What is Retail Dispensary Compliance?
There are over 18,000+ issued dispensary/retail licenses in the U.S. and growing. If you include retail stores that are selling hemp-related products it climbs up significantly. Compliance involves a lot of different factors from inspection to employees and even self-regulation. What does a cannabis dispensary environment look like from a compliance perspective?
Risks to Non-Compliance
There is so much to operating in the environment that it’s not just about selling products to patients and customers. Opening a dispensary is a uniquely exciting opportunity, but it comes with risks. Understanding what systems to use, how to train employees, what regulations require regarding how you operate, and much more. Here is just one example of a dispensary getting fined $9,500. $7,000 of that fine was for not following a regulation that specifically states what you must do when you terminate an employee.
There are many more examples of these types of issues that occur throughout the country.
Even the decision to purchase a Point of Sale (POS) platform comes down to how compliant is the platform. If you are operating a cannabis dispensary in a medical-only state, does your POS and other systems comply with HIPAA? Do you know what HIPAA is? Could you afford an $865,000 lawsuit? The Department of Health and Human Services’ Office for Civil Rights has fined the UCLA Health System $865,500 for HIPAA violations. The cause? Allowing for non-authorized personnel to access the medical records of two celebrity patients. Yes, this is an extreme case, but do you have HIPAA training for your dispensary agents?
These are only two examples, but here are our five tips for staying in compliance:
- KYR (Know Your Regulations)- what state do you operate a dispensary in? Most states have a listserv that you can get regarding changes that are happening to the regulations. Also, read the regulations to understand how they impact your business.
- KNI (Know your Inspector)- who are the people that are regulating and inspecting your dispensary from a state perspective. Understand their background and where they came from so that you understand how they look at things. Are they former law enforcement, food safety, health department, gaming or have other regulatory experience?
- KYE (Know your employee)- everyone thinks you have to hire employees with cannabis experience. Yes, it is important to have individuals on staff that can help educate others, but look for individuals with retail, healthcare, hospitality, or other roles that work with customers on a daily basis.
- Document, Document, Document – document all interactions with employees, customers, state regulators and more. You should have anything discussed written down somewhere but be careful. Have systems in place that when you have a conversation with someone that you follow-up with an email to confirm the details of the discussion so you remain organized. Remember, “If it isn’t documented, it didn’t happen” (Tim Gunther).
- Self Report- don’t try to cover up issues that occur, if an issue happens that goes against the regulations then have a process to report the incident and the corrective action plans around the issue. It is better to self-report inventory issues instead of trying to hide the fact that shortages are happening.
Automate Dispensary Compliance with the EZGreen Compliance Tool
Staying ahead of regulatory compliance can be challenging. You can enlist the help of a dedicated dispensary software platform that automates the most challenging aspects of maintaining and reporting compliance by deploying a purpose-built point-of-sale solution like EZGreen. This will help to lessen any risks or future penalties in retail dispensary compliance.
The blog has been co-authored with Tim Gunther the founder of ILoveCompliance.biz.
