Compliance is a serious matter for cannabis business owners. The legal cannabis industry carries the unique burden of having to exist within multiple state-led regulatory frameworks, while also acting in direct conflict with federal law. When cannabis companies operate in compliance, not only does it help establish the utmost in product safety and efficiency for consumers, but it also ensures that cannabis legalization continues without interference from federal law enforcement.
But it’s these very circumstances that make achieving and maintaining compliance expressly difficult. If there is to be a thriving industry, states have a responsibility to not only prioritize the development of regulations but to also communicate them broadly and clearly within their jurisdictions so that companies can adhere to them. In this post, we explore what the expanding Northeast market can learn about compliance from two legal jurisdictions: Washington D.C. and Massachusetts.
No Compliance Without Regulation
When voters approve legalization, states are left with the herculean task of defining what that means across everything from sales to operations to advertising and more. At the end of the day, compliance isn’t possible without state regulations, and there’s no better example of this than Washington D.C.
The district’s cannabis law allows for adult use and possession of up to two ounces of cannabis and for home cultivation of up to six plants, but because the city is also the nation’s capital, retail sales are strictly prohibited. D.C.’s legal industry is therefore operating under the foundation of a donation-based model in which consumers may be gifted with cannabis after purchasing a separate item or service. There have been repercussions, however: stalled market growth as more established cannabis companies avoid setting up shop there, unrealized tax revenue potential, the emergence of a gifting “gray” market, and an increase in overdoses stemming from the use of the synthetic marijuana street drug known as K2.
D.C.’s Mayor Muriel Bower hopes to resolve these issues by using the Safe Cannabis Sales Act of 2019 to usher in the creation of a legal sales and tax structure.
Investing In Education
Once a market’s regulations have been set, the onus of compliance shifts to the business owner who must put in the work of understanding what’s legally required of them. Without this due-diligence, cannabis companies risk a number of crises including fines, closures, raids, or worse.
To help support licensee compliance and ensure safety for industry employees and consumers alike, the Massachusetts Cannabis Control Commission launched Responsible Vendor Training in July 2019 as a first-of-its-kind statewide program. Companies that complete the program to become certified Vendor Trainers are then able to provide Marijuana Establishment Agents with standardized training on everything from state and local regulatory guidance, to how cannabis impacts the human body, to seed-to-sale tracking compliance and much more.
Explore the importance of compliance in more detail during “Compliance is Critical: How to Avoid A Costly Mistake,” an educational panel happening Wednesday, February 19, as part of the National Cannabis Industry Association’s upcoming Northeast Cannabis Business Conference. Formerly Seed to Sale Show, #NECannaBizCon invites you to hear the latest regional insights, pursue emerging business opportunities, and broaden your East Coast network at the industry’s only true B2B cannabis tradeshow to focus on the Northeast market. Meet with NCIA members, entrepreneurs, policymakers, industry leaders, and services providers on 40,000 square feet of expo floor. It happens February 19-20, 2020 at Boston’s Hynes Convention Center. Registration is now open!