Compliance Archives

Payment Processing for Cannabis Delivery Services and Why Paying Online is Better

Posted on June 1, 2021February 16, 2022 by Antonio Javiniar

The State of Payment Processing for Delivery in the Cannabis Industry

Let’s face it — the cannabis industry has a cash problem. Now, too much cash isn’t a bad thing; cash is still king. But, when cash is the only means of doing business – from customer transactions to paying tens of thousands of dollars in taxes exclusively in cash – it quickly becomes one of the biggest bottlenecks and security risks for the industry and its operators.

The cause for this? Federal and local regulations make it difficult for cannabis businesses (especially those that are plant-touching) to access basic banking services and digital payment processing alternatives to cash. With the blooming cannabis industry projected to grow to $41.5 billion in retail sales by 2025, it’s important that as the industry awaits changes in federal cannabis policy, that the private sector works to make existing cash alternatives more safe, compliant, and accessible to cannabis operators.

In this blog post, we’ll do a brief overview of cashless payments, why cannabis delivery services should implement cash alternatives today, and the existing technologies that make payment processing safe and accessible under the current state of cannabis regulations.

Intro to Banking and Cashless Payments in Cannabis

Due to constraints brought on by federal and local regulations on cannabis banking, the cannabis payment processing sector has exploded with businesses seizing the opportunity to solve the cash-only issue of the industry. With this comes many bad actors looking to make a quick buck and disappear (as does any industry), but also comes many promising companies truly looking to establish a safe, secure, and scalable payment and banking solution for cannabis operators nationwide.

Why is this issue so important? Well, it’s an issue of efficiency and security. Without access to traditional banking services, cannabis operators often find it difficult to:

• Have a safe and secure way to store and access their cash in the same way non-cannabis businesses do

• Access capital needed to scale their operations without hefty interest rates through cash advances

• Accept more convenient ways to pay for cannabis like with credit and debit cards

• Pay their taxes and other business expenses

And that’s just the beginning. As a “high-risk” industry that is still federally prohibited, operators can find it hard to also insure these cash assets without having to pay large premiums.

Collectively, these hurdles would undoubtedly make it more difficult for the industry to reach those projections, giving even more credence to calls for a cash-alternative solution sooner rather than later.

Existing Methods of Cashless Accepting Payments + Risk

So if the demand is high for cash alternatives, what cashless payment solutions already exist?

Well, there are a few alternatives to cash cannabis operators can choose from. Currently, non-cash cannabis transactions can happen in a few different ways:

• Automated Clearing House (ACH)/Bank to Bank Transfers

• Have you ever signed into your bank account through a third party to purchase cannabis? If so, you’ve just paid through ACH. ACH is simply a transfer of funds between a customer’s bank and yours (the delivery service). ACH is arguably the most secure method of handling non-cash cannabis transactions in the industry today.

• Cashless ATM Terminals

• If you’re thinking that you’ve paid for cannabis with your debit card before — you’re not wrong, but you’re not entirely correct either. Cashless ATMs are a clever workaround to solving the cash-only issue in cannabis. Instead of customers paying with their debit card, they’re actually “withdrawing” cash directly into your business bank account. Funds are debited from their account into yours equating to the amount of their order.

• Cryptocurrency

• As an emerging technology (and with the future of cryptocurrency use cases in cannabis still hazy), crypto payments are rather rare to come across. However, it is a form of payment that exists and can be used by retailers.

Each of these payment methods, of course, carry their own respective pros and cons. As more established and reputable payment processing companies enter the cannabis market, and as the industry continues to build upon non-cash alternatives, the relative risk in implementing a payment processing solution is better managed.

The Argument for Cannabis Deliveries Going Cashless

So, why should you implement alternative methods of payment processing for your cannabis delivery service? Well, aside from it becoming an inevitable transition your cannabis delivery service will have to make eventually to meet customer expectations, implementing a payment processing solution can benefit you in multiple ways:

• Employee Safety and Risk Management

• Eliminating cash from delivery transactions minimizes the risk of cash theft. At any given moment, whether during daily delivery operations or periodic cash-only tax payments, cannabis delivery staff can be carrying with them thousands (if not tens of thousands) of dollars in cash on their person. ⁣This makes them (and you!) a high-value target for theft. Taking cash out of the equation through cashless payments mitigates this risk and creates a much safer, more convenient working environment for everyone.

• Access Banking Services

• Non-cannabis industries may take it for granted, but access to simple banking services is crucial to the future of the cannabis industry. As bigger, more reputable institutions come into the cannabis payment processing sector, more financial resources like banking become accessible to cannabis operators.

• KindTap, for example, is a closed-loop network providing merchants and customers a compliant way to pay online, thereby removing the friction of paying upon delivery or in-store pickup. By partnering with financial institutions in various states that have compliant cannabis banking programs, KindTap enables a frictionless payment solution for online transactions through a bank account-link and their own credit program.

Moreover, solutions like KindTap are actively integrating with point-of-sale technologies like WebJoint, to seamlessly fit into the customer’s natural purchasing experience and offer a non-cash payment option.

• Increased Customer Satisfaction = Increased Customer Spending

• Customers tend to spend more when they are not only happy with your service but also when they aren’t limited to the cash they have on hand. Today’s consumers pay for almost everything with their debit/credit cards – it’s more convenient and secure than cash. Though debit/credit card payments for cannabis aren’t possible just yet, there’s a reasonable expectation for operators to mimic the convenience factor that comes with it as best as possible. A successful implementation of non-cash payment alternatives will prove to be a great-long term investment for your business.

Future of Cashless Payments in Cannabis

So what does the future of cashless payments in cannabis look like? To be quite frank, it’s hard to tell. Unfortunately, federal legalization is still up in the air and with it, regulations dictating banking services for cannabis operators hang in limbo too.

