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8 Compliance Risks Cannabis Dispensary Owners Can Eliminate Right Now

The rate at which cannabis is being legalized is nothing short of impressive. However, its legality comes with a few strings attached. For starters, you have to deal with exorbitant taxes and a myriad of state laws and regulations to stay compliant. And that’s where the problem comes in: Compliance in the cannabis industry is […]

8 Compliance Risks for Cannabis Dispensary

The rate at which cannabis is being legalized is nothing short of impressive. However, its legality comes with a few strings attached. For starters, you have to deal with exorbitant taxes and a myriad of state laws and regulations to stay compliant.

And that’s where the problem comes in: Compliance in the cannabis industry is barred with numerous, ever-changing regulations that make it hard for even the most seasoned business people to keep up. A simple mishap could put you at a high risk of getting finned, ruining your business reputation, or even worse, losing your license.

To help you navigate this fairly new legal terrain, here are a few compliance risks you can eliminate right now.

Poor Recordkeeping

The cannabis industry is barred with tons of recordkeeping requirements that must be followed strictly. This explains why recordkeeping is one of the most prevalent compliance issues that dispensary owners face.

Every regulated state has laws put in place to ensure that dispensary owners and other people in the cannabis industry maintain a record of inventory, orders, internal operations, and the movement of products through seed-to-sale tracking systems. Some states require physical records, while others require both physical and virtual records. It all boils down to your dispensary’s location.

Even if your dispensary is fully compliant with state regulations, it’s still vital that you keep all physical paper records. In the regulator’s eyes, it’s not about what you say you did. All that matters is if you can prove it. To achieve this, you need to go over your paperwork regularly and keep both physical and virtual records.

Improper Training

It might sound pretty basic, but poor employee training has left tons of dispensary owners on the wrong side of the law. One of the biggest mistakes employers make is not making their employees read the rules or not training them on how to follow them. 

Let’s take storage, for example. If cannabis is not properly stored, it can gain or lose water weight depending on storage conditions. Despite this seemingly obvious fact, improper storage is one of the most common compliance mistakes cannabis dispensary workers make. And since cannabis is highly regulated, a mismatch in weight from what the manifest says could mean legal trouble for the dispensary owner.

The biggest way to avoid falling into compliance issues due to your employees’ mistakes is by taking time to thoroughly explain the rules and why they have to be followed. This might involve retraining employees, which might seem like a hassle. But considering the repercussions involved if you don’t, it’s totally worth it.



They say no success is too much success. But in the cannabis industry, that may very well be the case. There are rules set in place in regulated states to dictate how much cannabis a person can purchase each day.

So, what’s the harm in selling someone an extra gram or two? Well, state regulators take it very seriously. Take Colorado, for example: Two dispensary owners were recently sentenced to two years imprisonment for intentionally allowing their customers to purchase more weed than they were legally allowed.

The worst part about this is that some equivalency laws exacerbate the likelihood of overselling. For example, a single gram of concentrate is equated to 3.5 grams of flower in the state’s eyes. The best way to avoid this kind of problem is by using software specifically designed for the cannabis industry. These software systems feature various recordkeeping applications that allow you to avoid simple mistakes like overselling cannabis.

Serving Underage Customers

Nobody under the age of 21 is allowed to buy weed in the US. But youngsters are pretty ingenious, so you’re bound to come across a few fake IDs in your work. And we don’t have to tell you how much trouble you can get into from selling cannabis to an underage person.

Sometimes, law enforcement even uses fake ID holders to catch non-compliant dispensaries. A simple electronic ID card reader could go a long way in alleviating your risk of falling into such a trap.

Customer Privacy Violation

Dispensaries keep a record of their customer’s personal information. Like all other physical and virtual records, they are prone to theft and misuse. If you are found guilty of divulging your customer’s private data or losing your transaction or inventory records, you might face civil penalties.

Invalid Licenses

No other business out there is restricted as much as the cannabis industry. As such, licensing requirements are quite extensive. Depending on where your business is located, you might need a:

  •     Retail license
  •     Business license
  •     Cultivation license (if you’re cultivating marijuana)
  •     Dispensary license

You also need additional documents on the state and municipal levels. Additionally, all your documentation has to be up to date, and all applicable fees must be paid on time. It doesn’t matter whether you don’t have a license or if it has expired; the consequences are pretty much the same—the end of your business, every dispensary’s owner’s worst nightmare.

Invalid Licenses

Insufficient Security Measures

Depending on state and local laws, your dispensary might need a little more than basic video surveillance and alarm security features. In addition to basic security measures, your team must surveil all inventory through the entire distribution process. You also need to hire armed security and burglar-proof your inventory. Even a simple inventory discrepancy can lead to serious fines.

Violation of Product Safety Regulations

Each state has product safety regulations in place. For example, you must ensure that all your cannabis packaging is childproof. Additionally, each item must have a clearly marked label with all the product’s information. To avoid any future legal discrepancies, it’s advisable that you learn your state’s requirements on the labeling, safety, and packaging of cannabis products. 

The Bottom Line

In the cannabis industry, a single mistake could cost you thousands of dollars in fines. To avoid this, you need to stay on top of all local and state cannabis policies. Avoiding the compliance risks above can help your dispensary survive regulatory scrutiny, allowing you to focus on what matters: growing your business