You have a license. Now, how do you keep it?
When you spend all day just running your business, paperwork is always the last priority. But in the cannabis business, you don’t have that luxury.
Compliance comes with the territory in regulated businesses. When you applied for your license you promised the state (and locals) that you would implement certain standards and provide them unlimited access to your business to prove it. Compliance is your way of showing that you are following the rules — and weeding out the bad operators who undercut standards, damage the industry, and unfairly impact your ability to compete on a level playing field.
Experienced operators know that regulators can receive complaints from lots of sources, including current or former employees, vendors or customers unhappy with your product, service, or work conditions. Many are unfounded, but regulators are there to hold violators accountable.
In New Mexico, operators have lots of mandatory reporting to regulators, including:
- Training files for all employees (monthly, annually)
- Security failures and breaches (annually and as they occur)
- Wasting and disposing of unused cannabis (every 72 hours)
- Inventory retail reconciliation (monthly)
- Testing results (daily, as they are received)
- Movement and sales of products (daily)
- Mock emergency and recall procedures (annually)
- Facility maintenance records (weekly and monthly)
Most small companies do not have enough compliance work to justify a full-time employee and that’s where we come in. We work with clients to develop a weekly or monthly compliance service to gather required documents, submit them where required, and document compliance.
Large operators with in-house compliance staff love having an outside set of eyes walk through their facilities or audit their internal work to ensure everything stays up and up every month.
CCD employs inspectors whose job it is to inspect facilities, either because of a complaint or just because they were in the neighborhood. If you are found in violation, you may receive a warning, or the CCD may close your facility pending a license suspension/revocation hearing.
Penalties for violations.
Cases of minor violations of rules or law usually start with a Notice of Violation from the Cannabis Control Division. Examples of minor violations include:
- Failure to post required permits
- Failure to provide all required health and safety warnings on product labels
- Improperly installed locks
- Failure to provide copies of training documents upon request
Even though these are minor violations, licensees must still respond by creating costly and time-consuming Corrective Action Plans to identify failures in internal processes and steps for meeting compliance. You will likely have to pay a fine of several thousand dollars.
Serious violations can include:
- Immediate dangers to public health and safety
- Failures to secure cannabis
- Providing cannabis to unauthorized persons (juveniles, free samples to the public)
- OSHA violations
Serious violations can lead to immediate closure of your facility and actions against your license, including suspension and revocation.
Our compliance teams are set to provide weekly, monthly or quarterly site visits to your facility to conduct inspections using the same standards CCD, NMED, OSHA and other agencies use when they come to your facility.
These walkthroughs are a good tool to ensure that in-house staff are keeping up with ever-changing requirements and able to answer required compliance questions from regulators.
License owners will receive a report of any non-compliant issues and recommended plans for compliance.
Corrective action plans.
If you’ve received a notice of violation, you probably have to provide a detailed explanation to the state explaining why the violation happened and how you will correct it. You will also be required to demonstrate how you will retrain staff or modify your facility to meet the law or rule.
These plans are often due within 5, 10 or 20 days of you receiving notice so we have to act quickly to avoid negative action against your license.
Our team works with your staff, often with your attorney, to talk through the issue and develop the corrective plan to get you back on track. In some cases, we can help represent you to the regulatory agency. If you have a notice of violation, let’s talk quickly.
Monthly vs. emergency?
Compliance is like medical care for your business. Preventive care is much cheaper and less disruptive than the emergency room.
Most cannabis companies contract with a compliance company to provide updates on regulatory changes, regular site visits with site managers, on-call emergency consulting and, in some cases, responsibility for managing regular regulatory filings.
As the state’s largest cannabis services company, we have the benefit of seeing what regulators are focused on across multiple facilities statewide.
Our compliance clients receive:
- Alerts when regulations impacting your license type change
- Model policies for adapting your business to new rules or new rule interpretations
- Regular (weekly, monthly or quarterly) site visits with your management to verify current compliance
- On-call staff compliance training
- Access to regular “how-to” training from Weeds staff and partners on licensing topics (BioTrack, building services, training, testing etc)
- On-call “what does this rule mean?” consulting for your team
- Priority support for any notice of violation or compliance documentation request from a regulatory agency