All businesses must adhere to tax rules and regulatory compliance, but for cannabis companies, the laws are significantly more challenging to navigate. The cannabis industry has specific tax rules that differ from other sectors, and failing to follow them can result in severe financial and legal implications.
At Green Space Accounting, we know that managing your finances as a cannabis company can be much more complicated than the average start-up. Keeping a compliant financial system in place is not always easy with constantly changing state laws and regulations.
Here are a few tips on how to avoid compliance issues with your budding cannabis business.
Have Your Business Documentation in Order
One of the first steps to staying compliant is to have all the appropriate financial information and licensing for your business on hand.
Always be prepared with copies of your cannabis license, information from your seed-to-sale tracking system, and your point of sale software records. Having this paperwork, along with legal documents like operating agreements, Articles of Incorporation or Organization, and EINs will ensure that you have a fully compliant relationship with your bank, as well as local and state government.
It’s also a good idea to have detailed records on all sales transactions within your business, especially ones dealing with cash. Cash is used more frequently in cannabis dispensaries than in other retail industries. Having proper cash-handling procedures in place can save you from theft and keep you ready for any unexpected auditing.
Stay up to Date with State and Local Regulations
It’s important to remember that regulations surrounding cannabis change over time, so monitoring your state legislature and all applicable state and local agencies is crucial to keeping your business compliant. By making yourself aware of the rules for the cultivation, manufacturing, and distribution of cannabis, you can avoid the risk of fines or legal action and build a better relationship with your local government, law enforcement, and, most importantly, customers.
One way to stay up to date with regulatory compliance laws is to consume state and industry news surrounding cannabis daily. Not only do these publications keep you informed on business and consumer trends, but they also avoid complicated legal jargon, speaking directly to business owners in a way that’s easy for them to understand.
Another great way to stay on top of state and local cannabis laws is to network and build relationships with your local regulators. While maintaining compliance internally is the biggest goal, creating an ongoing relationship with the regulators in your area can help you better understand the changes within the industry and the steps you can make to conduct business more transparently.
Develop SOPs, Training, and Reporting Systems
Think of these SOPs as a set of rules that all employees need to abide by to keep your company’s production, sales, and accounting processes consistent and safe. Having a set of standard operating procedures can help you recognize potential compliance issues and fix them before they occur. These procedures can include an employee handbook on proper handling and storage of cannabis consumables to installing a seed-to-sale tracking system for inventory management purposes.
The best way to stay on top of your SOPs is to create reports, checkbooks, and logs in all aspects of your operations to show regulators that you are a transparent business that has a complete understanding of your state’s compliance laws. Frequent compliance training sessions are also an effective way to educate your entire team on the legal and tax regulations associated with your business.
Cannabis Payroll
To avoid issues concerning payroll, installing time tracking software for employees is also a great way to keep your staff organized and stay on top of the 280E tax code. The 280E law denies cannabis businesses federal income tax deduction for operating business expenses, which means that the wages for some employees may be deductible, and some may not be. By introducing software where employees can specify the tasks they’re doing and track the salaries they’re receiving, you’ll stay compliant with the tax code and better understand the productivity your team is generating.
Frequently Audit your Business
Hiring an outsourced accounting team to audit your cannabis business is a great way to avoid any potential risks regarding compliance. Auditors serve as an additional, unbiased set of eyes that will examine all areas of your organization and identity aspects that might need improvement.
If you are looking to stay on top of the legal and tax regulations for your cannabis business on a tight budget, self-auditing your company is a great way to check whether or not your training, bookkeeping, and SOPs are being appropriately implemented.
Entrepreneurs who belong to the National Cannabis Industry Association can receive discounted access to an acclaimed compliance management platform created by Simplifiya, which gives licensed operators a self-audit checklist that helps them identify, track, and mitigate potential issues before it’s too late. The platform also provides templates for creating SOPs customized for each license type and tied directly to your state regulations.
The Bottom Line
Whether you are a start-up, a growing business, or a multi-state operator, complying with federal and state compliance laws is essential. By following the above tips and staying transparent with your employees, partners, and investors, you’ll be ready for any audit that comes your way.
