Cannabis Industry Regulatory Compliance
The U.S. Department of Justice announced an update to its federal marijuana enforcement policy in light of recent state ballot initiatives that legalize, under state law, the possession of small amounts of marijuana and provide for the regulation of marijuana production, processing, and sale. This revision of the United States federal position is a watershed that has critical industry implications, especially for technology providers.
Both Colorado and Washington states are poised for legalizing adult-use recreational marijuana sales on January 1st, 2014. As such, the Cannabis industry was awaiting federal reaction. That official response: "Based on assurances that those states will impose an appropriately strict regulatory system, the Department has informed the governors of both states that it is deferring its right to challenge their legalization laws at this time… Deputy Attorney General James Cole says the Justice Department… indicated they would not challenge Colorado and Washington marijuana laws as long as they implement effective enforcement systems." See the C-SPAN video.
In light of the U.S. Deputy Attorney General's latest comments, it's incumbent upon us, the technology side of the Cannabis industry, to deliver on the implementation of compliance. Technology is the tool to show federal and state governments that we can make transparency and auditing a reality. Washington state is in the process of evaluating which technology provider will help them bring that to fruition. But, while Washington will likely award a statewide inventory tracking system contract, they will not mandate its use. So, by necessity, we (meaning Cannabis technology providers) should self-regulate, under the auspices of the National Cannabis Industry Association, and define an open XML electronic reporting and web services standard for software data exchange via the Internet that can be adopted by every appropriate U.S. and Canadian regulatory body, and eventually the U.S. federal government, to audit compliance. This open industry standard will not only enable and ease regulatory compliance reporting at a state level, but it will satisfy the pragmatic federal challenge, thus enabling this industry to thrive.