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Risk Management: 3 Keys to Success for your Cannabis Business

The Cannabis industry continues to boom as legalization increases across many States and jurisdictions. It’s an exciting time to be a part of this new age of legalized cannabis, but if you own and operate a cannabis business, you know the risk that comes with the territory. 


Since cannabis is still not federally legal and is still a newly regulated industry, there are many hoops that business owners must jump through and updates that must be made frequently to maintain compliance. 


A single oversight or mistake can cost you thousands in fines, employee training costs, and loss due to suspension of operation. So where are the biggest risks in the Cannabis industry, and how can you manage these risks and position your business for success? 


In this article, we are discussing compliance and risk assessment in your Cannabis business and sharing 3 risk management strategies to help you successfully prepare your business for compliant operations and profit. 


Table of Contents

  1. The Types of Risk In Your Cannabis Business
  2. Why Compliance & Risk Management Strategies Are Important
  3. 3 Risk Management Strategies
  4. How BuildMySOP Offers Risk Management Solutions



THE TYPES OF RISK IN YOUR CANNABIS BUSINESS

Whether you operate manufacturing, dispensary, cultivation, or transportation facilities, the risks for operations in the Cannabis industry are vast. 


So in order for a facility to succeed, owners have to foresee the risks in every facet of the operation. Collecting data and analyzing the results, procedures, and practices related to every part of the operation is crucial for risk management practices. 




The most common risks lay in the following areas:


Banking

Because Cannabis legalization is limited to States and local jurisdictions, many Cannabis operators are unable to open bank accounts due to its “controlled substance” status. 


Cannabis banking reform is underway by the National Cannabis Industry Association (NCIA) as they lobby Congress for change. Progress has been made, but still the Cannabis industry awaits for laws to change so that there is universal access to banking privileges. 



Safety & Health

Different facility types come with different risks to safety. As we mentioned before, theft and robbery are some of the biggest risks as most businesses are cash-based, while product transportation and delivery also present highly vulnerable situations for robbery. 


There are health and safety hazards in relation to Cannabis cultivation, manufacturing, distribution, retail, and laboratory facilities.  OSHA has implemented health and safety regulations in relation to risks like


Security

Again, robbery and theft, including internal theft, are the number one security risk within the Cannabis industry as a whole. Maintaining consistent protocol with employee access, badge requirements, and log-ins and log-outs can help mitigate security risks on the premises. 


Regulators urge Cannabis business owners to train their managers and employees on security procedures like security camera usage and recording retrieval, emergency evacuations, secure transportation and delivery, ID checks, and more.


Employee Training 


Employees have a lot of responsibilities within the facility and without thorough training, they will not be equipped to perform to the best of their ability. They need to know the operational procedure for tasks, security and safety measures, and be supported by owners and managers in their performance. 


Having a system that provides employees with all SOPs and open lines of communication with management is a great start to equipping employees with what they need to perform their duties in a safe way. 



WHY COMPLIANCE & RISK MANAGEMENT STRATEGIES ARE IMPORTANT


Compliance and risk management strategies are important because they are the things that will determine if your business is a success or not. 


Regulations are put in place in the hopes to protect your business, your employees, and your customers, so taking compliant practices seriously and planning for each risk in order to deter it from occurring is key to your business`s success. 


Regulators are looking for compliant business practices that are accurate, consistent, and transparent and if they see sloppy management practices, they won’t hesitate to grant you a fine or violation. 

 

In order to operate in compliance, you need to prepare your facility for an Audit and inspection by every agency, organize your documents, logs, and forms, implement and review SOPs, and maintain all security and safety practices. 



3 RISK MANAGEMENT STRATEGIES


The risks can be overwhelming to Cannabis owners who are busy running their businesses while strategizing the expansion of their operation. 


In order to manage the risks, there are a few strategies that Cannabis facility owners should implement now if they aren’t doing so already. 


Address the Risk


Strategically address each and every possible risk within the business, from theft and robbery to fire and ID checks. 


Have thorough standard operating procedures for each and every risk, from how to prevent the event from happening up to how to deal with the situation in the event that the risk does actually occur. 


