Cannabis Compliance Software

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Since California became the first state to legalize weed back in 1996, the cannabis industry has all but exploded into one of the biggest economic forces in all of America. Today, the industry brings in slightly more than $8 billion a year and is projected to shoot up to about $66 billion a year by the time 2025 rolls around (no pun intended). It’s safe to say that the industry is poised for growth and there is one main reason for that – legalization.

Today, 33 states plus D.C have legalized weed for medicinal use and another 10 for recreational use. These are all states where the cannabis industry has introduced new jobs, sources of revenue, and new legislation. Because the cannabis industry is still very much in its infancy, there are a lot of rules and regulations that must be followed to ensure public safety.

The regulating bodies concerned depend on a series of systems to ensure compliance. One of those systems – and perhaps the most integral part – comes in the form of cannabis seed to sale software.

An Introduction to Seed to Sale Tracking Technology

Seed to sale tracking technology is something that came about because regulatory bodies within the cannabis industry needed a way to ensure compliance. The cannabis industry is barely three decades old. As such, there are still so many teething issues as far as public health and safety are concerned. This is an industry that deals directly with consumers by cultivating, packaging and transporting consumables to people, some of whom depend on it for medicinal purposes.

You can see why regulators would want to ensure that everything is on the up and up. For an industry that was illegal not so long ago, a lot has to be done to ensure that it operates legally in this new era. As such, a myriad of regulating bodies have joined hands to make sure that consumers get the best and most hygienic products possible by setting up laws and regulations to govern the industry.

To ensure that industry players are playing by the rules, these bodies needed some form of tracking system linked to a centralized platform where they can access the data needed to verify compliance. Thus, seed to sale tracking software came to be. They are primarily designed to help with compliance. Here are some of the most important compliance stages that a robust seed to sale software has within its framework:

  • Cultivation: Within the seed to sale tracking system, there is a way of keeping tabs on every seed upon propagation. Usually, it’s assigned a barcode that acts as a unique identifier throughout its life cycle. This barcode records all the plants’ phases including additives, interactions with people, testing, and so on to ensure that that plant is handled in a manner that adheres to regulations throughout until it’s maturity.
  • Harvesting: Several cannabis components are batched by material-type. Each of these new batches receives a new barcode or unique identifier. That new identifier contains the information pertinent to the history of the plant that went into making the component.
  • Tests: This is an important part of compliance. All cannabis and associated derivatives are tested for chemicals, harmful additives, and other contaminants that might pose a threat to public health and safety when consumed. These tests results are captured within the system often end up being printed on the product labels. In some states, these product labels are a requirement for compliance.
  • Transportation: Just like with air travel, a detailed manifest must be filled out before the transportation of marijuana can begin. This manifest often includes information like the origin of the shipment, what it contains in the form of quantities, the driver’s details, and the destination of the consignment. These reports are available for law enforcement officers to view in real-time so there aren’t any issues with the transportation.
  • Point of sale: To complete the chain of custody in a single plant’s life, it is tracked all the way to the point where it’s sold to a customer at the cannabis dispensary.
  • Identification and verification of the consumer: When dealing with medical marijuana, you are going to sell to customers who are cardholders and have a prescription for cannabis use. Tracking systems within the industry generate unique IDs for every patient. The information included in that tracking ID varies but tends to be centered around the patient’s name and sales limitations. Dispensaries are not allowed to sell anything past the indicated sales limitations for that patient. This means that if a patient’s sales limitation is 5 ounces a day then they can’t get more than that for fear of misuse or illegal resale.

At the end of the day, the best seed to sale tracking system links to a state-mandated portal such as METRC where all the necessary regulatory information can be found. It’s through this system that law enforcement agencies, as well as the associated regulators, can find the information they need to verify compliance by all cannabis industry players within that given state.

What to Look for in a Leading Seed and Sale Tracking Software

What to Look for in a Leading Seed and Sale Tracking Software

There are several factors to consider when looking for the right seed to sale tracking system for your cannabis business. Here are some of the basic yet important considerations to have in mind:

