By Walter Moore, CEO Cognitive Harmony Technologies
Here’s the scenario: you’ve submitted a cannabis business license application and are planning to launch a cannabis business with everything in order, from supply chain needs to a network of ancillary businesses to a banking solution. It sounds like your business is in the clear and that the tedious compliance work is finished. But don’t get too comfortable as jurisdictions with licensed cannabis industries across the U.S. require timely license renewals, as well as updated paperwork each time an aspect of your business changes.
The bottom line is that business owners need to stay diligent to remain compliant and keep pace with evolving regulations. Compliance is the number one tool that regulators use to control the market and, cynically speaking, limit the number of active businesses. You don’t want your business to become a target, so it’s important to have a self-auditing checklist.
Here are 4 best practices to ensure that your cannabis business remains compliant year after year:
Implement a Project Management Tool
Remaining compliant is a full-time job in itself, so implement a project management tool as you would for other business initiatives like marketing and sales. Pick the software or platform that fits your company’s goals and size best, but even something as universal as Google Docs can work effectively. The key here is being able to collaborate and make updates in real time to track the state of completion of various compliance-related tasks.
Here’s a hypothetical but plausible example of why a project management tool is useful: a license renewal application may require 15 documents to be produced and assembled, and those 15 documents may consist of 20-30 separate components; and all of these documents must be tracked and completed to submit a successful license renewal application. A project management tool is a surefire way to get your documents in a row and stay organized to meet compliance requirements.
Draft a Compliance Roadmap
Once you have your project management tool set up, the next important step is to draft an end-to-end checklist that considers every possible variable required to remain compliant. This is an internal audit roadmap that indicates in advance what the state is looking for, including current standards, deadlines, necessary documents and more. Companies can assemble this compliance road map themselves, or commission a third-party company to do a compliance evaluation and position your business for long-term sustainability.
Adapt to Changes
Remaining compliant can lead you down a rabbit hole, especially any time an aspect of your business changes. So, any given new initiative, from bringing on a new investor, issuing equity to employees, implementing performance bonuses to attract new talent, updating your security system, and much more, are all considered compliance-triggering events. Therefore, business owners must resubmit relevant paperwork to the state to get these changes approved. Therefore, monitoring internal affairs is extremely important, especially with how they relate to evolving external regulations and legislation. The processes to resubmit for approval are straightforward, but it’s crucial to pay attention and keep up with all the changes.
Save Your Paperwork
Even when preparing the paperwork to indicate how aspects of your business have changed, don’t discard your old documents. Implement a filing system for all your records indicating compliance because depending on the state, there may be requirements to retain records for up to 5 years. So don’t be so quick to clean house; in the cannabis industry, it’s worthwhile to be a bit of a hoarder.
Remaining compliant isn’t rocket science, but it is hard work. But by following these steps to stay organized to keep track of every component of your business, you’ll likely be able to avoid overwhelming compliance issues and continue to run your business in accordance with state rules and regulations.
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