Whether you’re looking for cash flow management, business planning, or internal controls, our team is dedicated to helping you achieve peace of mind when it comes to your company’s finances and compliance. We understand that the financial side of your business can be daunting, complicated, time-consuming, and most of all: stressful. You don’t need to go through it alone. Our team is prepared to help you achieve your financial goals. Whether you’re looking to earn more revenue, scale your business or achieve a little peace of mind, you can trust Green Space Accounting to guide you.
Committee Blog: Re-thinking Cannabis Track and Trace Models — A Sustainable and Scalable Approach
by NCIA’s State Regulations Committee Contributing authors Jennifer Gallerani, Tim Gunther, Elise Serbaroli, and Erin Fay
The COVID-19 pandemic and subsequent recession powerfully demonstrated that the cannabis industry is providing essential medicine and products to countless Americans, as well as creating jobs and tax revenue. Retail sales of medical and adult-use cannabis in the United States were on pace to eclipse $15 billion by the end of 2020, and if you include ancillary products and services, the industry is estimated to reach $68.4 billion in 2021. The U.S. cannabis industry is experiencing rapid job growth, boasting an estimated 300,000 full-time jobs in 2020. Those numbers are expected to almost double by 2024. Over the next four years, the industry is expected to add nearly 250,000 full-time equivalent positions. By comparison, roughly 271,000 people currently hold beverage manufacturing jobs. These numbers demonstrate with sureness that the U.S. cannabis industry is on a high-growth trajectory, which makes it imperative that the market operate under a practical regulatory framework that benefits both regulators and operators.
Most states that have approved some form of legal cannabis sales (medical and/or adult-use) have also selected a single, mandated technology platform that all operators must use to track and trace their cannabis seeds, plants, and end products. Some iterations of the current track and trace model — which is primarily centralized approach — sets businesses, employees, and regulators up to fail. Of course, it also further limits the competitiveness of the regulated market with the unregulated market, and the ability for policymakers to be confident that cannabis consumers in their states are obtaining taxed, tested, and regulated products.
Local governments are missing out on tax revenue, and businesses (both large and small) are forced to spend unnecessary resources on a system that is fundamentally flawed. The centralized model, contracting with one specific software provider, and mandating operators to use that software provider in order to stay compliant, is wreaking havoc on the entire U.S. cannabis industry and is not sustainable for a federally-legal and global supply chain.
As a team, the National Cannabis Industry Association’s State Regulations Committee’s Technology and Compliance Subcommittee has spoken to regulators, operators, and international technology providers in the interest of presenting a practical track and trace solution to benefit the industry as a whole. This is the first blog in a series that will highlight the issues that cannabis operators and regulators are facing because of the current centralized state-mandated track and trace model. We propose that the U.S. cannabis industry operate under a more practical framework that has a higher probability of success for regulators and cannabis businesses through slight changes and improvements based on proven best practices.
The History of Track and Trace in the U.S. Cannabis Industry
Track and trace systems serialize assets to identify where assets are (track) and to identify where assets have been (trace). Track and trace is not something new. It is the globally acknowledged standard for product movement and reconciliation in both the Pharmaceuticals and Consumer Packaged Goods (CPG) industries. A secure track and trace system combines material security and information security elements to confirm assets are legitimately produced and sourced, following a pre-defined and auditable path.
As the regulated cannabis markets started to take shape and mature in 2012, one of the driving factors that shaped the need for a track and trace system was the 2013 U.S. Department of Justice Cole Memorandum (Cole Memo). The Cole Memo indicated for the first time that the federal government would only intervene in states that failed to prevent criminal involvement in the market, sales to youths, and illegal diversion to other states.
The first four states to legalize adult-use cannabis were Colorado, Oregon, Washington, and Alaska. All four of these states instituted a market-based licensing system to regulate the commercial activity of cannabis sales. The intentions of the newly instituted policies were two-fold: protect consumer health and minimize diversion, both of which align with the core principles of the Cole Memo. To meet these intentions, the states instituted procedures for inventory control and tracking documentation using a state-mandated centralized model, in an effort to create a transparent and controlled system of oversight within the cannabis industry.
