Compliance. Anyone in the legal cannabis market has to deal with it, but very few people in the legal cannabis industry understand it. It’s hard. It’s complicated. And it’s changing every day.
Most people inside and outside the industry look at compliance as the price we pay for legal cannabis and think that “oh, once we legalize cannabis on the federal level, compliance will get easier to understand and implement.”
Sadly, that’s not true. Whether cannabis is federally legal or not, compliance is always going to be complicated. It’s also something the cannabis industry needs in order to survive and every cannabis business needs to best serve their clients, whether that’s another cannabis business or a consumer.
Navigate the page
- Why Compliance Matters
- Compliance resources and rules
- Compliance state by state
- Compliance business by business
- The cost of compliance for customers
- The cost of compliance for businesses
- The cost of compliance for regulators
- Compliance done poorly
- Parsl’s solution
Why compliance matters
Cannabis compliance is a huge pain in the butt, no matter what your role is in the industry — consumer, business or regulator.
It’s also critical for an industry like cannabis because it has been illegal for so long and has an impact on people’s health. Any industry that has an impact on people’s health is highly regulated and the legal cannabis market needs to be regulated, especially right now, in order to help distinguish it from the illicit market.
Compliance matters for so many reasons. Some of the biggest ones are that cannabis industry compliance is:
Non-negotiable
Compliance. Anyone in the legal cannabis market has to deal with it, but very few people in the legal cannabis industry understand it. It’s hard. It’s complicated. And it’s changing every day.
Part of legitimizing the industry
Part of moving the cannabis industry from illicit to normal, especially in the eyes of those who are not part of it, is the belief that the products are good, safe, and science-backed. Compliance helps with this.
When cannabis was outlawed in the United States in 1937, there was a big marketing campaign to besmirch the reputation of the plant and any of its derivatives, including hemp. Now to offset the very effective campaign and to stay clear of any association with the illicit cannabis market, certain measures need to be taken, which include strict compliance with all regulations.
Helps maintain the standard of cannabis products
Everyone in the legal cannabis market wins when the standard for cannabis products remains high. That’s every type of cannabis business, consumers (medical and recreational), and regulators.
The illicit market has proven many times over the years that it doesn’t care about the consumer. The vape crisis that landed several people in the hospital in 2019 was just the most recent example.
The legal cannabis market is invested in ensuring products are high quality, avoiding not just fillers oils but also unnecessary chemicals and other additives. Compliance ensures no legal cannabis company is padding their margins while risking the health and wellbeing of their customers.
Part of legitimizing the industry
It’s going to be next to impossible to eradicate the black market without a very strong legal cannabis market. A very strong legal cannabis market is unlikely to happen without strict compliance.
Strict compliance will reassure consumers that the products they’re purchasing will actually help them. Strict compliance will give businesses the ability to look forward, knowing one bad product isn’t about to destroy their reputation. Strict compliance will give regulators peace of mind and states money to care for their populations.
Once everyone trusts the legal cannabis industry and is invested in the better, legal products available there, they won’t be operating in or purchasing from the black market, which will force it to shrink and perhaps even disappear.
Compliance resources and rules
The rules you need to follow in order to stay compliant as a cannabis business will depend on several factors, including where your business is located and which type of cannabis industry business you own.
On a licensing level, you may need to acquire both state and local licenses and permits, which can involve several different agencies and departments. For example, in California, you may need to contact:
STATE:
- Bureau of Cannabis Control (distributors, laboratories, retailers, delivery-only retailers, microbusinesses, and temporary special events)
- Department of Food and Agriculture (cultivators, processors, and nurseries)
- Department of Public Health (manufacturers)
- Department of Fish and Wildlife
- Regional Water Boards
- the California Department of Taxes and Fees Administration
- California Department of Insurance
- + more!!
