Cannabis and Compliance

As we continue to learn the legal obstacles and complications within the emerging cannabis industry, attorney Darren J. Hunter helps us navigate the differences between state and federal laws, and why performing a hazard assessment is only the start of conforming with cannabis compliance laws for a new cannabis business.

By way of background, Hunter is the founding partner of Hunter Masalski LLC, and represents a wide variety of companies and industry groups—including cannabis—in all aspects of environmental, health, and safety law, with an emphasis on OSHA, PHMSA, and EPA compliance and defense.

LANG: With cannabis illegal at the federal level, how are you able to provide services to cannabis clients?

HUNTER: On the one hand, this question is complex, but on the other hand, it is fairly simple. On the federal level, the Drug Enforcement Administration (DEA) has classified marijuana as a Schedule 1 drug and it is illegal. Many states, however, have legalized cannabis for medical purposes, and a number of other states have begun to legalize cannabis for recreational purposes. Therefore, the cultivation facilities and dispensaries in these particular states are legal businesses. Cannabis companies have to comply with a wide range of state and local regulatory requirements. There are also a number of federal laws that apply, despite the fact that marijuana is a Schedule 1 drug. For example, cannabis companies must comply with applicable health and safety laws under OSHA, as well as applicable environmental laws, such as waste handling.

LANG: In your practice servicing cannabis clients, what have you found to be the greatest challenges or problems?

HUNTER: Because the cannabis industry is still in its infancy, cannabis companies have so many start-up hurdles, including facility build-out and product development. While many cannabis businesses have the best intentions, compliance with the regulatory maze is a challenge. From a health and safety perspective, cannabis facilities generally do a good job of addressing workplace hazards, such as flammability during the extraction process. However, it is often a challenge for these facilities to come into full compliance with the many “paperwork” requirements. For example, many of these facilities may have performed hazard assessments to determine the appropriate personal protective equipment to perform all of the tasks involved in the cultivation process, such as using gloves while trimming, but they may not have formally certified their hazard assessments. These types of paperwork requirements are overwhelming for any business, but particularly for a start-up in a brand-new industry sector.

LANG: Any parting thoughts you would like to add?

HUNTER: The cannabis industry provides a very valuable service for many people, particularly those who carry medical licenses, and for that reason we anticipate continuing growth. Therefore, as frustrating as all of the regulatory requirements are, compliance is crucial. Cannabis businesses may consider hiring an internal compliance professional, but there will always be specialty areas, such as health and safety, and those companies should consider retaining necessary experts to help drive compliance.