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Member Blog Site: Increased Enforcement Is Coming– Takeaways for California and the Wider Marijuana Market

by Michael Cooper, MadisonJay Solutions, LLC As June came to a close, so too did California’s phase-in” Transition Period “of marijuana regulation. As a result, a number of additional labeling and screening requirements are now live. And with those freshly efficient guidelines, there are also increased prospects for enforcement actions. However the lessons from California’s regulative rollout do not stop at the state border. What should California cannabis organisations be doing differently? The simplest answer is, obviously, the like in every state cannabis market: follow the guidelines that are in result. However it is an universal truth of highly regulated industries that not every possible scenario will be resolved by the rules. That is, in cannabis as in all highly managed industries there are possible ambiguities and questions of analysis inherent in the policies.

California Bureau of Marijuana Control chief Lori Ajax recently aimed to assist relax industry issues by offering insights into her group’s enforcement frame of mind. Ajax noted that “ [t] here’s a great deal of confusion out there “on what is and is not compliant. As an outcome, she explained that when the Bureau discovers conduct it concludes is an infraction, the regulative reaction will be notified by whether business “honestly thinks they remain in compliance.”

So how should a service tackle showing its great faith efforts to comply with marijuana policies, in California and in the other state-legal markets? Start on top

Great compliance practices begin with the tone at the top of the business. There is a reason a lot of the nation’s leading companies include their senior executives in developing and promoting compliance efforts. Doing so sends a strong message to the whole company that compliance is a top priority, which the path to business advancement does not involve cutting corners. Putting real resources into compliance supplies an effective indication of a company’s worths, and senior executives’ time is a key business resource. Put another method, if a regulator is attempting to choose whether you have made a great faith effort to comply with the rules, you do not want to lay the choice at the hands of an inexperienced intern. Develop Strong Procedures

Leaders in highly regulated industries have the tendency to implement strong compliance processes. Why? For something, clear written policies assist staffers comprehend exactly what they can and can refrain from doing. And these policies are an irreversible resource for your group, even when your compliance personnel is not on facility. However in addition to assisting your group follow the guidelines, strong processes also help regulators comprehend exactly what you are doing. If, for example, a regulator wishes to see if you “truthfully think [] you are in compliance, among the very best pieces of evidence is a clear roadmap of your efforts to be in compliance.

Keep Focus

This is a fast-moving industry, and the rules are hardly ever static. An organisation could have a strong dedication to compliance and in-depth processes, however if its compliance efforts are keyed to regulations that have actually been out of date for many months that is unlikely to sway a regulator. For example, no matter exactly what they might have done in the past, a Colorado retail licensee would likely get little sympathy from regulators if they cannot upgrade their policies regarding declarations on possible health advantages of their items in the wake of the MEDICATION’s recent bulletin relating to sellers recommending marijuana for morning illness. A regulator will have little compassion for an organisation that cannot modify its compliance efforts in the wake of contrary guidance. Reliable compliance requires watchfulness. In short, cannabis companies in California can likely anticipate increased levels of enforcement as these extra guidelines come into impact. But the best practices for California companies are no different than for those around the country: by prioritizing compliance throughout the company and building and upgrading strong compliance treatments, a highly managed company takes key actions towards showing its great faith, truthful efforts to adhere to the law.

Michael Cooper is the co-founder and handling member of MadisonJay Solutions LLC, a leading regulative consultant to cannabis business and a member of the NCIA. A graduate of Harvard College and Harvard Law School, he formerly served as General Counsel of MHW, Ltd., which offers compliance services to the drink alcohol market, and in the lawsuits department of Cravath, Swaine & & Moore LLP, known as among the country’s premier law firms for almost two centuries.

Mr. Cooper can be reached at mcooper@madisonjaysolutions.com!.?.!. Learn more at https://www.madisonjaysolutions.com

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