Marijuana dispensaries and grow operations face the same risks and costs related to sexual harassment and misconduct as any other business, but they often do not have the deep pockets of large companies nor a bevy of lawyers to protect themselves. Just one lawsuit can take your dispensary’s profits, create a hostile work environment, damage your company’s reputation, destroy employees’ confidence in management and hurt your ability to retain employees.

It is naive to think that men and women who work together in a dispensary are not going to notice one another, make emotional connections or have interactions outside of work. Additionally, the workplace has become a venue into which workers bring much of their personal lives. Employers must walk a tightrope between an inviting environment and a legally prohibited one.

There are two main types of sexual harassment, which apply to both genders:

1. Using a Position of Power to Exploit Another Employee

This form of sexual harassment involves a person in power basing an employee’s benefits, such as promotions or continuation of employment, on the employee’s acceptance of sexual advances, innuendos or inappropriate touching.

This is considered employer exploitation. In most states, the company is liable for the supervisor’s behavior, and could be liable for lost wages, emotional distress damages, interest and attorney fees.

State laws vary, and dispensary owners should be familiar with their state’s laws governing sexual harassment by supervisors and co-workers. Some state laws also take into consideration whether the company or management knew, or should have known, about the harassment, yet failed to take immediate and appropriate action. If the employer knew of the harassment, it could also be on the hook to pay punitive damages.

2. Creating a Hostile Work Environment Through Inappropriate Actions or Words

Hostile work environment (HWE) sexual harassment consists of harassing conduct such as sexual innuendos, slurs, intimidation, groping, grabbing and hugging. Managers, co-workers, subordinates and even owners can engage in conduct that creates a HWE. A single instance of harassment could create a HWE if it is severe enough, and multiple acts of subtle harassment could also create a HWE if they are pervasive enough.

An employee does not have to be the target of inappropriate conduct to file a claim. An employee who witnesses her co-workers being groped and propositioned can bring a claim for HWE sexual harassment.

Preventative Measures

The level of prevention you have in place can be determined by your answers to these questions:

• Have you specified and articulated your dispensary’s policies regarding appropriate employee behavior? Do these policies include behavior outside of work? Dating between co-workers? Holiday parties?
• Most states hold the employer responsible for preventing sexual harassment at work-related events, regardless if they are on work property.
• Do you have regular staff meetings with employees to discuss your company’s zero-tolerance policy regarding sexual harassment?
• Are the state and federal posters regarding current Employment Notices posted in a conspicuous place?
• Do you have an employment handbook containing specific policies and explanations regarding appropriate workplace behavior?

Examples of Workplace Sexual Harassment

Asking a co-worker on a date. If your dispensary doesn’t have a written policy against employees dating one another, you should enforce a “reasonableness” rule. If a co-worker wants to ask out another co-worker, and that person is not interested, then there should not be a second request. Repeated date requests may constitute harassment.

A manager or a person in positional power (someone who influences wages and promotions, for example) should refrain from asking out employees.

Sharing the love with a hug. One person’s idea of private space can be very different from another’s. Thus, while you may think hugging an employee or co-worker is a natural display of affection, the one being hugged may consider it unwanted sexual behavior. The best policy is for all employees—regardless of position or rank—to avoid body contact.

Neglecting dress code standards. Dispensary employees should always be dressed appropriately. Define the company’s expectations regarding appropriate attire that reflects the dispensary’s brand and reputation. This information should be in the employee handbook and discussed at the time of hire. Employees can’t be expected to follow a policy if they are not aware of it. If an employee fails to meet the dispensary’s dress code standards, then management should follow these six steps:

1. Publicize the policy and provide specific examples of attire that violates the policy.
2. Talk privately with the employee to determine if he or she realizes his or her attire is in violation of the policy. Always have another co-worker or manager present as a witness.
3. Use the employee handbook to guide the discussion.
4. Tell the employee you do not want to offend or embarrass him or her. State the issue with the employee’s attire. Show the employee where the dress code policy is contained in the handbook.
5. Determine if the attire can be corrected without sending the employee home. For example, put on a sweater, add a scarf, change from skirt to jeans, put on a uniform or a dispensary jacket.
6. Send the employee home to change if other options are not available.
7. Let the employee know that continued violations of the policy could lead to disciplinary action.

