When it comes to launching a cannabis business in 2018, there are a million things you need to factor in to even get a license, let alone launch a successful operation. Whether you’ve been in the industry for six months or six years, a consultant is a popular approach to navigating the newly implemented rules and regulations in any given market.
The competition to obtain a business license is fierce in most states, which is why a consultant who has experience in licensing can be a huge advantage. Those who are new to the industry will more likely need an experienced consultant, but even those who have been in cannabis for a decade are often overwhelmed by the new expectation of tracking and reporting on everything your business does. The trouble is, because the cannabis business model is still so new, it’s easy for “bad actors” to appear as experts, at least when it comes to the regulated business model.
Last week, I was fielding some customer calls when I spoke to a consultant who was shopping seed-to-sale software on behalf of their client, who is a prospective licensee. The individual happened to operate in a state that utilizes METRC, but upon mentioning the reporting requirements that go along with operating in a METRC state, the consultant replied with, “What’s METRC?” That’s why I tell my clients and partners to make sure they thoroughly vet their cannabis consultants to make sure they aren’t being had.
So how do you know your consultant isn’t taking you for a ride? Here are 2 cornerstone pieces of cannabis business operations that you can use to quickly sift through the bad actors:
- Government Traceability – In every state with a legal cannabis program, whether medical or recreational, businesses are required to submit data to a stateside traceability software system that allows the respective governing agency to monitor the state’s cannabis supply-chain for inconsistencies or irregularities. The only 3 companies that currently operate state-level traceability systems are BioTrackTHC, Leaf Data, and METRC. There are even a handful of individual counties in California that utilize a county-level system, so make sure you and your consultant are familiar with the respective reporting and tracking systems in your licensing jurisdiction.
- State Requirements – Every state has unique rules and regulations for their respective cannabis program. Just because someone is a whiz at filling out licensing applications does not make them an expert on cannabis rules and regs. For example, most states require that you keep updated SOP’s readily available at your business location, other’s require unique labeling features for compliance, and all of them have very specific zoning requirements. Quiz your consultant before you hire them. The rules of each state are vast, unique, and complex, so do a little research and fire off some specific questions to see if they’re able to respond accurately and quickly.
It may seem simple, but this is the green rush and everybody wants to be a part of it, including those who don’t deserve to be. We work to make this industry work, and that’s why we make it a personal responsibility to make sure your business, well, works.