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As the cannabis industry continues to face major headwinds, with equity markets all but decimated, a lack of meaningful federal reform on the horizon, price compression, ongoing tax woes, and both surmounting inflationary pressure and fear of recession, industry players need to be incredibly efficient, methodical and cautious in their retail practices in order to survive and thrive during the downturn. Retailers also need to adhere to a myriad of strict and evolving regulations to prevent costly fines and to protect their licenses.
The tips below outline the most important things for cannabis retailers to stay compliant, safe and efficient while avoiding major pitfalls.
Invest In Employee Training
Budtenders – your most public-facing touchpoint of your business – not only play a big role in shaping your customers’ experience, but they bear some of the heaviest compliance burdens and liability potential in the cannabis industry. Failing to properly train your retail staff may create legal, financial and reputational issues for your business in the long run.
It’s imperative to set protocols for your retail staff that they both understand and follow. For example, if a budtender dispenses the wrong product or gives incorrect information, this can result in fines – not to mention it can lead customers and patients to experience adverse health reactions and it erodes trust. Adequate training prevents these damaging mistakes from happening in the first place.
While high turnover and staff shortages continue to be major hurdles for dispensaries, robust training is nonetheless extremely important. Standard operating procedure (SOP) software solutions can be a great way to streamline training and ensure budtenders follow protocols, easing the economic and time burdens of turnover. Strong training also signals to employees that they’re valued and you’re invested in their success. This in itself can lead to less staff turnover, helping you decrease the costs of hiring, training and onboarding a new employee.
Monitor Public Health
Assessing public health risks is one of the top duties of regulators, and violations aren’t taken lightly. With the spread and devastation of COVID over the past three years, it is especially important to implement a proactive approach to compliance as it relates to both sanitation and public health.
First, review your sanitation policies to make sure they’re in compliance with local and state health regulations and update any procedures as needed. Then, you will want to maintain a regular cleaning schedule for your facility, ensure employees consistently follow all sanitation guidelines and consider hiring a third-party cleaning service. Some additional tips to keep your retail locations safe and compliant include:
- Keep dedicated logs for routine cleaning and maintenance.
- Maintain a daily routine for inspecting refrigerators and freezers where edible cannabis products are stored.
- Regularly monitor temperatures and check for water leaks or mechanical issues.
- Test the calibration of your fridge/freezer thermometers regularly.
- Always store chemicals in an area separate from cannabis inventory and employee areas to prevent contamination.
- Immediately shut down operations if there is ever a sewage or hot water shutdown. These are imminent health hazards.
Expect the Unexpected
You’ll need to expect the unexpected. Local and state licensing authorities, in collaboration with law enforcement, will often perform sting operations. Undercover police officers have been known to pose as retail customers to identify any retailers who may be taking part in underage sales or “looping,” the phenomenon when customers come into the store more than once in a day and purchase more than the legal limit.
To prevent any serious infractions, employees will need to stay vigilant at all times, and accurately record and monitor everyone who enters the store, along with every transaction made. This is why establishing strong training coupled with SOPs are so vital. Retailers need to ensure the people they employ both understand and abide by internal policies and procedures as well as applicable state and local rules and regulations regarding compliant cannabis sales.
ID-checking solutions your company should be prepared for include:
- Utilizing an ID scanner, ID-checking software and an analytics system tied to your ID verification and/or POS system
- Using a UV counterfeit detector light
- Employing reputable security guards who have ample experience in ID checking.
- Instructing employees to:
- Check customer or patient’s ID multiple times throughout the course of the sale.
- Ask individuals who are wearing sunglasses to remove them so they can be positively identified in person and on camera.
- Rub fingers over the ID to see if there are any inconsistencies in texture.
Be Prepared for Regulatory Inspections – At the Drop of a Hat!
In most states and localities, licensing authorities can show up to inspect a licensed facility completely unannounced. Therefore, it should go without saying that your retail location should operate in a constant state of compliance. It can be tempting to let something slide just once with one of your employees, especially if it’s small (i.e. drinking beverages in the sales area or wearing a sweatshirt over their employee badge so that it’s not visible), but don’t let yourself allow non-compliance to slide. Regulators are not lenient and retailers get dinged time and time again on infractions that may seem trivial.
If you let “minor” violations pass without correcting or reprimanding employees, this is how a culture of non-compliance develops. Keep hard and fast rules, or non-compliance can easily snowball and serious violations and repercussions will occur. Furthermore, although minor slip-ups may not immediately result in serious consequences, your business’s reputation in the eyes of investigators and regulators is very important. Investigators may not fine you every time for minor slip-ups, but your reputation will tarnish and investigators will thereafter target you as a risk and become more vigilant, looking for places to ding you.
This leads to the next point, which is to maintain a strong relationship with regulators and investigators. Establish a point of contact between regulators and your business. Ensure that the primary point of contact is someone responsible, trustworthy and has both the authority and ability to address any questions a regulator may have. As the owner or manager, always make yourself available to regulators. Maintain strong lines of communication with them so that they don’t merely view your business as just another licensed cannabis retailer but as a shining example of a compliant cannabis business.
Document Everything
There’s a saying that 90% of cannabis compliance is documentation. Keeping documents. Organizing documents. Making sure none of your documents are expired. Being able to produce your documents for an inspection at a moment’s notice. Storing files electronically in an easily retrievable manner is imperative. Make sure all your documents are up to date, all infractions and remediations are documented, as well as all disciplinary actions, relevant regulatory changes, visitor logs and transaction records. Nothing frustrates regulators more than having to wait for store personnel to rifle through files, so keeping good organization is key.
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