Compliance Complacency

 

When operators get either comfortable or overwhelmed, they tend to get a little complacent when it comes to the management of compliance, its overarching role. There are a variety of factors that can catapult an owner/operator into this non-compliant abyss, such as lack of experience, lack of support, burned out, staffing issues, financial challenges, market recessions, supply chain issues, or lack of understanding the seriousness of operating in a regulated environment.

There is one experience that cannot be avoided in running and operating a regulated cannabis business - challenges. 

Challenges will be forever woven into the cannabis landscape. It is part of the fabric of being an entrepreneur or business owner in the regulated sector. 

The journey to become operational and stay in business will test business owners in new ways, as the market continues to dip, dive, constrict, grow, expand - it sometimes is like experiencing all four seasons in one day. 

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We’re seeing it now in States like Colorado and Michigan for example. The market is constricted, and there are operations which are considered to be distressed assets due to the current cannabis market recession. It’s really the market adjusting to the country legalizing cannabis in more States, more access and more product nationally for consumers.  

We’re also seeing more violations and more regulations on the rise in the maturing States. New States are still getting their feet wet, and learning the process as they go. More mature places like Colorado, Michigan, Massachusetts, Missouri, Washington have had enough time now to work out the kinks in their regulatory framework. 

Examples of why we have Complacency

  • Lack of enforcement of the rules - this can be a result of inconsistent state inspections, or lack of violations when there are violations, also regulator staffing strains.
  • Operators become dependent on the regulators to tell them what is wrong without consequences - operators become less afraid to not comply.  
  • Lack of clarity or understanding of the rules - this happens when there tends to be too many interpretations of the law or it is stuck in a gray area.
  • Too much regulation – over regulated. Sometimes owners, or managers, do not have the skills or enough support to keep up with the constant changes. 
  • The lack of training with employees – having no accountability in the company.
  • Burned out in the business – no more passion, something gets lost along the way and people give up because it is too hard. 
  • Not 100% invested in the overall business – not enough skin in the game.
  • Being overwhelmed - this can lead to shutting down and putting your head in the sand to ride out the storm so to speak. 

Running a compliant cannabis operation is not for the faint hearted, and it will take everything you have to give and a lot of commitment. For new operators, and existing there is a path forward to be successful in the industry. Having the right tools, systems, plans, processes, and structure in place makes it all achievable. Doing it the right way, right out of the gate is only 10% of what you need to do. It’s what you do with every single day after you open that really counts. 

Examples of how to combat complacency

  • Be engaged - It’s important to have your finger on the pulse of the rules and regulations, updates, bulletins, workgroups, and changes coming down the pipeline that could affect your operation.
  • Maintenance -  keep the wheels moving on the business, don’t lose the momentum when it comes to ensuring you’re running a tight ship. 
  • Weekly reviews - the compliance checklist is a great tool to make sure you’re establishing good checks and balances. 
  • Implement structure and accountability with your team - hold people accountable. 
  • Invest in compliance - investing in compliance is cheaper than a violation. You have to spend money to not lose all your money. 
  • Support - have the right people in place who have the skills and capacity to grasp the regulatory side of the cannabis business. Ask for help!

It's important to have a plan for compliance in place to follow - this gives the business the opportunity to pivot and adapt when needed, especially in the regulated market.  Just like when you create a business plan, it is a guide and a placeholder for what goals the business is trying to meet and accomplish not only in the present day but the future. The same goes for a plan for compliance - it helps foster the engagement process and lays out the ground work, and creates the map to follow. 

ICS Consulting specializes in Compliance based services, such as Third-Party State Regulatory Audits, State and Local License Application Support, Technical Writing, Standard Operating Procedures Development, Worker Safety, QMS, OSHA Compliance, Metrc Seed-to-Sale Support, Compliance Operations Training, Employee Retention Solutions, and Employee Onboarding. For more information on how ICS Consulting Service can help your Cannabis Business, book a free 30-minute consult and we'll help you map out your next steps to be successful in the Regulated Cannabis Industry.