Taking too long? Close loading screen.

Despite government regulations causing a significant burden on cannabis operators (LCOs), it is always best practice to remain compliant with these regulations. Failure to do so can result in significant fines and even the removal of your license.

Compliance does not end with governmental regulations, however. In order to operate safely and securely, LCOs also need to remain compliant with their insurance policy and within the terms of their lease. Even minor deviations from the terms stipulated in your policy or lease agreement can lead to a claim being completely dropped or a legal dispute with the property owners in the event of a crime taking place on-premises.

Compliance as a core business practice reaches every aspect of your operations, from handling money to advertising to how you secure your business. Ensuring that your security system remains compliant may involve a complete re-evaluation and reconstruction of the security plan, as Chris Eggers of CCSS explains in Chapter 7 of his book Securing Cannabis: A Comprehensive Guide To Increase Security, Reduce Costs, Reduce Liability, and Avoid Landmines

When creating a compliant security plan, three items must be considered: local and state regulations, your insurance policy, and the terms of your lease. In order to ensure that your system complies with all three, retaining the services of a security firm like Cannabis Compliant Security Solutions, which specializes in the cannabis field, is highly recommended.

Regulatory Compliance

Remaining compliant with local and state regulations is essential to your business operating within the bounds of the law and avoiding damaging legal and financial consequences. Chapter 6 goes into detail about how businesses can find their local regulations and build a security plan that is both compliant and effective.

When auditing your existing security plan and system, it is important to keep in mind that, although your system may have passed an initial inspection, that doesn’t mean that it is entirely compliant. Regulators may miss something during an inspection, which can come back to bite you if a security event takes place and law enforcement takes a closer look at the system during the investigation.

Insurance Compliance

An often overlooked aspect of creating a security system is ensuring that every incorporated element stays within the parameters put in place by your insurance policy. Policies often include a section dedicated to security considerations, which can be much more stringent and specific than what is required by regulatory requirements.

LCOs often learn too late that an element of their security system is noncompliant with their insurance policy. Even small deviations from policy stipulations can lead to a severely reduced recovery. The book provides an example of one company that only recovered 10% of the losses incurred in a break-in after it was discovered that it used security elements not listed in its policies’ approved options.

The cannabis security status quo (Chapter 4) is unfortunately rife with security challenges and criminality, which means insurance policies are a necessity when operating in the industry. Making sure that your system complies with your policy is key to mitigating the substantial risks present in the current state of the marketplace.

Lease Compliance

Lease compliance and security are generally about business matters. While leases may not contain specialized security requirements, they do contain general provisions regarding LCO tenants complying with regulatory requirements.

LCO leases often contain indemnification and limitation of liability provisions regarding security incidents. Property owners that are renting their space to LCOs may incorporate the chargeback of security investments in security investments and fortifications, as well as operations like security guard services to their tenants. If upgrades are required to remain compliant, tenants need to be on the lookout for provisions that state they are responsible for the costs incurred.

The chapter ends with a comprehensive checklist of what items CCSS heavily recommends each LCO needs to evaluate when performing a compliance audit. To gain access to this checklist, as well as every other piece of information you need to create an effective and compliant security system, we recommend checking out the full book. Securing Cannabis: A Comprehensive Guide To Increase Security, Reduce Costs, Reduce Liability, and Avoid Landmines is now available here!