LOCAL:
- City Council or Board of Supervisors,
- the City Manager,
- the Planning Department,
- the Zoning Administrator, and
- Police Department
- Fire Department
- Building Department
As a note, cannabis businesses generally acquire their state license after having been granted their local permit.
Compliance rules vary by state
Each state has different requirements and permissions for cannabis businesses and consumers. We have collected the relevant state data and resources for you and organized them here.
| State | Fully legalized | Medical Legal | CBD only | Decriminalized | Illegal | Notes |
|---|---|---|---|---|---|---|
| Alabama* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. In March 2020, the Alabama Senate Passed legislation to allow and regulate medical marijuana. The bill will now move on to the House. |
| Alaska | Yes | Yes | Yes | No | Since 2015, it has been legal for individuals 21 years of age or older to possess up to one ounce of marijuana. Individuals are only allowed to consume marijuana on private property or in designated marijuana retail stores. A medical marijuana program still operates, in which patients can apply for a medical marijuana card. | |
| Arizona | Yes | Yes | Yes | No | Medical marijuana was legalized in 2016. However, it was not until May 2019 that legal medicinal marijuana sales commenced with the opening of the first dispensary. In order to obtain medical marijuana, you must be over 18 and have a qualifying condition confirmed by a physician. In November 2020, Arizona passed adult use cannabis laws allowing adults 21+ to buy and possess up to 1oz of cannabis, including up to 5grams of concentrates. Home cultivation allowing 6 cannabis plants per individual’s primary residence and up to 12 plants per residence with 2+ adults 21+ in age live. Recreational dispensaries will open and public marijuana use is now a petty offense. | |
| Arkansas | No | Yes | No | Yes | Medical marijuana was legalized in 2016. However, it was not until May 2019 that legal medicinal marijuana sales commenced with the opening of the first dispensary. In order to obtain medical marijuana, you must be over 18 and have a qualifying condition confirmed by a physician. | |
| California | Yes | Yes | Yes | No | A bill which legalized the recreational use of marijuana was passed in January 2018. Those who are 21 years or older are able to possess up to 28.5 grams of marijuana which can only be consumed on private property. California also operates a medical marijuana program. | |
| Colorado | Yes | Yes | Yes | No | Recreational use of marijuana is legal in Colorado. Individuals must be 21 or over and can possess a maximum of 1 ounce at any one time. The state also operates The Colorado Medical Marijuana Registry which is a confidential, statewide program. It allows patients with qualifying medical conditions to receive a registry ID card for legal access to medical marijuana. | |
| Connecticut | No | Yes | Reduced | Yes | Connecticut has decriminalized marijuana for small amounts. Individuals caught with half an ounce or less must pay a fine if they are first or second time offenders. Medical marijuana has been legal since 2012 and qualifying patients can possess a 'reasonable amount' for a months supply. | |
| Delaware | No | Yes | Reduced | Yes | Small possession of up to 1 ounce is considered a civil penalty and is punishable with a maximum fine of $100. In 2011, Delaware passed a bill legalizing medical marijuana which allows patients to possess up to 6 ounces of medical marijuana. | |
| Florida | No | Yes | No | Yes | Florida legalized medical marijuana in 2016. Patients must be a permanent or seasonal residents of Florida, be entered into the medical marijuana use registry, and obtain a medical marijuana ID card. | |
| Georgia* (CBD only) | No | No | Yes | No | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. In July 2018 the Constitutional Court of Georgia ruled that people can no longer face administrative punishments for consuming cannabis. Qualifying persons can apply for a low THC oil registry card allowing individuals to legally possess up to 20 fluid ounces of low THC oil. | |
| Hawaii | No | Yes | Reduced | Yes | Hawaii decriminalized possession of up to 3 ounces of marijuana, which is punishable by a $130 fine. Repeat offenders or those caught with large quantities face harsher punishment. Hawaii also operates a medical marijuana program for qualifying patients. | |