As the industry has developed over the years, most states that have approved some form of legal cannabis sales have selected a single mandated technology platform that all operators must use to track and trace their cannabis seeds, plants, and cannabis products. As shown in Figure 1, the majority of legalized states have chosen METRC as their exclusive contractor of track and trace services.
A Scalable and Sustainable Track and Trace Solution
The legal cannabis market has changed significantly since 1996 and it is important for the industry to re-evaluate the intention and implementation of track and trace. Regulatory bodies contracting with one track and trace technology provider and mandating operators to use that specific provider in order to stay compliant is problematic for many reasons. Time has shown that the current centralized model is fiscally irresponsible and ultimately counterproductive, with significant negative externalities, including ethical concerns such as anti-trust issues. Most recently, an Oklahoma cannabis operator (seeking class-action status) initiated litigation against the state’s Medical Marijuana Authority (OMMA), alleging that the state exceeded its authority by requiring licensees to pay for a state-mandated track and trace program, and that the state’s contract with METRC creates an unlawful monopoly, among other claims.
To provide an analogy, let’s think about how businesses are required to report taxes. The IRS sets out certain rules and every business must report their income and assets according to that framework. Technology providers (such as TurboTax, Tax Slayer, H&R Block, etc.) have built scalable products to support businesses in reporting their taxes. The IRS does not mandate that businesses use one single specified software in order to report their taxes. Doing so would kill competition, introduce a monopoly, and eliminate any incentive for the technology providers to improve their product. By the IRS allowing free competition over the realm of tax preparation and processing software, the public benefits from the technology companies being incentivized to update and improve their software features and benefits.
The centralized model is crippling the entire industry as system failures are occurring on a more frequent basis, and its after-effects are causing a more detrimental and wide-ranging impact as the industry grows at an exponential rate. Most recently, METRC’s integration functionality (how third-party business operations software communicates to the state’s system) was down for more than fourteen days in California, causing significant problems in the nation’s largest cannabis market. One software provider and its tag-producing partners are benefitting, while setting industry regulators and operators up to fail. One software provider cannot meet the current or future needs of regulators and operators, especially not on a national level. Meanwhile, there are many excellent software providers that specialize in track and trace. The free market should determine the most efficient and user-friendly approach to allow businesses to stay compliant and accurately report to the appropriate regulatory authorities.
By leveraging the knowledge and experience the industry has gained over the last 20 years, we can incorporate best practices from other industries’ and other markets’ track and trace systems, and set regulators and operators up for success.
Join us as we dive deeper into the issues surrounding compliance and track and trace in the cannabis industry. Our multi-part blog series provides an in-depth look into the technical shortcomings of the current centralized approach and provides a roadmap for implementing a distributed model approach. Some of the disadvantages we will cover in the subsequent posts include:
Impact of System Failure: The current centralized model provides a single point of failure: if the system goes down, all licensee operations must stop operating entirely. In some cases, operators may manually record activity during a system failure, and then manually enter the activity when the system resumes. This introduces a high risk of human error. No backup system or alternative means of recording through the use of technology exists since the state relies on only one system.
Challenges with Scalability: The history of performance with centralized track and trace systems demonstrates that there are significant challenges in scalability because of multiple system failures and shutdowns. The system would benefit from a more advanced track and trace capability, specifically with its API (Application Programming Interface). Many times it is not the technology of the licensee system, but the technology design of the state-mandated systems.
Fiscal and Environmental Impacts: Licensees are required to purchase plant and product tags from the single state-mandated vendor, which creates a fixed price system that is typically not in favor of a licensee. It is also creating a sustainability issue in the industry, as the plant and product tags are single-use. More operators are speaking up about the waste it is generating in our cannabis industry.
Interested in joining us in establishing an effective and scalable track and trace framework for regulators and operators in the legal cannabis space? Click here to stay updated on the State Regulations Committee, and the efforts that it’s Technology and Compliance Subcommittee are taking to improve and advance track and trace nationally. Let’s close the informational gap between operators and regulators, and help the entire industry move forward together.
