Over 10 years after the launch of recreational cannabis sales in Colorado, recordkeeping and inventory management violations are by far the most-cited by state compliance authorities.
For more than a year, Rootwurks has used Freedom of Information Act (FOIA) requests to obtain from Colorado officials the relevant data on cannabis compliance violations in the state.
The data is clear: recordkeeping and inventory violations comprise a disproportionate number of Colorado cannabis compliance citations.
According to the data, out of a total of 585 compliance violations in the state in 2022, 118 (20%) were for recordkeeping. Inventory management violations were close behind and made up 16% of all violations. The next most frequently cited were for testing and sampling errors (12.3%) and storage and transfer errors (8.7%).
The total of 585 violations in 2022 was a major increase over 2021 and 2020, when 196 and 381 were recorded, respectively. This discrepancy is linked to the COVID-19 pandemic and the shutdowns that made site visits much more difficult. The 585 total for 2022 is close to the pre-pandemic number of 527 for 2019.
The data Rootwurks acquired covers the years 2019 to 2022. Over those four years, recordkeeping violations have made up 17% of all violations, and inventory management has been 19.54%
The data also indicates which violations have become less prevalent over the past four years. For instance, there were 108 customer ID verification violations in 2019 (20.5% of all violations), a number that dropped to only 21 in 2022. Visitor access violations also dropped dramatically between 2019 and 2020, a decline that coincides with the COVID-19 pandemic.
The fines for these violations can range from up to $10,000 for a license infraction to as much as $100,000 for a license violation that affects public safety.
In November 2022, Colorado marked ten years since the passage of Amendment 64, the ballot initiative that legalized recreational cannabis and established the state’s regulated cannabis market.
Today in Colorado, the state’s cannabis guidelines stipulate serious penalties for compliance failures, ranging from up to $10,000 for cannabis license infractions and up to $100,000 for license violations affecting public safety.
Those affecting public safety are the most severe and include retail marijuana sales to persons under 21 years of age, medical marijuana sales to non-patients, consuming marijuana on licensed premises, permitting the diversion of regulated marijuana outside the regulated distribution system, making misstatements or omissions in the inventory tracking system, and failure to maintain books and records to fully account for all transactions of the business, among others.
In addition to fines, those cited for these violations can also face license suspension, restrictions, or revocation. And when such violations are publicized, it can result in serious damage to a company’s reputation.
Rootwurks will continue to examine this data and future state compliance data to develop better solutions for industry professionals.
Our flagship product, the Rootwurks Learning Experience Platform (LXP), includes a series of cannabis training and education resources to help companies meet their regulatory obligations and sophisticated compliance management tools to manage record keeping.
Rootwurks has also partnered with Konope Compliance, a Colorado state-certified provider of Responsible Vendor Training, which is available in the LXP.
To learn more about how Rootwurks helps cannabis companies in Colorado meet their training requirements, drop us a line here.
Also, check out our recent webinar on recordkeeping in cannabis, Tips and Tricks for Documenting Cannabis Compliance, to see how to master recordkeeping, one of the most important regulatory requirements in Colorado and legal cannabis states across the country.