Implement SOPs


While analyzing and addressing the risks, there is an opportunity to set up an SOP for each and every procedure that occurs within the operation of the business. SOPs should cover everything from alarm system maintenance to trash management, beginning with the very first step to the very last. 


Employees should be trained and have the opportunity to review SOPs frequently. Managers should be available to offer support and additional training in order to protect their employees and customers from situations that can be prevented. 


In the event that an employee sells Cannabis to an underage customer, the Regulator investigates what the owner has done to stop the sale; what training the employee has had, how often employees are trained, and what tools they have access to.


Selling to an underage customer can cost anywhere from $7,500 to $15,000 for a first offense, and often includes additional employee training, suspension of operation, and fines. 


The investment into SOPs gives owners assurance in their risk management practices and helps to prepare them for success and growth. 


Assess and Improve 


Business owners should invest in systems to measure the risks. There are great tools and systems out there for operators to use that can help to track and record data in your facility. 


Whether you need to know your cultivation history, employee training records, onboarding procedures for new employees, or safety and security maintenance, BuildMySOP offers an SOP system to manage and assess it all. 


HOW BuildMySOP OFFERS RISK MANAGEMENT SOLUTIONS TO CANNABIS BUSINESS OWNERS


BuildMySOP offers the Cannabis industry document, task, and employee management systems with customizable SOPs designed specifically for your business. 


The platform helps with project management and data analysis, maintaining all records pertinent to your operation and/or business license application and employee training and task records, so that you are able to compare and strategize the procedures for the operational tasks in order to ensure efficiency and timeliness. 


Logs And Forms


As a Cannabis business owner, you are responsible to keep many different types of logs and forms, some in relation to employee protection such as the “Recordkeeping Form for the Worker Protection Standard and the USDA Restricted-Use Pesticides Regulation”, and others relate to the plant itself like the “Combines planting and Harvest Report- Variety Report”.


BuildMySOP houses these types of logs and even has a feature to allow Auditors to access files under a “view only” access. This is especially beneficial when inspectors need to review your records, and you are able to provide them a login that they can access from anywhere, anytime, to review compliance content. 


It’s also a great way to practice transparency while maintaining privacy in the event of submitting records or forms to either a State or local jurisdiction that honors all submissions as “public record”. When files are hosted on the BuildMySOP platform, they are submitted electronically and thereby cannot be shared as a public record. 


The platform also allows managers to assign tasks along with the SOPs which helps protect your business in the event of an employee violation where a mistake was made but a record of their training and SOP review was signed off on at the start of their shift. 



Employee Training


The platform maintains records for all employee training and notifies management when an employee’s training needs to be current or renewed and a signature is missing. All employee training is time-stamped and dated, and the platform is easily accessed from a tablet or desktop, so access to the system on-site is easy. 


The BuildMySOP.com platform makes it easy for employees to review SOPs related to their duties. When they arrive for their shift, they login to the system and see the list of duties that management has assigned them for that day. And next to each duty is the SOP that lists the entire procedure, photos, videos, etc that the employee might need to be refreshed on. 


There is even the ability to have employees review the SOPs for their shift and sign off on completion, recording their compliance to being trained that day. 


Task Management


BuildMySOP.com provides facility owners with project management and data analysis tools, and can easily gather data from employees that can then be used to compare and strategize the SOPs to ensure efficiency and timeliness. 


Again, managers can assign employees duties or tasks for their shifts which is a great tool to manage and protect employees and the facility. It offers structure in expectations and assignments and protection with access to SOPs. 



WHAT`S NEXT?


Learn how our BuildMySOP platform works! In our last episode of the AskTheRegulator* podcast, we demonstrated how to use the SOP platform, what tools we provide, how owners and managers can use the tool in their daily operations, and how employees can access pertinent features like training and scheduling. 


Get your hands on our FREE Audit Checklist, created by a former Regulator with the Colorado Marijuana Enforcement Division, Tom Mohan. 


And get in touch with BuildMySOP.com today to learn more about our standard and customized templates, subscriptions, and our review services! 




For additional product and pricing information, visit our website.


Version 3 Copyright 2022 © BuildMySOP.com Last Updated 2022-11-09 06:05 PM