Cannabis Compliance, a Key to Success for Hispanic Entrepreneurs

Hispanic Heritage Month is upon us! To honor Hispanic entrepreneurs, we would like to revisit the live webinar conducted by the NHCC Legal Committee and Simplifya in June of this year, titled “Cannabis Compliance, a Key to Success to Hispanic Entrepreneurs’‘. The webinar was hosted by Jerrico Perez from Vicente LLC and a board of directors of the National Hispanic Cannabis Council Legal Committee. The panelists included Gabriel Mendoza, EVP of Operations at 4Front Ventures, Mauricio Agudelo, President of H2O Health Ventures, and Ilenea Jimenez, Regulatory Analyst at Simplifya. Here is a recap of questions that were asked, and a summary of how the webinar panelists answered: 

What are some of the more sensitive or “important” compliance guidelines?

Cannabis license holders should focus on public health and safety. Licensees have a lot to consider, including:

  • Inventory tracking
  • Security
  • Sanitation
  • Diversion
  • Sales to minors
  • Adult-use and medical purchase and possession limits.
  • Health and Sanitation requirements, including
    • Employee personal hygiene and cleanliness. 
    • Proper handwashing techniques. 
    • Awareness of foodborne illness. Did you know vomit can aerosolize up to 50 feet?
    • Hot running water and appropriate facilities (handwashing, toilet) must always be available at your facility. 
    • Reviewing your local and state health agency rules for more information. 

What are the repercussions for companies that don’t meet their compliance demands?

Consequences of noncompliance tend to cost more than the cost of compliance. Enforcement actions, such as fines and court orders (i.e. suspensions and loss of license, at both the licensee and the employee levels), are very possible. 

There are many health and safety issues that impact the cannabis industry as it stands, and they are magnified with noncompliance. Noncompliance can lead to increased vulnerability to robbery and crime, especially in cash-only establishments. You also have to worry about adverse health events, employee health considerations, product recalls, mislabeling, and general sanitation issues. 

All of the above can negatively affect your ability to further participate in the industry. Enforcement actions against your license can label you as a bad industry actor, resulting in negative news and potentially ruining your brand and reputation.

What do most companies do to manage these tasks?

Good industry actors instill a proactive compliance culture from the top down. They maintain, follow, and train employees on their Operations Plans and SOPs as submitted to their regulatory agency. Most companies make sure to thoroughly understand the laws that must be followed and the consequences of noncompliance (violations and enforcement actions). If possible, they hire legal counsel and maintain a dedicated compliance team. They conduct consistent and routine internal auditing, along with ongoing training, supervision, and corrective action. 

What about digital compliance tools, can they help?

Digital compliance tools can help automate many aspects of your business operations. This includes:

  • Attestations.
  • Date/time stamps.
  • All information is automatically recorded, which reduces time spent on manual entries and documentation management.

What solutions does Simplifya offer cannabis small businesses?

All Simplifya core products are constructed based on specific state regulations and have clickable citations for reference. These are the product offerings we have in our core product suite: 

  • Audit Content
    • Converted regulations into simple yes-or-no questions at a 12th-grade reading level. 
    • Audit and Remediation reports – Can be saved in Smart Cabinet. 
    • Ability to assign action items for completion. 
  • Standard Operating Procedures (SOPs)
    • State-specific and operation-specific procedures with regulations incorporated.
    • Customizable.
    • Attestation feature as an HR tool. 
    • Time-stamped so you can see when things were completed.
    • Includes best practices to help you go above and beyond.
  • Smart Cabinet
    • Can house any documents related to the business, including SOPs, audits, and remediation reports.
    • Use of a Consistent Naming Convention
      • Important to name uploaded documents appropriately so they can use the search function efficiently and pull up needed documents quickly. 
  • License Tracker
    • Set reminders for expiration dates of licenses and locations.
    • Track business licenses, employee badges, trainings, certifications, and more.
    • Send reminders to employees, third-party emails, attorneys, etc.

Do you need a dedicated compliance professional on staff?

It is a best practice to have a dedicated compliance professional on staff, but they aren’t always required. What you want is someone who understands the rules and regulations, and often a compliance professional is a good route. Simplifya has a dedicated team of experts and lawyers constantly tracking and reviewing regulations so anyone can run one of our audits without worrying if they understood what the regulations meant. RegTech like Simplifya helps mitigate risk so that operators can focus on their core competencies.

What advice would you have for smaller companies that may be understaffed and have more trouble juggling their compliance demands? 

Focus on a proactive compliance culture. Get to know your regulators, local inspectors, and local law enforcement. They can help you get familiar with the resources your state cannabis regulatory agency provides, such as training.  Make sure everyone understands the risk of mistakes that can lead to violations and enforcement actions increase with speed of work (i.e. incorrect weights, mislabeling). Make sure you are following all applicable laws, including labor and safety laws (breaks, PPE, common hazards).

For dispensaries:

  • You may have to institute longer wait times so staff can focus on serving shoppers compliantly and maintain proper staff-to-shopper ratios. 
  • Be ready for “loopers” – shoppers returning multiple times to exceed their legal cannabis limits.   

What are the key steps to take when implementing a compliance plan at a cannabis business?

  • Get to know all laws that apply to your business (i.e. cannabis laws, zoning, local, etc.)
  • Understand what enforcement actions may be taken against your license. 
  • Conduct an internal audit.
  • Identify and address gaps.
  • Keep up-to-date with Training/Operations Plan/SOPs.
  • Provide consistent and routine monitoring and quality assurance of processes, books, and records. 
  • Provide consistent supervision and corrective action. 
  • Consistent and routine internal auditing and remediation. 
  • Follow Good Documentation Practices –  “If it’s not written down, it didn’t happen”. Track and document everything. 
  • Add all visitors to your visitor log to maintain an audit trail. If your state rules don’t require inspectors to sign themselves in, you may create an entry for your company’s records.


View the webinar here

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