cannabis compliance tips

Top Four Cannabis Compliance Tips For 420

The high holiday of 420 is right around the corner, and with it comes a host of cannabis compliance issues your business needs to address to protect your license.

Even if you’re usually on top of cannabis regulatory requirements, it’s easy to get distracted with all that’s going on this week.

However, compliance can’t take a break this week just because of the added excitement. To keep you on top of your compliance game, here are four cannabis compliance tips that will help keep regulators at bay while you’re celebrating 420.

Tip 1: Keep Tabs on Your Supplier and Clients’ Licenses

In many states, any time you buy or sell any cannabis product, you need to ensure the business on the other end of the transaction is properly licensed. This should always be your first step before contracting with new suppliers or shipping to new clients. It’s particularly important in the lead up to 420, when you may be dealing with new business partners for the first time.

For example, let’s say you’re a licensed cannabis cultivator in Colorado, Fran’s Funky Flower Farm, and in the days and weeks before 420, you’ve received order requests from Carl’s Cannabis Club and Scott’s Store. These are new clients for Fran and she needs to do some due diligence before sending out Carl and Scott’s orders.

cannabis compliance tips

Fran should first check the status of Carl and Scott’s state licenses before authorizing the sale and shipping the order. Colorado cannabis regulations forbid licensed cultivators from transferring any product to unlicensed individuals or facilities. The state’s Marijuana Enforcement Division (MED) provides online tools that allow interested parties to check the license status of both facilities and individuals. Fran would be wise to regularly check with state authorities before completing an order from a new client.

Carl and Scott also need to perform the necessary due diligence before receiving an order from a new supplier, such as Fran’s Funky Flower Farm. In particular, they both must conduct the same checks on Fran’s business that she ran on them. State cannabis regulations are clear: licensed retailers must not receive any product from an unlicensed cultivator or manufacturer.

Tip 2: Know The Limits on Promotions and Advertising

Many states with legal cannabis markets tightly restrict the types of promotions licensed operators may want to conduct. California, Colorado and Ohio regulators generally forbid many types of promotions that are commonly used in other industries. An example of a prohibited promotion in those states would be providing free cannabis products to customers. Outside of some exceptions given to medical-use compassion programs for low-income individuals, giving away cannabis flower and product to customers is illegal. In addition, cannabis businesses may not engage in buy-one, get-one free specials on cannabis flower or products.

cannabis compliance tips

Cannabis businesses must also stay vigilant about the types of images and language they use in advertising messages, including on their websites. Many uses of known or novel cartoon characters, images and wording that may appeal to children, and product descriptions relating cannabis products to candy or food are generally prohibited.

If you’re a licensed business in a state with a legal cannabis industry, you should familiarize yourself with the advertising and promotion regulations that pertain to you.  Also prepare to get creative with your 420 and year-round advertising, so long as you are compliant with all applicable laws and regulations. The Guardian covered several novel advertising methods used by some of our Canadian industry colleagues that may work for your cannabis business.

Tip 3: Answering Questions From New Cannabis Users Appropriately

The history of the holiday teaches us many folks who don’t regularly consume marijuana will celebrate 420 by partaking in cannabis consumption. As such, many budtenders and other customer-facing employees are likely to face a bevy of questions from folks who aren’t familiar with the potential effects.

It’s essential to train your budtenders to give information to new customers and patients in a way that will not get your business into trouble with regulators. In particular, your budtenders must refrain from making any specific statements to customers and patients that could be construed as a healthcare claim about a cannabis product.

Teach your budtenders to speak about their personal experience with the products you sell in a general and vague manner. Even then, budtenders must take extreme care to explain that their experience was personal and may not be experienced the same way by others.

Budtenders should also encourage all customers to contact their healthcare providers to better understand how cannabis consumption may affect their own bodies. Last year, the Colorado MED promised a crackdown on licensed retailers in the state after media reports surfaced of budtenders providing medical advice to callers posing as pregnant women.

Tip 4: Build a Culture of Compliance Among Your Employees

Mastering and keeping current on regulatory requirements shouldn’t be the sole responsibility of your compliance manager. Rather, you should empower your compliance manager to hold ongoing conversations and training sessions with all of your employees to keep compliance in mind before, during, and after 420.  

Don’t panic if you haven’t consistently focused on compliance ahead of the holiday. You can now use 420 as a reason to cultivate a new and concentrated effort on the importance of regulatory compliance.

In the immediate term, you should prepare your employees for the onslaught of customers that Saturday will bring. Remind them that despite the chaos that day, they need to follow all applicable laws, regulations and rules set forth by your state and local authorities. Be sure to create easy-to-follow checklists and other helpful documents for your employees to use that easily answer compliance questions.

Over the long term, compliance managers should huddle with operational supervisors and company executives to devise a compliance training calendar. You don’t need to make this a staid, stand-alone affair that strikes fear into the heart of your colleagues. Think about incorporating these compliance trainings into regular all-employee meetings.

In addition, compliance managers should schedule regular compliance coaching sessions with individuals or small groups. These more intimate meetings may allow individuals to ask questions they feel intimidated to pose in larger groups. Smaller group or one-on-one meetings will also make it easier for your compliance manager to give individualized feedback.

Bonus Tip: Enjoy 420!

This week and the holiday itself mean a string of long days. Remember to set realistic goals about what you can accomplish.

Above all, don’t let the stress surrounding 420 take away from the point of holiday: to enjoy cannabis. Just be sure to enjoy it responsibly and compliantly, of course! Stay sane and safe this week!

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