Telling an inappropriate joke. The key here is whether a “reasonable person” would find the joke offensive. It doesn’t matter if you or the person to whom you told the joke finds it harmless. A third person within earshot of the joke could find it offensive and report it as such. If one or more co-workers often tell sexually implicit or discriminatory jokes in your dispensary, it could be determined that a hostile work environment has been created.

Basic Prevention Steps

Creating and disseminating a written policy and reporting procedure is crucial. This policy shows the dispensary owner/operator is taking all reasonable steps to prevent harassment, and that he or she will take appropriate action if it occurs. Some states impose liability on employers for the conduct of their supervisors and managers regardless of best efforts. Because this distinction is important, the dispensary owner/operator is advised to consult with an employment attorney well versed in both federal and state law.

The impact of sexual harassment in your dispensary affects everyone. A hostile work environment can make employees uncomfortable, to say the least. Employees may not want to work for you if they feel the situation could happen again, that they could be subject to retaliation, or if they feel you ignored the situation and shielded the harasser. Studies suggest that perceptions of an organization’s unresponsiveness to harassment leads to “bystander stress” and lower job satisfaction.

Sexual harassment has a negative and demoralizing effect on your entire operation. While you cannot control every aspect of people’s behavior in your business, it is possible to take proactive measures to avoid the threat of a lawsuit and damages. The situation is dependent upon the type of working environment that you create and support. Communication about your dispensary’s sexual harassment policies, regular reminders about the information contained in your employee handbook, and modeling the behavior you want to see in your employees will create a positive and productive work environment that will enhance your business.

After 20 years as an industry advocate and entrepreneur, I can confidently say that, contrary to popular belief, the laws regulating the cannabis industry are not its biggest challenge. The ability to build and lead a team that will ultimately determine your success is the biggest challenge, and if you aren’t already experiencing this, you’ll likely find that it’s way harder than you might envision.

It sounds easy and fun: Hire a group of interesting people for a dream job. Heck, your own friends and family are probably eager to help. These connections are surely trustworthy and talented, but without a complete review of the company’s needs, it’s impossible to ensure they have the desired skills.

Before making any hiring decisions, resist moving too fast. The best hiring processes start with forethought, and putting together a winning team is a pass/fail endeavor. Put together a stellar team, and the company can reach its goals. Hire unsuitable workers, and the marketplace will soon notice, and you will likely lose loyal customers.

Your job is to create a step-by-step plan for hiring, training and terminating employees. It’s a holistic system, so design the entire process start to finish before implementing it.

The first step is a weighty evaluation of the company’s purpose. Determine what will be accomplished, how to achieve it and which tasks need to be managed. Group these tasks into job descriptions and dedicate time to understanding the knowledge, skills and abilities needed for each.

Next, create an organizational chart, or “org chart” for short. This is a graphic presentation of your company’s structure, showing each job title and how the workforce supervision flows. A properly constructed org chart will help with:

1. Communication and Chain of Command: Each employee will know to whom to report problems, ensuring vital information is delivered to the appropriate parties. It will also ensure that each employee knows to whom he or she reports, helping to alleviate power struggles.

2. Efficiency: The org chart will list certain job responsibilities, allowing employees to be pro-active in their daily tasks and eliminating the need for them to wait for instruction.

3. Planning for the Future: For employees looking to be promoted within an organization, an org chart can show them the path forward and make them aware of the skills and behaviors needed to obtain future positions.

When constructing your org chart, start at the top with the Board of Directors and officers. Add the supervisors below them, and place the general staff positions below their team leaders.

A dispensary organizational chart might contain these positions:

• Board of Directors: Sets corporate goals, elects officers and provides mentorship to the staff. Shareholders may elect the board, or the founders may appoint it.
• Chief Executive Officer (CEO): Establishes and supervises the company procedures and policies, and responsible for reaching the goals set by the directors.
• Chief Financial Officer (CFO): Supervises the company’s finances, including creating budgets, managing financial reports and overseeing purchasing and inventory.
• Inventory Manager: Manages purchasing and directly manages the inventory control system.
• General Manager (GM): Supervises and manages the company’s daily operations.
• Assistant General Manager: Assists the General Manager with daily operations.
• Direction of Clinical Services: Manages member and community services.
• Receptionists: Assure that only properly credentialed people enter the cannabis facility.
• Dispensary Service Clerks (often called budtenders): Assist patients/customers in understanding the active effects of marijuana and in choosing the best products.
• Packaging Staff: Assures that each product is properly packaged and labeled for sale.
• Shift Supervisors: Manage staff assigned to specific operations and procedures.
• Bookkeeper: Coordinates data entry and supervises financial and inventory reconciliations.
• Office Administrator: Manages payroll and benefits, pays bills, and assists the CEO, CFO and GM.