| Idaho | No | No | No | Yes | Possession of more than 3 ounces of cannabis is a felony. | |
| Illinois | No | Yes | Yes | No | As of January 2020, recreational marijuana is legal. Individuals who are 21 years of age or older can possess up to 30 grams of weed. Marijuana can only legally be purchased through licensed dispensaries and must be consumed in a private home. The state also operates a medical marijuana program for qualifying patients. | |
| Indiana* (CBD only) | No | No | Yes | No | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. In March 2018, Gov. Eric Holcomb signed Senate Enrolled Act 52, legalizing low-THC CBD derived from industrial hemp. The law allows any person to buy, sell, and possess CBD oil, as long as it contains no more than 0.3 percent THC. | |
| Iowa (CBD only) | No | No | Yes | No | Yes | |
| Kansas | No | No | No | Yes | ||
| Kentucky* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. In February 2020, the state House approved a medical marijuana bill with a 65-30 vote but the Senate decided to not take it up before adjourning for the year in April. |
| Louisiana | No | Yes | No | Yes | Medical marijuana in Louisiana became available to patients in August 2019. | |
| Maine | Yes | Yes | Yes | No | Under Maine law, individuals 21 years of age or older are allowed to possess up to 2.5 ounces of marijuana. Adults are also allowed to lawfully possess and cultivate up to three mature marijuana plants, 12 immature plants, and unlimited seedlings. Medical patients have the same purchase limits. | |
| Maryland | No | Yes | Reduced | Yes | Possession of less than 10 grams of marijuana is not a criminal offense in Maryland and is subject to a $100 fine. Dispensaries and growers have been allowed to provide medical marijuana to registered patients since 2014. | |
| Massachusetts | Yes | Yes | Yes | No | Individuals aged 21 or over can possess up to 1 ounce on their persons and up to 10 ounces in their own homes. In January 2013, a law took effect allowing medical marijuana. | |
| Michigan | Yes | Yes | Yes | No | In December 2018, recreational use of cannabis was legalized in Michigan. The state also operates a medical marijuana program. | |
| Minnesota | No | Yes | Reduced | Yes | Possession of 42.5 grams or less is a misdemeanor punishable by a maximum fine of $200. Minnesota’s medical marijuana law was signed into law in 2014, removing criminal penalties for the medicinal use of marijuana by qualifying patients. | |
| Mississippi | No | Yes | Yes | Yes | In November 2020, Mississippi passed a comprehensive medical marijuana program | |
| Missouri | No | Yes | Reduced | Yes | A bill took effect on January 1, 2017 which reduces penalties for the possession of up to 10 grams of marijuana, which now carries a fine of $250 to $1,000. Missouri legalized medical marijuana in November 2018, with dispensaries expected to start opening in August 2020. | |
| Montana | Yes | Yes | Yes | No | Montana legalized medical marijuana in 2004 and passed two complementary ballot initiatives to legalize, regulate, and tax marijuana for adults 21 and older in 2020. | |
| Nebraska | No | No | Reduced | Yes | Persons found to be in possession of up to one ounce of cannabis can be punished by a maximum fine of $300. Subsequent convictions are punishable by jail time and larger fines. | |
| Nevada | Yes | Yes | Yes | No | Since 2017, adults 21 years of age and older can legally possess up to 1 ounce of cannabis. If there is not a state-licensed retail cannabis store within 25 miles, adults 21 years of age and older can grow up to 6 plants per person, but no more than 12 plants per household. Nevadans voted to implement a medical marijuana program in 2000. | |
| New Hampshire | No | Yes | Reduced | Yes | Recreational use remains illegal. However adults aged 18 or older caught possessing less than three-quarters of an ounce of marijuana will only be punished with a $100 fine. Medical marijuana was legalized in 2013 and is available to qualifying patients. | |
| New Jersey | No | Yes | No | Yes | In November 2020, New Jersey citizens amended state law to legalize the cultivation, processing, and sale of retail marijuana and the recreational use of retail of marijuana for persons age 21 and older. New Jersey already had a medical program in place. | |
