How did the cannabis industry fare in 2022? It was a good and bad year. A Reuters story states some areas saw healthy increases while others declined. On the positive side, more states enacted laws to legalize marijuana. The Biden administration lowered federal offenses related to possession of cannabis.
The U.S. Congress has enacted the Medical Marijuana and Cannabidiol Research Expansion Act (MMCREA). What this does is open the door for more research into the medicinal uses of cannabis.
So, what is in store for the industry in 2023? Reuters anticipates the U.S. Congress will introduce more federal legalization bills including Cannabis Administration and Opportunity Act (CAOA) in the Senate and the Marijuana Opportunity and Reinvestment (MORE) Act in the House. If passed, these bills will end the ban on marijuana.
The industry expects to see the Secure and Fair Enforcement (SAFE) Banking Act introduced again this year. This protects financial institutions and other service-based organizations while conducting business with legally operating cannabis companies. It’s possible the States Reform Act (SRA) may be re-introduced. This will “decriminalize cannabis at the federal level while deferring to state powers over prohibition and commercial regulation” according to Reuters.
Further good news is that the lack of federal legalization hasn’t affected the industry’s growth. According to a CNN story, the industry brought in an estimated $27 billion in 2021. This is an increase of 35% over 2020. The industry is also responsible for more than 400,000 jobs.
Considering there has been little movement at the federal level, what does it mean for cannabis compliance? Anyone planning to or is already working in the cannabis industry is beholden to the laws of their state or province.
Why Is Cannabis Compliance Hard?
The U.S. and Canada have a diversity of cannabis laws. The place to start is to know the laws of your municipality, state, or province. Cannabis-related laws vary based on location. When a business does not comply with cannabis laws, it could lead to paying expensive penalties or worse, which is losing its license.
Most states and provinces have very detailed cannabis compliance requirements for video surveillance. Cannabis businesses need to work with lawyers and people who are experts in cannabis-related laws for their geographical location.
Be aware that in the U.S., the laws may not be state based. A state may have more laws within municipalities. California is a good example of this. For instance, businesses in El Monte, Calif., must retain recordings from their security cameras for 45 days. Long Beach only requires retaining footage for 30 days.
El Monte has another requirement that other municipalities may or may not have. Marijuana businesses must provide remote access to the recordings to the Chief of Police or a designated employee.
Not all laws are limited to what happens on the company’s property. Some may involve external factors. For example, Colorado cannabis businesses are required to have video monitoring of their lockboxes in vehicles that deliver cannabis products.
One of the key things to know about cannabis compliance is that law enforcement may not encourage patrols to drive by marijuana businesses. The problem is that law enforcement has other priorities. Remember, they’re responsible for ensuring the enforcement of all laws, not just those affecting cannabis businesses.
The other difficulty is that laws related to cannabis change frequently. This makes it challenging for law enforcement to track and enforce. It also justifies the need to hire lawyers and experts in the laws that affect cannabis businesses.
They’re more likely to prioritize people’s safety over business protection. Law enforcement agencies monitor people who are under the influence of drugs or alcohol. Why is this important to know? It means cannabis-related businesses can’t depend on law enforcement to patrol their business on a regular basis.
Between the comprehensive laws and being a cash-heavy business, it’s crucial for cannabis companies to implement security that is compliant with the laws while protecting the business. The next section provides ways to do that.
What It Takes to Ensure Cannabis Compliance
Cannabis businesses face more challenges than just the changing cannabis compliance regulations. To ensure a cannabis business is successful and does not lose its license, it must do what it can to protect its assets. These top five ways will help businesses boost cannabis compliance, reduce risk, and safeguard people and assets.
1. Create a security plan that includes procedures
If a cannabis business doesn’t already have one, then it should begin by developing and documenting a cannabis security plan and procedures. All businesses should have this including dispensaries, cultivators, and manufacturers.
In working through the cannabis security plan, review the current laws at the federal, state, and municipality levels as they relate to cannabis compliance. These laws can make or break a cannabis business. Again, it’s recommended cannabis businesses have a lawyer and security consultants who have experience with cannabis laws.
Here are the things found in a typical cannabis security plan:
- Introduction: This contains an overview of the security plan, its purpose, and its objectives. Identify the roles of the employees who are responsible for creating, documenting, maintaining, and updating the security plan.
- Policies and procedures: The purpose is to document all processes and procedures associated with security and running the business. For example, all potential employees should agree to a background check. They should pass the background check before they’re hired. Processes and procedures should cover security training and the need for all new employees to undergo the training. Every employee must receive a refresher at least once a year. This should be documented as well as access and asset management procedures, product storage, cash management, customer management, and video surveillance.
- Physical building design: This is a map of the property and all the security that is in place or will be put in place. It can be useful for identifying security gaps.
- Signoffs: Security training is critical to a cannabis company’s success. You can comply with all the video security requirements, but an employee can make a mistake that can open the door to theft. All employees must sign off on their security training. Their signature means they’ve attended the training and will follow procedures. This prevents them from claiming they did not know about something.
The security plan is not a one-and-done document. It must be frequently referenced to ensure compliance. Security advancements and evolving cannabis laws demand the security plan be reviewed and updated at least once a year.
2. Conduct random audits
Don’t wait for someone to audit the cannabis business. Do random audits to verify employees are following processes and procedures. A security specialist with experience in cannabis compliance can provide advice on how to do a random audit. The cost of working with an external consultant is small compared to losing a license or fines.
3. Invest in an inventory management or point-of-sale system
The most valuable asset in a cannabis business is inventory. Therefore, it’s worth investing in an inventory management or point-of-sale system. There should be a process associated with reviewing the inventory multiple times a day and during shift changes. Cannabis cultivators and manufacturers need to use an inventory management system to automate the process of managing inventory and packaging.
4. Add an access control system
Who should have access to the inventory at what point of the process? This is another process to document. You can also control access to the product with an access control system. This simplifies the management of who has access to the product and areas of the building. Some cannabis laws may require the use of an access control system.
Integrating an access control system with video surveillance fortifies security as it can watch for potential security breaches and monitor activity in real time. Some access control systems can grant access based on a time limit or scheduled unlocks. Speaking of video surveillance, that brings up the next item.
5. Implement video surveillance systems
While the regulations for the U.S. and Canada are different, most require security cameras with monitoring. The regulations vary when it comes to requirements for video resolution, camera placement, the number of days to retain footage, and more.
Cannabis compliance is complicated, to say the least. That’s why you want to partner with a video monitoring company with experience in the cannabis industry. When you work with the right security vendor, you’ll gain benefits beyond cannabis compliance. Video surveillance with remote monitoring can do more than help deter theft and problems.
Unfortunately, cannabis businesses that don’t work with the right vendor can end up paying a high price when their video security system doesn’t comply with the law. Don’t learn this lesson the hard way. Protect the cannabis business by asking about an installation guarantee clause. This protects the business in case the video surveillance setup fails compliance.
How to Find a Video Surveillance Company for Cannabis Compliance
These are the five top ways to get on the path toward cannabis compliance. But where do you begin the hunt for a qualified video surveillance company with experience in cannabis compliance? As a starting point, check out this free cannabis security guide. This guide looks at cannabis security in the U.S. and Canada.
As you reach out to security camera monitoring companies, ask them for client referrals and cannabis case studies. ECAM has experience with managing remote video surveillance for clients in the cannabis industry. To learn more, contact us.
Texas Private Security License Number: B14187.
