Cannabis Companies that Prioritize this Feature Are Typically More Profitable
Don't agree? Here are three reasons that will change your mind.
When most hear the topic of compliance come up in conversation, the first thing that comes to mind is endless amounts of paperwork, rigorous checklists, and surprise check-ins. Sounds stressful, right?
Most don't realize the power that a strong compliance culture brings to a cannabis company, especially as business leaders continue to face ever-changing rules and regulations leading up to federal legalization.
MSOs, cultivators, processors, and retailers experience most of the headaches and stress from a disorganized compliance culture. But once they have a system put in place, their only regret is they didn't plan and take action sooner.
"Once an operator prioritizes compliance and operational excellence and establishes a workable, user-friendly system, the pieces fall into place," says Dede Perkins, Co-Founder and CEO of ProCanna, a cloud-based compliance software system. "Productivity and consistency go up, stress goes down."
Here then are three ways a strong compliance culture can improve your brand's reputation, which ultimately impacts your business's bottom line.
1. Compliance builds trust from the market
hen a company has a strong compliance culture. The byproducts are visible throughout almost every aspect and department of the organization. Consumers feel safer buying product from a brand that willingly places a great emphasis on safety and compliance, B2B decision-makers feel more comfortable doing deals and aligning with other organizations who follow protocol. The organization's staff are more likely to talk about the company (in a positive way) to family, friends, and potential buyers.
Not to mention, brands who are compliant and don't cut corners are often praised by the market through press, media, and word-of-mouth, which we all know is the toughest stripe to earn in any industry.
2. Compliance improves valuation
A few years ago, we saw an incredible amount of money flow into Canadian cannabis companies as legalization took effect. Now, as more states come on board the legalization train in the U.S. and we sense federal legalization coming sooner rather than later, it's likely that we'll begin to see more capital flow into U.S.-based cannabis companies. With that said, when family offices, private equity firms, or venture capitalists come knocking on your door with a potential buy-out or capital infusion, they'll be asking to see that your compliance is up-to-date as well.
When asked about public perception, reputation building, and valuations, Dede Perkins said, "Put yourself in their shoes. If all else is equal, which company would you buy? The one with spotty documentation that flies by the seat of their pants or the one with a well-documented system of training, internal auditing, operational excellence, and consistent compliance."
3. Compliance makes onboarding new hires easier
Part of a strong compliance culture is ensuring that your standard operating procedures are compliant and follow local rules and regulations. Documenting your SOPs and having them readily available for your staff will not just make things easier and less stressful for existing team members. Still, it will make onboarding new hires exponentially more efficient and effective.
Says Dede Perkins, "Organizations that give team members easy access to changing regulations reduce confusion and streamline decision-making. These companies are nimbler than their competitors, which can be a real market advantage," says Dede Perkins.