By Verde101
Starting and maintaining a cannabis business is challenging, given the complex licensing process and the dynamic regulations that control cannabis operators. Below are some common cannabis compliance challenges you may face while operating your business.
1. There Are Several Regulating Agencies
Regulations governing the cultivation, manufacturing, distribution, and sale of cannabis can be challenging to comply with. Operators have to comply with state, federal and local regulations. Companies often unknowingly neglect to follow local fire, OSHA and health department regulations. For those manufacturing edible and or CBD products they also must adhere to FDA regulations, which are still evolving.
There’s no shortcut to staying compliant. Do your homework to avoid risks and complications for your business. To get a better understanding of what is legally accepted and required, learn how and why these rules regulate the industry. You can stay updated on industry trends by reading regulatory blogs and newsletters, monitor relevant agency websites, sign up for training and webinar sessions. Seek help from consulting firms specializing in cannabis compliance who can offer you advice based on first-hand experience.
2. Address Health and Safety Concerns
The cannabis industry is highly regulated largely because of health and safety concerns related to its consumption. These regulations protect both customers and employees. For instance, biological and chemical hazards can be dangerous at manufacturing and cultivation facilities. OSHA has established elaborate rules and standards to protect employees, avoid injuries, and create a safe workplace for everyone. To protect customers, manufacturers and cultivators must meet packaging and labeling requirements. This includes providing health and safety warnings, dosing instructions and lab results.
Both state agencies and local health departments regulate how you can manufacture, grow and store cannabis and cannabis products to prevent contamination. For example, operators are often required to store goods on metals shelves at least several inches off the ground. Failing to meet healthy and safety requirements can lead to hefty fines or even licenses being revoked.
3. Hiring Employees is Serious Business
With the growing demand for cannabis and cannabis-based products, there’s a huge hiring rush to fill new positions. But taking shortcuts and bypassing employee regulations does more harm than good. To maintain labor law compliance, businesses must advertise and hire for job vacancies in accordance with the Disabilities Act, Civil Rights Act, etc. Employees must meet state and local requirements including minimum wage and overtime requirements and posting up-to-date employee rights information in your workplace. Employees must classify employees properly. Some states allow for salespersons to be commission-only independent contractors while others require them to be employees. Ensure background checks comply with fair credit reporting regulations. Be sure to also comply with any cannabis labor unions in your state. Once you exceed a certain number of employees you may be required to join a labor union.
4. Don’t Mess with the IRS
Keeping accurate accounting records in a cash dominant business comes with certain challenges. Not filing form 8300 with the Internal Revenue Service can be a costly mistake. Form 8300 is required to be submitted for all cash transactions over $10,000 within 15 days of receipt. This includes multiple payments that are part of the same transaction totaling over $10,000. For example, if you sell 10 pounds to a customer at $1,800 per pound and receive two separate payments of $9,000, form 8300 is still required. Civil penalties for neglecting to timely file, or including incorrect information is $270 per transaction and up to $3,339,000 per calendar year. Criminal penalties for willfully failing to file or submit incorrect information include fines of up to $25,000 ($100,000 in the case of a corporation), and/or imprisonment up to five years, plus the costs of prosecution. The good news is you can file form 8300 late with a limited penalty as low as $50 per transaction depending how late you file.
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