What we can tell you, however, is that the payment processors left standing will be the institutions that place the operator’s security and accessibility to financial services, as well as the customer’s purchasing experience, at the forefront of their efforts. Existing solutions like KindTap that are thriving in today’s cannabis banking environment, revolutionizing cannabis payments, and blazing the trail towards a federally compliant cannabis payment network.

Cannabis Regulations in California and Elsewhere! (Overview)

Posted on January 7, 2020February 16, 2022 by Antonio Javiniar

Cannabis regulations for cultivation, distribution, sale, and use has received a lot of attention in recent years, in most parts of the world. There is a shift in the mindset, acceptability, and general perception of the cannabis plant in recent years. Somehow, this has helped to demystify some of the long-held beliefs stemming from the U.S. War on Drugs, effectively giving room for better assessment of its benefits to society.

How exactly has the playing field changed over the years in regards to cannabis regulations? In this article, we look at the various cannabis regulations that affect different stakeholders of the cannabis industry.

At the international platform, cannabis possession, cultivation, and supply are only allowed for medical use and scientific research. In this sense, on the world stage, generally, it is a crime to cultivate, possess, and supply cannabis. Many counties punish this crime by stringent prison terms. It was not until recently when several changes emerged on the perception and approach towards cannabis. The result of the move was an increase in the number of countries legalizing cannabis for both medical and recreational use.

Notably, though, this legalization often comes with strict guidelines on cultivation, supply, and personal consumption of cannabis. In this respect, therefore, in many places, cannabis is still not a commodity that one can access easily.

In the United States, 11 States have legalized marijuana for recreational use, while 33 states have legalized it for medicinal purposes only. Other nations, including Canada, South Africa, Georgia, and Australia, have legalized marijuana either for medical, recreational uses, or both.

The USA stands out amongst many nations in its approach to regulation of cannabis use. At the Federal level, cannabis is still illegal, and there are severe penalties for trading, consumption, and possession of marijuana.

Several states have now legalized either medical marijuana, recreational marijuana, or both. There is also a lot of diversity in the ways these states have enacted regulations on marijuana. There are specifications regarding cultivation, transportation, and even private possessions in homes across various states in the USA. Here is a highlight of multiple approaches given by just a few selected states.

California became the first state to legalize cannabis use with Prop 215 back in 1996. Prop 64, which would permit the recreational sale and adult-use of cannabis, was approved by California voters in 2016.

Prop 64 culminated in the signing of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) by the then governor, Jerry Brown, on June 27, 2017. MAUCRSA created the general legal framework for the cannabis market in California.

The bill created the Bureau of Cannabis Control (BCC), the lead agency responsible for licensing, regulation, and enforcement of laws for all cannabis-touching operators in the state. To supplement the BCC, the California Department of Public Health (CDPH) was commissioned to regulate manufacturers and the California Department of Food and Agriculture (CDFA) was made responsible for the oversight of cultivators and implementing the state’s track-and-trace system, METRC.

To date, California remains one of the most dynamic cannabis markets – it’s expected to be a $7.7 billion market by 2022. Cannabis is legal to persons over 21 years old. The law prohibits possession of more than 28.5 grams of cannabis in the plant form and 8 grams in the form of concentrates. The law allows cannabis consumption in private property, although landlords and property owners can set their own rules regarding cannabis consumption. Additionally, California has been one of the few states to permit state-wide cannabis delivery. The laws in California provide a template for several other states.

In all the places mentioned above and others, legality, especially in regards to commercial use, varies significantly. Here is a highlight of approaches adopted by different nations.

In Canada, users in Ontario are only allowed to purchase marijuana over a government-run online platform. Still, in Quebec, Canada, you can smoke cannabis wherever tobacco smoking takes place. Other provinces within Canada also have specified rules. In Europe, all national governments currently oppose cannabis legalization, mainly for recreational use. There are penalties for illegal supply. Similarly, within the European Union (EU), possession of cannabis for personal use is an offense. Nonetheless, in more than a third of the nations, a prison sentence is not an acceptable penalty.
In Spain, there is no penalty for growing or consuming cannabis privately. But cannabis sale is still prohibited. Similar to South Africa, you can only grow and possess small amounts of cannabis for personal use as long as you meet the age requirement.
In the Netherlands, officials tolerate cannabis sale in shops as long as it follows specific guidelines. It is an illegal activity but not necessarily punishable. In many jurisdictions, discussions into the legalization of cannabis are at advanced stages. One can easily buy various edible twisted extracts from reputable retailers.

Statistics indicate that there are more than two million Americans under incarceration. Although it is hard to determine the exact number of people held over marijuana-related cases, in 2018, about 47.5 percent of federal prisoners (81,900) were serving a drug-related sentence.

In another report, out of 20,000 drug convictions in 2017, only 92 related to marijuana. One argument has been that most of these convictions related to minor possession of marijuana and not to trafficking or violent acts. Yet, they have a significant impact on society.

Fortunately, with the increased pace of legalization across states, more government entities are looking to amend the injustices from the past. With more states legalizing, we begin to see more licensing programs centered on social equity (giving communities affected by the War on Drugs an opportunity to be stakeholders in the legal cannabis industry) and the mass expungement of non-violent drug offenders and their records. For example, Illinois’ governor just expunged 11,000 non-violent, cannabis-related drug offenses upon the state’s legalization in 2020.

Cannabis regulation, especially in older democracies, is a discussion that dates back almost a century now. In the last two decades or so, there has been a significant shift and rethinking the existing laws related to cannabis possession, growth, and distribution. Nowadays to buy cannabis seeds online, one can browse the net and choose among a plethora of strains.

With the revelation that cannabis-based products such as a CBD have positive impacts on human health, more changes will undoubtedly come to effect going forward. At the global stage, it is clear that there is a need for a better approach to harmonize regulations passed in different jurisdictions to make them relevant across the world.

