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!