Disclosures are often required when significant changes are made to a cannabis business or when certain events occur. These disclosures typically must be made at both the state and local level within a specified timeframe. Cannabis businesses must not only be aware of disclosure requirements, but also must have a system in place to ensure strict compliance.
Here are some examples of where disclosures are sometimes required:
- Change in ownership
- Change in financial interest holders
- Criminal activity
- Loss of connectivity to track and trace
- Inventory discrepancies
Be sure to consult your jurisdiction to determine the process for making disclosures as well as the time frame disclosures must be made within. For example, the Bureau of Cannabis Control in California requires cannabis licensee to use a notification and request form created by the Bureau when making disclosures. It may be as simple as an email to the relevant regulatory body in other jurisdictions, however.
Remember: the requirements at the local and state levels may be different.
As with any component of a cannabis compliance program, an internal system must be implemented to ensure that disclosures are made. A key component to this internal system is the thorough training employees on the situations that trigger disclosures. Having employees onboard will help ensure nothing slips through the cracks.
It’s just about impossible for a cannabis compliance officer to be aware of everything that’s going on a day-to-day basis within a cannabis company. Compliance officers, therefore, should check in with employees at regular intervals (weekly, biweekly, etc.) to confirm that no disclosures were overlooked. Compliance officers should also ensure that a reporting mechanism is in place for employees to report any events that may trigger a disclosure.
Be sure to check out our free California Compliance Guide if you’re interested in learning more about cannabis compliance. Even if you live in a different jurisdiction, the principles discussed throughout the guide are invaluable in any jurisdiction.
© RYAN T. KOCOT, ESQ. 2021
DISCLAIMER: THIS INFORMATION IS STRICTLY EDUCATIONAL AND DOES NOT CONSTITUTE LEGAL ADVICE.