Marijuana Business Magazine - March 2018

I n this post-Cole Memo era, mari- juana industry employees need to be even more scrupulous about dotting their i’s and crossing their t’s. That’s because states in violation of federal drug law want to show that their medical and adult-use marijuana programs are not spreading crime, such as the sale of MJ to minors.That makes employee compliance with local and state regulations more important than ever, according to a recruiter who places employees in all states with legal hemp or cannabis. “Now that the Cole Memo is gone, the industry is even under more of a magnifying glass,” said James Yagielo, CEO of HempStaff, a Miami recruit- ment firm that runs dispensary training classes for prospective employees in 11 states and consults with licensed can- nabis operators across the nation. “Now, if something happens, some- thing goes wrong, there’s going to be more media coverage of it.There’s more awareness of the conflicts between the federal government and cannabis. So if there is a raid, more outlets are going to cover it.” Yagielo and other cannabis compli- ance specialists suggest beefing up on staff training. Even if mass federal raids begin, the companies thought to have lax standards will likely be the first ones targeted. Here are tips from compliance specialists: • Train everybody. Sometimes the employees who know the most about cannabis know the least about local and state regulations. A master grower who knows more than you about terpene profiles may know less about regulations than a newbie trimmer or cashier. Give no one a pass when it comes to compliance training, not even yourself. • Don’t ignore local regulators. Federal drug enforcers don’t have the money to bust every marijuana operator, so they’ll likely go to local cannabis inspectors and police for advice on problematic cannabis operators. • Keepmeticulous records. Say an employee diverts product or doesn’t do a good job checking IDs. Having a record that the problem employee was trained to follow the rules, then broke them anyway, may give a busi- ness owner some protection in case of a raid. • Don’t just read the fine print. Keep reading it. You did a meticulous job setting up your cannabis business in order to receive a license. But state and local regulations change frequently. Keep a close watch on your email for industry bulletins from regulators. If you’re following outdated rules, your business could be unnecessarily exposed. Compliance may keep the wolves at bay in an era of increasing uncertainty. But marijuana business owners will need to be extra vigilant to changes in the legal landscape. Yagielo expects the rules for cannabis operators to get even more complicated in the absence of federal guidelines. “You’re going to see states imple- ment more regulations if there’s less federal oversight,”Yagielo says. – Kristen Nichols Options for MJ Entrepreneurs What did Weiss do to persuade those landlords who didn’t walk away? Education. “I’ve had multiple conversations over an hour long with landlords across the country to explain the Cole Memo and what the new guidance does,” he said. “The first thing they say on the phone is, ‘Well, I understand the feds no longer will step aside when it comes to cannabis, and they will go after businesses.’We have to educate banks, landlords and their attorneys that that’s not the situation. We have to be educators again.” Galindo noted marijuana entre- preneurs seeking property will likely have more success with smaller landlords. Property management companies and large landlords who own whole buildings are less likely to rent to marijuana businesses because there is a greater likelihood that exist- ing tenants may object to having a marijuana business as a neighbor. Another way to make your- self more attractive to a hesitant landlord is to be willing to go into long-term leases of at least five to 10 years, with the option of renew- ing the lease. Some landlords are comfortable with businesses as long as they have city permits, but it’s hard to obtain permits without real estate. Some landlords, however, are willing to sign a lease contingent on the busi- ness getting its city license. “Letting landlords know that you’re getting a permit from the city and that you want a long-term lease, that’s a good formula for get- ting these properties,” Galindo said. WHY IT STILL PAYS TO FOLLOW THE RULES COMPLIANCE March 2018 • Marijuana Business Magazine • 67