| New Mexico | No | Yes | Reduced | Yes | In July 1, 2019, first-time penalties for the possession of up to one-half ounce of cannabis were decriminalized to a $50 fine. Subsequent offenses remain punishable by the possibility of jail time. Medical use was legalized in 2007 through a bill signed by Govenor Richardson | |
| New York | No | Yes | Reduced | Yes | In August 2019, a new law came into effect decriminalizing marijuana possession under two ounces. Instead of a criminal offense, it will be considered a violation punishable by a $50 fine for under an ounce or a maximum fine of $200 for 1-2 ounces. In July 2014, Governor Andrew M. Cuomo and the New York State Legislature enacted the Compassionate Care Act to provide a comprehensive, safe, and effective medical marijuana program that meets the needs of New Yorkers. | |
| North Carolina* (CBD only) | No | No | Yes | Reduced | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. Possession of 0.5 ounces or less of marijuana is a Class 3 misdemeanor with a maximum fine of $200. Subsequent offenses are punishable by fines and jail time. |
| North Dakota | No | Yes | Reduced | Yes | In 2019, House Bill 1050 was passed, decriminalizing the first-time possession of up to half an ounce of cannabis, punishable by a fine up to $1000 but not by jail time. Subsequent offenses could result in jail time. In November 2016, medical marijuana was legalized for patients who have been recommended it by a licensed physician. Patients can legally possess up to 3 ounces of marijuana for medical purposes. | |
| Ohio** | No | Yes | Reduced | Yes | Possession of less than 100 grams is a minor misdemeanor punishable by a $150 fine. House Bill 523, effective on September 8, 2016, legalized medical marijuana in Ohio. | |
| Oklahoma (CBD only) | No | Yes | No | Yes | On June 26, 2018, Oklahoma voters legalized medical marijuana. Cannabis in Oklahoma is legal for possession and use for medicinal purposes with a state-issued license, while CBD oil derived from industrial hemp is legal without a license. | |
| Oregon | Yes | Yes | Yes | No | In 2014, Oregon residents voted to legalize adult use and possession of marijuana. Adults 21 years of age and older can possess up to 1 ounce in public and up to 8 ounces on private property. Medical marijuana has been legal since 1998 for qualifying patients. | |
| Pennsylvania | No | Yes | No | Yes | The Pennsylvania Department of Health has implemented the state’s Medical Marijuana Program, which was signed into law on April 17, 2016. | |
| Rhode Island | No | Yes | Reduced | Yes | In April, 2013, Rhode Island's decriminalization law went into effect. Adults found in possession of up to one ounce can be fined $150 but will receive no jail time or criminal record. The Edward O. Hawkins and Thomas C. Slater Medical Marijuana Act came into effect in 2006, allowing Rhode Island residents access to medical marijuana if approved by their physician. | |
| South Carolina* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. |
| South Dakota | Yes | Yes | Yes | No | In November 2020, South Dakota legalized medicinal and adult use marijuana, implementing a medical marijuana program and a process for regulating and taxing marijuana for adults 21 and older. | |
| Tennessee* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. |
| Texas (CBD only) | No | No | Yes | No | Yes | In 2015, Texas passed the Compassionate-Use Act, which allowed the legal use of low-THC cannabis products for patients with intractable epilepsy. It was expanded in 2019 to include other conditions. |
| Utah | No | Yes | No | Yes | On November 6, 2018, Utah voters approved the Medical Cannabis Act | |
| Vermont | Yes | Yes | Yes | No | As of July 1, 2018 adults 21 years of age and older in possession of one ounce or less of marijuana may be punished with a civil violation, not a criminal offense. Vermont first legalized medical marijuana in May 2004 and two amendments have been made to further clarify the marijuana rights of patients. | |
| Virginia* (CBD only) | No | No | Yes | Up to 1 oz | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. In May 2020, Virginia decriminalized possession of up to 1 ounce of cannabis, punishable by a $25 fine. |
