On Friday, October 27, 2023, Massachusetts established new cannabis regulations. These new Massachusetts Cannabis Equity Regulations “include policies that will implement the agency’s oversight of host community agreements (HCAs), new municipal equity requirements, and suitability reform, in accordance with Chapter 180 of the Acts of 2022, An Act Relative to Equity in the Cannabis Industry.” – Mass Cannabis Control Commission. The act also changes several licensing restrictions, allowing lenience of certain criminal backgrounds that were previously restricted. Lastly, the commission will require businesses to donate to the Cannabis Social Equity Trust Fund.

Brief Update on the Cannabis Equity Regulations

The Massachusetts Cannabis Equity Regulations give the CCC new commission authority to:

• Review, approve, and certify HCAs, and develop a model contract;
• Deem an HCA provision invalid or unenforceable, or voidable; and
• Issue sanctions against a host community that is noncompliant with HCA regulatory requirements, abstain from considering new license applications in that host community, or publish a list of communities that are out of compliance.

We will post a follow up when the commission fully implements the changes. However, our Massachusetts Standard Operating Procedures have been updated to reflect the new regulations.

The industry has recently encountered several shocking events. Not only has the industry had several recalls in the past, however the most recent recall has Missouri operators questioning what is going on with the state track and trace system who refuses to comment on the situation. Of equal importance, the Oklahoma Medical Marijuana Authority has shut down a marijuana business and arrested 2 individuals, charging them with drug trafficking and other charges. These incidents directly relate to the importance of cannabis SOPs, employee training, and a good seed to sale software system.

Cannabis SOPs

In the case of the Oklahoma business that was shut down, this business was not ensuring all plants were tagged and entered into the state track and trace system, METRC. Additionally, medical marijuana flower and buds, stored in trash bags, were not labeled or entered into METRC. In this example, standard operating procedures were not being followed. Cannabis SOPs will outline the importance of plant tags, and entering information into the seed to sale system that should be integrated with METRC, the designated track and trace system.

Employee Training

In both cases outlined above, the companies have a chance to improve the knowledge their employees hold about regulations and processes with employee training. The Oklahoma company should train its employees on the importance of tagging plants and inventory and also on the seed to sale software system to ensure the company is entering information correctly. On the contrary, the business in Missouri has a chance to train their employees on what to do when a recall is mandated, and how to research a recall in the seed to sale system. Lastly, the Missouri state regulators should also be trained on how to research a recall in METRC, the state track and trace system.

Seed to Sale Software

Lastly, both businesses should be investing in a good seed to sale software system to accompany the standard operating procedures and employee training that is mentioned above. A good seed to sale software system will integrate with the state track and trace system, and provide product tracking for production purposes. Systems that are hard to interpret, and trace packages back will hinder the business as we learned in Missouri, where business owners are losing millions of dollars because they cannot sell the affected products.

Save yourself millions of dollars and stay compliant with our cannabis SOPs and employee training. We can also give advice on the best seed to sale software systems currently on the market.

If you need assistance with your Missouri or Oklahoma cannabis business, contact us today!

We have a wide variety of services for a current or future cannabis business.

Kentucky Governor Andy Beshear recently signed Senate Bill 47 into law, legalizing medical marijuana in Kentucky. * Starting in 2025, Kentuckians will be able to apply for a medical marijuana card after obtaining a written certification from their medical practitioner showing a qualified medical condition. But what does that mean for Kentucky Medical Marijuana businesses? What businesses will be available, and how do you apply for a cannabis business license in Kentucky? Let’s talk details below.

We have seen several states roll out medical marijuana programs. We have also watched as medical markets turn into recreational markets. When a new law is passed such as Bill 47 that legalized Kentucky medical marijuana, state regulators must work together to either designate regulatory responsibility to a new administrative entity of the state, or to an existing entity like the Department of Health. While it is unclear at this time if Kentucky will create a new regulatory body, or will give the responsibility to an existing entity, the steps following are clear.

Kentucky Medical Marijuana Regulators

The next step that the state must take is to establish regulations for the medical marijuana program. Most always, these include guidance on business license types available, and how to apply for a cannabis business. As well as, operating requirements such as procedures for testing, recall, pesticide, waste, and quality control regulations. Once these regulations are established, the state will begin opening the licensing period for the license types available. Common license types include cultivator, processing, retail, and transport licenses.

Each license type will likely be required to show proof of a business plan and standard operating procedures specific to their cannabis business to demonstrate knowledge and potential competency.

After businesses are licensed, the state will likely start approving patients into the program and providing them with medical cannabis cards. Because these are not processes that can happen overnight, the state is estimating the program to be available to patients in 2025.

The Helpful Content Team will provide more details as they become available and be working on preparing standard operating procedure templates that will meet KY Cannabis business requirements.

Preview our KY Cannabis Standard Operating Procedures here:

Ohio will vote on Adult Use Cannabis sales in November 2023. If passed, Ohio will be the 24th state to legalize cannabis for recreational purposes.

If passes, the new law would allow adults over 21 years of age to possess up to 2.5 ounces of marijuana or 15 grams of marijuana extract. Additionally, Ohio Adult Use cannabis will be available at retail locations. Alternatively, adults will be allowed to grow up to 12 plants in a private residence. Lastly, recreational cannabis will sustain a 10% tax upon purchase.

