Cannabis is a rapidly growing industry, with many states legalizing its use for medicinal and recreational purposes. However, with this growth comes strict regulations and compliance standards to ensure the safe and responsible use of the product. Many cannabis businesses make compliance mistakes, leading to fines, loss of licenses, and other legal issues.
Here are six common cannabis compliance mistakes to avoid.
1. Not having proper licenses and permits
One of the most common compliance mistakes that cannabis businesses make is operating without proper licenses and permits. Each state has its own regulations regarding licensing and permits, and it is essential to research and understand these requirements before starting a cannabis business. Failure to obtain the necessary licenses and permits can result in fines and criminal charges.
2. Failing to label products properly
Another common compliance mistake is failing to label cannabis products properly. All cannabis products must be properly labeled with the correct THC and CBD levels, dosage information, and any other relevant information required by state regulations. Failing to do so can result in fines and legal issues. With ACE, compliant labeling and receipt printing can be programmed!
3. Not conducting proper employee background checks
Cannabis businesses are required to conduct thorough background checks on all employees to ensure they do not have any criminal history that could compromise the safety and security of the business. Failure to conduct proper background checks can result in fines and the revocation of licenses.
4. Violating advertising restrictions
Cannabis businesses are subject to strict advertising regulations, and violating these restrictions can result in fines and legal issues. For example, many states prohibit cannabis businesses from advertising to minors, and advertisements must not make false or misleading claims about the product.
5. Failing to maintain accurate records
Cannabis businesses are required to maintain accurate records of all transactions, inventory, and other business activities. Failure to maintain accurate records can result in fines and legal issues. It is essential to implement proper record-keeping procedures to ensure compliance with state regulations.
6. The wrong location
As a new business owner or an established business seeking to expand, choosing a location not near a school is crucial. Additionally, it is wise to avoid locations near other places that may attract underage individuals. This is particularly important due to the numerous compliance regulations ensuring the safe sale and use of cannabis away from children. It is essential to confirm that your desired location is permitted for cannabis sales under city ordinances and is appropriately zoned to avoid any potential penalties or licensing limitations.
In the United States, the regulations governing the cannabis industry are constantly in flux due to federal laws adding an additional layer to state-specific regulations. Thus, it is important to note that there is no one-size-fits-all approach to cannabis compliance in the US. Each state and local municipality will have unique regulatory frameworks encompassing laws, standards, and licensing systems. In addition to state and local regulations, compliance with federal laws such as the Health Insurance Portability and Accountability Act (HIPAA), the Federal Communications Commission (FCC), and the Occupational Safety and Health Administration (OSHA) must also be taken into account.