Operating within one of the most fragmented regulatory landscapes in the world, businesses involved in the cannabis industry face unique challenges. With the expansion of the U.S. markets, the complexity of cannabis compliance requirements is on the rise.
The significance of adhering to marijuana regulatory compliance cannot be emphasized enough. Implementing a robust compliance program is crucial for safeguarding businesses, reputations, licenses and pipelines. Compliance also plays a key role in fostering a culture of accountability, where employees are encouraged to adhere to frequently changing rules.
Here are the top five mistakes to avoid when it comes to cannabis compliance:
Insufficient understanding of regulating agencies
A common error made by cannabis entrepreneurs is neglecting to comprehend the governing agencies overseeing their operations. At the local level, businesses may face regulation by boards of supervisors and city councils as well as departments such as fire, planning, police, public health and tax.
Establishing a strong compliance program begins with creating a comprehensive list of all relevant local and state regulatory agencies and ensuring easy access to their contact information.
Ignoring ongoing compliance efforts
Regulations applicable to the cannabis industry are subject to change. Companies need to stay informed by actively monitoring local and state agencies as well as legislative developments in key markets. These entities usually provide advance notice when discussing cannabis-related matters.
Subscribing to email notifications from relevant authorities and implementing a system to track important meetings, monitor agency websites, and stay updated on the latest proposed and final regulations is essential.
Neglecting standard operating procedures, checklists and monitoring logs
This is one of the most significant oversights. Without a solid understanding of day-to-day business processes, maintaining compliance becomes nearly impossible.
Taking the time to identify potential compliance risks and implementing SOPs can help mitigate such risks. For example, checklists may be necessary for packaging and labeling, while visitor logs can ensure facility security. It is also crucial to train staff on the implementation of these tools.
Inaccessibility of documents
Countless businesses have faced repercussions due to their lack of understanding regarding reporting requirements. Operators often fail to keep records easily accessible for document requests from state or local agencies. Creating a master list of records and organizing them for quick access when needed is a recommended approach.
Integrating reporting requirements into SOPs and ensuring employees understand the situations that trigger reporting is crucial.
Clearly identifying whether a situation requires prior approval or can be reported afterward is also beneficial. A comprehensive and easily accessible list of reporting requirements significantly aids compliance efforts.
Underutilizing available tools
Many companies neglect to leverage technology and tools that can identify compliance issues proactively. Industries such as banking, finance and insurance have widely adopted software-as-a-service (SaaS) solutions for regulatory compliance and business operations. Similarly, SaaS solutions are now available for the cannabis industry, allowing business owners to electronically store and organize documents.
These tools enable easy searching, downloading and printing of records, as well as tracking processes and identifying potential problems. By utilizing these tools, businesses not only protect public safety but also safeguard their reputation, saving valuable time and money.
For companies such as IGC Pharma Inc. (NYSE American: IGC) that seek to commercialize FDA-approved cannabis-based treatments, the compliance requirements are clear, and they don’t have to navigate a labyrinth of differing state laws in each jurisdiction in which they wish to operate. This is different from what marijuana companies face in their bid to grow their footprint in different markets around the country.
NOTE TO INVESTORS: The latest news and updates relating to IGC Pharma Inc. (NYSE American: IGC) are available in the company’s newsroom at https://cnw.fm/IGC
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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