Most dispensaries outsource critical jobs to part-time, highly skilled individuals. Consider using professional service providers for these positions:

• Legal: Retain an attorney with cannabis industry experience to advise your company.
• Accounting: Find an accountant familiar with IRS 280E taxation.
• Marketing: Save money by using an experienced marketing firm with industry connections versus hiring full-time staff. An outside firm can design graphics, manage social media, design websites and manage advertising, all billed hourly or bundled into a contract, often for far less than the cost of hiring people with these skill sets.
• Human Resources: Engage a knowledgeable expert to advise your company on the ever-changing employment laws.
• Security: Either hire a local company to manage security for your dispensary or get a license to employ your own private security officers.

Compliance is a big issue at any marijuana business, and each staff position has a role to play in that. Most companies can’t afford, and don’t need, a full-time compliance officer, so the CEO takes the lead. She creates a standard operating procedure (SOP) for each regulation, detailing each process and the staff’s role within that process. Larger companies hire chief operating officers to implement these SOPs, who support all supervisors and staff, assuring they are outfitted and trained to meet the rules. In smaller businesses, the general manager fills this compliance role. It’s not easy to follow the regulations, so create a culture of compliance from the start.

The best hiring processes start with forethought, and putting together a winning team is a pass/fail endeavor. Put together a stellar team, and the company can reach its goals.

Job Descriptions and Hiring

It’s essential to write a job description for each job position, including for the board members, security officers and everyone in between. Doing so will help determine what function each position will fulfill, detailing the exact skills, knowledge and abilities required. This exercise will help you envision the company’s operations and how the workload flows from one staff member to another. Don’t rush this task; take your time to imagine the business in action and then consider what staff positions will be needed.

From there, it’s simple to create a job posting from a job description. Post these openings to outlets where qualified industry professionals will see them. The company’s social media handles and website are the best places to post, so start building some local following months before opening.

My own dispensary, Magnolia Wellness of Oakland, uses job applications, not resumes, to hire. It’s easy to compare applicants side-by-side this way. Our hiring team reviews each application, grading it A, B or C. “A” candidates get a phone interview, using a set list of questions. Those who score an “A” on the phone interview receive an in-person interview, where we look for people who are a good fit for the team.

“B” candidates are called if no one in the first round gets through the phone and in-person interviews nor takes the job. There are still gems in this pile, so don’t disregard people who get a lower rating. Keep all of your hiring documents on file, even “Cs,” as if required by law. Check with your Human Resources advisor to find out your local and state regulations about document storage requirements.

Supervising a staff is challenging, but it is easier with a step-by-step hiring plan. The intent is to employ a staff with the skills, knowledge and abilities to meet the company’s goals. At Magnolia, the mission is simple: “To have the best cannabis, served by the nicest people,” and our hiring process assures it happens.

On Dec. 7, 2017, Wanda James was sitting inside the Denver Performing Arts Complex, elbow-to-elbow with some of the cannabis industry’s top players, when her name bellowed from the PA system.

She had just won the Lifetime Achievement Award for her work in the industry.

James walked to the stage in her mid-length white dress, took her place at the lectern and, with her curly black hair resting on her shoulders and her husband standing behind her, she belted out her acceptance speech. But don’t ask her to repeat it.

“I think I asked for a dab, and then after that I don’t really remember what I said,” James says, laughing. “But hopefully I thanked all the folks that got us here.”

James wasn’t expecting the award. Jokingly, she says she is too young to receive a Lifetime Achievement Award. Regardless, the significance of the moment wasn’t lost on her.

“It’s beyond awesome. I didn’t open a dispensary, or start speaking out about mass incarceration and police brutality and equality thinking that one day I was going to get a Lifetime Achievement Award,” James says. “That’s not why you do it. You do it because it matters to you.”