In a pre-poll created by the Coalition to Regulate Marijuana Like Alcohol and conducted by FM3 Research, 55 percent said they “definitely” or “probably” will vote yes on the initiative, while about 34 percent “definitely” or “probably” will oppose it. Only about 11 percent were undecided. The survey polled 843 likely voters. Historically, voters have supported the decriminalization and legalization of cannabis. Hopefully, Ohio residents will also support the regulation of cannabis.

If Ohio legalizes cannabis for recreational purposes, the state will award retail and cultivation licenses to supply the public. Luckily, we can help you with the application process and required documents. Such documents usually include Standard Operating Procedures, business plans, and even diversity plans. We have all these documents in templates, or we can customize them for your specific application.

Ohio Standard Operating Procedures

Contact Us today for more information.

Need a compliance expert, hiring aid, website development, or on site consultant for a New Mexico MMJ Business?

We have a wide variety of services for a current or future cannabis business.

A wise CFO once tried to explain to me how he wanted the costs associated with the cultivation and production of cannabis good recorded. He described “buckets” that the costs would essentially “go into”. Thus began my journey of researching cannabis inventory costing. What are these theoretical buckets? What costs “go into” these buckets? How do we determine these costs? These were the questions I needed answers to. It wasn’t long before I understood what he was trying to teach me, and how it applies to the cannabis industry. Specifically, how cannabis inventory costing applied to the cannabis cultivation, manufacturing, and retail operations.

Cannabis Inventory Costing by Batch

Most importantly, batch costing is the process of allocating costs associated with a particular batch to get a total batch cost. Next, the total batch cost is divided by the number of units in the batch which results in the cost per unit. Each batch can be thought of as a “bucket” which accumulates costs. Thus, the CFO was talking about batches when he was referring to “buckets” while explaining cannabis inventory costing.

Cannabis Inventory Costs

I wish cannabis inventory costing were simple. It would make identifying all costs associated with each batch relatively easy. None the less, we can identify 3 categories of costs that should be allocated to each batch of cannabis. These categories include direct materials, direct labor, and direct overhead.

Direct Materials

First, direct materials are materials used in the cultivation or production of cannabis and cannabis products. Such materials might include nutrients, soil, packaging, and any ingredients used in the production of cannabis products. Direct material costs for each batch can be tracked in some seed to sale software systems.

Direct Labor

To begin, direct labor is the labor directly associated with the batch. Including, vegetation staff, cultivation staff, trim labor, and packaging labor. It is important to have a seed to sale system that has the capability of tracking the amount of time a plant spends in each stage of the cultivation and production process. The time in each stage will help determine the direct labor rate to apply to each batch. Because, each batch’s direct labor cost will differ.

Manufacturing Overhead

Overhead costs are costs that cannot be directly associated with a particular batch. Such costs may include electricity, water, and rent or mortgage. These numbers will also depend on how much of the facility is used directly in cultivation and processing VS how much of the facility is used for administrative and sales purposes.

To explain, if a 1,000 square foot building contains 250 (25%) square feet of administrative purposes, and 750 (75%) square feet of cultivation and processing, only 75% of the electricity, water and rent would be included in the manufacturing overhead amount. And then, this amount may be divided among the batches in production. On the contrary, the other 25% of the rent, electricity, and water would be included in the facility overhead, or cost of goods sold amount.

How to Determine These Costs

Tracking the costs associated with each batch of cannabis requires at least 3 things. An understanding of the costs and where they come from, a good seed to sale inventory tracking system, and lastly standard operating procedures. Fortunately, we can recommend good seed to sale systems. Additionally, we have Standard Operating Procedures that can assist you with identifying when costs are accumulated and how to record them. These documents are state specific because we understand that every state has different cannabis requirements.

Standard Operating Procedures

We want to help you track your cannabis inventory costing and implement processes to continually track costs. Contact us today to schedule a consultation.

Rhode Island cannabis became legal in May of 2022. You might remember our blog post “Rhode Island Recreational Cannabis” announcing the first Adult Use sales. At that time, there were only 6 recreational retail locations in the state, and the Department of Rhode Island Office of Cannabis Regulations were still working on the recreational program rules. At this time, the Department has drafted rules which include details about what will be required to apply for a Rhode Island cannabis license. Although the department has approved 6 dispensary locations, there are still 24 retail licenses available. Let’s discuss the requirements in detail below.

License Types Available

To begin, Rhode Island will be accepting applications for 5 different license types. In addition to retail, the Department will issue licenses for cultivators, product manufacturers, and “hybrid retail” licenses. To describe, a “hybrid retail” license is a license which can sell medical and recreational cannabis.

Requirements

Now that we have an understanding of what license types are available, lets dig into what is required to apply. First, the department will ask for all owners to be at least 21 years of age, and pass a background check. Additionally, the department will require applicable business entity information. This information will include proof of compliance with local and municipal planning and zoning rules. Most importantly, the department will require standard operating procedures, and business plans that comply with the regulations.

Retail & Hybrid Retail Rhode Island

Rhode Island Manufacturing

Rhode Island Cultivation

Rhode Island Vertically Integrated

Lastly, the business will need to submit the information required along with the required application fee which is $30,000 annually.

If you need assistance with your Rhode Island cannabis license, contact us today!

We have a wide variety of services for a current or future cannabis business.