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Smooth Operator: What to Know for Savvy Cannabis Manufacturing Compliance

It’s not an overstatement to say that a significant failure of cannabis manufacturing compliance can land you in jail. If that sounds severe, consider the recent case of Delta Extraction, a Missouri-based retail manufacturer in the spotlight for its alleged violation of Missouri’s compliance regulations, including importing marijuana illegally across state lines as well as failing to adequately monitor several of its grow facilities with the required security cameras and other safeguards against intrusion. Pending an upcoming hearing in December, Delta Excursion stands to lose its license to manufacture cannabis in the state of Missouri, which will mean the entirety of its 45,000 recalled cannabinoid products would be destroyed.

Though a serious case, Missouri’s hard line against compliance regulations reflects an industry reality. Manufacturers who are lax on compliance, whether from miscalculated risk or simple negligence, stand to lose not just the value of recalled product but their license to sell adult-use cannabis altogether. This is one reason why more and more operators are looking to outsource high-stakes compliance concerns to software companies, for whom damage control and compliance capabilities are a major selling point.

Manufacturing Compliance Concerns

To ensure full, ongoing, adequate compliance with state and federal regulations, manufacturers should have several systems in place, which include proper licensing, component inventory, consumer safety, mandatory record keeping, worker safety, and labeling. We’ll discuss each compliant component in turn here, with tips for streamlining included.


As the industry itself, labyrinthine labeling requirements vary by state. Failure to comply with even one of what can be in states like Missouri a 40-page itemized checklist can result–as Delta Excursion experienced–in an abrupt loss of your license to sell. In answer to the demand on the part of cannabis manufacturers for compliance help many software companies offer, with varying degrees of sophistication, in-built labeling features or partnerships with labeling companies. As a result, savvy manufacturers wary of Delta Excursion’s fate have begun screening software companies on the basis of their labeling capabilities alone. There is a maturity model to labeling sophistication, as can be seen here.

Cannabis Manufacturing Licensing

Opportunities for licensure vary by state and type. Each stage of the process, from seed to sale, corresponds to a different license, whether manufacturing, retail, or cultivation. In states like New York, eligibility to apply for licensure is limited on the basis of previous qualifications. Although the path to licensure is not always an easy one, getting a license does not always mean keeping one. Compliance failures can result either in temporary suspension or permanent loss of your license, in which case any retail product is destroyed at a net loss.

Learn more: Guide to Cannabis License Types in New York

Component Inventory

Component inventory refers to the raw materials of operating as a manufacturer: labels, boxes, jars, and the like. The importance of precise inventorying comes down to traceability. Though capabilities will vary across software options, advanced general software options can provide extremely high levels of traceability, down to the particular flower at a given grow facility.  Beyond its compliance importance, component inventory is the first step in damage control in the case that a product is recalled, for whatever reason.

Consumer Safety

Generally speaking, the more precise the traceability software, the more safety it provides the consumer. If, for example, a batch of edibles develops a mold issue as a result of bad ghee used during the batching process, consumer safety means being able to locate the source ASAP. In other words, as a compliant manufacturer, know with a high degree of specificity what goes into your products so that if and when an issue arises you’re in a position to rectify it, and promptly.

Worker Safety

Alongside consumer safety is worker safety, which carries the same risk of civil or criminal litigation. If you have a volatile extraction, for example, the production site needs to be properly ventilated. All workers should expect to be adequately equipped with personal protective equipment, or PPE, and negligence on the part of management is not an excuse for incomplete or inadequate worker safety measures.

Batch Record Keeping

It’s Manufacturing 101 that every stage and step of the manufacturing process needs to be documented, always. In the case that a bad batch is traceable to a broken machine, there should be records on when the machine was last inspected. From there, who fixes the machine, when, and to what degree, needs to be recorded. Hence the importance of batch records, the documented execution detail of the manufacturing process of your cannabis product, from the steps taken to make it to the equipment used in the process. We recommend you stay ahead of the game by conducting your own third-party audits. Generate a printable batch record with your estimates, actuals, and waste, with a full audit log for each batch run.

Learn more: How to Streamline Your Cannabis Manufacturing Operation

Cannabis Manufacturing Track and Trace Software

In most cases, state track and trace requirements entails syncing with one of two platforms, Biotrack or Metrc. These platforms tend not to be user friendly and many companies consider the syncing capabilities of commercial cannabis software worth the cost for their syncing capabilities alone. To learn more about Biotrack and Metrc and how to sync with them via third-party software, click here.

Streamline Your Manufacturing Compliance with Flourish

Flourish is a robust full-service cannabis software company offering track and trace capabilities for all of your manufacturing compliance needs. By its record-keeping capabilities Flourish can help you parlay compliance record-keeping burdens into usable, up to date data on which you can project forward, into the future. Learn more about Flourish's cannabis manufacturing software here.