What is Los Angeles’s Cannabis Social Equity Program?

Posted on November 11, 2019February 16, 2022 by Antonio Javiniar

The explosion of cannabis and cbd marketplaces with increasing legalization led to the implementation of social equity programs to ensure communities that have been disproportionately affected by the War on Drugs have the opportunity to become stakeholders in the legal cannabis market. The enforcement of cannabis laws and its criminalization has harshly impacted people from minority communities and low-income earners for a long time.

To address these issues around cannabis, LA is developing and enforcing new cannabis policies under LA’s Social Equity Program. This program aims to create a fair and equitable cannabis landscape to provide opportunities to individuals from communities disproportionately affected by the War on Drugs.

Read on to discover more crucial information about how this program works and who qualifies for social equity.

The main goal of this program is to reduce inequalities facing marginalized communities and promoting equitable opportunities in the cannabis industry. It will create better life outcomes for victims of the war on drugs and allow the city government to offer assistance through funding, licensing and physical space. Moreover, it gives the opportunity for those affected to participate in a booming cannabis market – allowing them to own retail premises to sell cannabis products like: flowers, edibles, concentrates, cbd pills, etc. However, there are strict requirements that cannabis business owners and distributors should meet to qualify.

Based on the factors influencing the groups of people most affected by the previous cannabis laws, the city of LA has come up with three requirements.

Here are the requirements that can qualify you for the social equity program.

Tier 1: Low income and prior California Arrest or Conviction

According to LAMC Sec. 104.20, any income that is 80% or below the City’s Area Median Income qualifies as low income. For the years 2017 and 2018, that is approximately less than $45,644 in gross or total income. To prove low income status, you need to provide a federal tax return from 2017 or 2018 reflecting low income or proof of eligibility for General Assistance, Food Stamps, Medical/CALWORKs or Supplemental Security Income or Social Security Disability (SSI/SSDI).

The second part of this requirement means that those who qualify need to have involved themselves in the cultivation, manufacture, use, possession, and sale of marijuana, leading to arrest or convection before November 8, 2016.

Low Income and cumulatively lived for at least 5 years in a Disproportionately Impacted Area

These zip codes are for areas that qualify: 90003, 90062, 90057, 90037, 90001, 90061, 90008, 90059, 90011, 90016, 90002, 90021, 90014, 90044, 90021, 90037, 90043, 90058, 90033, 90027.

Tier 2: To qualify for the program, you need to own more than a 33.33% equity share of the business that will benefit if you get the license. And the proof of:

Low Income with not less than 5 years of cumulative residence in qualifying area:

Not less than 10 years of cumulative residency in a qualifying area.

Tier 3:

A Tier 3 candidate has to sign a Social Equity Agreement with the City of LA to provide property, capital, licensing and compliance support for a duration of 3 years to individuals who qualify for Tier 1, and business, licensing and compliance support to for a period of 3 years to individuals who meet Tier 2 requirements.

Tier 3 applicants have to give Tier 1 candidates access to the property without rent charges and with prorated utilities for not less than 3 years in a plan in line with LAMC Sec. 104.20(e)

As of June 30th, brands’ cannabis products will most likely be non-compliant

Posted on June 24, 2019February 16, 2022 by Alvaro Wong

Yes, you read that right. As of June 30, 2019 many brands’ products will be non-compliant due to the updated package regulations by California’s BCC. The California Department of Public Health has mandated that “any inhalable cannabis product” should be marked with the universal symbol. This means that hardware, like vapes and vape cartridges, will now need to be labeled with the universal symbol if they want to remain compliant and continue to be sold in retailers. Previously, only the packaging itself needed to be labeled.

This is the timeline of execution for the new product requirements:

•Cannabis and cannabis product packaging that was compliant under the emergency regulations but is no longer compliant under the permanent regulations can be transferred to a licensed distributor until June 30, 2019.
•Licensed retailers may sell these cannabis products through December 31, 2019.

If you’re a retailer, you still have a little more time to get rid of the products, but are expected to destroy the items after December 31, 2019.

Now the question is why? The BCC hasn’t justified this new regulation ultimately leaving brands in the air. The Bureau is now expecting brands and manufacturers to re-invest significant amounts into re-labeling products that were compliant a few weeks ago. Ultimately, this hurts the players who are trying to operate correctly and props up those who don’t abide by (or have the resources to abide by) the constantly-evolving arbitrary regulations.

We at WebJoint feel your pain, this is reminiscent of last year’s switch from whole weight to pre-packaged items – it put brands and retailers in a difficult position, costing them time and money to stay compliant with regulations. So, we compiled all the assets from the BCC that outline the expectations for compliant product packaging and labeling.

We also did some graphic design work for the universal symbol, as the BCC only provides a JPEG of the logo. *sigh*

METRC and Your License: When should you be reporting?

Posted on June 11, 2019February 16, 2022 by Alvaro Wong

The licensing structure for the California cannabis industry is complex and confusing. Mix in the tech infrastructure of METRC and you’re thrown deeper into confusion.

If you’re a cannabis delivery service and have struggled with the ambiguity of the BCC, you’re not alone. Many cannabis deliveries are fighting to stay licensed—and operating in confusion is anything but helpful. There is a large grey area and due to a lack of information being available to non-applicants, we can only help with the resources made available to us.

NOTE: All credentialed CCTT–METRC system users have access to the “California Transition Period Guide,” which outlines how annual and provisional licensees will process and report transfers to and from temporary licensees. (CDFA x BCC FAQ)

However, we wanted to share what we do know in order to better service our delivery clients in this time of transition to compliance.

The provisional license was granted to those operators who had submitted annual applications to the BCC, but due to administrative delays on the State’s end, were not able to get processed before the expiration of the temporary license.

Under the provisional license, retailers are expected to report to the state’s track-and-trace system, METRC. If you have a provisional license, it also means you have applied for the annual license, hence you are eligible to receive training on METRC.

