The Importance of Compliance for Cannabis Brands
Published on 11/27/22
The cannabis industry is growing, with some states advancing in different ways than others. As legalization expands, new laws are being put in place to support the industry's growth while maintaining its customers' safety.
Here's what your brand needs to know about cannabis compliance.
Why is Compliance so Important for the Cannabis Industry?
There are two primary reasons why cannabis compliance is essential. One, it protects consumers. And two, it supports the future of the industry.
Most cannabis compliance is focused on ensuring quality products for consumers. Compliant products help keep customers safe and happy while ensuring they have a positive experience.
Compliance also defines the future of the cannabis industry. If too many brands aren't compliant, heavier regulations may come down. And this can stifle the industry's growth.
Areas of Cannabis Compliance that Need Extra Care
There are many different areas within the cannabis industry, each with its own considerations regarding compliance. Here are some of the more significant considerations for your business operations.
Compliance with packaging is essential to protect the customer and anyone who might come into contact with these products. Most states require that products be packaged in childproof designs, and many require clear warnings that the product contains THC.
As is the case with any industry that sells consumables or inhalants, there are laws in place that affect how you can market cannabis products. The cannabis industry is limited by what information can be shared or stated while remaining compliant. Making any claims that cannabis can promote health is generally against regulatory restrictions.
Seed-to-sale practices are focused on tracking the cannabis plant throughout its entire lifespan. These practices ensure that your plants and products are legally compliant from the moment they emerge as seeds up until they're sold at a local dispensary.
Other Niche Areas
As the cannabis industry evolves, we should expect to see new practices and areas of business development. These will likely come with their own regulatory considerations. Moving toward a future where cannabis is an accepted part of society means many new products and offerings will be introduced. Like anything else, it will all be regulated.
Cannabis Compliance: What You Need to Know
Staying compliant is essential in the cannabis industry if you want to stay in business. Failing to meet regulations can result in hefty fines, criminal charges, or worse - the closing of your business.
Here are several items to add to your compliance checklist.
Study Regulatory Laws
Planning to run a business in cannabis? You must know the regulatory laws. As a business owner, it's your responsibility to review these laws before putting things in motion. Stay up to date on local and federal regulations.
Know How to Grow the Right Way
A bad batch of cannabis can have unexpected outcomes for your business and the consumer. This means that growing your cannabis properly is imperative for success. Steps should be taken to ensure there's no cross-contamination and that you're using safe tools. More importantly, your employees need to be safe while they work.
Have Clear Procedures for Your Operations
Regulatory compliance often comes down to having the proper procedures in place that help your staff remain compliant. Having a clear set of procedures that support your business operations and encourage compliant behavior ensures that everyone is on the same page. This is a great way to clearly demonstrate that you're compliant.
Keep Your Area and Products Secure
Security is no doubt a concern when it comes to cannabis. You must be able to keep track of your products at every step of the process, which is why seed-to-sale systems that track plants for growers are so popular. Losing track of flower, seeds, or any other regulated material can land you in hot water.
Manage your inventory in a way that demonstrates how it's safeguarded. This means having secure zones, limited access, and a clear trail of who has handled any cannabis material. It doesn't matter if you're a grower or own a dispensary. Products must be accounted for.
There are plenty of other areas where you'll want to focus on compliance. From banking and sales to delivery and local limits, this industry has many moving parts. Many things have their own rules. Follow and understand these laws as they change and develop.
Avoid These Compliance Mistakes
Failure to be compliant can mean fines, suspension, or total loss of your license, depending on what regulations you break. Avoid making these common cannabis compliance mistakes:
- Holding an incorrect or expired license
- Not following packaging, labeling, and product safety laws
- Not having enough surveillance cameras
- Violating customer privacy
- Illegal marketing or advertising methods
- Poor inventory management
- Not maintaining financial data and records correctly
- Failure to pay taxes
Remaining Compliant in Cannabis
There are many different regulations in the cannabis industry, varying from one location to the next. There are federal regulations, state regulations, and even regulations for different cities. If you're going to work or run a business in the cannabis industry, it's crucial to stay up to date on these laws.
Remember that cannabis laws can vary and are constantly changing. To stay aware is to stay compliant. What's required by one state might not be required by another. On the other hand, what's legal in one state might not be elsewhere.