The outcome of November’s recent election cycle only further solidified the presence of the ever-growing cannabis industry in the U.S., as Maryland and Missouri join the list of over 20 states who have legalized cannabis. As our industry expands, it becomes more important than ever for businesses at every stage of the cannabis lifecycle to remain compliant with state and local cannabis compliance regulations. 

More than just safeguarding your investment and cannabis license, staying compliant can help your business survive the times and stay ahead of the game when federal legalization finally comes around. As a grower, you play a critical role in the cannabis lifecycle as the point of conception that sets the tone for distributors and retailers down the line. As a cannabis grower, you also have unique needs compared to cannabis entrepreneurs at other phases of the lifecycle.  

Here’s what you need to consider in order to keep your cannabis grow operation compliant:

Crushing Cannabis Compliance Basics

There are three main types of compliance that cannabis growers need to be aware of: financial compliance, regulatory compliance, and product safety compliance. In order to protect your license and, by extension, your grow operations’ capacity to function, it is crucial that you understand the complexities of operations and comply with any applicable cannabis regulations. From physical security to recordkeeping, a strong compliance program will identify and reduce risk concerns specific to your business and its individual processes. When done correctly, mastering compliance in these three areas allows your business to flow more efficiently, from seed to sale. 

Financial Compliance

Maintaining accurate financial records is critical for any business, but it’s especially important in the cannabis industry due to the fact that cannabis is still federally illegal. This means that traditional banks are often reluctant to work with cannabis businesses, which can make it difficult to obtain loans, lines of credit, etc. As such, it’s essential to keep meticulous financial records in order to prove to potential lenders that your business is a good investment. 

Additionally, financial compliance can increase your operations’ value to potential investors.  Being able to demonstrate the strength and dependability of your growth operation can increase interest from investors and buyers with the capital to grow your organization and take it to the next level. In order to reassure investors that the underlying company has a strong foundation, a good compliance program offers a transparent recordkeeping system that demonstrates not only compliance with current regulations but also operations aligned with best practices in the industry.

Regulatory Compliance

Obtaining the proper permits and licenses is crucial for any business owner, but it’s especially important in the cannabis industry given the complex web of state and federal laws that apply. In order to become a compliant cannabis business owner, you’ll need to obtain a number of licenses before diving into anything else within your potential grow operation. The process can be daunting, but there are many professional licensing services that can help guide you through it. If you are an established and licensed business owner, you’ll need to utilize SOPs, or Standard Operating Procedures, to keep your business compliant. 

Think of SOPs as a collection of guidelines that all employees must follow in order to maintain the consistency and security of your operations’ manufacturing, sales, and accounting procedures. You can prevent compliance problems from occurring by identifying key obligations in advance, using a set of standard operating procedures. Making reports, checkbooks, and logs for every element of your operations is the best approach to ensure that your SOPs are up to date and to demonstrate to regulators that your company is transparent and fully compliant with local regulations. 

Product Safety Compliance 

In order for cannabis products to be legally sold in most states, they must first pass a series of tests conducted by an accredited lab. These tests check for things like THC and CBD levels, as well as contaminants like mold and pesticides. In addition to lab testing, all cannabis products must be properly labeled and packaged according to state law. Failure to do so can result in hefty fines and/or seizure of products by authorities. While, as a grower, you may not think these areas apply to you, lab testing is a key part of the cultivation process that reflects your organization’s level of compliance and efficiency. 

Cultivation Methods
Finally, it’s important to note that different states have different requirements regarding cultivation methods. For example, some states require growers to use specific soil types or growing mediums, while others have restrictions on the use of pesticides or other chemicals. “According to Mike Bruno of Golden Ocean Solutions, tracking different state-by-state cultivation regulations will help growers produce a consistent high-quality product that will pass lab testing with flying colors.”  Be sure to research the cultivation requirements in your state before getting started. 

Starting a cannabis grow operation can be a great way to tap into the rapidly growing demand for cannabis products and build your own legacy within the world of cannabis. However, it’s important to remember that compliance is key. Be sure to research all applicable state and local regulations before getting started, and make sure you have a plan in place to ensure compliance throughout your operation. 

Need help ensuring your compliance strategy is airtight? Request a FREE demo today to learn more about how ProCanna can help your business stay compliant!