• Taylor H.

Cannabis Certificate of Operations Checklist


10 TIPS + TRICKS TO ENSURE YOU RECEIVE YOUR CERTIFICATE OF APPROVAL


There is no time to waste in the critical phase between winning a license and making your first harvest, product or sale. Before your doors officially open you must earn one last stamp of approval from the state: your Certificate of Operation, otherwise known as Certificate of Occupancy, or Certificate of Approval.


In most states, the license issued to your cannabis business is often conditional, temporary and indicates that although your business plan has been approved and are able to build out your facility, you have not been approved, yet, to officially operate. A final certificate of approval may only be issued to your cannabis business after each component of your facility and operations has satisfied the state and local laws and compliance requirements, as well as paid all applicable fees.


So, how do you ensure you receive your stamp of approval the first time around? Your goal is to make things as easy and foolproof as possible for the inspectors. Our goal is to make things as easy and bulletproof as possible for you, which is why we made this nifty checklist filled with tips and tricks to ensure you receive your Certificate of Operations.




Cannabis Certificate of Operations Checklist



1. Obtain the inspection and audit list from the department (if available) and conduct a mock inspection.


What better way to pass your inspection than to know what’s going to be inspected and audited? It’s like taking a practice exam before the final exam, which means conducting a mock inspection before your final inspection. Conduct a mock inspection with the inspection and audit list to see if you meet all the requirements. This can be performed by your Compliance Officer, Compliance Team, or a Compliance Consultant.

Go through each item to see if your facility meets the requirements and be critical about every aspect when you do. Think of any little thing a state inspector may criticize and fix it. Have the mock inspector ask questions pertaining to procedures, regulations, facility equipment, qualifications of personnel, etc. Once you ace the mock inspection, ponder and implement what you can do to go above and beyond the regulatory requirements. Don’t meet the standard, be the standard. When you have each item, and more, on the inspection and audit list checked to perfection, it’s like having the answers to your exam before you take the exam.


If the state inspection list is unavailable, considering having your Compliance Officer, Compliance Team or Cannabis Consultant draft an inspection list based on your state’s regulations for your mock inspection. Using your own internal audit list as a roadmap for the inspection can impress the auditor, and it will position you to guide him or her through your facility and demonstrate your compliance.



“An ounce of prevention is worth a pound of cure.”


2. Standard Operating Procedures – have them prepped, primed and ready for perusing.


Not only should your Standard Operating Procedures be cited with state regulations to the “T”, but the regulations should actually be implemented into your operations – it’s time to demonstrate the proof is in the pudding and everything you proclaimed in your licensing application is something you actually can and will do.


Make sure the digital copy of your SOPs is searchable for the inspector to review. If they want to search for your “inventory management” protocols? No sweat, they can find that detailed information equipped with state regulation citations in 2.5 seconds. Perhaps they are curious about your waste management procedures – a piece of cake! There’s a detailed description located on page X and has regulation ABC 123D.456(a) cited as to why and how this procedure meets and exceeds the state requirements.


Lastly, be prepared to thoroughly explain your internal procedures and methods of operation for their efficacy, maintenance and the ability to adapt to new, or changes in regulations. At its heart, the goal of an audit is to suss out what your operating procedures are and to judge whether or not they are sufficient. In some cases, that will mean reading over your written policies and procedures, grading them, and then determining whether those policies and procedures are actually put into practice.


More often, companies lack sufficient standard operating procedures, leaving it up to the inspector to figure out what your company does in certain circumstances. Your standard operating procedures should be detailed and thorough with a paranoid focus on safety and quality.



3. Ensure all applicable forms are printed, and the necessary signage, licensing and permits are posted/obtained.


Make all forms such as a visitor log, delivery manifest, employee training checklist, material safety data sheets, pesticide log, etc., easily accessible and easily identifiable for the inspector. Print them out, color code them – show the inspector you’re as organized as Marie Kondo. At one inspection, we laid each form out on a table, placed a colored post-it note on each identifying what the form was so the inspector could easily see we had all the appropriate forms.


Ensure all necessary signs, licenses, and permits are posted in prominent locations. This may include your state business license, signs pertaining to safety, hazardous materials, limited access areas, applicable laws and so forth. For dispensaries, this may include signs pertaining to on-site consumption, distribution to persons under the age of 21 is prohibited, and your state’s possession and legal limits.


Lastly, make sure each employee has the proper documentation on them at all times, whether that be a marijuana agent card, security badge, health card, TAM card, etc., and that you have copies of said documentation for each employee on file.



