Compliance for cannabis businesses remains a top of mind issue for an industry only a decade old in various states across the country. The high list of rules, regulations, requirements, and labeling can be a high bar for operators and ancillary businesses to meet, representing an additional layer of business challenges alongside the traditional marketing, product production, labor and hiring, and operational needs.
Luckily, the cannabis industry has also proven itself to be incredibly innovative and resilient, a hallmark that has allowed it to thrive while navigating challenges of governmental oversight. Several business leaders weighed in on the challenges of cannabis compliance, and the hope they have for the future of the industry, as we discussed how their offerings simplify canna-operations.
The importance of compliance cannot be overstated. As Tom Gavin, CEO of CannaTrac, a cashless payment solution for the cannabis industry, explains, “Keeping our industry compliant is the only way to continue the forward movement of legalization.”
Banking is often the first problem companies face, with roughly only 7 percent of U.S. banks willing to work with cannabis businesses. Confia is one such company providing a higher level of legitimacy for operators working both directly with the plant, and indirectly. The company sees compliance as the pathway to achieving federal legitimacy, and banking as a priority for change.
“Part of our company’s mission is to implement lasting change and revolutionize the way high-risk industries bank, namely cannabis,” said Confia CEO Mark Lozzi. “Not being able to control every outcome, especially the legislative timelines, we’re dedicated to simplifying the banking process and setting the precedent for financial services, regulators, and lawmakers alike.”
Charles Pyfrom, CMO of CannGen, also sees compliance as a top of mind concern for industry businesses, specifically in the realm of insurance protection. He shared: “Compliance is a crucial part of cannabis industry business operations, as it allows our industry to thrive and grow, while helping the industry to be seen as professional and legitimate. Having insurance is just another checklist item for businesses outside our industry while, unfortunately, cannabis operators often lack options for finding a conscious coverage provider who can help them meet all their varied needs.”
The problem may lie with lawmakers who lack experience in the varied challenges of the cannabis industry, which is unlike any other industry worldwide. Regrow CEO Rob Woodbyrne shared: “We find the compliance regulations for cannabis businesses, put on by lawmakers, to be challenging. They were written by folks who do not have experience in this industry, or understand the unique needs of cannabis operators.”
Regrow is a custom software tool laser focused on supply chain management. As many companies are in desperate need of a vendor to step up and solve the business problems inherent in an emerging, highly regulated industry, companies often use a patchwork of solutions which can be difficult to manage. Instead, all programs are rolled into a single solution for simpler compliance oversight.
Woodbyrne continued, “At Regrow, our goal is to help growers get back to growing, while providing executives and investors with the insight to make critical cost saving decisions, in a system where compliance becomes less burdensome.”
Insurance often presents difficulties with simple management as well. As Pyfrom shares: “At CannGen, we support companies who are playing the difficult balancing game of growing their businesses while meeting varied state regulatory requirements. We’re the one-stop-shop the industry has been looking for.”
As companies like Confia see it, if they can provide legitimacy by providing a bank account and supporting operators in their business endeavors in a way that becomes affordable and not punitive based on personal or cannabis industry profiling, then they benefit as does the entire industry.
Perfect compliance does appear to be a magic bullet for cannabis businesses seeking legitimacy. As Gavin continued, “Compliance is what affords cannabis-related businesses an opportunity to be looked at as businesses and not criminal enterprises.”
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