Stay tuned for the next two blog posts in our multi-part series!
Member Blog: Choosing The Right Physical Security System For Your Cannabis Facility
by Scott Thomas, National Director of Signature Brands, Genetec
Securing your cannabis business: Think big from Day 1
In the last few years, the cannabis industry has exploded. Recent changes in the U.S. administration could speed up the approval for medical and adult-use cannabis usage, leaving policymakers rushing to keep up with this fast-changing industry.
As more states legalize both medicinal and recreational usage, demand will increase and lead to new cultivation and retail operations. Some of these new businesses will expand and grow, while others will get acquired by larger organizations.
Whether you’re new to the market or already established, you know that security is important. Keep reading to learn how to go beyond securing your people and assets, while also maximizing your operational efficiency, protecting your data, managing compliance including audits, and more.
Unified security for a centralized view
The cannabis industry is expanding fast. Growers, distributors, and retailers are all looking to build and extend their businesses into new markets and territories, which means physical security needs are constantly changing. Can your security system evolve with you?
A physical security platform that combines your IP security systems into one platform can give you true seed-to-sale visibility for all your products. It can combine required components like video monitoring, access control, and intrusion detection into a single, unified view of all on-site activity.
Compliance is crucial
Cannabis laws and regulations are complicated and can put stress on cultivators and retailers.
Although governments are becoming more accepting of cannabis, complicated regulations will continue to dictate how your product is produced, distributed, and sold. It’s important to be proactive and not wait until laws are finalized before taking the necessary steps to avoid fines, product recalls, or the loss of your license.
A physical security solution should do more than protect your people and assets. It can also help you maintain compliance by integrating policy and regulations within its platform. Then you can easily create security and operational reports and manage evidence for internal and external audits.
Open architecture for longevity
When referring to technology, the simplest way to explain the difference between open architecture and proprietary systems is that some manufacturers design products that only work with their hardware or software. This locks the customer into their product, whether that product meets their future needs or not.
With an open architecture platform, your physical security solution can support hundreds of different camera models, access control systems, license plate readers, visual and audible devices, input and output devices (IO devices), Programmable Logic Controllers (PLC’s), and more. When you combine all of these devices into a single unified platform, you can gain access to a constantly growing ecosystem of hundreds of systems, sensors, and applications like:
Energy consumption controls that help you reduce energy in your indoor growing facilities
Customizable rules engine for automation and workflows
Map-based interfaces for enhanced situational awareness
Reporting tools for custom graphs, analysis, and long-term data logging
Custom dashboards allowing for user and group-specific interfaces
Stand-alone automated systems for custom applications and edge deployments
Securing your data
Securely storing your data can be challenging. Retail and online dispensaries need to keep sensitive patient and customer information safe to maintain trust. And cultivators need to keep research, intellectual property, and financial information secure. While many states have basic protocols around data and video storage, new federal and state regulations are quickly evolving as concerns over data privacy increase.
That’s why it’s important to have a provider that’ll continue to work with you as laws change and the threat landscape evolves. Your physical security system can help keep your data safe from people within your organization that shouldn’t have access, as well as mitigate your exposure to outside threats such as cyber attacks.
No shortcuts: what you need to think of when choosing a physical security solution
Trying to cut corners while securing your business can result in unexpected complications and higher costs in the long run. Think long term and prioritize a unified physical security solution that provides more than basic security and is a core component of your business operations:
Create security and operational reports and manage evidence for internal and external audits
Track your assets from seed-to-sale by integrating RFID tags or Barcode scanning into your security system to benefit from associated alerts, synchronization of assets, and inventory tracking
Control overall energy consumption in your indoor growing facilities to offset the energy costs related to plant cultivation
Combine different security steps that send alerts when triggered in sequence
Integrate restricted surveillance areas (RSA) for perimeter security monitoring to reduce the number of false alarms
Hardening tools to achieve greater cyber resilience
Manage identity and access rights for all of your major locations through one unified platform
Protect your video, cardholder, and system data with secure communications between clients, servers, and edge devices
Encrypt video in transit, at rest, and when exporting evidence
Automate health monitoring features to boost your system’s reliability, performance and to meet compliance regulation notifications
Scott Thomas has worked in the retail industry for over 27 years. Prior to joining Genetec Scott was a National Account Manager at Checkpoint Systems where he worked with numerous loss prevention and physical security technologies. Scott is a member of multiple Retail organizations and an active participant in the retail community.
