Overcoming Regulatory Challenges by Managing the Risks
What are some of the Challenges?
As more States pass legislation and Adult-Use and/ or Medical Cannabis come online, and the older markets begin to mature, the regulatory challenges remain the same. Overcoming regulatory challenges by managing the risks is nothing new for a regulated industry. Newer States are facing struggles converting from legacy over to regulated Cannabis, more along the lines of the commercial cost of being in compliance, understanding those compliance strategies and the correct implementation. The States and/or markets that are maturing for example like Colorado, with such struggles as overregulation, saturation in the marketplace, consolidation, the cost of compliance in a downturn, and staffing issues. Most markets can relate to some of the examples listed.
What happens to operators' compliance plans when certain areas of the country in the Cannabis Industry are struggling economically? What about the challenge of finding non-remote employees that we’re seeing in some States if not all of them? What will future Cannabis operators face once they get licensed in their own States? The list of questions could go on and on, but one thing continues to remain the same, how will Cannabis operators manage the risks in the face of the variety of challenges that face the industry either today or in the future.
Managing the Risks. Operators still have to operate and adhere to the rule of law, even in an unstable or volatile Cannabis market, or a recession, or even a pandemic - the rules are still the same for everyone. How can operators protect themselves? By managing the risks through standards, implementation and industry best practices. Have a plan for your plan. Here are just a few examples of how an operator can manage the risks:
Avoiding Cannabis Violations
Warnings, Infractions, and Violations can happen for a variety of reasons. One could be the misunderstanding of regulations, or being overwhelmed by too many rules, or the lack of legal support for the business in understanding the rules and regulations and/or complete disregard for the rule of law. In any of these examples, there is some type of breakdown in the overall internal system in the business or the lack of any supportive compliance system that can lead to getting a violation. For example, not having a comprehensive compliance program, or the lack of employee training, or not putting public safety first through having a strong quality management system implemented. Having specific compliance standards and systems in place, not only protects a business and their employees - it also protects the general public and lowers the risks and liability.
Be Proactive not Reactive
Being “Reactive” and waiting for the regulators or the State to come into your licensed Cannabis operation to tell you what you’re doing wrong is a big gamble with the investment that has been made in the business. Being “Proactive” not only supports a business to not be reactive when it comes to inspections but it also helps keep a finger on the pulse of where there might be compliance gaps happening operationally. Being prepared for anything in your cannabis business allows you to handle all the curveballs in the industry in a more adaptive nature. When operators are prepared, proactive, and go above and beyond the minimum requirements their ability to adapt increases tremendously.
Protecting Employees in the Workplace
As the cannabis industry continues to mature it is critical that businesses prioritize workplace safety. It should be a top priority of all businesses to keep their workers and workplace safe. While it is a relatively safe industry compared to others there are still common general industry injuries such as slip trips and falls, and there are also unique hazards like repetitive motion injuries for trimmers and sensitivity and allergic reactions to cannabis dust. Educating workers on these common and unique hazards and symptoms, as a part of your business’s worker safety training, is important to keep workers safe. There is a myth going around in the industry that OSHA does not enforce federal laws when it comes to Cannabis operators due to it being federally illegal. OSHA actually does enforcement in the Cannabis industry and there are several violations on record for operators. We’ve seen first-hand, warning letters issued to operators on the required OSHA SOPs that are mandated by federal law. Workers deserve a safe place to work.
One of the biggest worker safety hazards in cannabis operations is chemical hazards. Pesticide exposure is an issue for every cultivation and flammable and explosive material are issues for many extraction facilities. It is imperative that every business have a compliant Hazard Communication Plan for workers so they know the chemical dangers in the facility and how to prevent them. In Cultivations it is also extremely important to follow the EPA’s Worker Protection Standard that requires training employees and for the business to meet standards to minimize pesticide exposure
One of the things this industry is learning, and will learn more over the coming years, is that those who make products available to the public are held responsible for the injuries those products cause, under state and federal tort laws. Essentially producers and sellers of a product have a ‘duty of care’ to sell safe products. What may surprise some is that just because your product passes state required testing does not absolve you of negligence or liability. There are trial lawyers right now going after businesses whose product passed the required testing but failed after a secret shopper bought and tested the product and found dangerous contaminants. Once your product is sold your liability of its safety never ends. While most businesses do care about product safety, and have measures in place to ensure it’s safety, if it is not documented in the eyes of the law it never happened. This is why Good Manufacturing Practices (GMP) and Quality Management Systems (QMS) are imperative to defend yourself legally from product liability.
These are just a few of the ways in which a Cannabis operator can manage the compliance risks, even with the challenges the industry currently is facing. Having a plan such as a safety program that supports compliance efforts and reduces the overall risks is a win-win situation for operators, workers and the general public. If your company is looking for a worker safety program, reach out to us for more information.
ICS Consulting specializes in Compliance based services, such as Third-Party State Regulatory Audits, State and Local License Application Support, Technical Writing, Standard Operating Procedures Development, Worker Safety, QMS, OSHA Compliance, Metrc Seed-to-Sale Support, Compliance Operations Training, Employee Retention Solutions, and Employee Onboarding. For more information on how ICS Consulting Service can help your Cannabis Business, book a free 30-minute consult and we'll help you map out your next steps to be successful in the Regulated Cannabis Industry