Tag Archives: regulatory compliance

Human Resources and the Cannabis Workforce

By Aaron G. Biros
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Cannabis businesses encounter a variety of problems when hiring and managing employees. Some of those are issues that every business runs into and some of them are quite specific to the cannabis industry. Chris Cassese, co-founder and managing director of Faces Human Capital Management, has some solutions for cannabis businesses facing seemingly daunting workforce management issues.

Cassese co-founded Faces HCM with Caela Bintner after two decades of working in the human resources and sales strategy across a variety of financial institutions. He oversees software platform development, daily operations, sales, and business development for their organization. Before co-founding the company, Cassese held a variety of operational and product development roles during his ten-year tenure at Merrill Lynch, worked in marketing at HSBC and was a sales and performance advisor at Insperity, a professional employment organization. Faces HCM is a professional employment organization that handles workforce compliance, education, and other HR needs for cannabis companies. They work with companies like Dixie Elixirs, LivWell and Women Grow, among other cannabis businesses.

Chris Cassese, co-founder and managing director of Faces Human Capital Management

According to Cassese, the cannabis industry faces a roughly 60% turnover rate, which is on par with the turnover rates in retail and call centers. Those are industries that typically have high turnover rates simply because the nature of the business. However, Cassese says it doesn’t have to be so high for the cannabis industry. “It is easy to say it is just high turnover by nature, but we found there are some steps that we can put in place that seem relatively easy, but are key tenants of Fortune 500 companies’ hiring strategies,” says Cassese. “Engaging in a needs-based analysis with companies will help us figure out exactly what’s going on.” They start by looking at the onboarding process, or what happens immediately after an employee is hired. “We start by looking at their pay rate, employee handbook and the paid time off policy, which are some of the points that a lot of the owners are familiar with coming from other high-end industries outside of cannabis.” He says things like swag bags, free ski passes after reaching quotas and other perks can keep employees engaged on the team. “Things like that go a long way and can reduce turnover by up to 20 or 30 percent,” says Cassese. “Sometimes [business owners] are so stressed with regulatory compliance that they don’t have time to tackle these issues so employee dissatisfaction often starts with onboarding procedures.” That can include anything from analyzing the overall compensation structure to making a video displaying the company’s vision, mission and values. “There is no panacea for reducing turnover. It requires conducting a needs-based assessment, taking pieces of what we know works well in other companies and bringing that to the cannabis industry.” Making an employee feel like they are part of the team can help boost retention and keep turnover low.

One area they often help companies with is performance reviews. “Performance reviews are a big part of any business,” says Cassese. “You can’t make progress if you don’t know where you’re going. If you don’t know how you’re doing you can’t get better.” Looking at the supervisor level, they have often found employees have never given a performance review before. “We implement processes to teach them how to deliver positive or negative performance reviews and help make them feel comfortable delivering that,” says Cassese. They might have employees perform a DISC analysis (dominance, influence, steadiness and conscientiousness), a personality test akin to the Meyers-Briggs test. “From this we can help figure out the stressors and motivators of people and create effective teams,” says Cassese. “If an employee might be more outgoing or humble, high-spirited, results-oriented, analytical or good working on teams.” These are approaches to workforce management that have been adopted from Fortune 500 companies.

Caela Bintner, Co-Founder and Managing Director of Faces Human Capital Management

Cassese says one of the most overlooked items for companies are proper I-9 verification forms. This goes back to basic record keeping and documentation, but if overlooked, companies can get hefty fines for improper record keeping. “You are supposed to have a separate binder, in a separate locked drawer where your I-9 forms are housed, but a lot of people don’t know about that, which could come back to bite them in the form of large fines” says Cassese. “Businesses can’t afford to have sloppy record keeping. We help businesses take a look at their process and how they put their files in the cloud or physical locations, which is an area where companies often need guidance.” Civil fines can reach up to $20,000 for mistakes on I-9 forms.

Employee education is another crucial aspect of managing the workforce. Faces HCM has a learning management system that gives companies the ability to push education to their employees. Education is of course a broad term and can cover a wide variety of needs for employees. “We can help them take leadership, teamwork, excel, OSHA, safety classes and more,” says Cassese. “Training that shows you active listening, empathy skills and other types of training can really help budtenders deal with customers appropriately.” They have developed customized training programs for cannabis companies expanding beyond their own state too. “As you find certain cannabis companies growing in different states they want to create a repeatable, consistent and predictable experience,” says Cassese. “Putting those standard operating procedures online is important to streamline the process and ensures that you are creating a learning or education plan to meet your employees’ needs.” That can look like requiring employees to take an online course once every quarter, or offering them books on subjects pertaining to their specific job function.

Little things like improving the employee experience, implementing an education program and keeping up with employee records can make or break a business. They all add up to solid workforce management, which if done correctly, can enhance a business’ bottom line and keep employees working for you.