“I didn’t open a dispensary, or start speaking out about mass incarceration and police brutality and equality thinking that one day I was going to get a Lifetime Achievement Award. That’s not why you do it. You do it because it matters to you.” – Wanda James

James and her husband, Scott Durrah, own and operate Simply Pure, a Denver-based, vertically integrated medical and recreational dispensary with three cultivation centers. Located at the corner of Tejon Street and West 32nd Avenue in Denver’s LoHi neighborhood, Simply Pure benefits from being in the heart of one of the city’s trendiest and fastest-growing areas. The location, combined with Simply Pure’s carefully curated product selection, has made the dispensary particularly popular among tourists. Simply Pure General Manager Brian Nowak estimates that “60 to 70 percent of our customers are tourists,” and says the shop serves roughly 150 customers daily.

According to Nowak, the dispensary has 390 SKUs. It carries established brands such as Pax, O.Pen, Coda, Wana, 1906, Stillwater and Stratos. James estimates that Simply Pure works with 40 different vendors for non-flower products. But being placed on Simply Pure’s shelves isn’t easy. “It’s not just about the quality. You can have the best product in the world, but if you don’t know how to market and sell it, that doesn’t work for us,” Nowak says, adding, “Those companies stuck in 2009 using at-home labels on a standard container, that is not going to cut it.”

Vendors must participate in the marketing of their products at Simply Pure. They are required to commit to a certain number of vendor days (where growers and processors interact with customers in the dispensary), promote the dispensary on their social media pages and train Simply Pure’s budologists (budtenders) on their products.

In addition, says James, “We partner with people that have the same beliefs that we do in terms of processing and purity.” For flower, Simply Pure typically only sells its own; however, James states that the company works with four third-party growers that it “implicitly trusts.”

Like most dispensaries, though, Simply Pure was not an overnight success. It took James and Durrah several iterations to make Simply Pure exactly as they wanted. But to understand how James got to where she is today, you have to understand where she came from.

FROM THE TOP

James was “born a poor black kid” to a British mother and American military father. The typical Air Force brat, she spent time growing up in Germany, England and Italy. She attended the University of Colorado, Boulder, where she was part of the Naval ROTC. Upon graduating, James became a commissioned officer in the U.S. Navy where she worked in Integrated Undersea Surveillance System (IUSS) hunting submarines. “If you ever saw [the movie] ‘Red October,’ that was based on everything we did,” James says.

In 1991, at age 26, James left the military after completing her tour and moved to Los Angeles where she took her “first job in Corporate America” before becoming director of marketing and sales for Southern California Presbyterian Homes (now known as be.group).

This is also around the time James met Durrah—a professional chef, a former Marine and currently Simply Pure’s chief operating officer (COO). When they were 32, the veteran couple opened their first restaurant, The Jamaican Café, in Santa Monica, Calif., and they have owned restaurants ever since.

In 2001, James ran for a House seat in California’s 32nd District. Despite her bid being unsuccessful, the experience energized her to jump further into politics. Later, she managed two congressional campaigns and was eventually appointed to Barack Obama’s National Finance Committee, and Colorado Gov. John Hickenlooper’s Amendment 64 Task Force Work Groups.

“Politics is important to me,” James says. “My brother was arrested for cannabis at age 19 with four and a half ounces of cannabis. [He] did 10 years in the system in Texas.” James was surprised to discover people were actually jailed for cannabis possession because in the “very white world” in which she existed while at the University of Colorado, she had never seen anyone arrested for marijuana. “So, it was shocking to me to start finding out [that] people were arrested for simple possession, and [that most] of [them] were black or brown,” James says. (According to the American Civil Liberties Union, 88 percent of the 8.2 million marijuana arrests between 2001 and 2010 were for possession, and African Americans are nearly four times more likely to be arrested for marijuana than white people.)

“Business owners [must] start talking like business owners and sharing our successes and our challenges so that we can make things more positive. Making it difficult for other business owners to get into this industry is not helping the people in this industry.”
– Wanda James

TRANSITIONING TO CANNABIS

Motivated by her brother’s arrest, the number of minorities incarcerated for possession and a desire to make a difference, James moved back to Colorado in 2004. In 2008, “Barack Obama was elected, and [Scott and I] decided to open a dispensary as a political statement,” James says. “Let me be frank: It was also good business.”

