September 24, 2023

Compliance for Cannabis Retailers

Jay Rosenthal
September 24, 2023

Welcome to the world of cannabis retail. We’re excited to have you on board as you explore what it takes to open and manage a cannabis dispensary.Β 


This is the first installment in a series on key cannabis retail topics, including compliance and regulations, banking and payments, point-of-sale, e-commerce, and insurance.


These introductory articles are written to introduce you to a range of subjects that apply to all retail businesses, but also address cannabis specific considerations.Β 

‍Why Compliance is King in Cannabis

Imagine compliance as the keystone of a grand archway. It supports everything else you'll build in the cannabis world. Whether you're aspiring to become a dispensary operator or you're already in the game, compliance isn't just a box to tick – it's your entire foundation.


At Dutchie, we understand that navigating the intricate landscape of cannabis compliance can be overwhelming. That's why we're here to guide you through this journey. We specialize in providing cutting-edge solutions for point-of-sale, e-commerce and payments, all designed with compliance in mind.

The Unique Challenge of Cannabis Compliance

What makes compliance in cannabis so distinctive? It's a confluence of factors that set it apart from any other retail business. First, there's the immense hurdle of obtaining a license to operate. But it doesn't end there. Once you're in, you must continually meet ongoing compliance requirements – and these aren't your run-of-the-mill regulations.


Bryan Barash, Vice President, External Affairs and Deputy General Counsel at Dutchie, sums it up best: β€œIf you’re in the business of cannabis, you’re really in the business of compliance. As a retailer in cannabis using a point of sale, an e-commerce system, a payments system, you need to be able to navigate the state regulatory infrastructure in every state. Across the spectrum, there is a complicated web of cannabis laws. Some are very specific and some are very vague. The laws are not united by any kind of federal infrastructure.” 

Demystifying Cannabis Compliance

Before you plunge headlong into the cannabis retail world, let's break down compliance into more manageable components. In this series, we'll explore the key aspects of compliance that every cannabis retailer needs to grasp.

State Track-and-Trace for Cannabis

Unlike many traditional consumer packaged goods, cannabis regulators insist on tracking the entire lifecycle of the plant, from germination to harvest to the final product sold to a customer, and all the movements in between. This is called track-and-trace or seed-to-sale tracking. There are two major providers of track-and-trace technology widely utilized by regulators: BioTrack and Metrc. Dutchie seamlessly integrates with both - and we automate much of the compliance reporting directly into our point-of-sale system.‍


Learn more about Dutchie’s seamless integration with Metrc from Metrc’s Director of Product Management.Β 

Cannabis Point-of-Sale: Source of TruthΒ 

You've probably heard of point-of-sale (POS) systems, the heart of most retail businesses. But in the world of cannabis retail, a POS system is a game-changer. It not only handles customer transactions but also tracks inventory, sales, purchase limits, and payments. Plus, it ensures all the necessary data is reported to the track-and-trace system. In our upcoming articles, we'll explore how your POS system becomes your steadfast ally in the world of cannabis compliance.

Medical Record Keeping and Privacy

In states where medical cannabis is the norm or under "hybrid licenses" that cater to both medical patients and adult-use customers, there's a higher standard for record-keeping, privacy, and security. Understanding your specific state's requirements is crucial as you plan your business venture.


Read more about the transition from medical to recreational cannabis sales in 8 things to prepare for when transitioning from medical to recreational sales.Β 

Physical and Data Security for Cannabis Dispensaries

Security is paramount in the cannabis industry. Similar to the heightened regulations around patient data, the requirements for physical and data security are often spelled out in a state’s regulatory framework. Security requirements may include the perimeter of your facility, the type and number of security cameras, how long recordings should be kept for, and many other cannabis industry-specific requirements. Understand the security burden will be higher than a regular retail business - and the associated costs should be calculated into your start-up costs and ongoing burn rate.


Learn more about the importance of data security and HIPAA compliance in the cannabis industry from Dutchie’s Head of Information Security.Β 

Marketing and Advertising for Cannabis Dispensaries

Another unique aspect of cannabis retail is understanding that marketing and advertising cannabis is unlike other, less regulated businesses. Cannabis marketing and advertising is generally regulated by state and local jurisdictions. Understanding and complying with marketing and advertising guidelines is essential to your business.

Banking and Payments for Cannabis DispensariesΒ 

Due to federal restrictions, cannabis banking and payments can be a bit tricky. You'll need a plan for handling both cash and cashless payments, and integrating cashless payments with your POS system is vital. Dutchie offers integrated cashless payment solutions to make this easier for you. Dutchie has integrated, cashless payments available to customers.Β 

Cannabis Business Insurance

Especially in new markets, insurance brokers may not have a deep understanding of the requirements for cannabis businesses in specific jurisdictions. As well, the insurance needs of your business may change between pre-license and operating phases of your company. Our experts will offer guidance to help you navigate this ever-changing landscape.


As you embark on your cannabis journey, remember that compliance isn't a roadblock; it's your guiding light. Stay tuned for the next articles in this series, where we'll dive deeper into these critical aspects of cannabis compliance. Dutchie is here to support you every step of the way, so get ready to master the art of compliance in the cannabis industry.

About the author
Jay Rosenthal
Lead Content Producer @ Dutchie