The cutoff to apply for temporary licenses was December 31, 2018 according to the BCC Order of Adoption. Any applicants post-date will have to apply directly for this type of license. The annual license is the ultimate goal for all cannabis deliveries. If you are a new applicant, meaning you have not received a temporary license, you are required to receive the “Account Manager System Training” program for METRC. This is mandatory. The training will allow for the individual to order tags, record inventory, and train other staff members on using the compliance system. Keep in mind you need an application number to register for this training.

You will have 30 days after receiving your annual license to complete the training and source a METRC-validated software (i.e. WebJoint) to run your business on. Because staying compliant is a crucial component of your delivery’s success, we recommend having a dedicated compliance officer or inventory manager who has extensive knowledge on compliance. The application process is expensive and tedious enough—risking your license due to an administrative hiccup is the last thing you need.

CannaSafe Updates WebJoint on Phase 3 Cannabis Testing in California

Posted on January 28, 2019February 17, 2022 by Jonathan Wigodsky

Founded in 2012 by Aaron Riley, CannaSafe has become one of the industry’s leading cannabis testing laboratories in the United States. CannaSafe received the first International Organization for Standardization (ISO) accreditation of any cannabis testing laboratory in 2017, setting the bar of expectations in the highest way possible. Cannabis regulations state that cannabis testing is mandatory for all products with the responsibility lying on distributors to have testing performed.

Cannabis testing entered the third and final phase of requirements on December 31, 2018 after two previous phases which tested for the presence of Category I & II residual solvents and pesticides. Other factors that are tested for include water activity, microbial impurities, and foreign material in cannabis samples. CannaSafe takes pride in being an industry thought-leader by utilizing two liquid chromatography tools to examine each sample brought in by their 700+ clients. Riley’s team continues to set the standard as a High Times Cannabis Cup Official Testing Lab Partner and has recently received accolades as DOPE Magazine’s Best Testing Facility at the SoCal Industry Awards.

“The California’s BCC 3rd Phase of required laboratory testing goes into effect on December 31st, 2018. This includes Terpenoids, Mycotoxins, Water Activity, and Heavy Metal screening. CannaSafe has been fully equipped and operational in Phase 3 testing since March of 2018.

The process of testing Heavy Metals starts with digestion. Whether it’s flower, edibles, distillate, or trim, we run it through a digester that completely breaks down the sample using strong acids, pressure and temperature. This allows the sample to be analyzed in our Inductively Coupled Plasma Mass Spectrometer (ICP-MS) instrument. Our Ultrawave system has the ability to digest multiple samples and matrices in one run, greatly increasing efficiency and turn-around time for our clients.

Per the BCC rules, we monitor for the big four metals in samples: Arsenic, Cadmium, Mercury, and Lead. These metals are commonly found in soil, and can leak from contaminated vaporizer cartridges, which can be extremely dangerous. CannaSafe’s main goal is ensuring consumer safety, and these instruments can detect any trace of metal in a sample down to the part per trillion level.

Terpenoids are analyzed and quantified using a gas chromatograph and either an FID detector (GC-FID) or an mass spectrometer (GC-MS). Terpenes are organic compounds produced mainly in plants and more than 100 terpenes have been identified in cannabis. They are responsible for the aromatic characteristics of the flower, giving it those distinct smells that we all enjoy. Since terpenes are volatile, they can be heated and the released gas measured against certified reference standards to quantity the relative concentrations in a sample. CannaSafe quantifies 21 of the most abundant terpenes found in cannabis and this analysis is not limited to flower; any sample matrix can be analyzed for terpene content.” – Ini Afia, Executive Lab Director at CannaSafe

Cannabis Compliance with Jordan Wellington from Simplifya

Posted on January 24, 2019November 21, 2023 by Jonathan Wigodsky

WebJoint had the privilege of interviewing Jordan Wellington, Co-founder and Chief Compliance Officer (CCO) of Simplifya. Simplifya is a Denver-based compliance software tool for cannabis licensees. Simplifya aims to excel in the cannabis space by providing software solutions for the complicated navigation of regulatory practices. With a legal background, Jordan specializes in operational compliance and government relations, having previously advised government bodies on the pathway to legalization in states such as Colorado. Simplifya’s team aims to make compliance a breeze with an intuitive user experience that works in a similar fashion to checklists for cannabis operations.

What can you tell us about the origins of your interest in cannabis?

Jordan: Like many, I developed an interest in cannabis in college. I supported legalization and found cannabis policy interesting, but I never imagined I’d find a career in it. I accidentally fell into it after moving to Denver in 2012. I was working as a staffer for the House Majority Office at the Colorado General Assembly, and I was assigned to handle implementation of legalization following the passage of Amendment 64. I then worked for the Marijuana Enforcement Division in the Department of Revenue, where I worked on drafting the regulations governing the state’s adult-use and medical markets.

From there it was a pretty short jump into the cannabis industry to help businesses navigate all of those laws and regulations. It has been one of the greatest honors of my life and I’m forever grateful for the opportunity.

Source: Simplifya

What is your opinion on cannabis compliance in California being propped up as the “poster child” for federal legalization of cannabis?

Jordan: I think California will have an incredible cannabis market, quality operators, and a tremendous influence, both nationally and internationally. From a regulatory perspective, the state has a long way to go to build an efficient marketplace. We saw tremendous market disruption and price fluctuation during the July 1, 2018 inventory transition, which could have easily been avoided through a more thoughtful policy approach. The state still hasn’t finalized its regulations and recently flip-flopped on a number of costly issues that require long lead times for businesses to adjust, such as packaging.

