Compliance in the Cannabis Industry: Navigating Complex Regulations and Standards with Technology

Dispensary compliance is the name of the game in cannabis – and it can slow things down if you are not 100 percent dialed in. So, why not learn how to optimize and speed things up? Your customers and team will love you for it. In this episode of the Cannabis Community Insider, discover key nuances and optimization strategies in dispensary compliance on the tech side as it relates to labels, scanners, printers, and point of sale systems.

This episode benefits current industry operators, compliance officers, dispensary license applicants, investors, and anybody who wants to learn more about this critical component of the cannabis supply chain. Episode sponsored by – ELO, Star Micronics, & POSRG

Learn valuable insights from an all-star panel of technology experts, including:

– Stephen Gladden, ELO

– Brianna Moriarty, Star Micronics

– Duane Roebuck, BlueStar Inc.

The panel covers helpful topics such as:

Challenges in Technology and Equipment 00:00

• In the cannabis market, there are many regulations and roles that people need to follow.
• One of the biggest mistakes people make is not going to the experts to get the necessary technology.
• Many people try to get technology from online platforms like Amazon or eBay, which results in missing out on valuable information and resources about the specific market’s technology needs.
• One of the biggest challenges in the cannabis industry is finding technology that is purpose-built for the industry.
• Consumer-based technology may be cheaper but will not last long and endure.
• Investing in products that grow and scale as the business does is essential.

Importance of Purpose-Built Equipment 02:08

• Buying purpose-built equipment is crucial in the cannabis industry.
• Purpose-built equipment is designed to last longer, is easier to manage, provides longer support cycles, and can scale as the business grows.
• Consumer-based technology is constantly changing, and manufacturers are opportunistic, which can cause a mix of assets that are not compatible with each other.

Importance of Aesthetically Pleasing Equipment 05:10

• Dispensary owners often go for an Apple Store-type feel, with aesthetically pleasing equipment.
• Having aesthetically pleasing equipment is essential because it helps create customer engagement.

Introduction 05:34

• The focus should be on the word “industry” in the cannabis industry.
• The industry requires industrial-level solutions to function.
• Companies like Coca-Cola, Pepsi, and Pfizer do not buy equipment off Amazon.
• The panelists discuss how they got involved in the cannabis industry.

Eco-friendly printer with leaf logo 07:07

• The company was promoting an eco-friendly printer with a leaf logo on it.
• The printer was popular among dispensaries because of its eco-friendly nature.
• The company began expanding its product line to cater to cannabis companies.
• The speaker saw the cannabis industry as a fast-growing one.

Market opportunity for cannabis industry 07:35

• The speaker saw the cannabis industry as a fast-growing industry.
• More states are legalizing cannabis, providing a huge market opportunity for businesses.
• The speaker said the company was expanding its product line to cater to cannabis companies.

Agriculture 4.0 09:04

• The speaker met a grower in the cannabis space who talked about the yield rates, product consistency, and other factors that affect the product.
• The speaker realized that this was like agriculture 4.0.
• The cannabis industry was going to be huge, not just for cannabis but for other industries as well.

Personal interest in the cannabis industry 10:04

• The speaker’s interest in the cannabis industry began when he listened to Dr. Dre’s Chronic album in 2001.
• The speaker’s organization contacted him about five years ago to find growth opportunities.
• The speaker saw the cannabis industry as an opportunity for growth.
• The speaker wanted to help cannabis companies by educating them and providing relevant solutions.

Environmental impact of the cannabis industry 12:29

• Consumers are interested in the environmental impact of the cannabis industry.
• Politicians in Illinois are putting more emphasis on the environmental impact of the cannabis industry.
• One of the speakers mentioned an eco-friendly printer with a leaf logo on it.
• Every applicant is required to write an environmental plan to address environmental considerations.

Eco-friendly Dispensary Operations 13:31

• Star Micronics promotes eco-friendly practices in their products.
• Their printers are energy efficient with automatic shut-off when not in use.
• They promote eco-friendly paper and try to reduce margins to reduce paper usage.
• Other areas where eco-friendly practices are implemented include RFID technology to reduce paper and digitization to reduce paper usage in delivery options.
• Operational efficiencies presented by RFID technology help track a product with one RFID tag throughout the seed-to-sale process.
• Digitization in dispensaries can help in loyalty opportunities and using electronic wallet solutions to complete transactions.

Eco-friendly Manufacturing 15:31

• Most products today are manufactured with better energy consumption in mind.
• They are better than they used to be regarding automatic shut-off and energy efficiency.
• RFID technology, camera vision, and intelligent technology are used to maximize yield and reduce water usage.

