Compliance in a Cannabis Extraction Facility

One of the most important, if not the most important, factors in running a licensed extraction facility is compliance. Nothing will get you shut down faster than not following the rules. In the cannabis space, this can be a massive hurdle. National, federal, state, city, and county regulating bodies all have their hands in the process, and they regularly contradict each other.

To the outside world, our industry is intimidating. Most government employees spent a substantial part of their lives viewing cannabis as an illegal substance, so the scrutiny is understandable. Most of these departments have very little insight into our industry and will not get there on their own. They must be trained by educated, responsible members of the industry, in hopes of some uniformity in regulation.

Educate yourself, then educate the regulators

The biggest piece of advice I can offer for managing compliance in this space is to educate yourself, present facts, and therefore educate the regulators. Help them help you. I have had endless conversations with multiple governing bodies, and every one of them had something in common: as long as you are clearly trying to follow the regulations, they are willing to work with you. Try to hide something, and they will find every violation that can be wrong.

I got to a place where I openly invited every department I could to tour my facility for educational purposes. Now that facility is frequently used for training the regulators themselves. The benefits of being a trusted resource for regulators are beyond words. The only way to retain that trust is to continue to be compliant and to keep educating.

The rules are a moving target

Even the most compliant companies still face challenges. The rules for our industry seem more extreme than almost any other, and that is even more true for an extraction lab. What works in the county may not work in the city. What works today may not work tomorrow. Interpretation of the regulations leaves a wide margin of error, and engineers, equipment manufacturers, operators, and regulators are constantly at odds over it. The fact of the matter is that the regulator has the final say.

Staying ahead of the regulations is its own discipline. Joining regulator working groups for rulemaking is essential for a licensee: you gain insight into future regulations and input on how they should be enforced. Joining local and national industry groups gives licensees a voice that does not come directly from their license, which helps when dealing with regulators from the protection of a separate entity. Having a facility close down, even for a day, can be devastating. It can be suicide for a licensee to take on a regulating body alone. They may win the fight, but they start a war that might not be winnable.

Why one bad actor changes the rules for everyone

Extraction labs that use volatile solvents hold a special place in a regulator's attention. Class I, Division 1 (C1D1) electrical classification describes an environment where ignitable concentrations of hazards can exist under normal operating conditions. During one facility inspection, a fire inspector witnessed an employee emptying a collection vessel improperly after an extraction, releasing unrecovered solvent at very hazardous levels. That single event, because of one bad player operating outside the manufacturer's standard operating procedure, triggered new regulations almost overnight.

As long as a handful of operators cut corners, the whole industry inherits stricter rules. That is exactly why building compliant from day one, and documenting it, protects not just your license but the industry's ability to operate at all.