James and Durrah felt confident entering the cannabis space because they knew they had nothing to hide. As former Naval and Marine officers, both had been well-vetted for most of their lives. “So, we went headfirst into this cannabis industry,” she says. “We’ve been outspoken since the very beginning.” She remains that way to this day, dubbing Simply Pure “America’s Political Dispensary.”

When they opened their first dispensary, Apothecary of Colorado, in 2009, they were the first African Americans in Colorado licensed to own a dispensary, a grow operation and an edibles company. Durrah’s culinary background helped them specialize in edibles, which he concocted himself. One fourth of the dispensary was designated as “The Gourmet Shop” and featured his products. “Forty-five percent of our sales were edibles,” James recalls.

However, they noticed other edible manufacturers weren’t using satisfactory quality assurance (QA) procedures because, at that time, as James says, “There were no rules. We were concerned about how poorly edibles were being made. They were being made in people’s homes with no cleanliness.” Being from the restaurant industry, this was unacceptable to James and Durrah. So, they sold their dispensary and worked full-time with the State of Colorado to help craft the state’s rules for manufacturing edibles.

In 2010, James and Durrah returned to the scene and opened Simply Pure Edibles.

Simply Pure Edibles produced vegan, gluten-free, organic products. Unfortunately, James and Durrah were making them when the bottom fell out of the medical marijuana market. James recalls: “Edibles were being made for $3 and sold for $1.” In 2012, James again decided to shutter the business “before [it] got in any kind of [financial] trouble, and we just decided to reopen once [adult-use] legalization passed.”

THIRD TIME’S THE CHARM

Three years later, in September 2015, Simply Pure reopened at its current location as a medical dispensary. (It began serving adult-use customers in December 2015.) After all her perseverance and resilience, James finally had the dispensary she always dreamed of. This one was here to stay.

On the outside, the building is inconspicuous other than a mural depicting the Rocky Mountains, various Denver attractions and Simply Pure’s logo. James commissioned the mural, but not solely for aesthetic purposes. “In Colorado, we can’t have any kind of billboards or advertising … so the mural helps with that,” she says.

Despite previously opening a dispensary and an edibles company, James still encountered difficulties when launching the third iteration of Simply Pure. As could be assumed given the industry, finances were a major obstacle for James. “Finance in this industry is obscene. … How do you make money? How do you stock up your cost of goods? How do you lower your tax rate? How do you find the right financial partners?” she says, going on to stress that it is crucial for dispensary owners to find the right chief financial officer (CFO)—one that “begins to understand cannabis or even wants to understand cannabis.”

James joins many others who have proposed a solution to the industry’s finance woes: “Get rid of 280E. You don’t need to tax at that level,” she says. “Then the federal government needs to back up out of this.” James laments that the federal government is making “a mint” off cannabis sales. IRS tax code 280E was created to take profits from drug dealers, so why it is being applied to legal cannabis businesses, she isn’t sure. “The fact that the government wants to put me in the same boat as ‘Scarface’ really kind of upsets me,” James says. “I have a great big sign. … ‘Scarface’ didn’t have a sign that said, ‘Buy Cocaine Here,’ nor was he registered with the Secretary of State.”

NOTHING IS RANDOM

James wanted Simply Pure to be different than other Denver dispensaries and took her time to make it that way. “This is a ‘Colorado Cannabis Experience,’” James says with pride. And the experience starts when you walk in the door.

Simply Pure has a large, inviting, comfortable lobby that feels like a friend’s living room. “I think there’s a little layer of sophistication,” James says. It has a sturdy wood door, wood floors and light gray walls. An antique chandelier with lantern-style lights suspended from the ceiling by a wrought iron chain illuminates a wall full of magazines and newspapers in which James has appeared. There’s a total of 10, including Ebony and Black Enterprise. A large area rug spans the room, and rustic wooden chairs with metal accents line the walls. The waiting area has seating for six, but can hold many more due to its open floor plan. Reggae music reverberates throughout the lobby.