IoT in the Cannabis Industry 18:34

• Companies use water, temperature, and humidity sensors to increase operational efficiency.
• Sensors are also used to monitor plants remotely without disturbing them.
• IoT technology can help maximize yield by reducing the use of resources with the least amount of water and space.

Compliance in Dispensaries 17:47

• Compliance in dispensaries includes agriculture 4.0, RFID technology, and camera vision smart technology.
• Compliance technology can help maximize yield by reducing the use of resources with the least amount of water and space.

Environmental impact statement 19:48

• Efficiency of equipment is critical to include in cannabis license applications
• Environmental consciousness should be part of the story regardless of whether applying for a license or if the company is an existing player
• Making the customer experience more simple and better is essential in a dispensary environment
• Reviewers may not know if the equipment used is efficient, so it must be stated in the application

Impact on consumers 20:34

• The efficiency of equipment used in dispensaries has a direct impact on the consumer experience
• Self-service and self-ordering options are becoming more popular in the cannabis industry
• New customers need more education about cannabis products
• Some states require dispensaries to educate customers, so it’s important to make sure the consumer understands what they’re buying
• Cannabis is a controlled substance and needs to be treated as such

Point of sale software 21:19

• Point of sale software is important in the cannabis industry
• The Cannabis Community is a B2B company that specializes in point of sale but also enables software companies that develop online ordering and delivery applications for cannabis
• Self-service and self-ordering options are becoming more popular in the cannabis industry

Importance of efficiency in dispensaries 22:41

• The amount of time it takes for a customer to check out of a dispensary can be drastically different between dispensaries
• The efficiency of the dispensary is important for the customer experience
• The speed of the checkout process is especially important during COVID-19

Importance of education 24:35

• New customers need more education about cannabis products
• The market today is primarily former black market buyers who know what they’re looking for
• The older generation and those who are on the fence about cannabis need more education
• Some states require dispensaries to educate customers

Importance of efficient systems in dispensaries 25:55

• Time is money and revenue for dispensary owners and operators.
• In some states, there is a limit on the number of people who can be in dispensaries.
• Tourists can take longer to serve, causing longer waits for other customers.
• Each barcode scan, receipt print, and transaction matters because it all adds up.
• Consumer-grade equipment may not have enough memory or capabilities for long-term use.
• Business-grade equipment is more reliable and efficient.
• Dispensary owners may purchase cheap scanners, but they may not last long and may slow down transactions.
• Investing in efficient equipment is worthwhile.

Onsen Lab smell proof bag giveaway 28:15

• The Cannabis Community is giving away an Onsen Lab smell proof bag.
• Participants had to register and attend the virtual event to be eligible to win.
• Nate Warren won the giveaway.

Open source software solutions for compliance 31:06

• Enterprise-level B2B software can be expensive and a barrier to entry for some.
• Android is an open-source platform with a large developer community.
• Android POS systems can be more cost-effective and secure.
• The ELO cloud feature provides a full secure link.
• Open-source software solutions can be explored for customer databases and inventory systems.

Android as a POS platform 32:13

• The commercial flavors of Android are lower cost compared to the Wintel market.
• Android-based POS systems can be cloud-based and can pull data from different systems.
• Using a microservices architecture, businesses can create a cloud environment.
• This environment can allow businesses to interact with different systems.
• Even couponing and loyalty systems that aren’t native to the POS can be integrated.
• This architecture can help mitigate both cost and compliance and security issues.

Cost considerations 33:00

• Open source platforms are great, but it’s better to go with a vetted vendor to avoid issues.
• Spending extra money to ensure quality and security is necessary, especially for brick-and-mortar retail.
• It’s a capital-intensive market, so businesses need to be in it for the long haul.
• It’s important to be viewed as a safe and secure place to go shopping.
• No matter your market, you can’t be afraid to spend money.

Compliance in the Cannabis Industry 34:29

• The cannabis industry has a lot of additional regulations that need to be followed, requiring more equipment.
• Retailers in the cannabis industry need label printers, scales, and barcode scanners, among other things.
• Cannabis retailers should view this equipment as a must-have to ensure compliance.
• Businesses outside the cannabis industry also place similar orders for equipment.
• Compliance in the cannabis industry is similar to compliance in other industries.

Using Android for flexibility 35:47

• Building a retail experience from the ground up on Android allows for flexibility.
• Mobile-based architecture allows businesses to pivot quickly when regulations change.
• This architecture allows for the quick integration of new apps.
• Using commercial hardware with mobile-based architecture enables businesses to pivot quickly.
• This allows businesses to use software that consumers are already comfortable with in their technology.