Things aren’t much better on the local level. Licensing delays have plagued some jurisdictions, while others have imposed substantial compliance burdens on operators. Additionally, we haven’t seen nearly as many cultivators join the regulated marketplace as we had hoped, which can likely be attributed to regulatory overreach and a burdensome licensing process at the state and local levels. At this point, California should not be looked at as a model of legalization or implementation, but hopefully, it will grow into that role as the system gets ironed out.

Can you discuss one aspect of cannabis compliance that is often overlooked by operators for each of the following categories?

Taxes: It’s not only critical that businesses pay their taxes, but also that they keep clear records to support any deductions that are made.

Cultivation: It’s really easy for cameras to become obstructed at a cultivation facility as plants mature and equipment is moved around.

Manufacturing: There’s so much documentation required at a manufacturing facility that folks can forget to record critical information as they go about their daily routines.

Distribution: There’s a lot of risk for distributors managing both ends of the supply chain and making sure they’re receiving and delivering products to compliant businesses with appropriate licensing.

Retailers: Staff training can be especially tricky for retailers because there is a tremendous amount of turnover at these facilities and the entire staff is in a compliance-sensitive role.

What do you find to be the most vital piece of cannabis compliance education that retailers lack knowledge on?

Jordan: I think retailers really struggle with answering some of the more difficult questions posed by consumers in a manner that doesn’t create risk for their company. Specifically, budtenders are frequently asked medical or legal questions that they are not technically or legally qualified to answer. These employees are just trying to be helpful and provide good customer service, but they can unintentionally create a lot of liability for themselves, employers, and the industry overall.

In terms of education, I think it’s critical to have clear standard operating procedures and staff trained to follow those procedures. There’s also value in having experts come and teach the staff, so they can ask questions and develop a better understanding of how to handle difficult situations with customers.

Can you speak to the value of hiring a dedicated compliance officer?

Jordan: Cannabis businesses that do not invest in compliance face significantly more risk because the government can issue fines and suspend or even revoke their licenses. Compliance issues in one jurisdiction can also lead to losing merit applications or even denial in other jurisdictions, even when the underlying violation doesn’t result in revocation. At the same time, we are seeing compliance obligations become increasingly burdensome and complex.

Cannabis businesses are reacting to these market conditions by increasing their investment into operational compliance and hiring new staff members solely dedicated to compliance. It’s a mark of our maturing and evolving industry, and it’s one that I think increases the chances of federal legalization and the end of prohibition.

Do you see Simplifya as being a software “substitute” for in-person compliance officers?

Source: Simplifya

Jordan: The vision behind Simplifya is to help support cannabis businesses of all sizes, whether they have a dedicated in-house compliance person or not. We provide all of our clients with the tools to run a compliant operation, helping to manage cannabis business licenses, standard operating procedures, documents, and self-assessments. Our team of regulatory experts ensures all of our content is accurate and up to date, so owners, managers, and employees can spend less time reading the rules and more time running their operations and making sure the rules are being followed.

For small businesses, we empower owners, managers, and employees to handle compliance obligations internally and reduce reliance on costly third-parties to address basic issues. For larger businesses with dedicated compliance staff, our integrated communication system and accountability features help maximize the efficiency of our clients’ compliance investments. I wouldn’t say our software is a substitute for a compliance officer, but I can confidently say it will help make any business operate more compliantly and efficient, whether they have a compliance officer or not.

How does Simplifya ensure that the software is fully compliant with each of the regulation sets in “green” states around the country?

Jordan: We have a dedicated team of in-house cannabis regulatory experts that constantly review regulations across the country to make sure our content is accurate. They are attorneys and policy nerds who spend all day, every day tracking regulatory changes and boiling them down into simple instructions for cannabis businesses to follow.

Where do you see Simplifya making the largest impact with respect to cannabis compliance education?

Source: Simplifya

Jordan: We have a tremendous impact on the industry by helping to mitigate risk for our clients. Our software is designed to address many areas of compliance, so our impact isn’t tied to any one compliance problem or issue. Instead, we help cannabis businesses across the board by teaching compliant operations and helping to hold staff accountable for their compliance obligations. In doing so, we provide business owners with peace of mind in one of the world’s most highly regulated industries.

Is compliance a regulatory practice? Is there something you can speak on about compliance that isn’t commonly discussed?

Jordan: I never think of compliance as a regulatory practice. To me, it’s a critical component of business operations that need to be thread through every aspect of a company. Compliance isn’t just about following rules — it is about risk mitigation, protecting your investment, and increasing the value of your company. In other words, compliance is about business. Simplifya serves as the industry’s CarFax report, showing investors and buyers that a company is a safe investment and that they aren’t buying a lemon.

Can you tell us about 3 things that get you excited for the future of the industry?

Jordan: Above all, I’m excited that my son will grow up in a post-prohibition world and will only learn about cannabis prohibition through history books. I’m also incredibly excited to continue to build our understanding of the medicinal properties of the cannabis plant and tear down the stigmas associated with the cannabis community. Finally, I’m excited about the expansion of social use laws that allow adults to consume cannabis in a social environment similar to how adults are allowed to consume alcohol. In other words, I’m excited to eventually be able to legally consume cannabis during a concert at Red Rocks Amphitheater here in Colorado.

What are 3 concerns that you have as the industry moves forward?

Jordan: I’m concerned the current pathway for legalization will leave behind many of the people who have long risked their freedom and safety to provide cannabis to consumers. Whether it’s limited licenses on the East Coast or the nonsensical, byzantine application process in California, too many people are being left behind that could be welcomed into our industry and build great companies. I’m also concerned about pockets of cannabis bias within governments and local communities dampening the progress we’ve made in ways that don’t get headlines, such as problems with child protective services.

Give us your “Top 3 Best Practices” in order to succeed as a cannabis delivery operator.

Jordan:

1. Hire a Great Manager. Employees always adopt their managers perspective on compliance, so find someone who cares about compliance and protecting your license.

