How to Navigate a State Regulatory Investigation Into Your Cannabis Business


<![CDATA[A new state regime for legal cannabis brings with it a new group of investigators and enforcers. New licensees may face state officials who are still learning and interpreting the regulations, have an abundance of investigatory resources with very few targets, and an eagerness to demonstrate they can effectively police the industry. As a result, a new licensee can face repeated audits and inspections until eventually it hits a tripwire that leads to a full-blown investigation. A state investigation can involve document requests, employee interviews, product testing, and, in the event of a negative finding, lead to a possible suspension of product shipments or license revocation. Depending on the allegations, companies must also stay attentive to federal criminal exposure if information is shared with the Drug Enforcement Agency (DEA).This explainer unpacks how to protect your company and navigate an investigation to a favorable (and profitable) long-term outcome.The Legal Gray Area of the Initial GrowBetween the time a state votes to legalize and the time consumers can buy the product off a shelf, a lot has to happen, resulting in a year or more of lag time between “legalization” and “open for business.”What happens in between?A state commission is established, along with a licensing and regulatory framework. The state determines the number of licensees it will allow and the process for selecting them. Litigation challenges follow from those who were denied a license. And ultimately, the licensees build out and prepare to open.As the cultivators prepare to launch operations, the first tripwire is immediately evident: Where will the cannabis come from? The initial crop of plants or seeds will likely come from outside the state. But moving cannabis across state lines is not an act that a state can readily authorize under its regulatory regime. There may instead be informal discussions…

Excerpt only …
Source : How to Navigate a State Regulatory Investigation Into Your Cannabis Business

reposted by Cannabis News World

This site uses Akismet to reduce spam. Learn how your comment data is processed.