Compliance is a beast with many tentacles — it’s way more than just inventory tracking.
For cannabis cultivators, it can be easy to get tangled and tripped up in the bureaucracy.
And things can quickly go sideways if a business isn’t responsive and professional when a regulatory agency flags an issue.
Officials in charge will likely wonder what other problems are brewing and take a closer look.
It’s all too easy for minor infractions to become major (and expensive) headaches that pull you away from what you need to be doing to keep your business on an upward trajectory.
To stay in regulators’ good graces and keep your cultivation facility humming, your company’s leadership team needs to ensure that compliance is baked into daily operations.
Having a fully fleshed-out plan that covers both normal business and behind-the-scenes administration is essential, so everyone on your team is ready whenever an inspector comes calling.
Create a Compliance Framework
I’ve learned some valuable lessons in my five-plus years serving on regulatory work groups in Colorado.
For one, officials on “the other side” don’t want businesses in their jurisdiction to fail.
But they do want their guidelines to be respected and adhered to in the interest of consumer and worker safety.
A primary way to ensure you’ve covered your bases is by compiling a comprehensive set of standard operating procedures (SOPs).
It literally gets your team on the same page about keeping daily operations compliant.
And it makes training easier across the board.
Line out every single grow-cycle task across your facility — everything from room setup and takedown to watering schedules, pest control and packaging for distribution.
Yes, it’s a lot!
But to avoid compliance-related fines, details are everything.
Hiring a compliance consultant can be a real time saver in getting this initial grunt work out of the way.
Break down the steps of each task for your SOP.
Take plant waste disposal, for example: Designated employees throw plant waste in a chipper to render it unusable, then discard it in a locked dumpster and sign logs as required.
Beyond the daily operations, work up SOPs for handling potential problems such as recalls.
This is an area where you can’t be caught flat-footed.
Prepare by doing “mock recall” exercises so staff members can quickly implement quarantines on plants or products and follow up with authorities.
For startups, it’s important to have an SOP set in place as you launch your facility operations.
Once a business is established, make sure to reassess SOPs regularly to flex with evolving regulations, particularly with pesticides.
With mergers, there’s no need to reinvent the wheel and change everything.
Focus on the business model, compare the successes and weaknesses and modify SOPs strategically.
Options for Inventory Management
Inventory tracking is what most people think of when it comes to compliance, and I won’t deny that state-mandated systems such as METRC can be challenging, to put it politely.
Just ask any manager who has had to temporarily shut down their operations when the system went down, or an owner who’s scrambling after the departure of an employee who knew all the ins and outs of the system.
There’s a lot of room for improvement, which is where specialized seed-to-sale software solutions can be helpful.
Instead of requiring extensive training to use the state’s system, employing software that interfaces with state systems can give businesses another avenue to track and document their inventory compliantly 24/7, while also providing data insights that can be used to target efficiencies and boost production.
Health and Safety in the Spotlight
Inspectors have a keen eye for safety in the work environment.
There are five areas in particular where I’ve seen fines quickly issued, and they’re all avoidable:
1) Unescorted visitors in limited-access areas: Even for a quick drop-in by an owner’s spouse, always adhere to the SOP for sign-in, badging and chaperoning.
2) Lack of ergonomic protection: This mainly applies to hand-trimming; consider an automated trimmer to relieve this burden.
3) Slips, trips and falls: Identify high-risk areas and stay vigilant about cleaning up standing water. Even for something as basic as climbing a ladder, implement training and employee accountability.
4) Inadequate personal protective equipment (PPE): In addition to pandemic-related protective gear, ensure employees have access to proper UV safety glasses for grow rooms and are equipped for handling corrosive nutrients and cleaning solutions.
5) Intruder prevention: Regularly inspect external fencing and your internal camera placements to avoid having plants block their view, and keep those visitor protocols tight.
HR Pain Points
Another area where many cultivators aren’t too well-versed is keeping human-resource matters and administrative paper trails organized.
An in-house or contracted compliance expert can get things wrangled as far as necessary documentation required for new employees.
There’s a lot to be said for the peace of mind that comes from knowing you’re complying with labor laws for collecting needed tax forms and posting requisite signage.
Your business can also go further when employees are well-trained and can access continuing education to become certified pesticide applicators or receive training in worker protection standards for the cannabis industry.
Avoiding an “Us Vs. Them” Mentality With Regulators
Cultivators can additionally protect their business interests by maintaining a positive, professional relationship with state and local regulatory agencies such as land-use committees and fire departments.
It pays to be an active participant in compliance: For instance, show up to land-use meetings. It’s a good platform to discuss regulations, and officials work to help you stay functional.
At the end of the day, regulators want businesses in their district to be successful because their tax revenue grows when businesses grow.
In my experience, good relationships with regulators take you far; smoothing the way for post-acquisition transitions, asking questions about inventory or packaging, or if you want to make improvements to your facility that require a modification of premises.
For example, did you know you need a state regulator review to install new lights and an electrical grid in your facility?
Yep. So it’s a good idea to maintain a collaborative relationship with regulators.
Having a compliance expert in your corner helps you navigate the bureaucracy and avoid expensive mistakes so you can focus on your operations.
