3 Tips to Manage Risk in Your Medical Marijuana Business

This August, 2,163 applications for medical marijuana facilities were submitted in Missouri. The Department of Health and Senior Services will license a limited number of cultivation facilities, dispensaries, infused product manufacturing facilities, and testing facilities across the state. 

You may have a lot riding on your medical marijuana business. It’s expensive to enter into the industry, and you will need to follow strict state regulations regarding medical marijuana, as well as any regulations specific to your city. We’ve provided three tips to help you manage risk once you are approved to start your business. 

1. Take Security Precautions

The risk of financial and product theft is high in the medical marijuana industry. Since the federal government views marijuana as an illegal substance, the majority of banks will not take cash from your business. This means that you will be responsible for the cash you receive in exchange for your product. You may need to hire guards for transporting your cash and invest in a high-security vault.

When it comes to providing security for your business, the state of Missouri requires facilities to install video surveillance at every entrance, exit and space where medical marijuana is growing, cultivated or sold. Along with security cameras, facilities must have alarm systems and card or biometric building access. If your facility is outside, you may be required to install additional lighting and fencing. Any thefts at your business should be reported to the Department of Health and Senior Services within 24 hours. 

2. Train Your Employees

Employee training is important to the success of any business. If you are a medical marijuana business, employee training isn’t just important; it’s crucial to producing a quality product and maintaining your license. Strict state regulations dictate things like how medical marijuana must be stored, as well as how to properly dispose of medical marijuana and its byproducts. 

As an example, Missouri’s regulations state that nonhazardous medical marijuana waste can be ground down and placed with other natural materials. This is acceptable as long as half of the materials in the final waste do not include medical marijuana. Whether you own a cultivation facility or are manufacturing infused products, your employees should know how to properly dispose of materials and waste created within your facility. 

There are many more regulations that medical marijuana facilities must follow, including the maximum amount of product that can be given to customers. The weight of your product is also important in shipping scenarios, where the weight of the shipment must match or come close to matching the weight listed on the manifest. If the weight doesn’t match, you could find yourself in some hot water. 

Make sure your employees understand the state guidelines and follow your business practices. You will want to keep your employees in the loop as guidelines and laws change. This way, you don’t run the risk of getting fined or losing your license. 

3. Keep Detailed Records

To comply with Missouri’s regulations, you must keep consistent records of all of your business activities. The state requires you to keep at least five years of records tracking your daily harvests, inventory, acquisitions, sales and disposals. Cultivation facilities have to track pesticides, fertilizers and other chemicals used on each batch of plants. 

Almost everything that involves your product must be recorded. You will need seed-to-sale software which interfaces with the State’s METRC software, which you are mandated to use. By keeping daily records, you will be able to supply the necessary information and paperwork when the time comes for inspection.

Are you planning to open a medical marijuana business?

Contact Reynolds and Gold. We can provide you with the legal knowledge you need to plan for risk in your business. 

 

A scientist at a medical marijuana testing facility harvests a cannabis plant.