This relaxed, “Colorado-chic” vibe (as James likes to call it) continues into the product space. Customers and patients are greeted by an open, ambient-lit room with wood floors and wood-paneled walls. Display counters and registers line both sides of the entrance. In the back are two additional displays and registers broken out for medical and recreational customers.

James designed the interior of Simply Pure, saying: “If I’ve done anything extremely well, it’s that I’ve put 30 years of experience into our logo design, into our name and into the look and feel of Simply Pure.” She adds that she had one goal when designing. “If my mom comes in here, she’s going to feel comfortable, and if my 30-year-old brother comes in here, he’s going to feel hip.”

Product layout is also part of Simply Pure’s aesthetic. “There is always a design to everything [we do],” James says. She places all her new products at eye-level near the entrance so customers and patients can easily view them upon entering. Products are grouped together by category for a simpler customer experience, she says.

However, in this industry, James’ love for design is also a hindrance. Simply Pure has several design modifications planned for 2018, but due to state regulations, changing any part of the store’s layout becomes an expensive headache. James wants to relocate a few displays and move all her cash registers to the back to give the store a more retail feel, but she can’t go in after hours and rearrange. “I would have to send a modification request to the state, and when they approve my modification, then I have to send it to the city, then to the fire department,” James says. She would then have to hire someone to reposition all the security cameras. She estimates that these changes will take a minimum of three months due to the approval process alone, and that leaves her with a sour taste. “In a business that’s [around] 1,000 square feet, [the fact that] I can’t move my counters around to make it look fresh in here—that’s annoying,” she says.

But, interior design isn’t only about what customers see; it’s also about what they don’t, and inside Simply Pure they will never see a security guard. “We like the Tiffany-style of security,” James says, referring to the high-end jewelry store, meaning that just because security guards aren’t present, doesn’t mean you aren’t being watched. “I purposely do not want people to come in here and feel like they are doing anything wrong or anything dangerous,” James says.

Instead, each Simply Pure manager has surveillance camera feeds at his or her desk, and there is another surveillance station at reception. “Panic buttons” are located throughout the shop, and the wall that separates the lobby from the dispensary is reinforced.

TEAM PRIDE

Currently, Simply Pure employs 31 people between its dispensary and four cultivation centers. At the end of 2017, the company received its marijuana-infused products (MIP) license and expects to hire an additional 15 to 20 employees in the early months of 2018 to assist with the extra workload.

James takes extreme pride in her staff, and reverts to her Navy days to describe to them. “Our budologists are like Navy SEALs … [SEALs] know they’re the best. They know they know their s---,” James says. “They walk differently. They stand a little taller. … They’re just those people, and our budologists are those people. They care about this stuff.”

The reason for James’ confidence in her staff? Simply Pure’s training program. According to Nowak, each new hire goes through a rigorous, two- to three-week training culminating in a 50-question final exam. New hires must receive a minimum 80-percent grade to work unsupervised on the dispensary floor. Simply Pure also provides mandatory employee training each month on a specific topic, such as cannabinoids or terpenes. “We provide education and training on those topics for the month, and then at our monthly meeting we do a test to make sure everyone is staying up to date,” Nowak says. Staffers must receive a 75 percent or higher to be allowed to continue to work.

Since Simply Pure’s customer base is roughly 65 percent tourists, having a knowledgeable staff is a huge advantage as they are often tasked with explaining products and effects to new cannabis customers. “We want to be able to show you what to expect when you smoke this [joint] that’s high CBD and low THC, as opposed to smoking a vape pen,” James says. 

James is so keen on customer interaction that she has been known to spurn technology that would move people through her dispensary faster. James uses an example of a point-of-sale (POS) system that was guaranteed to cut a customer’s transaction time to two minutes. “That’s fascinating, … but right now, I want somebody to be able to spend 20 minutes with my budologists. … That’s what makes Simply Pure different. We stand out because we’re proud of what we do,” James says. “You've got to want to be a part of this industry.” (Simply Pure does have online ordering for those who want that convenience.)

James helps her staff with that initiative by requiring each employee to attend one cannabis event per quarter. This could be a local trade show, vendor day or party. If tickets are required, Simply Pure will usually provide them. James also implores her employees to visit other dispensaries and talk to the employees. In late December, she took her staff to a competing dispensary and spent $350 because, she says, “We wanted to support them. They're doing great things. … I want my GM to know their GM. I want my budologists to know their budologists.”

