Why Cannabis Operators Need a Comprehensive Compliance Solution

Cannabis growers and producers rely on entry-level accounting systems (like QuickBooks) and spreadsheets to run their complying with state regulations. Whether it’s entering data into a state-mandated system—like Metrc or BioTrack—or reacting to auditors who drop in for a surprise visit, there’s a lot of scrambling to manually compile all the data from the financials, production, test results, and inventory.

When relying on this approach, it’s easy to make a mistake when rekeying the information. Even if everything in your greenhouses and production facilities is in order, you might violate a regulation simply because of an input error. It usually takes acts of heroism to keep everything in line.

The Challenges of Varying State Regulations

36 states have legalized the sale of cannabis for either recreational or medicinal use, and they all have varying regulations with nuances for each entity type. That makes compliance particularly challenging for companies with multiple entities and those that operate in more than one state.

Each state has different regulations covering every lifecycle stage from planting seeds to growing, processing, testing, transporting, and selling. The states also rely on different systems for tracking and tracing. Some states do not use a formal compliance tracking system but still require cannabis manufacturers to prove they comply—sometimes upon request and without any warning.

No matter which lifecycle phases your cannabis operations are involved in, and regardless of the states in which your cannabis entities conduct business, compliance can drain your resources if you rely on manual methods for proving you conform to regulations.

Key Foundational Capabilities for Compliance

To ensure continuous compliance with state regulations, cannabis manufacturers need to implement key foundational capabilities within their operational systems:

·   Auditable for tracking and managing product quality and on-hand inventory.

·   Automated data integration with state tracking and tracing systems to eliminate manual data entry and avoid input errors.

·   Flexible workflows that adjust to moving compliance targets and the volatility of the cannabis industry to remove the need to bounce back and forth between disconnected applications and spreadsheets.

·   Quality management program that handles cannabis contaminant and potency testing requirements that vary by state and often require the ability to quickly detect production quality and variation issues.

It’s also critical to combine seed-to-sale traceability data with data from inventory costing and availability, material requirements planning, machine scheduling, quality testing, replenishment, procurement, sales forecasting, and financial reporting. Bringing all this data into one system (rather than using multiple applications) gives you a single cohesive cannabis business management platform. In addition to facilitating compliance, this streamlines business planning and decision-making.

Integrating with Operations to Streamline Compliance

Some manufacturers and growers start out managing their day-to-day operations using QuickBooks and spreadsheets. These tools can work to a certain extent. But as your business grows and as you deal with proving compliance with state regulations, manually moving data from these systems over to state tracking systems will take up too much time, and the process is prone to errors.

However, if you rely on a compliance solution that’s integrated with your operations software, you eliminate all that manual re-keying. You can also respond to state auditors immediately, which in itself puts you in good standing. You won’t raise any red flags by taking too long to present your proof of compliance.

Most importantly, you avoid input errors. You also don’t have to worry about auditors looking at what you’ve entered in the state system and then showing up onsite to verify the information—only to find it doesn’t match your accounting system or spreadsheets. Even if you operate in a state without a compliance tracking system, you will still have to prove you can track all your cannabis and all your plants.

A Compliance Solution Designed Specifically for the Cannabis Industry

Many cannabis manufacturers have solved their compliance challenges by turning to SilverLeaf, a Velosio company. The SilverLeaf platform, built on Microsoft Dynamics 365 Business Central, is designed specifically for the cannabis industry and offers extensive configuration capabilities that allow you to define, track, and adjust workflows to ensure consistency and adapt to change. You can also report on and analyze your data from multiple angles while using configurable controls and workflows to catch data anomalies and potential errors.

SilverLeaf has configuration options to meet the different state requirements and integrates directly with state track and trace systems such as to automatically and continuously upload your compliance data. This ensures the data in the two systems is always aligned.

The solution also tracks plant tags throughout the seed-to-sale lifecycle and can help you comply with each state’s requirements. Plus, you can adjust to different rules about lab testing requirements. For example, if you produce oil products from a plant and put the oil into cartridges, some states require the oil to be tested while others require cartridge testing, and some require testing for both.

SilverLeaf also integrates with so that when you finish a product batch, it prints out all the labels for the product package and the plant. This saves you from entering data into another system and helps you conform to the varying state rules about how products are labeled.

Ultimately, SilverLeaf can help you comply with any regulations in your state while further streamlining the process. This frees up your staff from manual data entry and ensures your compliance data is always accurate.

To learn more about how SilverLeaf can help your cannabis company comply with state regulations, contact us today.