2. Sweat the Small Stuff. Regulators operate on an iceberg theory of compliance. If they see minor violations at your facility, they will wonder what else is hiding underneath the surface and start a disruptive investigation.

3. Don’t Just Teach It, Test It. It’s not enough to just train your staff, you need to hold them accountable by confirming that your staff is following through with what they’ve been taught.

Any last comments for those looking to get into the cannabis space?

Jordan: Working in the cannabis industry is unlike any other industry in the world these days. It’s the responsibility of every member of the cannabis industry to act in a manner that propels legalization forward and helps to change the world for the better.

The Ins and Outs of METRC in California

Posted on January 17, 2019November 21, 2023 by Jonathan Wigodsky

METRC is the reporting regulation system for California Cannabis Track-and-Trace (CCTT). Tracking products from seed-to-sale creates a lineage, or footprint, for each cannabis activity that a cannabis product experiences. What this means is that each plant is required to have its own unique identifier -or- barcode. It also means that products are able to be tracked from one end of the supply chain to the other (seed-to-sale). METRC is currently used in 11 states including the hemp farming that takes place in Colorado.

As a business owner in the state of California, you’ve recently undergone a significant amount of change. Let’s be honest here: adapting to change is not only difficult, but increases your overall operating costs.

This may seem like another roadblock that gets in the way of traditionally running an operation and conducting business like you “used to,” but there are lots of positives to the state-mandated use of METRC that will be seen as adjustments are made.

In an industry that has kept to the shadows for generations and is now reaching the mainstream media, a standardization process allows for legal licensees to separate themselves from an illicit and potentially dangerous underground market. The result is the elimination of the negative stigma that cannabis carries with it.

Think of METRC as the filing cabinet for cannabis products that you’ve never had. The products themselves are the actual files which need to be kept in order. This gives businesses statistics in real-time that can actually influence your financial projections and aid in the way in which you organize your business activities.

Traditionally, filing cabinets are used to organize your most important documents with the intention of being able to access data for the respective subject.

Each file needs a way of being organized so as to easily correlate with records and in-turn create a list of matching serial numbers for products.

This concept is carried over to the cannabis industry and provides a critically important way of legitimizing the industry’s inventory overall. More importantly, METRC can help you, as as business owner, stay compliant and increase organization which in-turn results in the ability to process more orders and avoid fines.

Seeds, clones, and flowering plants are tagged at the beginning of their life cycle. At the time of harvest, all waste and changes that the plants undergo is recorded. As plant material is then sent to manufacturers, each is scanned again to give real-time data on their current and previous locations. From manufacturers to distributors, cannabis goods are scanned and then again from distributors to the testing facilities before being returned for distribution to retail locations.

All testing results are uploaded to METRC, which then allows for the entire lifespan of the product to be traced as it is moved to or sold from a retail location to the end consumer.

Not only does METRC help in keeping licensed businesses honest, but it actively promotes the integrity of the industry as a whole by allowing employees access to any and all information on products you carry. This legitimizes the industry while taking into account the safety of consumers.

You might be thinking about the way that METRC keeps track of each product in order to keep an accurate ledger across the state so let’s take a little bit of time to explain the way that this system keeps records:

Radio Frequency Identification (RFID): A barcode that holds numerical value and stores data for individual or batches of plants. Think of this as any barcode that you’ve seen on common items. This maintains the integrity of cultivation operations by keeping data that is immediately accessible on immature cannabis plants, teens, and mature plants that are flowering prior to harvest.

Unique Identifier (UID/UDID): This tag is put onto plants which are then organized by lots of up to 100 plants per lot. If there is a combination of cannabis goods, they each get combined and put into the same package which can then be traced throughout the entirety of the lifespan of that product.

Package Tag: Intended to be placed on each package that is carried en-route to and from locations. Examples of this might be batches of flower sent to a retailer to be sold or edibles which have been manufactured and are ready for testing, prior to distribution. The tags to be used when transporting plants or cannabis goods. This tag can be placed on containers for retail locations which are scanned at the time of sale, aiding in proper METRC technique.

METRC’s RFID Package Tag
Source: METRC

Plant Identification Numbers: Serial numbers used to keep a linear record of products. Having a serial number on each product allows for an accurate numerical record to be kept. This enables the track record of a product to be kept from start to finish. Guessing inventory quantity or using square footage to estimate the amount of canopy space is eliminated with a sequential manner of keeping records. All cannabis products fall under this linear organization. Lot tags state the facility name at the top with a license number directly beneath it. On the side of the tag is a categorization of either Adult-Use or Medical as well as the date that the tag was created. At the bottom, is a Plant ID number, or, serial number.

METRC’s Plant Tag
Source: METRC

Source: GCN

As a cultivator, the task of METRC-integration may seem extremely tedious, especially when considering the size that a canopy has the potential of growing to. Your concerns may be eased when being told that RFID scanning won’t disturb plants as they grow and can be scanned form upwards of 15 feet away. This means that in theory—seeds, clones, and mature plants won’t need to be disturbed for the sole reason of reporting to METRC.

From seed to clone & harvest to trimming, all information is now going to be kept. Inclusive of this is the transfer of plants from one location to the other, the amount of waste that a cultivator produces, the destruction of plants due to various reasons, and finally, testing results when the plant material is manufactured. Accountability is central with METRC and nothing illustrates this more than the ability to trace products all along the supply chain, back to the origin.

As it stands, METRC integration is a looming part of this industry that truly requires a lot of attention for retail and delivery service owners. Temporary licensees do not need to integrate with METRC and instead, will wait until they receive a permanent license.

True integration begins when a permanent license is granted to any given dispensary or delivery service. From the time that you receive a permanent license, METRC training begins—and it’s no easy task.

METRC requires that all sales be reported at the end fo each day with an inventory reconciliation taking place once every 30 days. As previously explained, METRC tracks each and every product along the entirety of it’s lifespan in the supply chain. Retailers that fail to report to METRC are simply operating in a non-compliant manner.