| Washington | Yes | Yes | Yes | No | Initiative 502 legalized marijuana for adults 21 years of age and older. Adults can possess up to 1 ounce of cannabis, 16 ounces of marijuana-infused edibles in solid form, 72 ounces in liquid form, and 7 grams of marijuana concentrates. Medical use of marijuana has been legal since 1998, with changes in law throughout the years. | |
| Washington D.C. | Yes | Yes | Yes | No | On February 26, 2015, a new law came into effect allowing adults 21 years of age and older to possess up to 2 ounces of cannabis. Medical marijuana can be approved for any debilitating condition as long as it is recommended by a licensed doctor. | |
| West Virginia** | No | Yes | No | Yes | ** States with medical programs pending in various stages: these states don't yet accept patient applications and there are no medical dispensaries available. | |
| Wisconsin* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. |
| Wyoming* (CBD only) | No | No | Yes | No | Yes | * States with regulations in place for assigning patients to the medical marijuana program but no state-licensed facilities such as medical dispensaries have been introduced yet to purchase marijuana products from. Patients must possess a “hemp extract identification card” issued by the state Department of Health in order to legally possess high-CBD extract products. |
The following states do not have legal medical or recreational cannabis.
- Alabama
- Georgia
- Kansas
- Kentucky
- Idaho
- Indiana
- Nebraska
- North Carolina
- South Carolina
- Tennessee
- Texas
- Wisconsin
- Wyoming
Compliance software varies by state
Many states have a mandated seed-to-sale tracking system which every cannabis business operating in that state must use in order to stay compliant.
The state-mandated seed-to-sale tracking systems in the United States are:
The systems required to track everything as a business for compliance
Compliance is complicated at every level and at every step of the cannabis supply chain. Most compliance considerations apply to multiple steps of the supply chain so there is no good reason to have an unconnected compliance system where each business has their own system which is incomprehensible to their partners.
While this is not a comprehensive list, each step of the supply chain should be ready to consider the factors below. They should be able to expect everyone before them on the supply chain to provide compliance verification of the following things and they themselves must be able to do so for everyone after them on the supply chain.
A robust legal cannabis market will require this level of compliance and verifiable information.
In order to be compliant a:
Growers need to consider:
- State and local licenses
- Local leasing regulations/distancing requirements
- Navigating shipments through states without clear/good laws
- Security
- Regular state reporting and tax payments
- Product safety and testing
- Supply chain restrictions
- Disposal of packaging/unsellable product
Packaging companies need to consider:
- State and local licenses
- Labeling and packaging rules
- Navigating shipments through states without clear/good laws
- Regular state reporting and tax payments
- Rules around marketing
- Supply chain restrictions
Distributors need to consider:
- State and local licenses
- Local leasing regulations/distancing requirements
- Navigating shipments through states without clear/good laws
- Security
- Regular state reporting and tax payments
- Product safety and testing
- Supply chain restrictions
- Disposal of unsellable product
Dispensaries need to consider:
- State and local licenses
- Local leasing regulations/distancing requirements
- Security
- Regular state reporting and tax payments
- Product safety and testing
- Supply chain restrictions
- Consumption limits for patients
- ADA Compliance
- Regulations specific to events
- Regulations around gifting vs selling cannabis
- Rules around marketing
- Disposal of packaging/unsellable product
Consumers need to consider:
- State and local licenses
- Consumption limits for patients
- Product safety and testing
- Regulations around gifting cannabis
- Disposal of packaging
When One Piece of the Puzzle Fails…
….everything can break and a business can be out of compliance, even if it’s not entirely their fault. This makes the entire legal cannabis industry a delicate dance where trust is critical. Every business needs to be able to trust and verify others on the supply chain.