Genetec Inc. is an innovative technology company with a broad solutions portfolio that encompasses security, intelligence, and operations. The company’s flagship product, Security Center, is an open-architecture platform that unifies IP-based video surveillance, access control, automatic license plate recognition (ALPR), communications, and analytics. Genetec also develops cloud-based solutions and services designed to improve security, and contribute new levels of operational intelligence for governments, enterprises, transport, and the communities in which we live. Founded in 1997, and headquartered in Montréal, Canada, Genetec serves its global customers via an extensive network of resellers, integrators, certified channel partners, and consultants in over 80 countries.
Member Blog: High Five – The Top Ways an Integrated Cannabis Technology Solution Supports your Business
by Daniel Erickson, Director of Product Strategy, ProcessPro
Anyone involved in the cannabis industry is well aware of its exponential growth and the corresponding pressure for companies to increase performance, enhance quality, optimize operations, and maintain data integrity and control. In this complex environment, reliable technology and the use of disparate and manual systems not only affects profitability but also creates a competitive disadvantage in the market. Progressive cannabis companies are finding the potential that a single, comprehensive business system can bring to their operations to streamline processes. An integrated enterprise resource planning (ERP) solution’s features and functionalities support cannabis businesses in five key areas.
Cultivation Management
Cannabis ERP software with cultivation management functionality enables cultivation, manufacturing, and dispensary operations to manage, log, and report on every movement of individual plants throughout the entire supply chain in one platform, tracking growth and production to assist with regulatory compliance. Greenhouse recording and package IDs management within the solution can include recording activity costs, quality checks, audit trails, inspections, strain tracking, harvesting techniques, plant health, growing conditions, and batch yields. Evaluation of this data helps determine ideal conditions for maximum plant growth and yields to improve productivity as well as provide information to run a cost-efficient operation.
Regulatory Compliance
The highly regulated cannabis industry requires companies to maintain detailed, accurate, and real-time records to mitigate the consequences of non-compliance with state regulators, auditors, and law enforcement agencies. Constantly changing state laws and specifications require businesses to keep pace with these developments as well. It is predicted that federal legislation for the cannabis edibles market will closely align with current FDA regulations in the food and beverage market, and adopting the current manufacturing practices utilized in those industries can make the transition seamless for proactive cannabis manufacturers.
Cannabis ERP tracks, measures, documents, and reports on compliance initiatives including licensing requirements, waste disposal protocols, transportation records, compliant packaging and labeling, and tax payments – accommodating multiple locations, jurisdictions, countries, and intra-industry verticals. A solution with integrations to state government-approved software, such as METRC, Biotrack THC, and Leaf Data Systems, helps to ensure reporting is accurate and timely.
Seed to Sale Traceability
Critically important to the cannabis industry, tracking of accurate inventory and locations of valuable cannabis products mitigates theft and controls regulatory risk. A cannabis technology solution provides real-time seed-to-sale visibility of the supply chain by managing and automating transactions and lot tracking and traceability capabilities – ensuring security and accountability by utilizing user-based software permissions to validate employee transactions.
Inventory control monitoring tracks appropriate stock levels, monitors shelf life, and documents product loss due to damage, shrinkage, and accidental or purposeful destruction. To facilitate production and purchasing, the integrated functionality of material requirements planning (MRP) allocates the use of resources to ensure there are sufficient raw materials and ingredients to meet customer demand. An ERP solution helps prove the chain of custody, establish and uphold safety standards, increase accountability, and limit factors leading to compliance and health risks – reducing the possibility of unsafe products entering the marketplace.
