The Guardian Data Systems Blog

Our Perspectives on the Cannabis Industry

Cannabis Compliance 2017, New Year New Rules

Compliance is the most important cogWhen it comes to compliance in the cannabis industry it will only behoove you to start the new year off on the right foot. While most of us spent our youth fighting against conforming to the laws of the land, there comes a time when you find that it just may be in your best interest to comply. The arrival of the new year brought with it a slew of new laws and regulations beginning to take effect in the states that allow cannabis and many pertain to cannabis compliance. As we dive into the new year with fresh enthusiasm it is a great time to take all the steps needed to make sure your business is running in tip top shape.

Whether you are running your business in a state that just legalized cannabis or one that is just revamping existing regulations you probably already realize how important it is to stay on top of effective dates and pay attention to deadlines for applications. What you may not realize is that Compliance Management needs to be at the top of your to-do list. What does compliance refer to?  In order keep your business in good standing you must comply with all of the state, local and even federal rules of the state(s) where you conduct business.

Compliance regulations may dictate how you run your cannabis business

Because compliance measures will undoubtedly dictate your procedures the most successful business will make sure they have all the necessary applications in place from the start. Is your business set up properly from the front-end toUnderstanding the endless regulations in the cannabis industry the back-end to make sure you are staying compliant with all the varying laws and regulations? Are you sending all the proper reporting to the government? Are you calculating your taxes correctly and paying them on time? Are you making sure you are tracking and tracing your product accurately and in real time? Are you following all of the packaging and labeling guidelines? Can you even make sense of all of the laws and regulations that are involved in literally every single aspect of your business?

It is important to keep in mind that each and every state has its own unique regulatory environment. There are no standardized best practices for everyone to follow. Even the governing bodies or regulatory agencies that draw up the regulations differ from state to state.

There are, however, some common areas where businesses fail compliance no matter where they reside. Processes where businesses are finding it hard to stay compliant are things like licensing, inventory and tracking, packaging and labeling. Many states have regulations that require a cultivator to update the RFID tracking as soon as a plant goes from the clone stage to the vegitation stage. These guidelines vary between states and are usually based on size of the plant. As a cultivator you must know the definitions by which the state goes and make sure your tracking is accurate and set up from the get-go to update your grow as it moves through its cycles. If you have RFID tags integrated with robust tracking software installed you won’t find yourself falling behind on the work load and moving plants without having the time to correct the tags.

Incorrect packinInspectors have a close eye on marijuana businessesg and labeling of marijuana infused products is where most of the infractions come from that result in non-compliance.. There are very strict guidelines for labeling and packages that are set by each state’s’ regulations. So far there is no standardized regulation, each state is different, but generally they are quite strict due to public health and safety and keeping products away from children. When edibles for instance are sent to a dispensary they may be sent in packages that are not compliant with the law. When the dispensary takes the product into its inventory it has effectively accepted responsibility for the compliance rules on that product. It is up to the dispensary to make sure the packaging has everything needed to remain compliant and update the package or label as needed.

Compliance is the responsibility of the cannabis business owner

All of these regulations are implemented to protect public health and safety. It is up to the business owner to know the rules and make sure they are following them. Not only does each state have its own rules, but they are implementing these regulations on their own schedules. States like Montana and Florida will be rolling out and expanding on existing medical marijuana policies and regulation in the coming months. Florida’s new medical marijuana law went into effect on Jan 3rd, and it has the potential of being the largest medical market in the nation. Its regulations and licenses will be rolled out and issued with the coming months.

Medical cannabis licenses holders in Montana are eager to rebuild the industry but are now basically starting from scratch. While their programs will be re-launching immediately the regulations are still being drafted. Previously, there were no statewide regulations for medical businesses in Montana. Now they will all face new regulations when they come in effect this June. But, that will give business owners the opportunity to build it from the ground up and do it right from the get-go making sure they implement compliance procedures and the install the software to keep them that way. Especially since their regulations are being written as we speak and will be morphing it will be important for them to install a system that can easily morph with those laws and keep them up-to-date and compliant at all times.

Both California and Nevada governing bodies have been given a year to set up the infrastructure for their new recreational markets.  In Nevada, the Nevada Department of Taxation has until January 2018 to write the regulations governing the new industry and begin issuing licenses for dispensaries. But all the first licenses will only be awarded to existing medical marijuana businesses with the exception of one, distribution. Distribution licenses will be available immediately and will be going to current liquor distributors. While the alcohol industry does come with its own lot of law and regulation it is nothing compared to the compliance, tracking and endless reporting that comes with the cannabis industry. This will be entirely new and much more stringent territory for these guys.

Even though California’s Adult Use of Marijuana Act went into effect the day after the vote the infrastructure for the retail stores has a year to get set up right. Permits for commercial operation will go into effect January 2018 in order to give the multiple departments the opportunity to lay the groundwork.

So, you might think ycannabis license and regulation deadlines ou have plenty of time to get things in order but time flies when you’re having fun. Existing Nevada dispensaries will want to make sure their house is in order now to make the licensing and inspection process go smoothly when the time comes to open the retail side of their business.  California dispensaries have all been operating as if this is the wild, wild west and are now finding themselves in new territory, backpedaling trying to figure out how to get their ducks in a row.  In this industry the things you can get into trouble for run the gamut from not filing the correct paperwork with the government to leaving your dumpster unlocked. You might just be going about your everyday procedures, but if an inspector comes by on that one day you didn’t get something done right, it could disrupt your whole business. Failure to comply can result in excessive fines, license forfeiture, and possibly even being banned from doing business in the cannabis industry and if that doesn’t happen you might be subject to irreparable damage to your business reputation.

Be proactive about your cannabis laws and regulations

The best way to enter into the new year is to do everything you can to be prepared. Falling out of compliance will mean you risk being levied  with heavy fines and possibly even havingHeavy fines are placed on non-compliant marijuana businesses to destroy product. Many of these problems can be anticipated and mitigated from the beginning saving you time, headache and money. One of the most important components to running a successful cannabis business is to have a consistent good standing with the authorities.

Rather than finding yourself at the mandated deadlines scrambling to address a myriad of requirements be proactive about your business. Make sure you are ready for audits and inspections with confidence that you will pass them with flying colors. Guardian Data Systems can help you navigate the complex waters of regulations and it all happens in real time. You have everything you need at your finger tips to make sure you get where you are going. Keep your cannabis business compliant

Keep in mind, your license is considered a privilege. The best time is now to make sure you are looking towards the future and anticipating what you and your business are going to need to stay compliant and successful as time moves on. Understanding the plethora of regulations in your state can be daunting. Making sure you have all the processes in place in every aspect of your operation to make sure you remain compliant can feel overwhelming. Guardian Data Systems can make it seem like it all comes together like magic.

Armed with our Robust Tracking Modules, Dynamic Accounting Tools and  in-depth Business Intelligence Software, and youRoar Erp for cannabis corporations can rest assured that you have set yourself up for the best operational efficiency to help you manage and control costs and keep meticulously accurate records.

Having the knowledge and systems in place to reduce the chances that you are not following the letter of the law will give you peace of mind and allow you to focus your attention on building your dream.

Leave a Comment

No Comments