5 Keys to Implementing a Cannabis Compliance Program

Creating a cannabis compliance program is only the first step in ensuring that your business is compliant—the program must also be systematically implemented. Existing compliance content does a nice job of explaining the “what” by outlining state specific cannabis regulations, but often fails to explain the “how.” How does a business go about implementing a compliance program? This article will describe the 5 key considerations when implementing a cannabis compliance program.

1. Decide Who Will be Responsible for Implementing and Overseeing the Program

The worst thing a company can do is to distribute copies of its compliance program to employees and hope that they figure it out from there. Individual or individuals must be empowered by company leadership to implement and enforce the program. Ideally, the individual or individuals chosen will have a compliance background and have played a role in creating the program. Regardless of who is chosen, the individual or individuals must be empowered by company leadership to not only implement the program, but to also assess and modify the program where necessary.

Anyone involved in overseeing the compliance program must ensure it is presented and maintained in an organized fashion. A compliance “binder” that compiles all compliance policies is and is accessible to employees in hardcopy and digital format(s) is one way to get organized.

2. Understand the Role of Technology Providers

There are a number of technology solutions that offer compliance services that should be utilized to bolster existing compliance programs. In other words, technology solutions are not a substitute for creating and implementing a compliance program. Automation and other technology solutions are undoubtedly the future when it comes to cannabis compliance. While compliance technology solutions provide helpful workflows and templates, operators should not solelyrely on technology providers to develop or implement their compliance program. It is impossible for these providers to anticipate and respond to all of the unique challenges that your business will inevitably face on a day-to-day basis.  Business owners must independently monitor their compliance program and ensure that it remains tailored to their jurisdiction’s regulations and the business’ specific set of circumstances.  

3. Training  

All employees must be trained on all compliance policies and procedures at regular intervals (weekly, monthly, quarterly, etc.) as the business progresses. Only training employees when they are first hired is a recipe for disaster.With how heavily regulated the industry is, it is unrealistic to expect an employee to retain all of the policies and procedures relevant to the business in a single training. Provide employees with compliance training as frequently as necessary and gradually decrease the amount of training sessions as employees become more comfortable with their role.

4. Monitor

It is impossible to create a compliance program that anticipates every issue that may confront a cannabis business. Grey areas will inevitably arise, particularly when interpreting the cannabis regulations that govern a licensee’s business. A cannabis business must monitor its program, including its employee’s overall understanding of it, by maintaining an open dialogue with employees and seeking out feedback on challenges that are coming up in operations. Daily, weekly, bi-weekly, or monthly compliance calls should be considered. The frequency of the calls should be directly related to the “age” of the business—the “younger” the business, the more frequent the calls ought to be. Another option is to establish a confidential reporting mechanism for employees to report compliance concerns.

5. Reassess and Modify

Compliance programs are not static and should be reviewed/updated on a weekly, monthly, or quarterly basis. Have any regulatory changes occurred that impact a business? Has there been any internal changes to the business that need to be documented and possibly reported to a licensing agency?  These questions need to be considered at a regular cadence to avoid slip ups.

Effective implementation of cannabis compliance programs hinges on whether a company utilized an organized and systematic approach. No compliance program will ever be 100% effective, but a cannabis business puts itself in the best position to avoid issues down the road if it effectively implements its compliance program.

© RYAN T. KOCOT, ESQ. 2020

DISCLAIMER: THIS INFORMATION IS STRICTLY EDUCATIONAL AND DOES NOT CONSTITUTE LEGAL ADVICE.