Microsoft Enters Cannabis Compliance Software Market; Industry Outlooks

By Aaron G. Biros
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In a New York Times article published yesterday, news broke of Microsoft’s entry into the cannabis marketplace, teaming up with KIND Financial to launch its Microsoft Health and Human Services Pod for Managed Service Providers, which is essentially a seed-to-sale tracking technology. Their goal is to provide local and state governments with software solutions for traceability in the burgeoning cannabis industry.kind-financial-cannabis-government-solutions

In a press release yesterday, Kimberly Nelson, executive director of state and local government solutions from Microsoft said, “KIND’s strategic industry positioning, experienced team and top-notch-technology running in the Microsoft Azure Government cloud, made for an easy decision to align efforts.” According to KIND Financial founder and chief executive officer, David Dinenberg, the cannabis marketplace will continue to have strict oversight and government regulations. “I am delighted that Microsoft supports KIND’s mission to build the backbone for cannabis compliance,” says Dinenberg.MSFT_logo_rgb_C-Gray

This move could represent an opening of the floodgates for corporate interest in the space. According to Matt Karnes, founder of GreenWave Advisors, a cannabis financial data analysis firm, this could potentially result in an increase in capital flow into the cannabis industry. “This signals a wider acceptance of cannabis and perhaps that changes to national policies are more likely now that we see a large corporation stepping in,” says Karnes. “This could certainly mean an inflow of capital from larger, mainstream enterprises that were previously unwilling to take the risk.” Microsoft also made news recently for the acquisition of LinkedIn for $26.2 billion. The move to get into the cannabis space could represent a diminishing stigma associated with the market and a wider mainstream acceptance in business.

According to Nic Easley, chief executive officer at Comprehensive Cannabis Consulting (3C), this is another legitimizing factor for the cannabis industry. “It shows that cannabis is here to stay, and the fact that Microsoft is now spending resources on software, further validates that,” says Easley. “Many of the first mover seed-to-sale companies, entered the industry too early, had problems with their technology and lacked quality customer service, which created opportunities for new companies to emerge to dominate and capitalize upon the first ‘Netscapes’ of the cannabis industry’s failures.” Additionally, this could rationalize the market for other quality software companies such as Compliant Cannabis, according to Easley.

While Microsoft publicly announced their entrance into the cannabis marketplace,  one can speculate that other large companies are planning their entrance as well. “We are fielding inquiries from Fortune 500 companies, Wall Street investors and even major foreign investors on a weekly basis,” says Easley. “In the past week alone, we received calls from three different Fortune 500 companies asking us how they can get into the industry.” It appears that because Microsoft is in the cloud business and they are offering this ancillary service that not only does this further legitimize the industry, but it could be quelling the dated stigma associated with cannabis.

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Compliance: It’s Just Good Business

By Laura Davis
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The numbers are in and Colorado’s retail sales increased 42 percent in 2015. This increase in sales reflects a very vibrant industry in Colorado, the state that is leading the way in legal cannabis through sensible rules and regulations.

While the federal government has yet to consider cannabis’ legal status, savvy cannabis companies are striving to be exceptional business leaders and meet those federal regulations that pertain to product, environmental protection, and employee health and safety. Colorado’s cannabis business owners, including Good Chemistry, strive to lead the industry by developing best business practices, processes and guidelines that provide the foundation for the industry’s continued success and sustainability.

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A view of the interior of Good Chemistry’s retail dispensary.

The cannabis industry in Colorado and other states is heavily regulated at many levels from cultivation to sale. As the industry grows and matures, companies are looking to federal standards and practices that may not immediately apply to their state’s industry, but that have been in place for years to provide for public safety. As the cannabis industry continues to grow, it is critical that industry leaders demonstrate that, through their practices and adherence to public safety standards, their products are safe for the consumer.

This vision has led cannabis companies to seek out compliance experts and build compliance departments. Hiring compliance experts is a major trend in this fledging industry, and more than that, it is a critical element to maintaining employee morale and providing for public safety. Compliance provides a roadmap for employees, offering guidance and resources to assist them with job performance. It is a basic building block for employee retention.

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The exterior of a Good Chemistry dispensary

Internally, employees must be aware of what regulations can affect their specific position and job responsibilities. It is crucial that all staff employed by a cannabis business are aware of current and pending regulations. If the employees are well versed on the regulations that impact their duties in the company, there is less of a chance for error.

Externally, cannabis companies should strive for the highest level of compliance, and much can be gleaned from other, more established industries. Standard Operating Procedures (SOPs) should be developed to detail critical work flow areas of the business, including cultivation practices, sales protocols, and more.

Compliance can help to create a more sustainable business. In an industry that has grabbed headlines for energy, water and resource usage, compliance is at the core of a sustainable business model.

Overall, compliance is about working towards creating a sound, respected and sustainable industry. It is essential that the company places a high value on education and regulatory compliance from the chief executive officer to the budtender. Industry leaders must continue to advocate for sensible and practicable regulations for the industry. Cannabis business leaders play a critical role in building an entirely new industry from the ground up, which includes understanding, utilizing and anticipating regulations for the cannabis industry.

BioTrackTHC Wins Bid for Hawaii Marijuana Tracking Software Contract

By Aaron G. Biros
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According to Phil Bergman, senior communications consultant at BioTrackTHC, just yesterday the company announced it had surpassed 1,500 locations that its software systems are used in. BioTrackTHC has a traceability software solution that provides “real-time visibility into the seed-to-sale tracking data of licensed medical marijuana dispensaries, including plant and inventory quantities, production activity, laboratory testing results, transportation activity, and dispensing activity.”

