Before the 420 Sales Boom, Is Your Dispensary Compliant?

420 is a globally recognized cannabis holiday. Not surprisingly, for dispensaries worldwide, each year brings unprecedented sales opportunities with it. Even better for dispensaries in 2022, cannabis sales are expected to be higher than ever before, according to a report released by

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 were recently co-hosted a webinar with industry experts from The Bird Rock Group Cannabis Consulting, Synergy Cannabis Consulting, and Cannabist San Diego in this live webinar, where 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 checking your compliance before 420 sales this year.

Reducing compliance risks in your business.

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 any fake vendor phishing scams out there. Phishing scams may include things such as executive impersonation that takes place to gain access to their secure accounts.

The cannabis industry has been targeted by many phishing scams because often, its infrastructure isn’t as built out as other businesses. In gaining this knowledge, 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 for 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 at a minimum 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.

Seek out tech for help

There are a few different ways that technology can help you with the risk mitigation of your physical inventory. One of the most obvious ways is to seek out cannabis card processing 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 will become repeat customers returning.

Ultimately, prioritizing safety in and around your dispensary will drive down both your insurance and operating costs.

Make sure you identify vulnerable sites to your dispensary, whether it be your storefront, delivery, or curbside sales. Identify and immediately address any safety concerns within these aspects of your business.

Remember that providing a safe environment for consumers will equate to happy consumers, which ultimately yields an increase in your profits.

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 things to keep in mind as far as insurance policies go 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:

  • Customer
  • Investors
  • Competitors
  • Vendors
  • Employees
  • Or other parties

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 most retail businesses, and especially those in the cannabis space, you always hear that it all comes down to location, location, location. But, in reality, with dispensaries, it really should be documentation, documentation, documentation, AND location, location, location.

In the cannabis industry, the level of documentation needed is often deemed over documentation. The truth is, all of this documentation is another level of your risk mitigation and must be considered because it ultimately helps to protect your dispensary in the long run.

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 or proactively show regulators helps build the relationships necessary for your business's success.

In the cannabis space, documentation is considered to be a bit of a C.Y.A., or cover your ass, move. Having all these documents helps 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.  Another thing to think about includes storing and accessing all of this data. Questions such as who has access and what levels of access are available are all different things that dispensary owners have to think about even before starting a business in the cannabis space compared to other businesses.

Understanding and ensuring your dispensary is state compliant.

In addition to doing everything you can to reduce your compliance risks before this year’s 420 sales, it goes beyond that. You must also understand and ensure that your dispensary is state compliant. Here are our recommendations on how you can be successful in these pursuits.

Top 3 ways budtenders can get your dispensary into compliance trouble.

Part of understanding compliance also addresses 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 program. 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’ve got to have it all figured out ahead of time so your budtenders can be made aware.

2 - Allowing customers to enter your dispensary or make a purchase with expired IDs.

Even in states with the most strict initial ID checks at the front door, there are sometimes opportunities during the transaction or at the POS counter that an ID check is not completed again.

Make sure that your ID checks are well maintained, especially during peak volume times like 420 sales. One of the top ways that secret shoppers ding dispensaries are for expired IDs or no ID check at entry or transaction.

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.

Be proactive

Make sure you’re contacting your regulators and local enforcement agents and local inspectors. Reach out and be proactive about that to help develop relationships with these people who are critical to the success of your business.

Be proactive with any issues you may notice in your shop. If ever you have concern that something is not compliant, it is always better to call them in and have them check it out rather than them finding it on their own unexpectedly.

Remember that transparency is key with regulators. If you’re trying to sweep things under the rug, it will surely rub these people the wrong way, which is not a good idea for running your business.

How important is it that all employees grasp cannabis compliance regulations?

As a dispensary owner, you have a good grasp of the importance of cannabis compliance regulations, but it’s equally as important to impress this upon your budtenders as well. Here’s how you can do that.

Start with training

Understanding and walking within the compliance line is required, especially for a super red taped industry such as cannabis. In the United States, for example, cannabis is one of the most regulated industries, which means that even a tiny error can get a shop closed.

One of the main things to know about compliance is that there are regulations at the city and state levels. Both you and your employees need to know the difference, know what the right thing to do is, know what can get your shop doors closed, etc.

Make sure your budtenders understand that they’re the first line of communication with the consumer

It’s also crucial that your budtenders understand that they’re the first line of communication with the consumer. If the consumer feels comfortable, the establishment isn’t shady or unsafe, so your doors will stay open, and people will come back. At the same time, you’ll be able to maintain lines of compliance, and everything should be smooth in a business environment.

If we're aware of the things we need to be doing in terms of compliance, it's a good start.

Understand it from a cost perspective

As a dispensary owner, you spend potentially millions of dollars to get a business license. The last thing you want to do is to be quickly shut down for a compliance error.

Make understanding and staying within the lines of compliance a priority as an owner. Educating your budtenders should be at the front of all your compliance efforts, including continued education.

Final thoughts

Now that you have a better idea from the experts of the cannabis industry 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!

Increase 420 Sales

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