  • A system that connects to METRC: METRC or Marijuana Enforcement Tracking Reporting Compliance is one of the main regulatory compliance platforms used by many states where weed is legal. While it can also act as a seed to sale system in its own right, METRC is more of a reference platform where all the other seed to sale software links to ensure that users are staying ahead of the curve as far as compliance is concerned. The reason why having a system that connects to METRC is important is that the laws and regulations that govern the cannabis industry keep changing. Not being able to get these updates automatically or in real-time could present a few compliance issues for industry players. Staying connected to METRC is one way to avoid all that and ensure compliance.
  • A system that features robust security: Security is an important part of compliance in the weed industry. As we have mentioned, regulatory bodies keep a close eye on every single plant by giving it a unique identifier. By the time a plant is shipped out in any form – edibles, tinctures and so on – every single ounce has been recorded in the system. Retailers must account for every ounce they receive and sell. If you fail this accountability test, you might risk facing hefty non-compliance fines or even losing your license. Now, security is important in seed to sale software so that you can limit access to your inventory. Not all of your employees are as trustworthy as you would like them to be. Theft for either for their own use or illegal resale is not uncommon. Either way, you are the one that will be accountable for the lost inventory which will cost you revenue and risk your license.
  • A system that is capable of reporting and analytics: Reporting is a must as you have to contend with inquiries from regulators. You need a system that can report on every metric that your state regulators require, including the number of ounces received and sold, the different types of strains and components you have in store and their potencies, as well as who you sell them to in the end. Analytics, on the other hand, are really about helping you grow your business. With the right seed to sale system, you can keep track of how the different strains or clones of cannabis perform under certain environments within your grow house. Using this data, you can manipulate a few settings to increase your yield and therefore boost your revenue while remaining compliant.
  • A system with built-in age verification and ID scanning: You are going to be selling to licensed customers who have an ID If your system has no way to verify these IDs then you will not comply with state regulations. The system should be able to capture pertinent customer information such as their purchase records, sales limitations, preferred potencies, and so on.
  • A system that has purchase limitation tools: As mentioned, you can only sell a specified number of ounces to every given patient every day. Your system should tell you all this upon the scanning of the patient ID.
  • A system that is easy to use: You need a system that is not too complicated, at least not on the user end of things. One of the main reasons seed to sale software exists is so they can automate the process of compliance and create efficiency within the weed industry for both law enforcement as well as retailers. Software with a user-friendly interface achieves this without further complications.

You also need affordable seed to sale software. You must find out how much it will cost to operate the system in its entirety. Some vendors lure customers with cheap initial fees only to hit them with hefty charges later when it comes to technical support, customer service, upgrades, and so on.

6 Best Practices for Cannabis Compliance Programs

Every industry abides by a set of laws and regulations, including the medical marijuana industry. The only difference is that since this industry isn’t uniformly legal across all states, every state has come up with its own set of rules, laws, and regulations by which industry players within their borders must abide. As such, licensed dealers have been only focused on dealing with cannabis compliance as it applies within their state.

Now, however, as the industry grows and becomes a bigger deal and major moneymaker and as more and more states legalize it, many federal and regulatory bodies have started paying close attention. Once upon a time, licensed marijuana dealers in California would only have to worry about their local laws. Now, there are federal regulations to consider. This has brought about previously unseen layers of compliance with which these business owners must contend.

Some of these other regulatory bodies and regulations include huge names such as the FCC, HIPAA, and OSHA. What this means for a business owner is that there are now more ways through which you can face fines, reprimands, and even lose your marijuana license. The fact that these regulations are constantly changing doesn’t make it any easier. Today, it is more difficult to be compliant while still maintaining the level of business resilience needed to face the other challenges that come with a fast-growing, increasingly competitive industry.

How Can You Maintain Cannabis Regulatory Compliance Today?

The problem with maintaining cannabis compliance is not only the ever-changing rules, laws, and regulations that you have to manage. There are also a host of other daily challenges that can negatively affect your business as a whole, like high employee turnover, capital, extreme competition, inventory shortages, and state sale limits.

These are just a few of the issues that a business owner faces in this industry. As such, one of the best ways to ensure that you remain compliant with marijuana laws and regulations is to put a robust workflow or operational system in place. A highly specific compliance program that is not only updated regularly but also has checks and balances ensures that you are staying current with all the changing regulations in both your state as well as the federal level.

Best Practices to Maintaining Cannabis Compliance

Regardless of the policies and procedures in place, there are several best practices that you can follow or set up to ensure that you are in compliance with your state and municipality. Here are six of the best practices that you can follow to ensure cannabis compliance in any state:

1. Stay Current by Educating Yourself

There are two main things you can do to ensure that you are informed and that you stay current.

First, hire a compliance lawyer and a consultant to keep you in check with update legislation. This is by far one of the most practical steps you can take to ensure that you remain compliant: hire a lawyer who will help you with compliance and/or a consultant to keep you current and informed. The problem with this option is that it can get rather expensive.

Second, educate yourself to stay current with recreational and medical marijuana laws. Every state has a website where all the laws and regulations regarding marijuana compliance are listed and updated. Find that website for your state and read it at least once or twice every week. You should also be on a mailing list for the leading marijuana authority in your municipality to ensure that you are part of a community that is always on the lookout for one another, mostly because they are in the same business and the same laws and regulations affect everyone equally.