The Hawaii Department of Health’s Office of Health Care Assurance selecting BioTrackTHC for the contract marks five state contracts that the company has won. Currently, the software is used by Washington, New Mexico and Illinois and soon to come are New York and now Hawaii.BioTrack_THC_Logo_Re_Draw

The software essentially allows private businesses and regulators access to data on cannabis plants in real-time, tracking them through every step in the production process including growing, harvesting, quality and safety testing, transportation and sale. These state-mandated systems have the ability to prevent issues like diversion, theft and contamination, helping with transparency in regulatory compliance.

The software is used in both “medical and recreational cannabis facilities in 23 states, Washington D.C., Canada, Jamaica and South America. “The development of a healthy and successful medical cannabis program is a top priority for Hawaii, and we are extremely proud to have been chosen to be a critical part of it,” said Patrick Vo, chief executive officer of BioTrackTHC.

“We demonstrated significant interest in the state of Hawaii early on, including sponsoring the first ever Cannabis Business Expo there last year,” says Vo. “The Hawaiian people have their own special values and way of life, which is important to understand when working in Hawaii.” Winning the contract means their software will be used to track the production, transportation and sale of all medical marijuana in the state of Hawaii.

MRAs

The Role of 3rd Party Accreditation in Cannabis Safety

By Roger Brauninger
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MRAs

Living in a world of ever-increasing interdependence and an era of limited state government, financial and human resources, it is imperative that those charged with protecting the health and safety of patients and users of medical and recreational cannabis products leverage what private sector institutions and existing frameworks already offer in setting up quality standards for laboratory testing operations. That this moment arrives now – at a point where state governments are being tasked with undertaking the most significant change in the regulation of this substance whilst the federal government appears unwilling to play a substantial role – makes this partnership both inevitable and absolutely necessary.

Accreditation is an internationally accepted conformity assessment tool for ensuring laboratory competence and confidence in the accuracy and reliability test data. The accreditation infrastructure is well-established through accreditation bodies (ABs) and the Mutual Recognition Arrangement (MRA) of the International Laboratory Accreditation Cooperation (ILAC), supported by regional cooperative arrangements, including those of the Asia Pacific Laboratory Accreditation Cooperation (APLAC) and the Inter-American Accreditation Cooperation (IAAC). ILAC functions as a forum for harmonization of laboratory accreditation procedures and policies, thus reducing technical barriers to trade and promoting laboratory accreditation as a mechanism for establishing confidence in testing facilities. ILAC MRA signatory ABs are recognized, through a rigorous peer evaluation process, as competent to accredit testing organizations. All signatory ABs must meet the requirements of ISO/IEC 17011 and use ISO/IEC 17025 as the basis for accreditation of laboratories. In turn, under the ILAC MRA and the regional co-operations, competent laboratories are recognized globally, thus facilitating acceptance of the test results that accompany goods across international borders.

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A map showing the mutual recognition agreements across the globe

In other areas, such as the food supply and energy, both state and federal government have been an active participant in accreditation activities. According to The Administrative Conference of the United States in its Agency Use of Third-Party Programs to Assess Regulatory Compliance*, “…agencies in diverse areas of regulation have developed third-party programs to assess whether regulated entities are in compliance with regulatory standards and other requirements. Through these programs, third parties are charged with assessing the safety of imported food… Third parties also ensure that products labeled as organic and energy-efficient meet applicable federal standards. In these regulatory third-party programs, regulated entities generally contract with third parties to carry out product testing and other regulatory compliance assessment activities in the place of regulatory agencies. Regulatory agencies take on new roles in coordinating and overseeing these third-party actors.” While this reference largely deals with areas outside of cannabis regulation, it remains useful and relevant because of the manner in which cannabis products are used.

Traditionally, ABs have worked with regulators to establish specific technical requirements to supplement the ISO/IEC 17025 accreditation framework. In this partnership, the AB is responsible for executing the assessment and accreditation process but the regulator retains responsibility for the ultimate decisions on the acceptance of that organization’s accreditation. In the example of our food supply and its various sources, governmental recognition of accreditation bodies operating in accordance with international standards is much more practical than government agencies themselves accrediting the individual testing organizations or ABs. Thus the public/private partnership paradigm: To assess regulatory compliance a Regulatory Agency approves ABs that accredit organizations that assess whether Regulated Entities or Regulated Products are in conformity with a Regulatory Standard.*

In this example, all of the organizations are treated equally by the regulatory agency since they use the same recognition criteria for ABs and the same accreditation requirements in the assessment of conformity assessment bodies. This approach would also provide consistency at a point in time where many states are grappling with trying to find the best quality standard to use and which, to date, has resulted in many different standards being chosen or considered for implementation. This is especially true when one looks at the requirements put into place by the “early adopter” states. However, in those states that have entered this area more recently, it seems clear that the consensus is use of ISO/IEC 17025 as the most appropriate quality management standard for testing laboratories.