Wednesday August 15, 2018
Anyone in the cannabis industry will tell you that compliance is a headache, but necessary toward achieving a legitimized cannabis industry. Compliance oftentimes occupies the lion’s share of time and energy in a given dispensary day. It was a factor for many years in delaying California’s move to full legalization despite being an early medical state, and is often cited among non-legalized states as a roadblock to local efforts. Still, regulatory compliance remains one of the most crucial pillars of the cannabis industry. And those same people that bemoan regulation on a daily basis will tell you in the same breath, regulation is far preferable to the alternative: returning to the black market. Let’s take a closer look into the world of cannabis compliance and give you a better feel for just how essential it really is.
Why Cannabis Compliance is Important
In many ways, the resistance to restriction is understandable and questioning unfair regulation is comingled with ideals of our very national identity. Regulation can stifle progress, and there are certainly areas within cannabis regulation that could use updating, fixing and better communication.
However, the success of legalized cannabis is a direct result of effective regulation. It keeps the market safe and stable, both of which are desperately needed for a nascent market to survive.
The real-world implications of difference in regulation can be seen between Colorado and Oregon. In 2017, Oregon postal agents seized over two and a half times more product than had been seized through the mail in Colorado in the previous four years combined. The surplus of product moving from the legal market to the black market is a direct result of lax production guidelines in Oregon grows compared to stricter ones in Colorado.
While deregulation lead to extremely low costs of cannabis in Oregon, a temporary boon to the end consumer, the flooded market has hurt producers who are now operating at a loss and turning to the black market to recoup costs. It is an unsustainable model that is likely to have large implications in the years to come as the national and global cannabis markets develop.
It is this fragile transitional state that regulation helps the most. Due to the hindrance federal guidelines, ideals of the free market are difficult to apply to cannabis. Until the market can truly enter into the larger world economy as other goods, the mire of guidelines is needed to brace against collapse.
How Regulations Strengthen the Legal Market
Though it is among the most heavily regulated sectors of commerce, cannabis is hardly alone in the landscape of goods affected by strict regulation. Alcohol and tobacco sales are the easiest analogs, but in reality fisherman are more highly regulated.
Knowing various size limits can be the difference between a successful day on the water or taking a felony charge for your local fisherman. Going to jail over a tail not being long enough seems extreme, but fishing guidelines ensure that future generations will be able to eat. These simple things can have large impact.
Similarly, those selling cannabis are partaking in the transfer a potent item. It stands to reason that regulation would reflect some the gravity of the situation, despite our cultural tendency to treat cannabis flippantly or inconsequential.
Cannabis Industry Employees and Compliance
Certification to work in cannabis focuses solely on the candidate’s legal history. It does nothing to prepare the worker for the regulation needed to work in the industry and assumes that training will be provided by businesses. In many cases, the training provided by cannabis businesses is incomplete, insufficient or flat out wrong. A standardized safety certification would correct this and ensure that things like the Sweet Leaf raids don’t happen again.
The problem of effective regulation revolves around this very issue: what is needed and what is unnecessary? How we address this issue determines whether parameters surrounding cannabis are effective and efficient, or nonsensical and infuriating.
For example, labeling, which is often helpful for consumers, has become overwrought and burdensome for budtenders and cannabis employees. In Colorado, state regulations dictate a large amount of information is required to be provided about each product including:
Labeling Requirements in CO:
- A list of each and every ingredient used in the growing process
- The state’s universal THC icon
- “Highly visible” testing information
- Harvest date
- License numbers for producer and retailer
- Medical disclaimers
- Legal disclaimers and warnings
- Testing disclaimers
Beyond the legally required information, labeling usually includes the name of the product, the dosage (if an edible), strain name, type, and the name of the producer or grower. Furthermore, none of the legal information may be covered, and the companies tend to like their logo visible on products.
After learning all of these guidelines, it’s often challenging for new budtenders (and even some experienced employees) to try and figure out where to place a price tag on such limited real estate. Many times, there is no place to fit it on the box, resulting in an awkward folded flag hanging off like an afterthought. Essentially, it is easier to learn if the grower used magnesium than it is to read the price.
In the end, regulation is a double-edged sword. Though it can stifle progress and restrict business, it also keeps operations safe. Oregon, California and Washington are all facing overproduction and regulatory issues that will need to be dealt with in time. New, restrictive regulations will probably be required to correct these issues and protect the future of cannabis businesses in those states. People will complain as the sword cuts them, but in a market once unstable and dangerous, it is preferable to have a weapon like compliance in the fight (even an imperfect one).
What are your thoughts on cannabis compliance and how highly regulated the marijuana industry is? Share your thoughts in the comments below!