of starting your own cannabis business, reach out to me here.
Good luck to you all. Happy New Year!
Rob Hendrix, owner
Cannabis Central of Ellensburg
Cannabis Consulting Nationwide