Avoiding Operational Pitfalls in the Cannabis Industry

Written by Jenny Germano

Operational pitfalls are common in just about every industry. Pitfalls exist due to an array of reasons, but in most cases due to the lack of having systems in place to execute processes appropriately. Some operations have their processes in place, and also have systems in place, however the ability to be engaged, maintain and implement these can fall short. 

Being organized, having the correct team in place and having a well defined road map can help a Cannabis Operator avoid some of the typical pitfalls we’ve witnessed occurring in the Industry over the last few years.

Examples of Common Pitfalls:

  • The company is not prepared for onsite audits performed by State Regulators, or audits by the IRS.
  • Poor recordkeeping management, including non-existent adherence to State mandated retention requirements. 
  • The lack of meeting all of the SOP requirements, using old outdated versions and not updating SOPS regarding any material changes. 
  • The absence of OSHA standards relating to the facility type.
  • Insufficient State mandated seed-to-sale software training and lack of understanding of the life cycle of inventory moving through the operation. 
  • Acquiring licenses nationally at a rapid pace, and not having the right structure or processes in place as the company expands into markets with vastly different regulatory requirements.
  • Failing to be in alignment with what was submitted in the original application and diverting away from what was promised in order to win the license. 
  • Living in the “fantasy” of Cannabis versus the reality of it - this can be common when going after a license for the first time. 

These common pitfalls can be avoided by implementing and staying engaged with the systems being created. What is the company’s plan for implementing and staying committed to keeping the buckets of compliance a well-oiled machine?

We recommend creating a Compliance Plan for your cannabis operation. Having an overall plan for compliance from a broader birds-eye perspective is important. There are many parts of the business that involve compliance, including and not limited to all of the regulations relating to the different functions of the business, the integration of systems/platforms managing compliance, and how the company will not only comply with the rules but physically show compliance in the licensed operation. 

We have additional resources and tips located in our other Blogs on Managing the Buckets of Compliance and Creating a Compliance Program