By Bill Gunnison, Simplifya
Managing compliance for a business in a highly regulated industry, like cannabis, can seem overwhelming. You have to manage onerous requirements for recordkeeping, reporting, inventory tracking, testing, packaging and labeling, and security systems. The list goes on. You also have to verify that every employee of the company is following the rules, which frequently change. It can be completely overwhelming, so here at Simplifya, we’ve pulled together our top compliance tips for cannabis businesses to help make it easier for you to manage your cannabis compliance efforts.
Compliance Tip #1. Identify which state and local agencies regulate your business.
Make a list of these agencies and describe each agency’s regulatory responsibility. You may be surprised to learn how many state agencies regulate your activities. In California, for example, at least 11 state agencies regulate cultivation. You also need to be familiar with several agencies at the local level, such as the city council or board of supervisors, the planning department, fire department, police department, public health department, and the department that collects taxes. Make a list of the state and local agencies that regulate your business and include contact information (phone numbers and email addresses) for as many of them as you can.
Compliance Tip #2. Monitor the state and local agencies that regulate your business.
The regulations that apply to your business will change. It is critical to monitor your state legislature and all applicable state and local agencies. State and local agencies typically provide plenty of notice before meeting to discuss cannabis-related issues, so make sure you know where to find these notices and use a calendar to track the important meetings. You also need to monitor relevant agency websites and sign up for email notifications from all relevant authorities.
Compliance Tip #3. Identify the regulations that apply to your business.
After you have identified all relevant state and local agencies, and have established an effective monitoring program, download and organize the regulations issued by these agencies that impact your business. Organize these regulations in an easily accessible format so you can quickly reference them when necessary. Highlight the portions of the regulations that apply to your business and, if you have the time, create a condensed outline of all applicable requirements.
Compliance Tip #4. Draft standard operating procedures, checklists, and monitoring logs.
To adequately manage compliance, you need to have an intricate understanding of your business’s day-to-day processes so you can identify each step in the process that presents a compliance risk. Once you have identified the processes that present compliance risks, create standard operating procedures, checklists, and monitoring logs to mitigate these risks. You may need SOPs to ensure good manufacturing practices or for receiving or shipping inventory. You may need checklists for packaging and labeling. You may need to use logs to sign visitors into your facility, daily waste logs to track the disposal of marijuana waste, or security logs to track who accesses your company’s security system. Read all applicable regulations and create the SOPs, checklists, and logs that make sense for your business.
Compliance Tip #5. Train staff on standard operating procedures, checklists, and monitoring logs.
The SOPs, checklists, and monitoring logs you create will have no value unless you train staff on implementation. Keep records of these training sessions (which may be required by your jurisdiction) so you can keep track of which versions have been implemented into your operations. When regulations change, refresh your content and re-train employees.
Compliance Tip #6. Make a list of recordkeeping requirements.
Some records must be kept onsite, some must be accessible in the event of a document request from a state or local agency, and some records have to be kept for a specified period of time. Create a master list of records that includes required retention periods. Organize these records and make sure you know where all of them are kept.
Compliance Tip #7. Make a list of reporting requirements.
Make a list of all incidents you must report to your state and/or local agencies. Weave these reporting requirements into your standard operating procedures so everyone in the company knows which situations trigger reporting requirements. Make sure your list identifies whether a given situation requires prior approval or can be reported after the fact. Employee hirings and firings can typically be reported after the fact whereas bringing on new owners/investors or modifying your premises typically requires prior approval from a state and/or local agency. Draft a comprehensive list of reporting requirements and make sure employees have access to it.
Compliance Tip #8. Conduct random audits of your facility/operations to assess compliance with current regulations.
After you have organized applicable regulations, created SOPs, checklists, and logs, and trained staff on this content, you need to periodically check to see whether the training has been effective. Instruct your compliance manager to conduct random internal audits to assess day-to-day operational compliance. Address any concerns that arise from these audits and plan re-training sessions for employees as necessary.
Follow the steps above to establish a foundation for your compliance management program. If these tasks seem overwhelming, you can always use compliance management software to help- there’s even software available that is tailored to the cannabis industry.