Run a dispensary? The Top 4 Most Frequent Compliance Violations You Need To Know About
After cannabis harvests successfully make their way from the fields or grow rooms to extractors and processors, they are manufactured and packaged into any one of the many cannabis products that end up on the shelves of dispensaries across the US. Which means dispensary owners are the gatekeepers, responsible for upholding compliance for the health and safety of the millions of consumers who visit the establishments to legally purchase cannabis products.
Dispensary compliance is of the utmost importance not only for the well-being of consumers but for the cannabiz owners seeking to stay in business. The potential consequences make it even more important to understand cannabis compliance violations that can flag regulatory warnings, hefty fines, and license revocation. To stay in-line and in operation, here we’ve compiled the top 4 most common dispensary violations as a guide to follow for compliance success.
The Top 4 Dispensary Compliance Mistakes to Avoid
Dispensary compliance mistake #1 – Underage sales
One of the main goals of dispensary compliance is to protect consumer health and safety including that of minors. Yet, selling to underage customers continues to be a common dispensary violation. Underage sales is a point of contention among cannabis storefront owners since regulatory agencies send out minor decoys to test their dispensary standard operating procedures in the same way that decoys are used to catch establishments selling alcohol or cigarettes to minors.
New dispensary business owners in recently legalized states should be aware of the harsh consequences that can come from underage sales violations. For instance, in California, retail storefronts can be subject to penalties of up to six months in jail and a fine of up to $500 for a first offense. Luckily, a recent study in the state proves that infraction penalties seem to be working as shown by the majority of dispensaries properly enforcing ID requirements.
To ensure your dispensary operating plan is equipped to avoid sales to minors, here are a few successful gatekeeping practices noted by the survey conducted in California:
- Use an electronic ID scanner.
- Properly display ID requirements and verification processes outside of the establishment.
- Implement door security or train counter staff to properly certify IDs.
Dispensary compliance mistake #2 – Maintaining license documents
Most states have a zero-tolerance rule when it comes to operating without a license, and have strict requirements when it comes to reporting documentation. These compliance stipulations make it even more important to put systems in place to track crucial license expiration dates and outline the way in which they’ll be renewed. If found operating without a current or valid license, many states levy hefty fines, suspend business operations or even, in some cases, shut them down.
It’s also important to remember that some legal state regulations require employees to be licensed. For audit purposes, having a system in place that tracks employees and reports expiring licenses can be highly beneficial to avoid unnecessary violations.
Dispensary compliance mistake #3 – Tracking supply chains & reporting inventory
Traceability from seed to sale is one of the biggest concerns among legalized cannabis markets. So, keeping accurate records of each product’s journey along the supply chain is of high priority to state regulatory agencies that have the responsibility of keeping product out of the wrong hands. Proper seed to sale chain of custody also ensures that products avoid contamination that could pose significant health risks and harm potential consumers.
That means maintaining records of every licensed cannabis product sold in your dispensary is key especially for investigation or audit purposes. When an unexpected audit occurs, having detailed and accurate inventory records can help quickly dispel any reports or monitoring for wrong-doing.
Supply chain traceability brings with it the common requirement of reporting inventory to state agencies. If done incorrectly, this can also result in violations. Most regulatory agencies require that inventory is reconciled every 7-14 days. Any inaccuracies may result in fines, fees, or infractions, and may involve law enforcement as well if significant discrepancies signify product loss, or theft.
Dispensary compliance mistake #4 – Overselling purchase limits
Another common dispensary compliance mistake is failing to adhere to purchase limits, i.e. overselling. One common example of failing to monitor sales limits is “looping” or allowing a customer to purchase the maximum amount in one sale, and return later to purchase the same amount again, a practice that just recently sent three Colorado dispensary owners to prison for one-year sentences.
From state to state, product to product, purchase limits can vary and change in light of new legislation or emergency orders from regulatory agencies. Staying on top of regulations and ensuring you have proper dispensary standard operating procedures in place to successfully limit purchases based on exact regulation is crucial to avoid violations.
Automating Compliance for Success
It’s likely your dispensary has already implemented advanced POS systems to automate sales, inventory, and customer information, so why not automate your compliance systems for success as well? ProCanna is a comprehensive cannabis compliance software solution that streamlines regulatory requirements and operations. The mobile-friendly software is equipped with innovative features that allow you to be in-tune with the pulse of your business, avoiding warnings, fines, and violations from the state in which you operate.
What are you waiting for? Reduce compliance stress and customize ProCanna for your retail storefront or medical dispensary today. Schedule a demo and see the ProCanna difference, today.