Compliance

  • Mark Slaugh posted an article
    These essentials serve as a guide map to success beyond passing your initial inspection see more

     By Mark Slaugh, IComply 

    When starting a cannabis business in a new market, operators often have more questions than clear answers.

     

     

     

     

    Rules are subject to change, staff is inexperienced, and theoretical applications (literally) have to be put to the test in the real world, amid real economic forces, and against real competition.Normally, this means focusing on the build out of the operations, scrambling to interview and hire the right team, and executing in time to avoid being left behind. In our experience, ensuring that the ship is running smoothly after building it and crewing it is just as important to avoid catastrophe.

    Missouri is an emerging market with a lot of potential, power, and speed to recreational marijuana sooner than later. This means turbulent seas and a fast-pace to exponential growth. This also means that the fundamentals of each cannabis business have to be solid to ride the waves to come. As such, iComply recommends focusing on these fundamentals in conjunction with the buildout of your licensed facility. These essentials serve as a guide map to success beyond passing your initial inspection, as the command and control infrastructure you’ll need to navigate your new multi million dollar business:

     

    1. Compliant Processes

    2. Compliant People

    3. Measures and Management of ongoing Compliance

     

     

    Compliant Processes

    Firstly, compliance starts on paper. Literally. From facility designs, HR handbooks, employee training manuals, application representations and warranties, logs, forms, reports, and Standard Operating Procedures, no one can effectively and comprehensively manage operational compliance without ensuring the ongoing accuracy, continual management, and documented implementation of these vital control documents. We recommend focusing extensively on Standard Operating Procedures (SOPs) which act as living documents by which all other documentation, logs, forms, and training manuals are derived. Unfortunately, most cannabis operators pay little attention to their SOPs once written and let them sit on a shelf and gather dust until it's too late.

    Inadequate SOPs that don’t cover nuances important to effective business management – let alone comprehensive compliance. Most commonly missing are procedures for Equipment Maintenance, Quality Assurance and Control, Sampling/Testing, Bookkeeping, and Onboarding/Off-boarding Procedures – just to name a few.


    Compliant People

    Unfortunately, most workers never read the rules and regulations and most now working in Missouri have NEVER WORKED IN REGULATED CANNABIS. Rules are written by and for attorneys, not as casual reading material for owners or managers, let alone average industry workers. However, every person with a badge licensed to work in your business is expected to know the rules and follow them.

    It is essential that employees have rules broken down and taught to them in normal English. Corporate compliance training exists as a standard in most heavily regulated industries for a reason. Literally getting everyone on the same page teaches them the intuition and importance of adhering to SOPs, logs, forms, reports, and internal employee training. An infrastructure you have invested heavily on and is important to holding a level of accountability and risk mitigation for to protect workers, brand value to consumers, and the license.

    No one has an excuse to not follow the rules once they learn them.

    The lowest worker on the totem pole can shut down the business over a misunderstanding or mistake. The importance of effective and timely training becomes paramount to protecting your license and investment.

     

    Compliance Measures and Management

    Lastly, you must make sure your investment in processes and people endures over the course of time. If SOPs sit on the shelf and people forget their training expectations, you will not see an ROI on your compliance. Even worse, you’ll set yourself up for failure.

    Simply put, third-party validation, transparency and insight become critical to keeping the train on the right track. You must ensure compliance continues and helps keep cannabis employees on their toes. More importantly, compliance is a living beast that must be fed, nurtured, and disciplined over time. You cannot effectively adjust your operational compliance controls and infrastructure if you don’t know where or how to do so.

    In Missouri, the DHHS requires ongoing compliance management and daily reporting of inventory in electronic systems remotely monitored by regulators. State Seed-to-Sale tracking requirements in METRC mandate close monitoring and quarterly reconciliations at the very minimum. The State’s logic is sound on this to ensure accurate inventory reporting which allows cannabis companies to meet Federal and State compliance and ensure the prevention of cannabis diversion.

    Managing compliance is much more complicated than counting inventory every once in a while - especially across a complex and complicated business with multiple people and moving parts. However, if done correctly, these measures ensure that when auditors perform more detrimental inspections, investigations, and audits, having your own paper trail helps to create defensible transparency and keep you out of trouble, proactively.

    To find out more about protecting your business, visit www.icomplycannabis.com.

    MoCannTrade members can enjoy a 10% discount on any purchase using the code MOCANN2020

     

    Mark Slaugh
    CEO, iComply, LLC

    Mr. Slaugh established iComply, LLC in 2011 to help cannabis businesses navigate the complexities of regulated marijuana. He provides the leadership and forward thinking that continues to set standards across the global industry.

  • Article
    The urgency of the medical marijuana license application process has passed, but now license applica see more

    By Det. Joe Patterson (Ret.) and Patrick Poston Esq.

