Poll any group of cannabis cultivators across the country about their biggest challenges of running their businesses and odds are, most of them will tell you staying on top of state regulations keeps them up at night.
Cannabis regulations are abundant. Case in point: California’s proposed regulations for its recently overhauled cannabis program (MAUCRSA) came in at a whopping 148 pages—single-spaced to boot. That’s without considering the further tweaking and updating that will happen as California’s new adult-use program matures and new research findings on consumer safety and environmental impacts are made public, all of which will keep growers on their toes.
There are hundreds of ways cultivators can be noncompliant from the state’s perspective. Growers are most often preoccupied by the obvious issues such as avoiding banned pesticides and facility design problems. However, smaller violations are much more common, according to various state regulatory agencies.
For example, one of the most common violations in Arizona’s medical-only program comes from cannabis businesses not having appropriate bathrooms, a representative from the state’s Department of Health (DOH) told Cannabis Business Times. The DOH has cited cannabis facilities for issues seemingly minor, such as not having “mounted paper towels or toilet paper” and dirty handwashing sinks.
Other issues not on every grower’s radar that Arizona authorities commonly come across include (in no particular order): Grow room cameras not adjusted to consider growth of plants; cleanliness of equipment and floors; dispensary agents not in immediate possession of agent cards; allowing non-card holders into facilities; incomplete disposal records; and no start or end time on delivery trip plans.
In these type of cases, the Arizona DOH will try to work with the licensees, the DOH spokesperson said, and “set-up a provider meeting with the licensee to discuss the deficiencies and how/when the deficiencies will be corrected.” However, the department does reserve the right to deny or revoke a license for compliance issues.
All health and safety issues need to be addressed immediately, but solutions for smaller issues, such as toilet paper rack installation, can be communicated to the DOH within 20 working days. A plan of correction “should list the date the correction was made, as well as how he deficiency was corrected. This may include pictures, receipts or other mechanisms to verify compliance,” according to the department.
In Connecticut, response time varies based on the issue the facility faces, a spokesperson for the state’s Drug Control Division said. “For example … taking an ad off of Facebook can be done more quickly than updating a security system or managing a product recall.”
Connecticut treats its medical cannabis businesses as a pharmaceutical industry, providing clear guidelines on various processes and leaving very little room for interpretation in its regulations. The most common infractions come from companies improperly marketing or branding their products.
In Oregon’s medical market, state officials regularly see that growers have challenges with the Cannabis Tracking System (CTS) and maintaining records. A spokesperson for the Oregon Liquor Control Commission (OLCC) also noted that certain businesses violate state regulations by “exercising non-existent privileges.” For example, a producer selling an extract to a retailer is not allowed, due to producers not being licensed for concentrates. Rather, concentrate transactions need to happen between manufacturers and retailers.
Work With Regulators
Staying on top of regulatory changes is crucial to avoiding any compliance issues that could delay, suspend or shutter your business. Arizona officials noted that some licensees “offer ongoing training to ensure the staff is aware of the regulations. Ongoing training, which may include consultants, typically helps minimize non-compliance.”
All regulatory agencies CBT spoke with agreed that the best way to avoid and address any compliance issues is to simply be proactive and give the regulators a call if there is any uncertainty.
Communication is important for another reason: It can enact regulatory change. For example, the OLCC made a change to its surveillance video-backup requirements due in part to feedback from cultivators who operated in remote locations without affordable and reliable internet service.
“We realized it was a lot of data that had to go the cloud, or be backed up offsite,” an OLCC spokesperson said. “So we reduced that to 30-day backup of the camera that captures activity around where the on-site hard drive activity is.”
Simply put: Asking if you’re compliant is better than being told you aren’t.