James feels the entire industry could benefit from this type of open communication. “It is time for dispensary owners to stop being fearful about talking about their businesses because it’s destroying us,” she says. “This industry is so new, and so many people are so fearful that people are going to judge them on their lack of business acumen. Business owners [must] start talking like business owners, and sharing our successes and our challenges so that we can make things more positive. Making it difficult for other business owners to get into this industry is not helping the people in this industry.”

WHAT’S AHEAD

Simply Pure has much planned for 2018, headlined by a proprietary new grow technique. The company also will introduce its Vendor Participation Package (VPP), which James calls a revolutionary initiative to make partners out of brands Simply Pure carries, but she declined to elaborate further.

James is even thinking long term. She provides a few prophecies: In five years, “I see us as a national edible company. You will see Simply Pure products from California to New York to Florida to Texas.

“I believe the CEO of Simply Pure will be a young, fresh, new, talented, phenomenal person in five years; it won’t be me.” If that’s the case, James can rest easy knowing that she gave her all to the industry she loves. Her Lifetime Achievement Award is proof enough of that.

While medical and adult-use states continue to develop quality assurance (QA) standards for marijuana edibles, unsafe edibles are often unwittingly being sold to and by dispensaries. A 2017 University of California-Davis study of medical marijuana flower from Northern California dispensaries found samples containing multiple bacterial and fungal pathogens, including Escherichia coli (E. coli), Mucor and Cryptococcus, among others. If unsafe flower is being found in the marketplace, chances are it is winding up in some edibles products. And even if the flower is not tainted, you still run the risk of having a product made with sub-par ingredients or in an unsanitary environment.

The federal government still classifies cannabis as a Schedule I narcotic, thus no national food safety standards exist—only “best practices” from other states, says Nick Mirsky, operating specialist for Ann Arbor, Mich.-based medical marijuana consultancy TreeCity Consulting Group. “The World Health Organization (WHO) does have some standards that are used in Europe, but have yet to be adopted here in the U.S.”

Since cannabis is not recognized by the Food and Drug Administration (FDA) as a legal product, “it is up to individual states to develop their own standards for safety as they legalize products in their state,” says Cindy Rice, consultant at Boston, Mass.-based Eastern Food Safety.

So how can a dispensary ensure that the edibles it is sourcing and selling are of the highest quality, safe for its customers and follow state regulations? Below are five factors to consider.

1. Food Safety

Food safety should be the top priority for every business throughout the edibles supply chain, even if specific state standards are still being developed. “Just because you’re in the cannabis industry doesn’t mean you shouldn’t be guided by food-safety principles in general,” says Jason Cetel, senior associate at Gray Robinson Attorneys at Law in Tampa, Fla. Although some dispensaries don’t control the cultivation and production of pre-packaged edibles, “it’s really important for the dispensary to know that they are in the food supply chain—and they are the last link in this long chain,” Cetel says.

Dispensaries have a responsibility to understand the supply process, to know who their vendors are, what food-safety and -quality measures are being followed, and what ingredients are being used.

At the same time, the dispensary must ensure it is following safe-handling practices. “Is there anything in that food that should require food safety?” Cetel poses. For example, is it shelf-stable or does it need low humidity, refrigeration or freezing? “You are selling food, so what are the industry standards that guide that food? There’s a major liability if you’re not selling safe food,” Cetel says.

Mirsky sees proper storage and care, attention to sell-by or expiration dates, and independent testing and verification from reputable sources as vital elements to edibles’ safety. In addition, he notes, “Although not required, I would believe standard ServSafe certifications should be earned by those in the manufacturing environment,” adding that those operating in this space should adhere to the FDA’s Current Good Manufacturing Practices (CGMPs) regulation for food. (For more information on ServSafe, visit ServSafe.com; for more on CGMPs, visit bit.ly/foodCGMPs.)

Dispensary record keeping is necessary to document supplier, batch numbers, dates and product types, Rice says. Additionally, to help consumers continue the chain of food safety, the dispensary should provide instructions for safe handling of the products, including directions for shelf life, storage conditions, dosages and recommended use, she adds.

