Times are changing in the California cannabis scene. As the golden state barrels its way into a new era under the auspices of Proposition 64, the free-wheeling, wild-west mentality that marked the genesis of the nation’s cannabis industry are quickly dissipating. These changes are not without their critics, many people who have worked in the California cannabis industry under the Proposition 215 model see the current changes as a ploy for a big business takeover.
Controversy aside, the new recreational industry is going to be run like a regulated, taxed business, and anyone looking to stay involved in a professional capacity must be ready to “play by the rules.” To illustrate, as of July 1, 2018, California cannabis dispensaries can no longer legally sell untested products. Furthermore, in a short time, every plant-touching business in the State will need to implement, as well as abide by, METRC seed-to-sale tracking software protocol. Make no mistake about it, these infrastructural changes to the California cannabis industry represent nothing less than paradigmatic shift in all facets of business operations, including cultivation, processing, inventory, sales, and staffing.
Compliance represents the cornerstone of market evolutions occurring under the pressures of Proposition 64 legislation in California. As a result, with State mandated compliance programs rapidly coming into play in California cannabis, compliance related jobs are seeing perhaps the largest growth in the industry. For those who did not know, compliance departments in cannabis businesses ensure that companies are consistently operating by County and State regulations. A good deal of compliance work in cannabis relates to creating company procedures which ensure every department is abiding by local law. However, compliance people also deal with environmental protection standards as well as enforcing safe workplace practices as seen with OSHA. Moreover, it is the job of the compliance department to keep in touch with both local and state government regulatory committees to ensure a cannabis business remains compliant in an industry that is always changing. None of these jobs are easy. To this end, creating and enforcing brand new compliance programs in California is going to be a test of organizational prowess and professional fortitude.
California cannabis business owners and employees alike can learn a great deal by looking to other recreational marketplaces that have been operating under the controls of strict compliance standards. For example, the Colorado cannabis industry has had about five years to take shape as a functioning, taxed, and regulated recreational market. As such, since the California industry has been built with relatively lax controls, the Colorado cannabis industry is a harbinger of “things to come” in California concerning compliance.
On that note, Colorado cannabis businesses have seen their fair share of trials and tribulations with compliance, as the dispensary chain Sweet Leaf just had over twenty locations shut down due to serious legal infractions in retail operations. This scandal resulted in a net loss in the millions of dollars for the owners of Sweet Leaf. Make no mistake about it, in the coming months and years, California cannabis businesses will suffer similar fates to Colorado’s Sweet Leaf. As a result, it is momentously important for California cannabis business owners and employees alike to set high compliance standards in their operations. In fact, many cannabis industry experts feel it should be a business’s number one priority.
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While creating compliance programs in the California industry is a daunting task, the implementation of this new facet of business operations is also leading to exponential job growth in the compliance sector. As such, it is important for California cannabis business owners to understand what sort of professionals they need on their team to ensure a functioning compliance program. Similarly, for those applicants looking to enter the cannabis workforce on compliance teams, it is vital to know what sort of challenges will be faced on the job. To help us gain a better understanding of the ins-and-outs of working in cannabis compliance jobs, we reached out to Colorado cannabis industry professional Brooke Bearman. Over the last three years, Brooke has worked as a Compliance Manager for some of the leading extract companies in the Denver cannabis space, including Franklin BioScience and EndoCanna. Here is what Brooke had to say:
Can you tell us a bit about your background and how you wound up working in compliance departments in the cannabis industry?
I previously worked for the Federal government in the intelligence field, doing counterterrorism for the National Counterterrorism Center, the CIA, and TSA. When I moved back home to Denver, a family friend owned a cannabis company and was looking for a Compliance Director. My background in the very rules-based intelligence field and experience in government bureaucracy was a fit, so I joined his team. It was an easy transition in that regard, and I am able to navigate red tape, bureaucracy, and understand what role each regulatory agency plays. And I don’t mind paperwork!
What type of compliance jobs are available in the cannabis industry?
For bigger companies, there will be a Compliance Department, which will generally include the Director, METRC Administrators, Inventory specialists, and perhaps Operations Auditors. Each role is important. The Director will serve as the liaison to regulatory agencies and to the company’s legal team, as well as internally with the HR, Operations, and Cultivation Directors, and will set the compliance tone within the company. When establishing a compliance program, the Director will establish written policies and procedures, employee training and communication standards, internal monitoring guidelines, HR due diligence, and oversight and accountability measures.
