Cannabis dispensaries have to abide by many layers of rules and regulations. They operate under a huge microscope and even one misstep can be really, really bad.
Dispensaries that commit a compliance violation can be blasted in mainstream media, be pointed to for years by cannabis opponents, be fined, and/or shutdown.
Compliance should always be on the minds of dispensary owners and dispensary staff. Below are some common examples of compliance issues that should be avoided at all costs.
1) Not checking ID
The most common compliance violation that dispensaries make is not checking identification to ensure that a customer is of legal age or medical status to make a cannabis purchase.
Regulators routinely conduct underage ID stings on dispensaries to see if they are compliant. Those that fail are virtually guaranteed to be listed on websites and in mainstream media outlets.
It is a very, very easy provision to comply with. Dispensaries need to always ask for ID every time, from everyone. Customers need to recognize the seriousness involved and be glad to do their part.
2) Not meeting security requirements
Dispensary regulations are cumbersome. Many layers are involved, from state and local regulatory agency requirements to local ordinance requirements, to state laws.
It’s not an easy thing to navigate. One area that can be particularly tough is security requirements, which involve more than just having an alarm on the building and locking the door.
Inventory has to be properly transported and stored, a certain level of video security is usually involved, and a number of other specifications apply. Be thorough when reviewing related measures.
3) Looping
Cannabis dispensary ‘looping’ is when a customer visits a dispensary, purchases the maximum amount of cannabis from the dispensary, and returns the same day for repeated purchases.
Owners of a dispensary chain in Denver were recently sentenced to jail time for violating this compliance provision.
Preventing looping at a dispensary can be tricky and requires a heightened level of diligent record keeping and awareness. Failing to do so could literally result in incarceration.
4) Running afoul of promotional prohibition policies
Unfortunately, cannabis dispensaries are often treated differently than other legal businesses. An example of that is with certain promotional endeavors.
Policies regarding what a cannabis dispensary can do to promote their entity and what they can’t do vary from state to state, and even city to city in some cases.
Make sure that you are 100% familiar with what the rules are in your area prior to conducting a promotional effort to make sure that you don’t end up getting the wrong kind of attention.
5) Violating privacy requirements
Customer data breaches are not as common in the cannabis industry as they are in older legal industries, but they do still occur, and should absolutely be avoided.
Some states, like Oregon, have retention requirements in which a dispensary can only hold onto personal information for a certain amount of time before having to destroy it.
While information is being stored, no matter how short the duration of time, it needs to be protected at all times. Otherwise, a dispensary could face civil and/or criminal penalties.
6) Being located too close to another entity in violation
Dispensaries cannot set up shop just anywhere like most other businesses. Every state has some type of provision outlining how far away dispensaries have to be from things such as schools.
Obviously it’s easy to determine ahead of time if a location is within a certain distance of a school or other prohibited entity.
However, it can be trickier to calculate for a shifting real estate landscape. Just because there’s not a community center nearby now doesn’t mean it won’t be that way in the future. Keep that in mind!
