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Regulatory Compliance: the single most important component for the Medical Cannabis industry

One of the main characteristics of the so-called highly regulated industries is directly related to the strict compliance parameters. The government owns and reserves discretionary, and certainly subjective, powers to suspend revoke or to limit the permits, licenses and governmental authorizations related to the type of industry that may correspond.


The medical cannabis industry has been progressively expanded across the United States, Puerto Rico, Uruguay, Colombia, Israel and Germany, to name just a few countries that have implemented legislations to allow its viability and development. While the regulatory spectrum is diverse, it is almost always centered on important governmental controls aimed at monitoring the process from the seed to the final dispensation of the product. Regulations are also typically focused on issues related to severe and strict compliance standards, safety measures, product quality, monitoring of the entire operation, equipment and machinery certifications, environmental regulations, handling of controlled substances, labor legislation, disposal of organic and inorganic wastes, inventory, laboratory tests, packaging, labeling and marketing, among many other standards of rigorous and strict compliance.


According to the Marijuana Business Factbook 2016, for the third consecutive year, the greatest challenge for cannabis businesses was to achieve and maintain compliance levels required by local and state regulations.



Failure to comply with current regulations and governmental requirements may cause the revocation or loss of licensing, which may result in permanent closure of the business establishment, losing a significant monetary investment and in some cases even a criminal conviction. Likewise, depending on the infraction or non-compliance incurred, fines or administrative sanctions may be imposed, which, when accumulated, may result in an annulment or non-renewal of the corresponding license.


As previously mentioned, compliance is the single most important key component directly related to all the activities that take place in a medical cannabis business establishment, from the simplest to the most complex. The success of an industry that is in constant growth, evolution and development, depends directly of a solid regulatory monitoring system in which indicators are constantly measured and audited. It is not enough to merely maintain operations that are only limited to comply with a few internal standards and procedures.

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