When it comes to keeping current, one of the best practices is redundancy. Within your own organization, have someone, maybe one of your key employees, whose sole purpose it is to ensure that your business is staying current and compliant. Just because there is someone for that job, though, doesn’t mean that it is solely their responsibility. As a business owner, you also have to read up on all these things regularly. Additionally, your staff needs to be updated as well via your own private company network. This means that someone (preferably you) has to review the laws and regulations at least once a week and compile everything that the staff needs to know into an email. Not only will this ensure that you stay current and read up a lot about the industry but it will also create other checks and balances if employees have questions about the regulations. This leads to our next best practice for staying compliant…

2. Create Enough Redundancies

Quick question: would you give any single employee full access to your business finances? Of course not! You would create some kind of independent oversight to keep them honest and to make sure that expensive mistakes are not made. The same thing should apply to your compliance system. Never leave to just one person to ensure cannabis compliance within your organization, even if that one person is you.

Put enough redundancies in place to catch mistakes before they become costly. These redundancies are not only about staying compliant with the state regulations and laws but are also about protecting your own business interest. Giving a single employee unfettered access to your inventory might lead to the temptation of fraud or theft. Within this industry, theft of inventory almost always occurs from within. Apart from that, even if you fully trust your employee, whenever a single person is in charge of large inventory there are bound to be mistakes. It could be innocent mistakes concerning things such as stock taking, merchandise labeling, and customer sale limits.

All these avenues not only lead to you losing money but they could also land you in serious trouble with your state. Many states take inventory tracking in the marijuana industry very seriously. They want to know how your product gets from seed-to-sale. Mistakes within that chain could lead to noncompliance, which could lead to hefty fines or even loss of one’s license.

Besides these costly mistakes, there is one other reason why you need to create redundancies: compliance, in and of itself, can be a tricky subject matter. Some laws and regulations are not clearly stated or written in a way that a layman can easily understand. As such, it’s always best to have more than one person to interpret them. A discussion within a team could lead to a better understanding or comprehension of the law. If things are still unclear or if none of you don’t really know how to fully comply, then it’s best to hire a compliance expert both to interpret the law and regulation as its stated as well as highlight steps you should take to comply.

3. Regularly Perform Your Own Audits

Regularly Perform Your Own Audits

While it’s true that the state and a lot of other regulatory bodies are performing frequent audits – especially as the industry grows – it’s also true that you should perform your own audits. By the time the state gets to you and realizes something is off, it might be too late. Regularly look at your own business operations, refer to the state laws and regulations, and confer with an expert to ensure that everything is in good working order.

4. Keep Your Compliance Documentation Organized

States and municipalities require you to have some documentation handy just to show compliance. Failing to maintain these documents by keeping them organized, current, and in good order could lead to hefty fines or a review of your license.

Much like every other step you take to ensure marijuana compliance, you need to create redundancies for this step as well. Ensure that more than one trusted employee knows what kind of documentation is needed and have copies of the necessary documentation backed up in different places.

There is one other reason why maintaining your compliance documentation and keeping it well organized and within reach is a good thing: it shows that you have a sound operation in terms of transparency. One of the biggest challenges in this industry is securing funding. Investors want to see that you are not only capable of giving them a good return on their investment by having a sound business plan but also that you run a transparent and well-organized establishment that is compliant with the law.

5. Understand the Spirit of the Regulations and Laws

Public safety is often the number one priority for all regulatory bodies in pretty much every industry you come across. Once you look at it from that vantage point, you will begin to understand the spirit of the laws and regulations in place. A mistake that many business owners make is to assume that these rules and regulations are to “keep the working man down” and enrich the “Man” or “corporations”. Very few things could be further from the truth. Let’s look at the medical marijuana industry for example and some of the laws and regulations put in place:

  • Seed-to-sale tracking: States enforce this because they want to make sure that they know where every single ounce of marijuana that is grown and sold goes. This is to ensure that the right people get it and it is not being sold to
  • Advertising and labeling: Many states prohibit the use of advertising and labeling that may appeal to children. This is meant to keep children away from marijuana.
  • The shape of edibles: Most states prohibit businesses from selling edibles with the term “candy” as a reference or are in the shape of animals or fruit because these appeal to children.

Once you understand what the law is trying to achieve and the spirit in which it was enacted, it will be easier to remain compliant.

6. Make Good Use of Technology

Today, the Nugistic’s cannabis software has come a very long way. These pieces of tech have almost everything you need to run an efficient and regulatory compliant cannabis business. You must make good use of this technology to ensure compliance. Every state has a recommendation as to which software they prefer their licensed weed dealers to use. This software is often connected to and updated by the state’s very own system that is put in place by the regulatory bodies which makes your job much easier as far as compliance is concerned. Make use of this technology to run a well-structured and highly compliant business.

As long as you have all the necessary redundancies in place, understand the spirit of the law, and confer with a compliance expert to ensure that you understand all you need to do, there really isn’t any reason why you should have issues complying with your state’s laws and regulations. Just be sure to stay current!


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