After a risk assessment has been performed and cannabis business has implemented a compliance program, the program must be audited at regular intervals. Here are three things to consider when performing a cannabis compliance audit:
Revisit Your Company’s Definition of “Compliance”
Make sure any cannabis compliance audit covers the entire universe of “compliance.” The bulk of your audit should be focused on the state and local cannabis regulations that govern a given license type. Research whether any relevant regulations have changed, or if new regulations have been released.
However, it’s not just about the cannabis-specific regulations. A singular focus on state and local cannabis regulations ignores potential local, state, and federal law that may apply to a cannabis business. Cannabis regulations often fail to mention relevant sources of outside law entirely or only make cursory mention of them.
For example, Cal-OSHA took emergency action last year and required California businesses to implement COVID-19 prevention programs. This announcement wasn’t only directed towards cannabis businesses, but failing to comply could put a cannabis operation out of business. Make sure that your compliance program is current with ancillary law in addition to the cannabis-specific regulations.
Perform a Physical Inspection
COVID-19 has forced society to operate digitally since last year, but I’m hopeful that will change in the latter part of 2021. This a positive development when it comes to cannabis compliance audits because audits should be done in person.
Part of a compliance audit should include a walkthrough of a licensee’s premises. Are limited access areas locked? Are there any potential health and safety issues? These questions are harder to answer over Zoom. While portions of the audit may be performed digitally (reviewing a compliance binder, METRC records, etc.) perform cannabis compliance audits in person where possible and practical.
Document the Process
Cannabis compliance audits must be documented. Put together a checklist of concerns to look into prior to the audit to ensure it is comprehensive. Consulting inspection checklists used by inspectors in your jurisdiction or disciplinary guidelines can be invaluable when determining what to include in your checklist.
After an audit is complete, save any checklist or other documentation produced by the audit. If there are ever any compliance issues down the road, showing a regulator a documented history of compliance audits can be extremely helpful in showing a regulator that a slip-up was an aberration and not a trend. Simply saying that an audit occurred in the past isn’t nearly as effective…
Cannabis compliance don’t need to be overly complicated, but they do need to be comprehensive. If you’re interested in learning more about cannabis compliance, click here for our free Cannabis Compliance Guide: California Edition.