4. Know the ins and outs of your facility’s equipment, technology, and their respective maintenance.


For cultivation and production facilities this is a must, must, must. It’s of paramount importance to demonstrate the proper installation and safe operation of all equipment necessary for the cultivation and production of cannabis and cannabis products.


For cultivation facilities, this may include plumbing, heating, ventilation, air-conditioning systems, humidity control systems, carbon dioxide control systems, and all other growing technical facilities, including all related control systems. Additionally, your facility should demonstrate the capacity to nourish clones, germinate seedlings, attain vegetative growth, flower plants to maturation, dry and cure cut plants, trim and package finished plants and store finished cannabis products all in a manner that is compliant with state regulations.


For production facilities, this may include plumbing, ventilation, extraction and cooking equipment, solvent lines, electricity, electrical lines, refrigerators, ovens, stoves, and all other production equipment. Inspection agents will want to see a detailed description of operating procedures, equipment, and materials used in cleaning and maintenance operations, and methods of disassembling and reassembling equipment to ensure proper cleaning, sanitation, and maintenance.

Other hardware and software technologies include inventory management system, point of sale software, security systems and cameras, age verification devices, etc.


Additionally, verify that all scales used to weigh products are calibrated by a certified metrologist using NIST traceable weights.



5. Make sure you know how to accurately record data into the state-mandated seed-to-sale tracking system.


One of the state’s biggest concern is the prevention of diversion, theft or loss of cannabis. It’s vitally important as a business owner or operations manager to ensure you and your staff have a thorough understanding of the chain-of-custody reporting requirements, when and how to accurately record all cannabis cultivation, inventory, sales and waste activity, when to reconcile those records for any and all discrepancies, and how to request and read certificate of analysis reports from testing facilities.


Be prepared to thoroughly explain and demonstrate your knowledge, understanding, and ability to use the state-mandated seed-to-sale system properly. This is also a prime opportunity to ask questions if you are unsure about certain reporting requirements or where to subscribe for updates. Several states have had multiple shifts in compliance reporting requirements or made changes to their reporting system. No matter what changes occur, or when, your operation must be on point and always in compliance.



6. Hygiene, cleanliness, OSHA, and EPA.


First and foremost, make sure your entire facility is clean and organized – remember to channel your inner Marie Kondo. Make sure all active personnel are adhering to applicable hygiene standards and employees have personal protective equipment (PPE), such as head, face, hand, and arm coverings, are worn to protect cannabis or cannabis products from contamination, and that each employee practices good sanitation, healthy habits and wears clean clothing at all times.


Aside from the fact that its federally required under the Occupational Safety and Health Law, providing your employees with a safe and healthful workplace is the utmost importance as a business owner or operations manager. This includes training employees and taking steps to prevent any injury or illness to workers during their day-to-day activities. Most employers must follow a basic set of rules, while other regulations may apply based on specific business hazards or the type of facility. This ranges from pesticide exposure, mold, air contaminant hazards, fires, burns from ovens/stoves, machine hazards to sprains and strains from material handling.


We strongly suggest showing the inspector your:

  • Written policy signed by top management describing the organization’s commitment to safety and health and pledging to establish and maintain and safety and health program.

  • Formal Fire Prevention Plan that addresses major hazards in the facility, accumulation of waste material, maintenance of heat-producing equipment and names and titles of employees responsible for various parts of the plan.

  • Hazard Communication Plan that describes how it achieves compliance with labels on hazardous containers; material safety data sheets for all chemicals and pesticides; and hazardous chemical training for employees.

  • Job Hazard Analysis and Assessment Plan to identify hazards and possible solutions to reduce or eliminate hazards.

  • Documentation and reporting procedures in the event an injury or illness has occurred.

  • Education and training plan to ensure workers are trained in their respective role, workplace hazards and how to identify them and be involved in the process of controlling those hazards.


While some states follow the Occupational Safety and Health Administration (OSHA) guidelines put forth at the federal level, other states have OSHA plans that override the federal rules. Be sure to know whether your state has its own OSHA plans or not. For more information about worker safety and health in the cannabis industry, check out this guide.


7. Know the state regulations like the palm of your hand.


Every cannabis business needs a Compliance Officer, a Compliance Team, or Compliance Consultant who is dedicated to reading through the regulations. They should have a thorough understanding of all the state and local laws, as well as legislative initiatives that could affect distributors, dispensaries, laboratories, production and cultivation facilities. Regardless if you only have one type of facility, changes to other cannabis businesses inadvertently affect the rest of the chain-of-custody.