The sheer cost of compliance (time & $$$)
Compliance is critical and expensive. The cost of compliance is high for everyone in the industry, from regulators to businesses to consumers. The specific costs of compliance depend on whether you’re a cannabis industry regulator, business owner or consumer.
How cannabis industry compliance requirements impact consumers
Cannabis industry compliance is a reality of any legal cannabis economy. However many consumers are skeptical of it. They think it is all about taxation and government control.
However, there is a lot more to cannabis compliance than that and the strict requirements have an impact not just on cannabis businesses but on consumers as well.
Cannabis industry compliance requirements impact both medical cannabis users and recreational cannabis users .
Here’s how:
Ensures a certain level of quality standard
Compliance requirements in the cannabis industry ensure the products a consumer is purchasing are of a certain standard. An example of where this can go wrong occured in 2019, when many people ended up very sick or hospitalized as a result of using illegal market vape cartridges. A properly-run compliance system ensures cannabis businesses do not use dangerous filler chemicals as can occur on the black market. This is one way compliance protects the consumer.
Increases product prices
Unfortunately, having to be compliant with all regulatory requirements makes a product cost more at the checkout. This is because being compliant is expensive for businesses and they still need to make a profit. The additional costs of compliance are passed on to the consumer.
Decreases the number of new products each year
Compliance also slows down the number of products coming to market each year as the compliance process is slow and expensive. Consumers end up with fewer, but safer, product options.
Better dosage information and access to lab testing results
Compliance also allows an opportunity for better information regarding dosage and access to lab testing results. Savvy cannabis consumers are able to verify that the products they’re using are right for their needs.
Better labelling and packaging
Compliance also often requires businesses to sell their products in child-resistant packaging and to mark edible products. While this practice creates its own problems relating to the creation of huge amounts of single-use plastics that can’t easily be recycled, it does make cannabis products safer to have around children by helping to avoid accidental doses or overdoses.
Compliance makes the cannabis industry safer overall as a consumer, even if it isn’t yet a perfect system.
How cannabis industry compliance requirements impact businesses
Cannabis industry compliance is good for everyone but the strict requirements have a big impact on the bottom line of every type of cannabis business. Whether a business is a grower, a processor, a packaging company, a distributor or even a dispensary, a cannabis industry business is impacted by these regulatory requirements.
Here’s how:
Paying for permits/licensing and associated costs
Business owners need to cover the business costs associated with applying for and maintaining local permits and state licenses. This includes everything from zoning checks to license fees and can be annual expenses.
Paying for SOPs and their implementation
Business owners need to pay a compliance expert to create their Standard Operating Procedures and then pay their staff to learn how to implement these procedures.
Business owners need to hire and pay a compliance team to administer their record-keeping and compliance management.
Business owners have to cover the cost of financial, security, and inventory audits.
Paying to confirm product safety, packaging, and/or labelling
Business owners are expected to confirm product safety, packaging, and/or labeling compliance, depending on where in the supply chain the business is. Some cannabis businesses have to maintain all three!
Constantly monitoring and updating a business to comply with ever-changing regulations
The mental and financial toll of ever-evolving regulations and having to update everything above to stay compliant can be exhausting for cannabis businesses. And that’s if everything goes well.
When a business is audited and needs to prove compliance, that business could be frozen or even crumble under the extra work the owner, the compliance team, and the regular employees need to do. Given how quickly regulations can change, it’s hard to be 100% compliant at all times.
While it isn’t easy, compliance makes the cannabis industry better overall for a cannabis business. It’s worth the effort and expense even if it isn’t yet a perfect system.
How cannabis industry compliance requirements impact regulators
Cannabis industry compliance is good for everyone. However, the strict requirements have an impact not just on cannabis businesses and their consumers but also on regulators.
Those very important compliance rules make being a regulator more complicated too.
