What is Cannabis Compliance? Everything You Must Know

Like any commercial enterprise, the cannabis industry is subject to strict rules and regulations. What’s different about cannabis businesses, however, is just how new this industry is–and how severe the penalties can be for regulatory noncompliance. That’s where cannabis compliance comes in.

So, what is cannabis compliance? How can you ensure that your dispensary or grow operation meets vast and ever-changing requirements?

What is cannabis compliance?

Cannabis Compliance for Dispensaries

The details of what constitutes compliance and noncompliance vary across jurisdictions. Because cannabis and cannabis products are still illegal at the federal level, you’ll need to look to your state and local government regulations.

In most areas with legalized marijuana sales, compliance policies usually address:

  • Where dispensaries and manufacturing sites can be located
  • Where, when, and how cannabis businesses can advertise
  • How much these businesses can grow and sell
  • Who is eligible to grow, sell, and purchase cannabis products

You may also need to have a security plan in place. This plan should demonstrate how you intend to prevent theft or unauthorized access to your products, as well as how you protect customer and employee information.

Seed-to-sale and track-and-trace: inventory compliance in the cannabis industry

Track and Trace Compliance

You may have heard the terms “seed-to-sale” and “track-and-trace,” but what do they mean? Better yet, what do they mean for your business?

Seed-to-sale is a process that tracks marijuana plants from the time they’re planted to the time they’re sold. Every seed or clone–plus every product derived from these seeds and clones–is documented and traced until it’s sold to an eligible customer.

Track-and-trace refers to the systems that help growers and retailers maintain their seed-to-sale records.

Nearly every state with a legalized cannabis industry requires businesses to have a seed-to-sale inventory tracking system in place. If you don’t already have one, make that your top priority.

How can you keep your inventory management compliant?


If cannabis inventory compliance sounds daunting, that’s because it is.

There are a lot of moving parts to keep track of, and that documentation only gets more time-consuming as your business grows.

One of the easiest ways to make sure your inventory management system meets state and local requirements is to use a cannabis-specific POS system. 

The BLAZE dispensary pos platform, for example, integrates with Metrc and offers seed-to-sale tracking, simplifying your inventory management and offering unmatched peace of mind.

Specifics of Retail Compliance

Staying Compliant for Your Cannabis Retail Operation
Cannabis compliance becomes more specific when involving retail operations. Making sure your business is meeting requirements is crucial for avoiding penalties and legal repercussion.

Purchase Limits and Age Verifications

Purchase limits are the maximum amount of product a customer can purchase in a single visit. Depending on the state you operate in, there will be different requirements. Limits can also vary by consumer type, product category, and timeframe. 

Age verifications is just like what it sounds. Making sure your business is only selling to those of legal age is the law. Having ID scanners and proper training for employees will work to prevent your products from ending up in the pockets.

Automated Sales Reports

Sales reports are a necessary component of staying compliant. They ensure that all of your sales are above-board and that your income matches with your sales. Keeping track of all your sales data can be difficult. This is especially the case when businesses are keeping track of sales through excel or written documents. Cannabis specific software is needed to ensure sales reports are accurate and uploaded in a easy, efficient manner every time.

Reconciling Inventory

Auditing your inventory is a major component of your operations. Doing so, details that what you’re selling matches what your store has in stock. This prevents cannabis from getting into the wrong hands and creates transparency. Regular audits will catch mistakes and theft early on, before it turns into a bigger compliance issues which can lead to hefty fines and jail time. If discrepancies are found, report them to your regulator immediately.

What happens if you’re out of cannabis compliance?

Compliance for Dispensaries

Many states have cannabis regulatory boards that oversee compliance for cannabis-related businesses.

These agencies use tax records, observational data, and thorough reporting systems (among other means) to make sure growers and sellers stay above board. If they find out that your business hasn’t followed regulations to a T, they may issue you a fine or citation.

Penalties can be far more severe, however: cannabis regulatory boards often have the authority to suspend or revoke your license–or shut down your operation entirely.

Better safe than sorry

Cannabis compliance is far more intense than some people realize. Regulations are constantly shifting, and it’s imperative that you and your business can adapt quickly.

Your best course of action is to stay abreast of industry changes. You’ll also need to invest in leading cannabis tracking systems, like the BLAZE software platform. Otherwise, you could find yourself out of compliance, and that simply isn’t worth the risk to your business.

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