We’ve been talking about cannabis data quite a bit lately, and for good reason. We’re finally at a place in the cannabis world where we have reliable scientific data to share with consumers, giving credence to an unfairly stereotyped industry. Data is our path to credibility, and compliance is one of the best measurements to test industry practices.
Adherence Compliance is one of the many companies working to make cannabis regulations easy to understand and implement so our business owners can focus on their craft—rather than a bunch of red tape. They recently released data from 2017, “compiled from physical premise compliance inspections using the Adherence SCORE App.”
Although their report details compliance statistics for multiple categories, we’re going to focus solely on the top five compliance issues found among medical cannabis retailers, where regulation is of the utmost importance. Adherence Compliance reports that “inventory is the top failure item for all marijuana license types” and that “75% of all marijuana licenses fail at least one inventory requirement.”
Here are the “Top 5 Medical Dispensary Infractions,” according to Adherence Compliance:
- Inventory not up to date.
- Operations logs not up to date (“visitors, security, and/or waste” logs).
- Lack of proper local and federal documentation.
- Products missing “all required public health and safety warning statements.”
- Surveillance issues; cameras don’t show entire premises, have “blind spots or sight obstructions.”
Interestingly, Adherence Compliance found that states with a longer history of legal medical cannabis (California, Washington, Colorado) did worse on compliance testing than their newly-legalized counterparts (Maryland, Illinois, Nevada). The highest-scoring state for medical dispensaries was Illinois, with a 95.6 compliance rating; California came in last, with a 76.8 rating.
We reached out to medical dispensaries from around the country to hear their opinion on Adherence Compliance’s findings.
Kevin Heiderich of Washington state’s Carlton Cannabis, Tacoma House of Cannabis and Tonasket House of Cannabis didn’t seem surprised by the findings: “With so many areas to run afoul of compliance,” he explains, “only the most steadfast and detail-oriented persons will be able to maintain that compliance, and as volume of the store scales, so will the opportunities to fall out of compliance.”
Heiderich’s advice for retailers? “Maintain superior communication with your governing authority, and let them take the lead on direction of how to stay in compliance.”
We also wanted to know how one of the higher-scoring states felt about the findings. I spoke with Jeremy Unruh, Director of Public and Regulatory Affairs at PharmaCann, based in Illinois and New York (with plans to expand to Maryland, Ohio, Pennsylvania, Massachusetts and Michigan). He says it’s quite clear why newer markets are excelling at compliance, as compared to “legacy” states: limited licenses in the Midwest and East Coast, as opposed to a “free-for-all” market in the West.
“In the western states,” he told me, “the number of licenses is basically limited only by the ability to find suitable real estate and the appetite of local governments to host cannabis operators . . . in contrast, the eastern, newer markets were basically created from scratch . . . The number of licenses are limited by law, and each is given out on a competitive basis. Only the best, most sophisticated and economically-sound operators win licenses in the east. Because each of these license-winners has so much at stake, there is a natural focus on ensuring compliance obligations are met. This tends to keep enforcement activity down.”
Unruh also points out that the sheer number of dispensaries in the West versus the East plays a large factor in compliance. With more sites to cover in the West, there’s more room for things falling through the cracks: “In Illinois, for example, there are only about 20 cultivation/processors. Those sites are visited by inspectors weekly. Regulators have a much tighter grip on the operators in states where they can spend more time at each facility. In the West, where there are hundreds, if not thousands of licensees, regulators have far less contact with the individual operators. When the cat’s away, the mice tend to play.”
As the industry gallops ahead at its breakneck pace, will we see the trend of newer markets dominating compliance continue? For now, understanding the issues our regional markets face regarding compliance is key to remaining informed consumers. Residents in Washington state may seem dismayed that their state scored so low, and those in Illinois may be ecstatic, but understanding the nature of the industry—how many licenses were awarded in this region? What exactly are dispensaries being tested on?—may explain why it’s so difficult to get a perfect compliance score.
Related – Cultivation Compliance