The Future of Cannabis Compliance for Dispensary Owners
Discover how tomorrow’s dispensaries will automate regulatory compliance.
Both the medical and recreational cannabis industries have a short and dynamic history. Only a few decades have passed since California’s historic approval of the Compassionate Use Act of 1996, and Colorado’s pioneering recreational market has only been in place since 2014.
For state lawmakers, cannabis entrepreneurs, and dispensary owners, this means that cannabis regulation represents new ground. Each state has inherited a unique regulatory landscape and is now charged with advancing the industry in accordance with its constituents’ wishes.
There will be obstacles and roadblocks on the way. Before the cannabis compliance landscape coalesces into a stable, future-oriented business environment, it must address its most pressing problems.
This white paper will show how today’s most advanced dispensary owners are resolving the most challenging issues in cannabis compliance:
- Inventory reconciliation between in-store, online, and delivery.
- Database connectivity and seed-to-sale tracking inefficiencies.
- Product recall handling.
- Cannabis taxes and CPA accessibility.
- Analytic cannabis software implementation.
For dispensary owners, these challenges are complicated by the fact that the regulatory landscape varies from state to state, and every state’s regulatory framework is evolving. In some states, the distinction between medical and adult use cannabis is not entirely clear, and current providers find it difficult to adapt to constantly changing needs.
Fortunately, dispensary owners have access to technological solutions that can ease the industry’s most pressing pain points. Streamlined operations can greatly reduce the burden of maintaining regulatory compliance with cannabis law when properly implemented.
Identifying Dispensary Challenges and Risks
Every medical dispensary license holder in the United States has to face the same set of obstacles. In the beginning, ad-hoc solutions to these challenges are enough to get by. But busy dispensaries with more than 100 transactions per day quickly find themselves overwhelmed by inefficient, time-consuming processes.
The problems facing the cannabis industry in the United States are significant both in size and scope. By limiting dispensaries’ growth potential, the establishment of a robust, growth-oriented industry becomes nearly impossible. Some of the specific issues that dispensary owners need to solve include:
- Database Integration. Dispensary owners must report to their state’s seed-to-sale tracking system and fill multiple databases with plant data, sales figures, and waste reports. Currently, minimum-level integration between the state system’s plant and logistics tracking databases requires an inordinate amount of error-prone manual data entry.
- Reporting and Taxation. In a highly regulated industry, manual reporting and tax filing can lead to serious discrepancies. Automated solutions are necessary to bridge the gap and ensure dispensary owners report accurate figures to regulatory and tax authorities.
- Inventory Management. Without an integrated point-of-sale (POS) system, manual dispensary inventory management is virtually guaranteed to result in data entry doubles and unreconciled stockouts.
- Lack of Payment Support. Due to the continued federal scheduling of cannabis products, institutional payment providers can’t offer the services that other industries enjoy. Maintaining a cash-only business in the digital era generates serious operational problems for patients and the dispensaries that serve them.
These problems are widespread, affecting nearly every single one of the nation’s 5000+ licensed cannabis dispensaries. It’s easy to put these issues in a context that any cannabis entrepreneur can immediately understand. Imagine the following scenario:
An online customer purchases the last remaining edible product at XYZ dispensary. Moments after the order is placed, a walk-in customer grabs the edible and puts it on the counter. The budtender operating the register doesn’t know that another customer ordered that product, so he rings it up as usual.
An hour later, the online customer walks in only to find out that their order cannot be fulfilled – the dispensary has probably lost a customer.
Later on that month, during a routine internal inventory audit, the dispensary’s compliance officer discovers that there is a negative quantity of the edible listed in the store’s inventory manifest. As it turns out, both the online and in-person order triggered a stock reduction from the dispensary inventory.
The danger this represents is clear. If regulators catch a dispensary with negative amounts of products in stock, they may conduct a surprise audit. When auditors unearth the discrepancy, they are likely to fine the dispensary.