Why a Cannabis Compliance Officer Is Essential To Protect Your License

By: Heather Schafer

Did you know that as a licensee you are responsible for every “act, omission or failure” of your representatives or employees? Did you know that every licensee is required to maintain inventory records, reconcile those inventory records with actual inventory every 30 calendar days and report any significant discrepancies within 24 hours?

How about this one, your state cannabis license requires that you maintain adequate financial records, personnel records, training records, security records, waste management records, all contracts and all records pertaining to any cannabis activity under your license or occurring on your premise and make those records available to your regulatory agency immediately upon request.

As you can see, regulatory compliance touches nearly every aspect of your cannabis business and that requires that you have a full-time compliance officer to oversee every aspect of your operations and ensure that they are compliant with state regulations.


A compliance officer has, essentially 3 roles within the cannabis business.

1. Using their intimate knowledge of local rules and state regulations, they should be writing Standard Operating Procedures that both make sense with how your business will operate and comply with all rules and regulations.

2. They should be implementing the compliant Standard Operating Procedures and overseeing the training of all employees so that compliance is a focus of all employee training programs.

3. They should be the point of contact for the local and state inspectors to do inspections. They should be available during business hours, while in operation, so that if local or state inspectors do a surprise inspection they are able to walk those inspectors through the facility, answer all questions and are ready to implement all suggestions made by inspectors with a goal of remaining as compliant as possible.

Aside from the actual operations of your cannabis business, you should also note that the duties of a compliance officer will touch other parts of your business. BCC Section 5040(a)(1) states that when placing advertising or social media posts for your brand or cannabis business, at least 71.6% of your viewing audience must be 21 years of age or older.

The Bureau requires you to use up-to-date audience composition data to determine this and the only way to prove that you have complied with this regulation is to maintain records of this data and to have your compliance officer sign off that the data was double-checked before placing the advertisement or social media post. Another area that your compliance officer will touch upon is human resources or labor law.

Should a former or current employee file a claim, with the CA Labor Board, and action is taken against you for violating California labor laws, BCC section 5035(c) dictates you must notify your regulatory agency of the action within 48 hours of notification of the action.

You should understand that this will likely initiate an inspection of your facility and BCC section 5037 et.all provide that you must maintain employee and training records, for 7 years, and produce them upon request by your regulatory agency. These particular rules would make it advisable that your compliance officer have regular meetings with your human resources department to ensure that all records are being maintained adequately and would be ready for production upon request.


In Summary

As you can see, your Chief Compliance Officer (CCO) is an essential part of your management team and should be seen as equally important to your Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Administrative Officer (CAO).

Additionally, given the high level of regulation required within the California cannabis industry, it is a good idea to start your business with these key management team members in place. It should be noted that with these key team members in place, there should be no need to hire a consultant to complete your applications and attorneys should only be needed for overall strategy, contracts and mediation of contract disputes.

Should you need assistance in auditing your business to determine overall regulatory compliance, training of your compliance officer or strategy in putting your management team together, please feel free to reach out at Agora C Business Services or agoracbusinessservices@gmail.com

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