Cannabis Compliance Matters: The Top Red Flags to Avoid For Success

Oct 13, 2021 | Cannabis Laws & News, Dispensary

Once you get your cannabis business up and running your work with regulatory agencies isn’t over. Cannabis compliance matters are of utmost importance for keeping your license and avoiding hefty fines and violations. Especially considering that state regulators are just chomping at the bit to make their money where they can.

So what are the biggest compliance red flags you can avoid for success? Keep reading for the top dispensary regulations and cannabis compliance issues to know.

What is Cannabis Compliance?

Before we get into the most common cannabis compliance issues, let’s refresh ourselves on what cannabis compliance actually is. Each state has its own set of regulations and rules that cannabis businesses must uphold. The act of keeping up with these rules and regulations is known as compliance.

Outside of regulatory agencies, there are other rules and restrictions cannabis businesses will also have to follow, just like any other business.

Compliance matters not only for the individual state cannabis agencies but other governing bodies too. Making it that much more important to understand the art of staying in compliance, while managing your business.

Cannabis Compliance Problems to Avoid

Of all the cannabis compliance problems, there are a few simple and common red flags you can easily avoid. Without further ado, here are the top most common cannabis compliance issues and how to avoid them.

Inventory Matters

Especially for dispensary regulations, keeping up with your inventory is of superior importance. Why? Because the agency is closely monitoring and watching sales and can begin asking questions when stock and purchases don’t align. While checking and maintaining inventory may be a full-time job for a designated employee, it’s often worth their salary to avoid fines, violations, or suspension.
But recently, many dispensary owners have been implementing what’s known as cycle counting to save extra labor, time, and effort each day. This technique references only counting a portion of your inventory at a scheduled time each month until it’s all been ‘cycled through’. I.e. – edibles on one day, flower on another, etc.

Best Practices for Storage

Did you know, each state has its own restrictions and guidelines to how, where, and what needs to be stored in a certain way? Even cultivators are subject to compliance matters that designate where pesticides can be stored, and how batches of product can be stored while waiting for processing, testing, etc.
In Michigan, the state regulatory agencies require facilities to establish a ‘chain of custody’ of specific supplies and outline instructions for storage requirements. Being aware of these requirements, and implementing standard operating procedures to ensure they’re followed is key to avoid any slip-ups.

Safeguarding & Security

Security might seem like an obvious compliance practice to uphold, but it’s not always so simple. For instance, some states require storing and securing certain documents for designated periods of time, while others require video surveillance to be kept for varying periods as well.
In general, almost all state compliance matters require some type of video security or surveillance – typically running 24 hours a day. If your network, or systems go down – you could be subject to fines or violations. So, ensuring you have the best equipment and practices in place to double-check and maintain the system requirements is crucial.

Keeping up with ALL agencies

Like we mentioned previously, it’s not just the state marijuana regulatory agency you’ll have to keep up with. When it comes to any business, you’ll have to uphold rules, regulations, and requirements for local, state, and federal governing bodies. That includes OSHA for work and employee safety, HIPAA for medical patient information, FCC for communications and advertising, and local or state codes. Like, fire, zoning, and building regulations, too.

This is why having a designated compliance manager for any type of cannabis operation can be extremely helpful year-round. As many regulations come with permits or applications, that have to be kept up with to avoid fines, and late fees from other groups that want to benefit from your mistakes, outside just cannabis regulators.

ID Issues

Checking IDs is of utmost importance for dispensary regulations to avoid selling to underage customers. Or undercovers who are actively trying to profit off your mistake.
Implementing a system that verifies customer IDs at their entry, and at the time of purchase is a two-fold way of ensuring identification. Other dispensaries may choose to use ID scanners to validate the ID isn’t fake, to reduce human error, and to speed up the process. However, recently, there’s been an issue raised with privacy with scanning IDs in Colorado, specifically.
In that case, always make sure you have a manual way to verify customer IDs and ensure your employees understand the importance of verifying their validity.

Training Employees

Speaking of employees, remember, they’re your front-line heroes when it comes to operations and managing day-to-day tasks. So training them completely on compliance matters, even if it’s not their area of expertise, is critical.
When your employees understand compliance red flags and how they relate to your operation, they’ll be better equipped to avoid them in the first place. Plus, with proper training, they’ll truly understand the ramifications that the smallest mistakes can offset.

Staying in Compliance for Success

Now that you know more about the top compliance red flags to avoid you’re in a better position for success. Always remember, cannabis regulatory agencies and other governing bodies want to profit off your mistakes. Luckily, with these tips, you can stay on top of compliance matters and avoid fines, violations, and suspension. Sign up for our newsletter or follow us socially, to get more industry news and tips.

About The Author

<a href="" target="_self">Courtney Trzos</a>

Courtney Trzos

To Courtney, it’s always 420 somewhere… After attending Michigan State University and working in communications for over 10 years, she took her passion for cannabis, professionally. In 2017, Courtney began freelancing as a writer for cannabis brands across the globe, promoting the therapeutic and recreational use of the plant, while helping her partner cultivate crops full-time, and learning more about the industry from a seed-to-sale perspective. Get in touch with her and follow her journey at