2. Accurate Labeling

Whether edibles are packaged and labeled in-house or prepackaged from a supplier, labeling is a critical food-safety factor—and one Rice believes should follow FDA requirements, despite cannabis’s Schedule I status.

Important items on a label include an ingredients statement, list of allergens and dosage information of active cannabinoids, Rice says. “Packaging should meet standards for food, and suppliers/processors should be sure that it is food-grade,” she adds.

According to Mirsky, labeling should have company information, including notation that it’s an officially and legally licensed business whose products have been properly tested. This type of labeling will become a requirement in most states with medical and adult usage, Mirsky says, adding that “labels will and should have unique identifiers, so if an issue does occur, a recall can be issued and performed in a manner that is consistent with any other product where consumer safety may be affected.”

If you don’t verify your suppliers’ food-safety practices, require that your distributor be licensed and check your labels. You can be held liable in the event of a contaminated product reporting or recall (if proper label requirements weren’t displayed on the product), Cetel says. “The dispensary owner is in the supply chain. Just because you’re not putting on the labels, you still have to be knowledgeable about what you’re selling.”

“Just because you’re in the cannabis industry doesn’t mean you shouldn’t be guided by food- safety principles in general.” Jason Cetel, senior associate, Gray Robinson Attorneys at Law

3. Lab Testing

“Lab testing is important for consistency and purity,” Mirsky says. But, he adds, a common issue with current testing is that samples are not randomly selected, but are specifically chosen by producers/processors. “This can be skewed information, as the sample may not be representative [of] the batch/harvest.” Michigan, for example, requires batch testing on all products, Mirsky says, but requirements vary by state.

Despite that variance, Rice says, “Lab testing is important for food safety, notably for presence of pesticides, microorganisms, heavy metals and for dosage control in edibles.”

If a consumer becomes sick or injured because he or she consumed a product that contains pesticides, fungicides or molds, or even glass shards from the manufacturing process, there could be legal repercussions for everyone in the chain, according to Cetel. “In litigation, the plaintiff will inevitably sue everyone. Everyone is a potential defendant until you can prove otherwise,” Cetel says.

4. Ingredient Consistency

Consistency concerns arise again when discussing ingredient quality, particularly in source strains, potency and THC/CBD content between batches, Mirsky says, adding, “One of the main issues with edibles is that the dosage may not be consistent throughout the batch, i.e., not evenly distributed.” Pooling can occur, he explains, with one piece from a batch more potent than another from the same batch, so testing should be performed.

Consistency needs to be addressed by the grower and manufacturer. As such, the dispensary should set supplier requirements. “From seed to sale, the product needs to be controlled in its growing and production so that potency is consistent, ingredients and hazards are controlled, and labels are accurate regarding these aspects,” Rice says.

One requirement the dispensary could make is that of a Hazard Analysis and Critical Control Points (HACCP) plan, which Rice says would help identify possible hazards throughout the growing and processing stages, and help “prevent, eliminate or reduce hazards to safe levels every step of the way.” (For more information on HACCP plans, visit the FDA’s website: bit.ly/HACCP-info.)

“In litigation, the plaintiff will inevitably sue everyone. Everyone is a potential defendant until you can prove otherwise.” Jason Cetel, senior associate, Gray Robinson Attorneys at Law

5. Proper Training

No matter how many practices you put in place—within the dispensary or for your suppliers—they likely won’t matter if your staff isn’t trained. Training should include food safety, checking and assuring label compliance and effective dates, communicating with customers and regulatory departments, and what to do in case of customer complaints or illness, and damaged or recalled products, Rice says.

“Education is very important for the dispensary to understand its supply chain, what they are selling and convey that information to the staff, so they can inform the customer,” Cetel says.

Retail's Onus

It comes down to "must" versus "should." Due to cannabis's Schedule I status, the FDA may not be able to regulate edibles production, and many factors of edibles food safety and quality begin further back in the supply chain. But the dispensary, as the last link in the chain before consumer consumption, is legally and ethically liable for the products it sells. “Just because you’re in the marijuana space doesn’t mean you’re absolved from all liability risk,” Cetel says. “Don’t just bury your head in the sand and say you’re not regulated.”

Lisa Jo Lupo is editor of Quality Assurance & Food Safety (QA) magazine, a GIE Media publication.