how to start a cannabis business

Cannabis Compliance Have you ever been caught in a speed trap? That’s when you’re driving along, in a great mood, music on loud, and thinking that you are within the speed limit. Suddenly you see the flashing lights of a police car behind you signaling you to pull over immediately. The officer explains that you have exceeded the speed limit and has you clocked at 20 mph over the limit through a safety zone, and he writes you an expensive ticket.

The Cannabis industry is full of speed traps, and they can result in big fines or revocation of your cannabis license to do business.

Yes, cannabis business laws represent flaming legal hoops for you to jump through when attempting to open any kind of cannabis-related business. Whether you are a grower, a distributor, a manufacturer, or own a dispensary, you must comply with all the rules and regulations — even the smallest and most detailed of them. This is not Big Brother trying to send you to Room 110, it is simply cash-starved municipal and state budgets looking for ways to charge you additional money.

The cannabis business is no longer a friendly gathering of stoners looking to make a little money and supply their friends. It is now a very big business and has been made legal in most places because of tax and fee revenues that are badly needed to support state and local spending

It is your job as a cannabis industry entrepreneur to regularly check your state and local laws to make sure you are in compliance with any new laws or changes to the laws that you thought you have been complying with all along. These laws change on a disturbingly regular basis, and it is in your best interest to work with the local authorities or an attorney or organization that specializes in advising on cannabis law compliance.

There are three main areas that you, as a cannabis business owner or employee, must regard as highly important in your efforts to remain in compliance with the rules and regulations that govern your area of the industry. If you intend to remain in business and free of any fines or restrictions, you must devote serious attention to these areas:Cannabis compliance

Record keeping extends from the creation of a product, to intake of inventory, to the management of your employees, and to the sale and delivery of your product. This applies to growers, distributors, and manufacturers, as well as dispensaries. Detailed records help you spot areas of potential problems. It also provides excellent information that can be used to plan business operational improvements and expansion. Detailed records are also vital in disputing any allegations of non-compliance. Your ability to present such records can make the difference between conviction and exoneration in court and they can help keep your operation off the local legal watch list in the future.

Employee training is another key area of potential risk to your business.Good training helps with employee morale and retention of good employees because it brings them into the team effort to help the business succeed. All employees must fully understand how their jobs and personal actions affect the entire enterprise. In addition to showing up for work on time, clean and properly dressed, well-prepared to talk intelligently and truthfully about your products, your employees must understand that in spite of working in the cannabis industry, they can’t be stoned at work. If you have a dispensary, they can’t sell more than the legal daily amounts to any customers — even their friends.

They must take care to properly store flower, replace display case items instead of leaving them on counter tops, and keep edibles refrigerated as necessary. They must understand that all questions they can’t answer truthfully, or problems that arise with customers, must be reported immediately to their immediate supervisors. If you are a grower, distributor, or manufacturer, there are other things such as safety and EPA regulations that you must observe. Rogue employees and those not sufficiently concerned with avoiding mistakes can cause severe legal liability that could put you out of business.

“One really big mistake is that employers don’t actually make their employees read the rules or train them on what the rules are,” says Stephanie Hopper, the Chief Compliance Officer of
Canndescent, a luxury cannabis brand. “They don’t emphasize why it needs to be done every single day in the exact same way and that, if it’s not done, what the impacts are to the company.”

cannabis complianceManagement of operations includes careful supervision of employees, maintenance of your facilities, and daily monitoring of all business activities. This involves more than just employee training. The responsibility for management falls on your shoulders and those of your managers. A Chief Compliance Officer position is always a good idea. Someone must check to make sure there are no frayed rugs or power cords to trip on, chemicals and nutrients flowing into the water system, internal theft, incorrect labeling, unlawful trash disposal, age restriction violations, and many other details that can pose risk to your business if discovered by a customer, competitor, or inspector.

There has been a lot of change in the cannabis industry. In a very short time, it has gone from an underground activity that operated without trace to a heavily regulated sector of the commercial community. Liquor stores, pharmacies, food stores, restaurants, gas stations, schools, dentists and doctors, gyms, and all other businesses face similar regulations, so if you aren’t devoting serious attention to regulation risk in your business, you will encounter absolutely no sympathy from your state and local authorities.


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About 420 College:

cannabis cultivation permits420 College is California’s leading source for information and training on cannabis operations. If you are researching how to start a cannabis business in your city or county, then take one of our cannabis business workshops in Los Angeles, San Diego, Pasadena and Sacramento.

Our attorneys and network of industry leading professionals go over every aspect of cannabis business licensing, start-up and business operation in a lively, classroom style event.

At 420 College – it all begins with helping YOU to understand what is proper, lawful and appropriate!

Our hands-on cannabis business start-up seminars or one-on-one cannabis business consultations are a perfect way to get started! Find out how 420 College cannabis business seminars can help you in your business, click here.

To learn how to start a cannabis business,  Contact us here


George Boyadjian

Founder of 420 College.

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