Formula and Recipe Management
Comprehensive and tight management of formulas and recipes is essential in this consumer-driven market in which product quality and consistency in regards to taste, texture, appearance, potency are correlated to a company’s brand. Cannabis ERP maintains raw material data, production notes, versions, and revisions within each Bill of Material. The solution should also calculate nutritional information to include ingredients and allergens to produce accurate labeling, reporting, and product packaging necessary for consumers of cannabis edible products – providing traceability and a documented labeling history to identify items quickly in the event of a product recall. To support new and innovative delivery methods and products, research and development functionality within a cannabis ERP solution streamlines new product development and introduction into the market. The ability to experiment and test in a sandbox environment without affecting current production allows for easily transitioning approved products to live production.
Reporting and Analytics
By gathering data from all areas of the business in a centralized database, cannabis software makes it possible to analyze what is working within the operation and what is not. In the area of cultivation, adjustments to nutrients or other conditions can improve yield and lead to improvements in financial performance. Businesses can benefit from the ability to track consumer purchasing fluctuations in regards to holidays and seasonal trends to help navigate supply chain challenges and forecast demand. When data is collected throughout the life cycle from seed to sale, businesses are able to identify patterns, predict trends and changes in consumer taste, and help plan for the future – allowing companies to make data-driven business decisions.
Integrated features such as cultivation management, regulatory compliance, seed-to-sale traceability, formula and recipe management, and reporting and analytics offer a competitive advantage for cannabis businesses. In the dynamic cannabis marketplace, the functionality available in cannabis ERP provides the technological tools that companies need to thrive in a world with increasingly tighter profit margins and regulations.
Daniel Erickson, Director of Product Strategy, has been with ProcessPro since 1999. As the Director of Product Strategy, Daniel focuses on driving overall market success by ensuring products meet both current and future market demands. Leveraging his extensive understanding of process manufacturing, the unique business trends of this industry and information gathered from market analysis, customer feedback and regulatory compliance, he drives product decisions. Daniel has a passion for connecting the benefits of ProcessPro’s ERP solution and analytics software packages to batch process manufacturers and helping to effectively solve their key business challenges. Daniel has held a variety of positions within ProcessPro, including implementation, account management, product consulting, product management and sales, which has provided him an aptitude for manufacturing and the nuances within the food and beverage, nutraceutical, personal care, pharmaceutical, cannabis and chemical industries. His diverse experience with the customer base and within ProcessPro provides a strong foundation for his position.
In an increasingly hostile marijuana environment championed by Attorney General Jeff Sessions, tracking of marijuana from “seed to sale” is more critical than ever. All other threats aside, if you can’t document it, you’re in trouble.
And, that’s not just at a federal level. In an effort to document total compliance and control of this rapidly-growing industry, states have taken it upon themselves to require comprehensive due diligence from all cannabis purveyors.
Forbes magazine addresses this in a recent article entitled, “Tracking America’s Cannabis Industry Through Big Data.” Citing Colorado, the article states in part, “This harnessing of an information technology to track the cannabis market is key to Colorado’s forceful march towards creating a thriving legal marijuana industry. Crucially, the state’s ability to use tracking and Big Data could provide a reference point for other jurisdictions interested in the regulatory potential offered by tracking. This ‘closed loop’ ‘seed to sale’ inventory tracking system embodies a ‘full traceability’ mode…”
The article continues, “The use of tracking as a regulatory device is expanding, operating in Oregon, Maryland and Alaska. There are other cannabis tracking companies such as MJ Freeway operating in Nevada and BioTrackTHC in Washington, New Mexico, Illinois, New York, and Hawaii. After all, tracking is part of day to day life. We track parcels and Uber drivers with our phones while retailers track us through those pesky cookies on our computers. Whatever the context, whether it is a regulator or us doing the tracking or whether it is marijuana or us being tracked, the technology is an essential part of contemporary commercial and regulatory life.”
Cannabis Barcode labels to the rescue An established staple in retail and inventory environments, barcodes/QR codes facilitate trackability. Now that message is resonating in the cannabis industry. A primer in motherboard.vice.com points out, “Walk into any licensed cannabis grow op in Colorado and one of the first things you’ll notice are the barcodes.” They point out in another article, “There are a number of advantages of having a bar code for cannabis growers, producers and retailers. The most important is proper inventory control – which is mandated, in Washington, by the Washington State Liquor Control Board. Having bar codes on inventory items allows rapid identification of specific SKUs. The likelihood of inventory quantity irregularities is greatly reduced.”