There is not a single cannabis business that can afford to be without a deep understanding of the myriad of regulations and issues that can affect your operations and jeopardize your license. There are no insignificant regulations. The number of regulations you can “let slide” is zero. You don’t have the privilege to choose to comply with some and ignore others. From obvious regulations such as making absolutely certain that all of your packaging is certified child-resistant, to not so obvious regulations such as the number of parking spaces your facility has.


Some inspectors may say XYZ is required which may not be the case or interpret a regulation in an obscure way. Consider having one of your compliance representatives present during the inspection to discuss the regulations in case any issues pop up. Perhaps there is a misunderstanding of the interpretation of the law and requires you to put your heads together to figure out the right solution. Perhaps they have a sense of humor and simply want to test your knowledge of the regulations.



8. Be confident.


When an inspector arrives, you immediately assume they possess a sixth sense and know where all the critical issues can be found. In reality, they’re simply trying to get a grasp of you and your operations. There is where confidence is key. Confidence isn’t a requirement, but knowing the ins and outs of your facility, the qualifications of your personnel, methods of operations, and how everything will work seamlessly once operational will make a good, lasting impression and communicate that you’re seriously passionate and knowledgeable about your business.


If you have completed steps one through seven of this checklist and fixed any issues, mistakes or noncompliant elements – then you should be feeling pretty confident right about now. Your compliance representative should be exuberating confidence as well. After all, they are the ones making certain that all paperwork is properly completed and filed in a timely manner, and will spend their days going through every aspect of the business to assure it is running in a compliant manner.


Confidence is contagious. When you’re confident in yourself and your facility’s operations – so long as it is following state regulations – the inspector will be confident in your ability to run a successful and compliant cannabis business. They can rest assured the detailed business plan that won you your license is far better in action than on paper. Believe it or not, these people are not out to get you. They actually will work with you and help you get your operation in 100% compliance.



“Confidence comes not from always being right but from not fearing to be wrong.”


9. Build rapport with the inspector.


This is a prime opportunity to build a relationship with a local official. Welcome the inspector into your place of business as if you are welcoming a friend into your home. Be the perfect host by being friendly when they show up. Learn their names and offer them a bottle of water. Have a place for them to sit and work if need be – hell offer them YOUR office. Establish open communication and dialogue with them. You should be good at making friends with the inspector and other state regulators, as you will be the one point of contact.

There’s an underlying attitude that they dynamic with the state should be, or will be, cold and adversarial. This is wildly inaccurate! They are humans doing a job, just like you. Yes, their responsibility is to identify discrepancies and compliance infractions, but only out of necessity for the safety of the community and efficacy of cannabis regulation. At the end of the day, they want you to succeed, because your success is their success.


We have found that working with the regulators and viewing them as an asset rather than an adversary is one of the best ways to make certain you are doing everything correctly. It’s also helpful to meet with regulators at workshops and hearings so you can establish a more personal relationship that will prove beneficial in the future.




10. Ask questions.


The great philosophers spend their whole lives asking deep questions about the meaning of life, morality, truth and so on. Now you don’t have to be quite so contemplative, but you should nonetheless ask the inspector questions about the situations and struggles you’ll face, and questions regarding their experience inspecting your facility.


When you ask questions, show that you care. Demonstrate that you are interested with positive facial expressions and engaging body language. This sets up a further conversation and encourages the inspector to share information that could be important. A few same questions are:

  • If you owned a (insert facility type), what is something you would be most concerned with?

  • In your experience, what are the most common compliance issues (insert facility type) struggle with? Why do you think this happens?

  • Is there anything you would’ve liked to have seen done differently?

  • Are there any areas that we are doing the bare minimum in?

  • Are there any areas that we are exceeding the stated requirements in?

  • Will you elaborate on what the state is expecting in ___________?

  • What are some red flags or tell-tale signs to look out for regarding ______?

  • What is one thing I should do to make things better for you during an inspection?

  • If I have any questions along the way, may I contact you directly?


The idea is to engage in an open dialogue to gain an understanding of what the inspector and the state value. Ask questions that get the inspector to describe not simply what happened, but also what they were thinking. Not only is asking questions the simplest and most effective way of learning, but they are the best way to gain deeper insights, develop more innovative solutions, and make more informed decisions.


Download the checklist here!

© 2019 by The J. Whitney Group.

All Regional Laws Apply to The JWG Services

Cannabis Business Consulting
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The J.Whitney Group, LLC

8565 S. Eastern Ave. 

Las Vegas, NV 89123

Bldg. 150 | Ste.172

P: 702.623.5543

E: cannabusiness@jwhitneygroup.com