Cannabis industry vs traditional retail 37:51

• Cannabis industry is considered retail, but with more regulations and compliance requirements.
• Compliance is necessary in the cannabis industry to avoid losing the business.
• Traditional retailers have more resources to cope with their mistakes, unlike cannabis industry entrepreneurs who do not have access to capital and loans.
• Making mistakes in the cannabis industry can significantly impact the revenue or compliance of the business.

Importance of investing in quality printers 39:13

• Consumer grade printers are unsuitable for the cannabis industry because they are not meant to be in that environment.
• Using consumer grade printers can lead to additional costs for processors since they will last only for a few months.
• Investing in quality printers like Star Micronics and Zebra can last up to three to five years, saving processors additional expenses and ensuring they meet compliance requirements.

Importance of readable labels 40:52

• Labels are important in the cannabis industry, from a consumer and state official’s perspective.
• Labels need to be readable and understandable, especially when required by law, like in Illinois, where labels in English and Spanish are necessary.
• Brianna and Dwayne do not have expertise in labeling, but Dwayne suggests that whatever the state requires should be on the label.
• QR coding is emerging in the industry, especially for consumers who gravitate towards specific growers.

• Compliance and quality are essential in the cannabis industry to avoid losing business and additional expenses.
• Investing in quality printers can last processors up to three to five years and meet compliance requirements.
• Labels are essential in the industry, and the state requirements should be on the label to meet compliance requirements.

Labeling Challenges and QR Codes 44:04

• Labels on products are small and often smudgy, making it difficult for consumers and employees to read them
• Some dispensaries are starting to integrate QR codes on labels to provide more information to customers
• QR codes can be scanned with a phone to pull up information on the product, including the different strains, the percentage of THC, THCA, and CBD, and where it was grown
• Labels can be a touchpoint for branding and a way to differentiate products
• Inconsistency in labeling requirements across different states and growers can create challenges for inventory management
• Preempting federal law to create a standard for labeling may help mitigate these challenges

Challenges with Multiple State Operators 46:14

• Inconsistency in labeling requirements across different states and growers can create challenges for inventory management
• Once there is a federal standard for labeling, it may help mitigate these challenges

Purchasing Clones and Hybrid Cross Pollenization 48:02

• One way to create a consistent product is to purchase clones from a grower and then grow them to the desired quality
• Purchasing clones from different regions can provide different traits for the product
• Hybrid cross-pollenization and Mendel’s theories can also be used to create new strains

Automation in Quality Assurance 49:39

• Automation capabilities are increasing in the cannabis industry
• Smart devices, such as a four-legged robot dog that scans for mold, can be used for quality assurance checkpoints
• Labs are another area where standards are not consistent across markets, so automation can help create more consistency

Automation Opportunities in the Cannabis Industry 50:07

• Automation opportunities are increasing in the cannabis industry.
• It is possible to have automation opportunities at the lab level as well.
• Walk-around robots or Amazon-like robots can move things around in the lab.
• Automation can help move things into scanners, testers, and on a conveyor belt.
• The industry is expected to grow, and the mass of it will require automation and robotics.

Vertical Farming and Hydroponics 50:55

• Vertical farming and hydroponics can be useful in the cannabis industry.
• These techniques are used to grow plants in industrial buildings.
• Soil has been overused, so these technologies have been developed.
• They are predominantly utilized to grow cannabis.
• Robots are being used to pick apples and grapes in regular agriculture.

Brand Adaptation to COVID-19 52:02

• Some new products have been developed in response to COVID-19.
• Shield barriers for the retail store, checkout stations, and tamper-proof labels have become popular.
• Online ordering and curbside pickup have become huge.
• Elo access is a COVID-19 specific solution for temperature taking.
• Touch screens are being used to prevent the spread of the virus.
• Zebra technology utilizes mobile handheld computers for buying online, and pick up in-store solutions.
• Drive-throughs are being created to keep customers safe.
• Dispensaries might have a drive-through where someone walks the package out to you.
• Tablets are being used in hospitals and can handle industrial-grade disinfectants.

Contactless alternatives 56:01

• Kiosks are increasing in popularity even before COVID-19.
• McDonald’s and Burger King already rolled out kiosks before COVID-19 for an increase in revenue.
• According to the National Retail Federation, 70% of people surveyed preferred a contactless alternative even after COVID-19.
• Any one of the organizations that are part of the webinar can provide the best-in-class technology and solutions to make customers and employees safe.

Technology and its Advantages 56:49

• Technology provides the ability to bring the panel together even when they are far apart.
• Technology is a way to keep everyone safe.