We all understand the importance of cannabis compliance, and the risks of noncompliance. But with audits from the Bureau of Cannabis Control (and other regulatory groups) on their way up, what does an audit look like and what should you know to be ready?  Recently, several of our retail clients have mentioned to our director of compliance, Dr. Juli Crockett, that the Bureau of Cannabis Control has been making unannounced visits to retailers to ensure that a given business is in compliance. Looking for the TL;DR checklist of this post? Right here, folks: MMLG’s Bureau of Cannabis Control Audit Checklist.

While these visits seem to be primarily “educational”, with few fines being levied for compliance infractions, it is clear that enforcement is going up. With several deadlines coming up involving Metrc and the BCC, it is imperative to stay on top of these matters.

The BCC is charged with regulating licensed cannabis retailers and has the authority to create, issue, renew, discipline, suspend, or revoke licenses for the sale of cannabis and cannabis products within the state. This is why the BCC is making surprise visits to your licensed business, and not the unlicensed retailer down the street (although state task forces are becoming more and more vigilant on licensed and unlicensed businesses.)

To be prepared for a no-surprises visit from the BCC, it is good to know where other folks have encountered trouble. It’s also important to note that while the Bureau is auditing according to State regulations, different local agencies may have additional regulatory requirements that licensees must adhere to. A good preparation is to schedule a compliance audit of your facility. At a minimum, a self-audit of your shop using the state and local regulations is a good start. Be sure to avoid these ten common infractions we have seen during BCC retail inspections:

1.  Over-Limit Edibles: The BCC is very concerned about compliant edibles. In any audit, expect your edibles to be scrutinized. All edibles over 10mg of THC per package must have 10mg serving sizes clearly scored. As many retailers are still selling through 2017 back stock, there are still lots of over-limit edibles on retail shelves. Starting July 1, 2018, however, all edibles must contain no more than 100 mg of THC.
2. No Free samples: Sorry, the olden days of dab bars, free samples, and on-site product testing are over. Current regulations forbid giving free samples to patrons and employees. However, nothing in the regulations prohibits offering deeply discounted products as long as the sale is entered into Track-and-Trace.
3. No Alcohol or Tobacco Sales: Nope, you can’t have a blunt wrap with that anymore. Regulations prevent the sale of any tobacco products and/or alcohol, therefore, blunt sales have been blunted. Further, alcohol cannot be stored and consumed on site. That celebratory bottle of champagne and 2-year-old bottle of vodka in the freezer has got to go.
4. Security Personnel: All retailers are required to have a licensed security guard. Be sure your guards have all required documentation on them all and that all of their certifications are current. Note to L.A. retailers that the security guard cannot be employees and must be Red Cross First Aid certified.
5. Cannabis Goods Labeling: All products that are for medical patients should be labeled “For Medical Use Only.” All cannabis goods should have the Government Warning Statement. And remember, as of July 1, all products need to be tested by a licensed cannabis testing laboratory. Stay tuned: there may be some updates to the A and M designation coming through at the state level.
6. Exit Bags: Make sure you are stocked up on your opaque exit bags. All cannabis products must leave the shop in an exit bag. Beginning July 1, exit bags no longer need to be child-resistant.
7. Surveillance System: Can we see your customers’ faces? Your cameras need to cover the entire premises, and especially that the POS images are clear and allow for facial recognition. Regulations require that security videos be stored for 90 days. Additionally, L.A. businesses should note the aesthetic requirements for outdoor theft deterrents.
8. Employee Badges: While on duty, all Employees should wear their employee badges. Be sure the badges display all required information, as specified in the regulations. Train employees to don their badges at all times while conducting commercial cannabis business. Forgetting to put badges on after a break or at the beginning could be grounds for a finding of non-compliance during an actual audit.
9. No Minors: There should be no persons under 21 years old on the premises, unless they are in possession of a medical recommendation and have valid, verified identification showing they are 18 or over. All patrons entering the premises should undergo an age verification process before gaining access to the retail area. Is your retail establishment prepared to accommodate shoppers with kids? Remember, regulations also specify that all employees must be trained in the use of electronic age verification devices, and that all employees must be over 21 years of age.
10. Limited Access Areas: Limited Access Areas will be checked to make sure they are secure, and that an access log is kept. What’s an access log you ask? It’s a document to record all non-employee entrants into the Limited Access Areas. Additionally, all non-employee visitors to the Limited Access Areas must be accompanied by either an employee or the licensee at all times.

There are eleven more audit topics, all of which (and more) are covered in one of MMLG’s transitional retail audits. Contact MMLG today to schedule an audit of your licensed facility and be prepared for your next visit from the BCC. It’s not a surprise if you’re ready for them!