Before the 420 Sales Boom, Is Your Dispensary Compliant?

March 30, 2022

420 is a globally recognized cannabis holiday. Not surprisingly, it brings unprecedented sales opportunities for dispensaries worldwide. Even better for dispensaries in 2024, cannabis sales are expected to be higher than ever before.

While taking advantage of these remarkable sales opportunities should be a top priority, so should ensuring compliance. So, ask yourself before the 420 sales boom, is your dispensary compliant?

We co-hosted a webinar with industry experts from The Bird Rock Group Cannabis Consulting, Synergy Cannabis Consulting, and Cannabist San Diegowhere they covered all things cannabis, including the key point that an ounce of prevention is worth a pound of cure.

Here’s everything we’ve learned about keeping your dispensary compliant for 420.

A budtender is weighing flower for a customer at the dispensary on 420.

Reduce Compliance Risks in Your Dispensary

One of your primary concerns, especially in consumer-facing businesses such as retail, should always be risk mitigation. Risk mitigation within a dispensary is an umbrella term covering security risk management, management lines of coverage, and documentation.

Security Risk Mitigation

When developing your security risk management plan, there are several different risks to keep in mind, including cyber, physical, and safety.

Cyber Risks

When it comes to cyber risks within your dispensary, you want to ensure that your employees are up to date on vendor phishing scams. Phishing scams may include things such as executive impersonation hoping to gain access to their secure accounts.

The cannabis industry has been targeted by many phishing scams because often its infrastructure isn’t as robust as other businesses. It’s essential that you develop your risk mitigation for these cyber risks in the beginning and, if not, before your 420 sales this year.

Physical Inventory

Not surprisingly, the risk mitigation of your physical inventory is a paramount concern in the cannabis industry. Because dispensaries are primarily cash-operated businesses, especially in the United States, protecting your physical inventory is critical.

Often, break-ins into storefronts and the theft of physical inventory, also known as smash-and-grabs, are serious risks all dispensary owners must consider.

But, it’s not just having a storefront that presents risks to your physical inventory. Other elements to your business, including things like curbside pick up or delivery, also open windows for potential criminal activity to enter your store.

Hire Dedicated Security Professionals

To mitigate some of these concerns, you want to ensure you have hired dedicated security professionals at your retail establishment. Having this security feature is often required in many states, whether it be for a full-on 24-hour rotation or during your operating hours. 

Legal compliance aside, just be sure to remember that 70% of crimes are committed between 8:00 pm and 8:00 am.

Leverage Tech

There are a few different ways that technology can help you mitigate risks. One of the most obvious ways is to move your business towards debit or other card transactions to help cut into the cash dependence that many dispensaries fall into because of state regulations.


Lastly, before your 420 sales this year, make sure that you are keeping up with your regulatory requirements as a business. Operating a safe business is critical because people who feel safe in your store are more likely to become repeat customers.

Prioritizing safety in and around your dispensary will drive down both your insurance and operating costs, while increasing profits and customer satisfaction.

Management Lines of Coverage

Another way to help reduce risks within your dispensary is to stay on top of the different management lines of coverage, including insurance policies for your business.

Employment Practice Liability Insurance (EPLI)

Employment practice liability insurance, or EPLI, is a type of insurance coverage that includes damages and defense costs regarding many different employment-related claims. Some of the allegations that may be covered under EPLI include:

  • Workplace harassment and retaliation
  • Discrimination
  • Wrongful termination

Directors and Officers (D&O) Liability Insurance

Directors and officers (D&O) liability insurance is a type of insurance coverage that helps to protect the personal assets belonging to directors, officers, and spouses. D&O liability insurance helps protect these individuals for actual or alleged wrongful acts while managing a company if they are sued by any of the following:

  • Customers
  • Investors
  • Competitors
  • Vendors
  • Employees

Contacting Firms for More Information

To get more information about the management lines of coverage that are out there and applicable to your dispensary, it’s recommended to reach out to firms that work specifically in the cannabis space. A couple of nationwide and international firms recommended for starters include:


When you’re starting a retail business, you often hear that it all comes down to location, location, location. But in the cannabis industry it should be documentation, documentation, documentation — and then location, location, location.

Some of the documentation you’ll want to have readily available includes:

  • Metric track and trace of products
  • Standard operating procedure
  • Emergency action plan
  • Hazard control plan
  • Safety plan

Having these documents on hand and ready to show regulators helps build the relationships necessary for your business' success.

In the cannabis space, documentation is considered to be a bit of a C.Y.B. (cover your butt) move. These documents help you to be prepared and to be able to defend yourself if you have to.

Also, keep in mind that many states, such as California, have elements like record retention requirements built into the state regulation. It is important to be aware of who has access and what levels of access are available.

A person is rolling a cannabis joint for 420. Text over the image says: When it comes to regulators, transparency is key.

Top 3 Ways Budtenders Can Become Non-Compliant

Part of understanding compliance is understanding the common ways that dispensaries find themselves in trouble. Here is a list of the top three ways budtenders can get your dispensary into compliance trouble.

1. Trashing or Getting Rid of Expired Product

Trashing or getting rid of expired products in dispensaries can often be a bit of a gray area, especially without clear guidance on how to dispose of or handle your cannabis waste. Local laws and regulations may dictate waste management, depending on your area. For example, in California, you can find these details in code section 17223 - Waste Management.

As a dispensary, your waste management plan will detail the effective storage and disposal of your cannabis waste. Whether you plan to handle your waste management on your own or hire a cannabis waste company to come to pick it up for you, you must figure it out ahead of time.

2. Allowing Customers to Enter Your Dispensary With Expired ID

Always check customers' ID as they enter your dispensary, and do so thoroughly. Make sure that your ID checks are well maintained, especially during peak volume times like 420. One of the top ways that secret shoppers ding dispensaries are for expired IDs or no ID check at entry or when making a purchase.

3 . Improper Record Keeping

We can’t stress enough the importance of keeping a record of everything that happens within your shop. Additionally, make sure you keep that data accessible for any type of regulation or regulatory inspection.

A pre-packaged bag of cannabis, ready to be sold on 420.

Final Thoughts on Cannabis Compliance for 420

Now that you have a better idea on just how important compliance is, you can get ahead of things before the 420 sales boom this year.

Reducing your compliance risks is just the beginning. Don’t forget it is also your responsibility to understand and ensure your dispensary is compliant not only for 420 sales, but throughout the year.

Want to learn more about how to prepare for the 420 boom to increase sales and reduce the risk of compliance fines? Download our free guide below!

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