Record keeping is important to staying in compliance and running a successful cannabis business. Within the states where adult use and medical cannabis are legal, documentation is one of the most significant hurdles to pass. Unfortunately, it’s one of the most crucial sides to take care of within this fledgling, highly-regulated industry.
Over the past two decades, cannabis businesses operated with no paper trail. They knew that this less records they had, the more unlikely the DEA would find them. When cannabis was legalized, compliance and regulations created a tsunami on the whole industry, causing chaos, panic, and also casualties early in this game.
Efficient documentation may be all that stands between your business’s success or failure. It’s also important to recognize that attaining state permits will not be the end. Keeping in compliance is an integral part of retaining your license.
Audits by state authorities also ensure it is necessary to help keep your paperwork in order. Since this market is much more regulated than others, audits could be particularly tricky. There are several things you can do to help keep your business compliant to make the audit process easier on yourself and also the authorities conducting them.
Record Keeping – Store and organize all cash transactions. This can be key because cash is the key kind of payment. Cannabis-related businesses aren’t permitted to take credits and deductions for sales they make of merchandise created from cannabis recordkeeping plan. They could however, deduct some costs for goods sold since they connect with other legal areas of their business.
Constantly having all records showing your compliance is essential not to get caught unprepared by auditors. This includes vendor payments, sales, as well as employee salaries. In addition, the IRS requires that payments over $10,000 are reported.
At this time inside the game, ignorance isn’t an excuse. The six-month grace in California has become 0ver, and firms must be fully transitioned to be compliant. These regulations require effort, however, in order to manage a successful business, you must know every out and in in the rules.
With the cannabis industry’s strict regulatory environment, keeping accurate, detailed records has never been more valuable. But in addition to keeping your state’s regulators happy, these records also benefit your company.
Take, for instance, the pesticide controversy that rocked Colorado in 2015. Even though the problem was complicated-the state had two different banned pesticide lists-one cultivator’s pesticide records became central for the controversy.
In this court case, representatives of the business said they lost their pesticide records when coffee was spilled on the log book. Then someone mistakenly threw away the log book. Without having a record in which pesticides were utilised as well as in what amounts and just how frequently these people were used, the judge were required to base his decision on the worst assumption: This business was hiding something. Ultimately, the judge ruled up against the business and in support of state regulators.
You need records – Everyone working in grow rooms must understand what’s being catalogued and why. Which includes lighting schedules, feeding schedules and products, pesticide use, etc. Quite simply, log everything.
But don’t just note that “X” pesticide was used at “Y” time. Note the amount, how much time the sprays were, whenever they started and when they ended, and so forth.
If you’re pursuing the rules, you’ve got nothing to hide. Should you mistakenly break the principles, having a log of everything you’ve done will provide regulators an improved notion of the best way to tackle any problems. The ylwfxt information they have, the simpler their jobs will likely be and the happier they’ll be.
And ensure your employees date, time-stamp and sign off on everything. It’s just as essential to know who logged in the information as it is to understand what that details are.
You require backups – It’s good to have records in writing, but you need to have copies. The right place to ensure they are is online. Storing records over a hard drive is a superb idea, but the disk can be destroyed or tampered with. So also consider storing the records on the cloud. There’s no true physical location, so there’s no chance to damage your information.
Documentation can be quite a time-consuming task, too. It’s best to support everything on the weekly basis, at the very least. Making frequent backups not just updates your records in a timely fashion, it will so in a way where that details are still fresh within your employees’ minds.