A “Clerical Error” and the Need for Comprehensive Record keeping in Cannabis Compliance

“Your business is being shut down” is not the way most of us would like to wake up in the morning. 

That’s more or less the message that greeted cannabis operators across Michigan earlier this month when they were notified that their businesses were in danger of suspension due to unpaid monthly service fees. 

The mix-up began after cannabis regulatory technology company METRC (Marijuana, Enforcement, Reporting, Tracking, and Compliance) said more than 85% of cannabis companies in Michigan failed to pay a $40 monthly service fee. 

A Benzinga article stated that most of these companies were unaware that they were late on any payments, and the state’s Cannabis Regulatory Agency was quick to notify them. 

"The Cannabis Regulatory Agency (CRA) has been notified that your business is at risk of having its statewide monitoring system (METRC) account suspended due to past due monthly reporting fees,” the CRA wrote in a bulletin. 

“We recommend that you contact METRC as soon as possible to resolve the issue and avoid any interruption in your access to the system.”

METRC later said the matter was a “clerical error,” and only 11% of the Michigan companies that use its technology were late by more than three months. 

You may find it hard to imagine how a clerical error could nearly bring Michigan’s multi-billion dollar cannabis market to its knees, but the story hits on a valuable point about the industry: cannabis is full of surprises, and you better keep comprehensive records. 

The importance of comprehensive, easily-accessible records 

In the Michigan case, only 11% of operators were found to be delinquent on their payments. But what would happen if one of these operators wanted to contest the charges? Without any comprehensive records of its operations, the company would most likely have no way to prove payment.

But beyond the 11% who allegedly didn’t pay their bills, what could happen to the 85% if the clerical error wasn’t spotted and fixed? Without proper record keeping, they would ultimately be subject to the mercies of someone else’s mistake. 

In the cannabis industry, expect the unexpected 

The Michigan story is also another indicator of how unpredictable the life of a cannabis operator can be. 

From a pandemic to falling prices and oversupply, in the past few years, the industry has been subject to many ups and downs and no shortage of uncertainty. And that’s without factoring in the difficulties of working in an industry that is still illegal under federal law. 

Cannabis is also a heavily-regulated industry in which even veteran operators can find it very difficult to meet all of their compliance demands. Often understaffed or dealing with high turnover, many cannabis companies can’t hire a dedicated compliance management professional, and often turn to DIY solutions to handle cannabis regulations. 

With the Rootwurks Learning Experience Platform (LXP) tracking and managing compliance, companies can expand the efficiency of their operations and make sure their obligations are met, even if they’re short-staffed. And by using the LXP’s record keeping module, they can keep track of which compliance guidelines they met and which they missed, and the monthly payments they did or did not make. 

The difficulties (and surprises) of cannabis compliance are why we made end-to-end record keeping a central component of the LXP. The LXP’s record keeping module allows companies to keep comprehensive records of their employee training and education, their compliance actions, and obligations like a $40 monthly fee which if left unnoticed, could potentially become a major headache.

The module helps cannabis companies if things go wrong because it allows them to instantly access records about all of their compliance, education, and safety tasks. In the event of an alleged compliance violation - or just a simple “clerical mistake” - having those records on hand and instantly accessible can make all the difference. 

To hear more about the importance of record keeping in cannabis, join us on March 28th for the Rootwurks webinar "Tips and Tricks for Documenting Cannabis Compliance." Follow this link to save a spot.