October 15, 2018

Developing a strong culture focused on compliance

Exploring just what compliance means for the industry, and how business leaders can foster a healthy culture within their own companies.



Jenny Germano, the CEO and Lead Consultant with ICS Consulting, is a long time industry vet. Seeing the industry in Colorado go from an unregulated wild, wild, west to the strictly regulated market of 2018, has taught her the importance of understanding regulation and protocol. 

The Many Root Causes of Complacency

According to Germano, complacency in any company stems from a number of factors but ultimately is part of normal human behavior. One cause is simply understanding regulations themselves; another is a lack of professional guidance on how to apply them. Without a consultant, lawyer, or on-site specialist guiding the structure and adherence to the regulations, businesses may rely on low-level employees for execution. Compliance doesn't come naturally and often requires expertise to get it right.

She also finds employee burnout, and employee retention trigger increased problems. Low wages, long hours, and adverse work environments don’t encourage anyone, especially low-level employees, to value the work they do. If employees don't feel appreciated, they may have trouble returning the favor.

Tips to Combat Compliance Issues in Cannabis

Compliance is not just about structure; it’s also about culture. Part of the way business leaders can improve compliance is through building the necessary structures, checks, and balances into their corporate strategy, but the other is encouraging buy-in from employees across all pay-grades.

Germano suggests business leaders start by investing in an experienced consultant, who can assess your business from the bottom up and report back. Just like you would use a business coach or personal trainer to point out areas which need improvement, it's valuable to rely on a professional to highlight the issues your business faces with compliance. An outside party often sees a side of your company you don’t. Once you’ve had the challenges highlighted, build in structure, systems, and accountability to bring your company up to speed.

Once you've mastered the basic structure, the next step is to foster company buy-in. Implement weekly meetings across all levels of the organization, and schedule SOP training on a regular basis for all employees. Build an inter-organizational team, with participants from low-level positions and upper management, tasked with staying on top of regulatory changes, and rolling them out across the company. Although compliance may never be the sexiest part of your business, it can be a positive one and one which is an integral part of every position. Germano says it's about developing a culture where keeping up with compliance is the norm and not something which falls to the waist-side.

How to Keep Up With the Ever-Evolving Cannabis Regulations

Trying to keep up with regulatory changes in cannabis is a daunting task no matter your business or region. Just when you make it past one goal post, another appears just over the horizon. Germano offers a few suggestions to make regulatory compliance more manageable.

Instead of chasing down updates, why not have those updates delivered to your inbox? Germano recommends signing up to any and all email bulletins available in your region, to ensure you receive the latest and greatest regulatory updates as they happen. Some examples would include announcements from the Occupational Safety and Health Administration, your local health and fire departments, your city and county governments, as well as any relevant state marijuana agencies.

You can also rely on the expertise of others. Even if they don’t have cannabis experience, hire employees with a background in regulated markets, like the healthcare, manufacturing, or hospitality industry. If your budget allows, create a position for a full-time compliance officer, or at the very least hire a third party company who can fill this void for you. A compliance company, like Germano’s, can issue quarterly and yearly audits to keep you on track with your goals.

Lean into the Process

Germano advocates for the power of the employee. If you involve your people, from the budtender to the CFO, in fostering a healthy environment of compliance, you improve all areas of your business. Companies with a culture of compliance help to enhance the final product (or service), the customer experience, employee retention and culture, company leadership and more. If employees care about the process, they are going to care about the company, and care about the customer.

Developing a strong culture focused on compliance means leaning into the process. Germano highlights the fact that compliance doesn't come free, it takes an investment to build the structure, implement procedures, and create company-wide buy-in. With leadership fully committed to compliance, it will inspire the foundation to follow suit.