Member Blog: Cannabis Compliance Pains and How to Solve Them

by Frank Nisemboum, c2b teknologies

Amid increased anxiety and stress resulting from one of the most turbulent years in recent history, Americans everywhere have been turning to cannabis products to help them make it through. Bearing witness to a 71% increase in cannabis product sales nationally, according to industry experts at Leafly, the U.S. cannabis industry grew beyond expectations in 2020.  

While dramatic increases in product demand may seem like a cannabis business owner’s dream, maintaining compliance with unstable and unstandardized cannabis regulations can bring on more than a few nightmares. Every state seems to have different guidelines, requirements, and procedures than the next, with some in-state laws differing even between municipalities. 

Although maintaining compliance may seem like an unnecessary challenge without an immediately obvious return on investment, the real nightmare for cannabis operators begins once they’re found in violation. Non-compliance consequences usually include huge fines, the temporary loss of business, and even business license forfeiture. 

As a cannabis professional, you know that regulatory compliance isn’t optional and instead, an absolutely critical function of every cannabis operation. From cultivators and manufacturers to distributors and retailers, no business in the seed-to-sale supply chain can expect longevity in this industry without a plan that ensures adherence to local, state, and federal laws. 

The Most Common Cannabis Compliance Issues

One of the most common complaints regarding regulatory compliance involves the amount of time you have to spend on compliance: maintaining adherence, staff training, and preventing non-compliance violations. Let’s face it, this is a burden that doesn’t seem to directly correspond to a return on investment, particularly if you are a smaller cannabis business operating on thinner margins than some of the big guys. When time is among the most valuable things you have, wouldn’t you rather focus on front-end concerns that yield the more obvious benefits to the bottom line? 

Often it’s the level of cannabis regulation complexities that takes so much time and energy to overcome. Without approval and regulation on the federal level, requirements can drastically vary by state, subject to rapid changes by state and local legislatures. Maintaining compliance becomes a more significant challenge if you are a growing business with an eye toward expansion into more than one location in multiple jurisdictions. 

Together with medical privacy requirements, food safety, occupational safety, tax regulations, and other conditions, it seems like you’re spending more time investing in learning and implementing compliance initiatives than in product, facilities, or operational investments. 

COVID-19 certainly didn’t make any of this easier. These regulations have proven to be the most unstable, with many state and municipal governments behaving inconsistently, seemingly unsure of what they were doing week to week. 

On top of existing regulations before the pandemic, many cannabis businesses found ways to quickly adapt to new health regulations, mandatory facility closures, and point of sale changes. Dispensaries once focused on efficient customer service in limited-space shops now have to ensure social distancing, customer turnover, enhanced sanitation, and new capacity limits. 

Alleviating Compliance Pains through Preparation

The hard truth of the matter for cannabis businesses moving forward is that regulatory compliance will continue to be one of the most critical leadership focus areas. With more states poised to follow legalization trends in the next few years and lasting changes from an ongoing pandemic, the complaints concerning regulatory compliance are likely to get louder and more frequent. 

However, you can meet these challenges through systematic planning and the right cannabis tools to continue growing within the industry while striving for perfect compliance records. 

The most impactful steps you can take as a cannabis business include acknowledging the significance and planning for 100% compliance. Not only does compliance protect your business from incurring hefty fines and licensure consequences, but regulations also work to protect the safety of customers and staff. 

Regulatory compliance isn’t just about avoiding fines and protecting a business’s finances — it’s about providing a quality product consistently in a safe and secure environment. Tainted products can injure consumers, while children and animals are at risk of accidental consumption resulting from insufficient packaging. 

As a cannabis operator, once you adequately acknowledge the implications of maintaining compliance, you can begin developing a plan to make it happen. Depending on the scope and size of your operation, requirements specific can vary from one cannabis business to the next. If you run a cannabis business with front-end sales, for example, you may be required to follow regulations that a delivery-only company would not be required to follow. 

Ensuring your compliance plan focuses on the applicable statutes for your business type will save time, energy, and vital resources. Consulting with cannabis compliance experts is an economic investment every cannabusiness owner should make. They’ll teach you about meticulous record-keeping while helping you examine local regulations and understand the requirements specific to your business type. 

Vice President of ERP Sales, Frank Nisenboum, is a trusted advisor at c2b teknologies who has guided organizations of all sizes enabling them to establish a technology presence and expand their business through technology. His proven ability to analyze the current and future plans of a company and work with team members to subsequently bring technology solutions to the organization result in improved processes and controls that assure continued growth and profitability. 

Frank has worked in the ERP and CRM software selection, sales and consulting industry for almost 25 years. His strong ability to understand, interpret and match the needs of an organization to the right solution make him an asset to all of his clients. 

c2b teknologies integration and engineering experts have partnered with leading cannabis industry experts to develop a software solution that provides a complete cannabis operations system. The best-in-class solution not only handles tracking of seed-to-sale activities but encompasses your entire cannabis operations with compliance needs handles along the way. Our passion for solving problems drives us to deliver innovative solutions for everyone we work with. Visit c2btek.com for more information.