They also emphasize, “The reasoning behind implementing these cannabis surveillance systems is pretty straight forward. Since cannabis is still illegal on a federal level, the burden is on the states that have legalized weed to prove that legalization has not aided black market activity.”
Systems spring up to support tracking Regardless of what type of cannabis tracking label is used, sophisticated systems are springing up to oversee the entire process. An article in the Cannabis Industry Journal entitled “The Importance of Traceability” cites insights of Cody Stiffler of BioTrackTHC, one such system, at a Cannabis Labs Conference in 2016: “The primary goals of a traceability system, according to Stiffler, are to prevent diversion and promote public safety. Our software helps get safe products to patients and consumers in a responsible manner. BioTrackTHC’s tracking software covers everything from seed to sale, involving regulatory bodies in oversight. In the beginning of cultivation, each plant is assigned a bar code or sixteen-digit identifier.”
While “location, location, location” is the driver in real estate, “tracking, tracking, tracking” is the name of the game in the cannabis industry.
Mark Lusky is a marketing specialist who has worked with Lightning Labels since 2008.Lightning Labels uses state-of-the-art printing technology to provide affordable, full-color custom labels and stickers of all shapes and sizes, along with barcode labels and consecutive numbering. From small orders for individuals, to the bulk needs of big businesses, Lightning Labels is equipped to handle and fulfill custom label and sticker projects of all types. Lightning Labels was established in 2002 and based in Denver, Colorado.
Member Spotlight: National Grow Technologies
In this month’s NCIA Member Spotlight, we speak with the team at National Grow Technologies, who offer a variety of services and products to support the cannabis industry. Recently, NGT sold a cannabis flower batching and sorting machine right on the expo floor of NCIA’s Seed To Sale Show to fellow NCIA member The Clinic.
National Grow Technologies
Cannabis Industry sector: Equipment and Consulting
NCIA member since: The NGT founders have been members of NCIA since 2010 through different endeavors. National Grow Technologies has been a member since its formation in 2015.
Tell us a bit about your background in cannabis and how the team at National Grow Technologies came to fruition?
National Grow Technologies‘ background stems out of the formation of the Colorado medical and adult-use cannabis markets. Our team brings 25 years of combined experience in the regulated cannabis industry as well as 50 years of combined horticulture experience. This includes build-out, ownership, and management of multiple dispensaries and full-scale cultivation operations, originating in 2009. We have since been involved in multiple projects, in numerous regulatory states, both nonprofit and for profit.
NGT team: Scott Field, Chandra Carleton, Bruce Granger, and Bill Campbell
From the beginning, the need for regulation was obvious, prompting our involvement at a legislative level. This includes involvement in SB 10-109 and HB 10-1284 as well as the Rule-Making Workshop in 2010. What an exciting, educational experience, helping create the first regulated cannabis market. If we only knew then what we know now.
As you can see, our passion for the cannabis industry runs deep. Through that passion, NGT developed organically, just as we developed our own dispensaries and cultivations. We immediately became involved in the national cannabis market, traveling to cannabis-related events, meeting many people in the industry and trading knowledge. We have always held the belief that “helping someone else learn strengthens our own education.” Through that enlightening experience, our processes to bring a quality commercial product to market were developed. Since that time National Grow Technologies and its partners have been working to help new and exciting businesses develop and refine the quality of their process.
What unique value does NGT offer to the cannabis industry?
National Grow Technologies does not just sell best-in-class equipment such as the GVS Precision Batcher or the GreenBroz trimmer; we also use our extensive experience to ensure that this equipment works for our clients. As the cannabis industry has evolved, many new products have been developed. Not all have effectively executed the operation for which they were designed, or are capable of integrating with commercial processes. Through extensive testing and use of various industry specific machinery, we are able to choose the highest performing equipment on the market. We take great pride in not just supplying this equipment, but also providing the training, services, and process development needed for repeatability of success.