Here’s how:
Keeping track of all the rules and businesses in your jurisdiction
Keeping on top of and enforcing ever-changing regulations is a lot of work, but it’s a regulator’s job to be the expert at all times, despite not always having a lot of say in what the rules and regulations are.
The cannabis industry is diverse and businesses are starting, growing, and shrinking all the time. Keeping on top of who needs to pay what and when is time-consuming and expensive.
Squashing the illicit market
The illicit cannabis market is still operating in many states so regulators need to help law enforcement root out and shut down those businesses. It’s a never-ending game of whack-a-mole with new illicit businesses popping up every day.
Creating policies and pivoting rapidly when they don’t work as hoped
It is impossible for regulators to know how a policy will look in practice, what the surprise consequences and downstream impacts will be, and how the market will react. No matter how perfect a policy seems on paper, there are going to be surprises once it’s implemented. This means regulators have to be constantly monitoring and pivoting, which is not easy with complicated cannabis laws.
Compliance makes the cannabis industry better overall as a regulator, even if it isn’t yet a perfect system.
Cannabis compliance done poorly is even more of a headache…
..and can have serious impacts on people’s health and wellbeing as well as on brands reputation and longevity.
In 2019, Harvest Health & Recreation clashed with regulators in Ohio and Pennsylvania over compliance issues. These disputes should serve as very powerful examples of why strict compliance to every cannabis industry regulatory rule is so critical.
Harvest Health & Recreation
Harvest Health & Recreation obtained seven dispensary licenses in Pennsylvania, despite the official limit being five per business. In August 2019, two Harvest Health & Recreation affiliates chose not to pursue the licenses granted to them, bringing the total number of active licenses down to five.
The state of Pennsylvania also revoked a cultivation license for Harvest Health & Recreation due to a lack of marijuana tracking records and security footage kept by a predecessor company, Agrimed.
Harvest Health & Recreation won a cultivation license in Ohio by virtue of being an “economically disadvantaged” applicant by claiming an African-American woman-owned 51 per cent of the company. This dispute was settled in March 2020 when Harvest Health & Recreation chose to ‘voluntarily’ donate $500,000 to Ohio’s prescription drug reporting database program.
Critics and regulators are arguing that Harvest Health & Recreation broke several rules which are in place to ensure a fair market and security in the industry. They are using these instances to point out the importance of strict compliance with cannabis laws at every level and in every part of the cannabis industry.
Easier-to-implement-and-manage compliance would help mitigate situations like these. Cannabis businesses would not accidentally violate regulations and if compliance is not maintained for nefarious reasons, regulators would have rapid insight into these breaches and be able to remedy them quickly.
Why Parsl’s comprehensive offering is best…
In order to stay compliant with cannabis regulations, businesses need to have seed-to-sale tracking, a secure way to accept and make payments, and an unhackable way to store data related to tracking and payments.
Right now the cannabis industry is relying on multiple tools in order to perform these essential businesses processes. Some of these tools work beautifully and others are imperfect solutions. Even the best of tools offer limited functionality, requiring business owners to manually upload and manage data for compliance. Unfortunately, humans make mistakes and even a small human error can lead to noncompliance and cannabis business licenses being revoked.
Parsl offers not just a comprehensive seed-to-sale tracking software but the ability to automate compliance and to share data up and down the supply chain. This level of insight and accountability makes business and compliance easier for everyone – from regulators to cannabis businesses to cannabis consumers.
While payment processing is not yet available in the Parsl ecosystem, it is in the Parsl roadmap and will be available in 2021.
For more information or to learn how Parsl could help you, whether you’re a consumer, cannabis business or regulator, contact us today.
Special thanks to:
- Matt Hutchinson, Head of Distribution and Fulfillment at LeafLink
- Ken Hwang, Co-Founder of My Green Network
- Leah D’Ambrosio, Founder of BakedSmart
- Abraham Villegas, Founder of The Medical Cannabis Community
