Guest Post by Justin Dufour, Founder of Viridian Sciences
Cannabis is a complex product in a complex industry with complex regulations. Regulatory schemes across the country can vary significantly from state to state. They cover every aspect of the business from seed to sale.
Every cannabis business must adopt a “compliance first” mentality to keep on top of regulations and remain compliant.
Compliance is not optional
Complying with voluminous state and local regulations is non-negotiable. Every business in this space must maintain compliance. Compliance mitigates interference from state regulators, auditors, and law enforcement agencies.
A run-in with regulatory and legal bureaucracies can result in minor inconveniences to expensive fines. Even potential criminal charges are possible. Companies must produce, manufacture, distribute, and sell cannabis-related products with strict adherence. This mitigates risk.
Even businesses which are compliant with all state regulations can find themselves in a situation where local law enforcement thinks otherwise. Many cannabis-related businesses have seen their assets unjustly confiscated and their doors padlocked. It could be months or years before they’re back in business without detailed records that prove compliance.
The cannabis industry is still in its infancy. None of the regulations in any of the states are written in stone. All states with regulated cannabis industries are studying the effectiveness of their regulations. Many are considering what changes could be made to improve the program. Compliance managers need to get in, get involved, and stay active.
Many states require licensees to use a mandated tracking system. But don’t confuse this with compliance. These systems do little or nothing when it comes to validation of the data being entered.
Develop a reliable system for compliance
The most reliable tool to ensure compliance for any cannabis company is a robust enterprise resource planning system, or ERP. A cannabis-centric ERP should be used to track all aspects of production, manufacturing, distribution, and sales. It should also be meticulously kept up to date with all aspects of regulatory compliance. This is a must for any company serious about compliance.
A proper ERP can help businesses track multiple compliance metrics. These include licensing requirements, seed-to-sale inventory tracking, lab testing, waste disposal procedures, transportation procedures, packaging and labeling requirements, tax payments and so on.
A robust seed-to-sale system must be able to track data from multiple locations. And it should be usable for multiple in-industry verticals (grower, processor or dispensary). Companies that operate across multiple jurisdictions should also utilize a single system.
Another important aspect of a good tracking system is security. Housing customer data in-house can be a liability for your company. One solution is to store every bit of data in a cloud ERP. This helps to prevent a data breach. Remember the importance of a cloud systems ability to be secure, redundant, and able to quickly recover from disasters.
Without such a system to track all regulatory compliance metrics, cannabis businesses risk serious punitive setbacks which can cost time and money and land principals in jail.
About the author:
The founder of Viridian Sciences, Justin Dufour, met his former partners while studying for the patent bar in Oregon and started Orchestrated Software. During his time at Orchestra, Justin acted as the Chief Technology Officer and guided strategic development for the company. Justin’s efforts lead to a four-fold increase in production and efficiency. The solution Justin developed for the Craft Beer industry is responsible for processing over 50% of all the Craft Beer brewed in the United States, with clients such as Firestone Walker, Odell, and Full Sail.