It’s a race against the clock!

Requiring that METRC training is completed within 5 days of the issuance of a permanent license means that managerial staff and/or owners must complete the entirety of training sessions provided to them by the state.

5 days for completing the METRC certification may not seem like a lot of time to absorb information that is at the core of avoiding fines and keeping your license in good standing by being compliant; and it isn’t.

Considering that a 30-day window for full METRC integration of current inventory starts at the same time as the certifications for staff members, the race against the clock is on!

The 30-day framework mandates that all inventory be uploaded to METRC using the above UID numbers. More specifically, current inventory that is in progress of being uploaded to the database is accepted and anything outside of this, must have trace information from the time that it is a seed.

In short, you have 5 days to complete METRC certification and 30 days to upload all information of current inventory once you receive a permanent license. After those 30 days, all METRC-required information must start at the seed or clone stage of CCTT—meaning that your physical, POS, and CCTT information must match.

Each and every sale that is made is technically called a “change of custody,” requiring that a new report to the state’s system must be made. This includes purchases from distributors, records for certificates of analysis (COA), distributor license numbers, shipping manifests, and request receipts.

Hiring an employee that solely focuses on METRC reporting and integration is an excellent way of being sure that you maintain a culture of compliance. This new door will not only allow individuals to enter the industry, but aid in maintaining the integrity of your business.

Uploading CSV files or manually importing data at the end of every day is not only time consuming, but provides a large margin for error.

Having an in-house compliance expert ensures that fines are avoided and that audits are maintained on a regular basis. The new standard of hiring a compliance expert goes deeper than that—it means that the entirety of your staff ought to be trained and understand the proper standard operating procedures (SOP) of your business. After all, you’re responsible for explaining mistakes made to the state should there be any discrepancy.

Mindfulness of the available products is one aspect of METRC-integration that shines in a positive way. The ability to track the origins of plants and products overall helps legitimize the industry. The creation of a standard for the industry as a whole is vital to breaking barriers and giving individuals access to a substance that has tremendous benefits.

This standard also paves the way for ensuring that cannabis goods are safe to consume—something that we ought to take into consideration for all customers—new & experienced.

METRC is an adjustment for everyone in the California marketplace right now. Guessing the number of plants that you have as a cultivator is no longer acceptable and for retail owners, simply keeping a paper ledger for your business is outdated.

And although METRC integration may feel like an unnecessary way of keeping track of products, the positives far outweigh the negatives. Some of the positives include, but are not limited to: increased reliability and safety for consumers as the result of tracing products from seed-to-sale, the organization of sale ledgers as the result of an electronic database, and on-the-spot projections for products you sell to consumers. The latter allows for you to maximize profitability by offering what is in demand.

A Definitive Guide to Compliance — California Cannabis Dispensaries

Posted on December 5, 2018February 17, 2022 by Jonathan Wigodsky

Cannabis Retail License Types:

M: Allows for the sale of cannabis products to those aged 18 or older.
A-U: Adult-use license types allow for the sale of cannabis products to adults ages 21 or older.
Combo: Allows for both consumer-types to be serviced by one location. The tax regulations pertaining to each consumer-type doesn’t change for those operating under a combination license.

Individuals interested in opening a delivery service must consider the two different licenses that are offered to the public by the BCC. These two license types are broken down into M (Medicinal) and A-U (Adult-Use) licenses.

Those with a class M license may service individuals that have a state-approved MMICP enrollment. MMICP allows for individuals ages 18 and older to engage in the purchasing of cannabis products from retailers without paying the sales & use tax. However, this does not meant that they are exempt from the 15% state excise tax.

A-U license holders may engage in the recreational sale of cannabis products to individuals that are aged 21 and older. These clients must pay the excise tax of 15%, local tax, and sales tax. They are not exempt from taxes in the way that MMICP holders are.

Annual License Fees

Associated fees to obtain a cannabis retail license in California.

The latest regulations do not require for the entirety of the annual license fee to be paid until a business license for the applicant has been approved. Moreover, the fees associated with annual licenses have changed and are now based on a tiered system that depends on the amount of estimated annual revenue that is to be made.

The modification of any premises must be recorded and submitted to the BCC. This includes, but is not limited to the modification of entryways in a building, relocation of doorways, and serious modifications such as wall creation or removal. To stay safe on and err on the side of caution, be sure to record all of the modifications and have professional diagrams which show the progression of these changes.

Note: The latest regulation changes require submission of a Notification and Request Form, BCC-LIC-027

You can never have too many video cameras to protect your dispensary.

Cameras used to monitor the premises must do so 24 hours a day at a minimum of 15 frames per second with a time and date stamp. Cameras should produce an image of 1280×720 pixel quality and be installed in permanent locations which have a 20-foot clear line of sight of each entrance/exit. Perspectives of the cameras should be from both the interior and exterior of the building. Limited access areas must be capable of being sen in video recordings as well as locations where cannabis products are packed, stored, loaded and unloaded for transportation, prepared, or moved on the dispensary premises.

4 Regulations Changes for Dispensaries in California

Posted on November 20, 2018February 17, 2022 by Jonathan Wigodsky

Dispensaries have long been the kings of cannabis and as things turn up during the regulatory transition period, the BCC is slowly inching towards a final set of rules to adhere by. The competition is hotter than ever. Are you prepared to stay compliant and be one step ahead of the rest of the field?

As a storefront retailer, you have the opportunity to make a lasting impression on customers that come into your dispensary and keep them coming back by curating an irresistible experience each and every time. But, you can only do this if you’re a compliant business

Check out these 4 regulations changes for dispensaries in California!

Associated fees to obtain a cannabis retail license in California.

Before July 1, 2018, to service both medicinal and recreational customers, two separate applications were required with the attached fees for each being due at the time of application submission. One of the major changes to this process since July 1 is the ability to submit a single application that encompasses both the medical and recreational market with cost of application not being due until the approval of an application.

