Cannabis Compliance Issues & How California Dispensaries Avoid Them
Is the cannabis industry regulated? Can cannabis compliance issues adversely impact a dispensary?
If you operate a California dispensary, cannabis compliance can impact whether or not your dispensary is successful. And it’s how you avoid being shut down.
Let’s explore what’s happening in the world of cannabis compliance and how dispensaries avoid some of the most common cannabis compliance problems.
Common California Cannabis Compliance Issues & Solutions
Compliance in the cannabis industry safeguards legitimate sellers and decreases the expansion of the black market’s market share. However, compliance goes beyond California’s edible regulations and monitoring the THC content in customers’ preferred method of consumption.
Even though the California edibles laws in 2020 are crucial to consider, other regulatory issues in the cannabis industry persist. Understanding the most common issues businesses experience while selling cannabis flower, extracts, and edibles in California has the potential to keep your dispensary from experiencing unnecessary consequences.
With marijuana dispensaries receiving their medical and adult-use business licenses each day, compliance in the cannabis industry is more important than ever. Dispensaries that don’t focus on compliance are at risk of having their licenses revoked, as well as receiving pricey citations.
Here are some of the most common cannabis compliance violations dispensaries in California experience and their solutions:
1. Lacking a License
The black market is thriving. However, there are plenty of risks associated with distributing cannabis products without the proper license.
Sure, it might seem easier to sell marijuana products without oversight. But these violations can result in your dispensary getting shut down. Is it really worth the risk?
Cannabis businesses operating without a license have an adverse impact on the cannabis industry too. Plenty of marijuana business owners jump through the hoops to establish a legitimate business, only to get undercut by unlicensed dispensaries willing to decrease prices by offering sub-par – and often, dangerous – products.
Even though this is one of the most daunting cannabis compliance problems, there’s a way around it. You can get a temporary license at first. However, you’ll still need to submit an application to become a licensed retailer.
You’ll submit your application for a cannabis business license to the Bureau of Cannabis Control. This application has to include all relevant business information, including the business name and contact information, along with formation documentation. You’ll also need to provide financial information, including loans, bank accounts, and investments.
If you currently own a marijuana dispensary, you’ll have to supply your sellers permit and business operating procedures concerning your inventory, transportation, and security. You’ll also have to submit your social security number, government-issued ID, fingerprints, and a criminal background check.
2. Avoiding Proper Disposal
Naturally, as a cannabis waste management provider we strongly believe in proper waste practices. We’ve seen first hand what complications can arise from a failure to dispose cannabis waste properly.
Unused or leftover marijuana products require proper disposal. While your dispensary might not have to worry about cultivation-related waste, other cannabis waste exists on the retail side of things.
Whether you have expired, unused, or leftover edibles or cartridges, cannabis waste disposal is a serious matter. The California Code of Regulations Title 16 Division 42 of the Bureau of Marijuana Control states cannabis waste is:
“… waste that is not hazardous waste, as defined in Public Resources Code section 40191, that contains cannabis and that has been made unusable and unrecognizable in the manner prescribed in section 5080 of this division.”
This means packaging or materials that have been in contact with cannabis and are not for sale or usable in any way can be considered cannabis waste. Most of the time your products on the shelves will expire and you will not be able to sell them legally.
If you’re unsure about whether your dispensary is generating cannabis waste, contact us for more information. We’ll make sure you’re on the right track and completely compliant with current California state laws.
3. Failing to Track Inventory
What is seed-to-sale tracking? In short, it’s a system by which the regulatory agencies that monitor your compliance. This means if you’re not tracking your inventory, you’re not following California’s cannabis regulations.
It’s always a good idea to have a system in place to track your dispensary’s inventory. Dispensary point of sale (POS) software is quickly becoming the go-to to keep track and automatically generate reports, bypassing this compliance problem with ease.
Operating a dispensary means you’ll need to check your inventory every 14 days. If you have any discrepancies, product loss, or theft in your inventory, you’ll need to contact the Bureau of Cannabis Control. As long as you don’t have inaccurate inventory reports, you’ll easily achieve and maintain this aspect of dispensary compliance.
4. Skipping Delivery Documentation
The legitimate side of the cannabis industry thrives on documentation. So it should come as no surprise that dispensary delivery services are subjected to several compliance standards.
Delivery drivers have to be 21 years of age or older, carrying a copy of the dispensary’s cannabis business license. These drivers also must drive an enclosed vehicle for the deliveries.
Before delivering cannabis products, dispensary operators have to submit all vehicle documentation to the Bureau of Cannabis Control. This includes the vehicle’s VIN number, DMV registration, and license plate number. Drivers can only carry up to $3,000 worth of cannabis products at a time.
5. Daily Purchase Limits
Some marijuana dispensaries find it challenging to monitor the daily purchase limits for medical and adult-use customers. Patients and recreational users have different purchase limits, and it’s essential to calculate how much each customer purchases. However, some people try to save time, overlooking this compliance necessity.
Cannabis retailers in Colorado have already experienced the crackdown on enforcing daily sales limits. However, California is experiencing the pressure to abide by these limits too.
The simple solution to cannabis compliance issues regarding daily purchase limits is to have POS software in place. (Refer back to number 3) This software can be set to produce a notification showing when a transaction will meet or exceed a customer’s daily limit. As you prevent overages with this software, you’ll keep your dispensary compliant with California’s regulations and avoid exorbitant citations.
6. Distribution to Minors
The Bureau of Cannabis Control does not tolerate the sale of cannabis to minors. In fact, this is probably the most severe cannabis compliance violations in California.
Peace officers have been authorized to send minor decoys into dispensaries to determine whether the establishments are violating the state’s laws. If the decoy successfully enters or purchases cannabis from the shop, an arrest or citation can be issued as a result. This is probably why training budtenders is so important for cannabis dispensaries.
To keep your dispensary free of minors, it’s best to check the identification of everyone before they’re allowed inside. If they never make it through the door, you’ll never need to worry about minors purchasing your products.
The best way to prevent all cannabis compliance issues is to remain vigilant in your day-to-day activities. Keep track of all aspects of your business to avoid compliance issues and continue experiencing the benefits of owning and operating a cannabis dispensary in California.