METRC Administrators are responsible for ensuring that the company is maintaining proper records within the state-mandated inventory tracking system, from creating clones to packages/products entering and leaving the facility to sending out test samples. In addition, they are responsible for maintaining recordkeeping logs, such as METRC adjustments and errors and waste logs.
Inventory specialists perform compliance audits through verifying product inventory at retail and manufacturing facilities. For companies with multiple locations, the Inventory Specialists may travel to perform site audits of inventory of marijuana, marijuana-infused products, live plant clones, and corresponding digital inventory records.
Larger companies may also have Operations Auditors, who will perform and control the full audit cycle on site to include risk management and control management over operations’ effectiveness, process, compliance with all applicable directives and regulations, accounting documentation, and other associated risks. They will present reports that reflect audit results to the Compliance Director, identifying operational risks within the facilities and recommend risk aversion measures and cost savings.
In a compliance role, how difficult is it to stay on top of changing laws and legislation in cannabis?
It’s a huge challenge. The rules change frequently, especially in the early years of a state’s cannabis program, so I recommend attending as many work groups as possible. Here in Colorado, the Marijuana Enforcement Division (MED) offers the Rulemaking Work Group meetings, which gives companies, lawyers, and advocacy groups an opportunity to learn about potential new rules and comment on their impact to public health and the industry. Colorado also features the METRC User Group, which allows METRC users to meet with MED and METRC software engineers to offer suggestions of how to make METRC more user-friendly.
The City of Denver brings together government and industry with groups such as the Cannabis Sustainability Work Group, which promotes cannabis sustainability and employee safety. Denver also sponsors the Marijuana Management Symposium which provides opportunities to ask inspectors questions offline.
Joining industry groups or using compliance software tools may be helpful as well.
What skills makes for a good cannabis industry compliance person?
I’d say key skills for such a role include the ability to perform research and conduct investigations, strength in organizing and managing information, technical writing skills, and it’s very helpful to have solid interpersonal skills. While you need a strong working knowledge of federal, state, and city regulations as they pertain to cannabis, you also need to be able to apply the rules to real life situations.
Having experience working for a startup helps because you’ll need to be comfortable with change. Be prepared to wear many hats, adjust to changing priorities, take initiative, and work well under pressure.
What sort of advice do you have for California cannabis business owners just coming online with METRC, compliance, etc.?
Hire a compliance person! It will save you money, headaches, and potentially legal trouble in the future. It says a lot about a company when they have a dedicated compliance professional on their staff: it tells an inspector that the owner cares about compliance; investors will know that the company is following regulations.
Cannabis is a fast-paced industry and while you want to concentrate on operations, you can’t forget about compliance. It’s a time-consuming process that may feel like it distracts from the daily activities of growing the business. By hiring someone to focus on compliance full time, the Operations Director or owner can fully focus on the key business of cultivation, processing, production, HR, and sales.
What advice do you have for applicants interested in pursuing professional compliance roles in the California cannabis industry?
Networking is very helpful! Start by attending rule-making work groups and see who you meet. Try cannabis job fairs and industry events. In the compliance field, you may need to start out at as a METRC Administrator or Inventory controller, but you can work your way up. And study, study, study those rules!
Once you are in a compliance position, be diligent – compliance requires a lot of discipline. Keep up with your audits, training, recordkeeping, and due diligence. Enforce your standards – it’s not only about developing policies, distributing them, and educating your employees about them. You must also make sure employees are actually following them. When you learn someone is not complying with procedures, take action. Promptly respond when there is a report of suspected misconduct or other problem and take steps to prevent further compliance issues.
About the author: Kent Gruetzmacher M.F.A. is a Colorado based freelance writer and the Director of Business Development at Mac & Fulton Talent Partners (www.mandfconsultants.com), a recruiting firm dedicated to the indoor gardening and cannabis space. He is interested in utilizing his M.A. in the Humanities to critically explore the many cultural and business facets of this youthful, emergent industry by way of his entrepreneurial projects.