Our training and support is what distinguishes our company. For every piece of equipment we sell, we strive to create an environment capable of its full potential. We realize even the best equipment can have its effectiveness diminished if used incorrectly. That is why NGT offers training programs with every piece of equipment we sell. Once you have successfully completed training and operations begin, the equipment must remain functioning optimally. NGT also has service programs for every piece equipment we sell. We recognize that our success is only possible with yours.
The GVS Precision Batcher, sold to The Clinic on the expo floor at NCIA’s recent Seed To Sale Show
While supporting our clients through the integration and implementation of new equipment, we are aware that changes in process produce ripple effects through other processes or even the Standard Operating Procedures of a facility. Since our inception, we have been fueled by a desire to increase efficiency of cultivation operations, while recognizing the limitations of each facility. We have the skills necessary to refine your process, review plans to assess proposed process, or put processes into SOP documents. We are here to help.
By viewing a facility systemically through its entire manufacturing process and integration of new equipment, NGT assists our clients to optimize production. We do not run cultivations. We help clients run cultivations more efficiently, allowing them to fast-track business execution, while minimizing their financial exposure, creating a quicker ROI.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does NGT help work toward that goal for the greater good of the cannabis industry?
We at National Grow Technologies look to use our experience from helping create a regulated market to educate emerging markets on techniques proven to provide the safe access of cannabis for adults. It is the responsibility of everyone in this industry to engage in business practices that ensure a proper and clean seed-to-sale process designed with the health and safety of consumers as a core principal. Cannabis needs to be handled and processed in a way that is safe for human consumption. This is a process that can be clearly defined, which will align procedures that navigate an increasingly complex set of ever-changing rules and regulations, while remaining true to the value of safe access. Each and every one of us has the responsibility to move this industry to a safe and sustainable position in manufacturing and distribution of cannabis.
Why did you join NCIA? What is the best part about being a member?
Bruce Granger and Chandra Carleton
In 2010, one of the founding NGT members, Bruce Granger, was at the meeting with Aaron Smith when he said that he was going to build a National Cannabis Industry Association. Bruce has been a member ever since, through multiple business endeavors and now with NGT. We have stayed a member of NCIA due to the symmetry of our business models. We are both committed to the education, support, and unification of the industry.
NCIA has always been a resource of knowledge for ourselves and many in the industry, keeping us informed through their newsletters, Quarterly Cannabis Caucasus, and informative speakers at every conference. They have supported the cannabis industry by taking a message of positive reform to Washington, D.C. We will only be able to continue and expand our industry with the education and enlightenment of our political system.
Reconnecting with our friends or meeting new members, the business opportunities abound. In fact, thank you to NCIA for bringing NGT and The Clinic back together at the NCIA Seed to Sale Show this past January 31 – February 1. The Clinic is now the proud owner of the first GVS Precision Batcher in Colorado, a state-of-the-art piece of equipment capable of precise weighting and batching cannabis flower. It is all of these memories of where we came from, and all of the possibilities the future holds that keeps NGT coming back to NCIA.
Note: NCIA member profiles highlight members and stories within our cannabis industry community. They do not constitute an endorsement or recommendation of specific products or services by NCIA.
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by NCIA’s 
Scott Thomas has worked in the retail industry for over 27 years. Prior to joining Genetec Scott was a National Account Manager at Checkpoint Systems where he worked with numerous loss prevention and physical security technologies. Scott is a member of multiple Retail organizations and an active participant in the retail community.
An established staple in retail and inventory environments, barcodes/QR codes facilitate trackability. Now that message is resonating in the cannabis industry. A primer in motherboard.vice.com points out, “Walk into any licensed cannabis grow op in Colorado and one of the first things you’ll notice are the barcodes.” They point out in another article, “There are a number of advantages of having a bar code for cannabis growers, producers and retailers. The most important is proper inventory control – which is mandated, in Washington, by the Washington State Liquor Control Board. Having bar codes on inventory items allows rapid identification of specific SKUs. The likelihood of inventory quantity irregularities is greatly reduced.”