    The urgency of the medical marijuana license application process has passed, but now license applicants need to be focused on next steps to fully capitalize on this unique opportunity. There were nearly 2,300 applications for 348 medical marijuana licenses in Missouri with roughly 1 in 7 applicants securing a coveted license. The investment of time and money in business planning and application only to fail the commencement inspection and be denied the ability to operate could be catastrophic. Given the emphasis on security in the application process (20% of the overall application), security training and compliance are paramount to passing the commencement inspection and additional annual inspections.

    Security requirements for cultivation, manufacturing, and dispensary facilities are detailed in 19 CSR 30-95.040(H). With respect to required security training, 19 CSR 30-95.040(H)(7) dictates each facility employs a Security Manager responsible for, inter alia (among other things), conducting a semiannual audit of security measures to ensure compliance and training employees on: security measures, emergency response, theft prevention and response within one (1) week of hiring and on an annual basis. Thus, it is critical licensees have a plan in place to ensure compliant security training of all new hires within 7 days as well as a policy to maintain training records for the commencement inspection (and subsequent inspections).

    Additionally, 19 CSR 30-95.040(H)(8) mandates the Security Manager, any facility agents who provide security for the facility, and any third-party employees who provide security complete additional training in:

    • Theft prevention or a related subject;
    • Emergency response or a related subject;
    • Appropriate use of force or a related subject that covers when the use of force is and is not necessary;
    • Process of crime scene protection or a related subject;
    • Control of access to protected areas of a facility or a related subject;
    • Minimum of eight (8) hours of training at the facility in providing security services; and
    • Minimum of eight (8) hours of classroom training in providing security services.

    Of all states that have passed legislation allowing medical marijuana, Missouri is one of the most stringently regulated with a heightened emphasis on security. The state will have fourteen (14) or more DHSS inspectors to perform the commencement inspections and enact random annual inspections (announced or unannounced). With the financial implications at stake for license holders and investors, it is imperative licensees ensure effective security compliance.

    Establishment of a comprehensive security training plan is the first step to capitalizing on this opportunity.

    Every applicant group had to explicitly identify their Security Director on the application(s). In Missouri’s highly competitive application process, we expect to see many impressive resumes for the Security Director position. In many cases, it is highly likely the hand-selected Security Director had a long career in areas like corporate security, military service, or law enforcement. These individuals were presumably indispensable in building out your security plan. However, if these Security Directors are expecting to be more of an advisory position and not wanting to handle the minutia of the above outlined requirements, then hiring a Security Manager or contracting with a Security Management Firm is an option worth exploring.

    Once licenses are awarded, there will be so much more for operating groups to do; finalizing real estate deals, applying for construction permits, solidifying strategic supply chain partnerships and so on.

    Not a single one of these is more important than the other and many applicants come from backgrounds with experience in these activities. Nevertheless, security management and training are essential to maintain regulatory compliance, protection of your staff, your investment, and solidifying the Missouri cannabis industry as a legitimate and lucrative business.

    What do you do if your group decides they would rather contract these responsibilities to a professional firm?

     

     

     

     

     

     

     

    If you find yourself in need of a service provider for security management and training there are several Missouri based companies to assist you with not only these requirements, but also security equipment (cameras, lights, entry access, etc.), guard services, and many other security related matters.

    No matter what your needs may be, you should properly vet all security personnel or firms based on past proven performance, knowledge of compliance regulations, and ability to deliver services properly. This may seem daunting but asking the right questions can you help vet security employees or contractors in order to find the true professionals.

    Below is a brief list of questions any experienced security professional or firm should be excited to answer:

    • What training and education background do you or your firm have as it relates to physical security experience?
    • Do you or your firm have the required professional and businesses license to operate in the State of Missouri
    • Are you and your firm insured?
    • What type of facilities have you been responsible for in the past and can you provide references?
    • Have you or your firm ever been defendants in civil litigation as it pertains to business or negligent security activities?
    • What types of ongoing training do you or your firm conduct in order to stay up to date on regulatory updates and case law updates?
    • What is the pricing structure of your services? (By the hour, monthly retainer, or something else).
    • Is your group a member of the Missouri Medical Cannabis Trade Association?

    Finally, the individual or group who wrote the security portion of your application should be consulted prior to signing any contracts with firms or hiring an individual Security Manager. The purpose of this is to ensure the contractor or individual has a working and proficient knowledge of DHSS regulations and that the security plan set forth in your application can be fulfilled as it was stated on the application. Remember, you have to make a good faith effort to accomplish what you said you would do on the application, falling short on what was placed on the application could put your license(s) in jeopardy.

    Best of luck to everyone as we await licensure. We look forward to working with all involved to make the Missouri cannabis industry safe, professional, and profitable.

    About the Authors:

     

    Joe Patterson (Co-Founder/Chief Executive Officer) and Patrick Poston, Esq. (Chief Legal Officer) are from Ceres Management Group (Ceres MG) LLC. Ceres MG is a Missouri based firm that provides competitive application writing services, security program development, and security management for the Missouri Medical Cannabis Industry.

    Ceres MG is a military and police veteran owned business with strong connections to statewide law enforcement and international security experience,

    For more information, you can contact Joe Patterson via email at JPatterson@CeresMG.com