This not only simplifies the application process for these looking to service both sides of the market, but allows for a little bit more of economic freedom to take place and a smaller overhead for any potential business owner.

Be sure to specify which category of business—A-U, Medical, or both—you’d like to participate in on your application!

Dispensary security staff must be 21 or older.

The old regulations on security personnel didn’t have a set age limit or qualification for staff. This meant that almost anyone you hired over the age of 18 years old could play a part of your security team.

But those were the good old days; things are different now!

The BCC has ramped these requirements up to a minimum age requirement of 21 years of age and made it mandatory for all security personnel to be licensed/ accredited by the Bureau of Security and Investigative Services.

This is unfortunate for those under the age of 21, but there is something to be said about the level of maturity that comes with life experience and the 3 years of difference in age. As someone 21 and older, you not only are of age to legally consume cannabis (at will) but are capable of dealing with any legal situation that might arise at your dispensary.

After all, you wouldn’t want to leave the security of your business in the hands of someone that is bound to be younger than the majority of your customers, would you? Make sure your dispensary security is adequately aged and fit to perform whatever duty is necessary.

Cannabis goods displays cannot be sold to consumers in CA dispensaries.

11 months ago, your customer could walk into your dispensary and pick out any jar of cannabis they wanted to smell or touch with the expectation of being sold what was about to be weighed out in front of them. Well, those days are long gone and the BCC has made it very clear that there are display standards to uphold when customers come into your location.

Check out our simple do’s and dont’s for cannabis displays below:

Do:

–Ensure that cannabis not used for displays is locked and inaccessible to the general public.

-Display cannabis and report the display as use in METRC.

-Allow customers to smell samples and get hand-on with what they are going to purchase.

-Dispose of all cannabis on display in accordance to regulations.

Don’t:

-Sell cannabis that isn’t pre-packaged.

-Give samples to customers in-store.

-Sell the display package to a customer even if its the last one on shelves—this is a blatant violation and is sure to get a fine tacked onto your monthly expenses.

In a nutshell, cannabis can be displayed insofar as it is not to be offered for retail sales at any point. Cannabis not for display that is intended to be sold should be stored in a way that is not obtainable by the general public.

A-U customers must be 21 years of age or older while medicinal patients can be 18+

Each customer needs to be checked in at the front of your dispensary on each visit. Age requirements are 21+ for recreational users while those holding a valid MMID card can be 18 years of age and older. Appropriate forms of identification are state or government issued forms of identification including driver’s licenses and passports.

Checking in customers is a basic requirement that has been set by the BCC and the importance of this goes beyond just the regulations. Checking in customers works in more ways than just staying compliant. It helps keep track of the amount of foot traffic your dispensary is generating, resulting in an accumulation of wealth in data that should be used to your marketing department’s advantage.

One slight hiccup can send your cannabis business tumbling.

Breaking down the cannabis regulations in California is a lot like trying to keep up with a toddler that is making their mind up at the dinner table—exhausting. Our goal is to provide you with an easy-to-digest list of the essentials that make your business run seamlessly in a time where everyone is struggling to understand the BCC changes.

The State of Payment Processing for Delivery in the Cannabis Industry

Intro to Banking and Cashless Payments in Cannabis

Existing Methods of Cashless Accepting Payments + Risk

The Argument for Cannabis Deliveries Going Cashless

Future of Cashless Payments in Cannabis

General Overview

Cannabis Regulations in the United States

California Cannabis Regulations

Cannabis Regulations In International Markets

Effects on the Social Set-Up

Conclusion

Disclaimer

LA’s Social Equity Program

What Is LA’s Social Equity Program?

Benefits of LA’s Social Equity Program

What Are the Qualifications for LA’s Social Equity Program?

Related Post: Cannabis Regulations in California and Elsewhere! (Overview)

Conclusion

Disclaimer

Disclaimer

When should you be reporting to METRC?

Temporary Licenses and METRC

Provisional Licenses and METRC

Annual Licenses and METRC

How WebJoint Helps

Author’s Note

Disclaimer

Setting the Bar for Cannabis Testing

What can you tell us about the origins of your interest in cannabis?

What is your opinion on cannabis compliance in California being propped up as the “poster child” for federal legalization of cannabis?

Can you discuss one aspect of cannabis compliance that is often overlooked by operators for each of the following categories?

What do you find to be the most vital piece of cannabis compliance education that retailers lack knowledge on?

Can you speak to the value of hiring a dedicated compliance officer?

Do you see Simplifya as being a software “substitute” for in-person compliance officers?

How does Simplifya ensure that the software is fully compliant with each of the regulation sets in “green” states around the country?

Where do you see Simplifya making the largest impact with respect to cannabis compliance education?

Is compliance a regulatory practice? Is there something you can speak on about compliance that isn’t commonly discussed?

Can you tell us about 3 things that get you excited for the future of the industry?

What are 3 concerns that you have as the industry moves forward?

Give us your “Top 3 Best Practices” in order to succeed as a cannabis delivery operator.

Any last comments for those looking to get into the cannabis space?

What is METRC?

METRC as a Filing Cabinet

What tags are used with METRC?

METRC for Cultivators

METRC for Retailers

Hiring a compliance officer is the new standard.

How does this benefit consumers?

METRC changes the legitimacy of cannabis operations

Cannabis Retail Licensing

Annual License Fees

Zoning:

Modification of Premises

Receiving Shipments

Staff Requirements

Hours of Operation

Limited Access Areas

Alarm System

Locks

Video Cameras

Storing Video Surveillance

Inventory Reconciliation

A & M Licenses + Attached Fees

Security Personnel Age Requirements

Cannabis Goods Display Limitations

Verifying Customer Age. Every Time.

The BCC doesn’t play around…

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