Dana Cawthon: 3 Rules Every Medical Marijuana Dispensary Must Follow to Help Stabilize Industry

By Dana Cawthon

In our uncertain and volatile marketplace, it is more important than ever for medical marijuana dispensary owners to comply with local rules, standards and regulations established for the industry.

With a proliferation of MMJ businesses in recent years and marijuana legalization on the ballot in several states, authorities are looking for any reason to shut dispensaries down. Moreover, recent banking restrictions have made it significantly more difficult for dispensaries to be successful from a financial perspective.

The best way to overcome these obstacles and reinvent new, more favorable market conditions is to maintain strict business guidelines. While this may seem obvious, it is crucial for each medical marijuana entrepreneur to make sure he consistently reexamines his business practices and adheres to the following three rules:

#1. Managerial Accounting – As an owner, it is imperative for you or your management team to routinely (daily or weekly) go over the company’s financial statements and target discrepancies. This adds to your bottom line by keeping you on pace for the short and long term financial goals established in your business plan. It also helps to manage inventory as well as to establish buying trends and pricing practices. Adopting effective accounting practices is the best tool to use to eliminate employee consumption and theft—the largest area of business risk in the MMJ industry. Another positive byproduct of implementing a strict accounting routine is that you will be much more ready should the government ever decide to audit your company.

#2. “Hands On” Leadership/Human Resources Development –  It is vital that dispensary owners have a thorough knowledge of the rules, standards and regulations of the industry in order to convey them to their employees. Non-compliance exposes you to being shut down. Interactive leadership engages your team to be more responsible, to take pride in the importance of their duties and to build morale. An employee will be more valuable through this commitment and accountability and become much more likely to stay longer, thereby reducing turnover.

#3. Business Ethics –  Establishing and implementing proper business ethics will help to change the perceived culture of the MMJ industry and enable us to become better corporate citizens. Our industry promotes and sells a product that is subject to added public scrutiny due to its inherent “gray areas.” Therefore, dispensary owners need to be proactive and set a high standard for policing ourselves in order to gain acceptance. Each owner should implore his team to not “use” on the job, to insist on seeing proper ID’s, look and act professional at all times, know the rules, and engage with customers and the public at large in a positive manner. Adhering to strong business ethics will help establish an owner not only as a leader in the MMJ industry, but even more importantly as an asset to the general business community as well.

While the medical marijuana industry is in its infancy, we need to step up our game and earn the right to be viewed as a legitimate trade. The best way to ensure our success and safety is to practice what we preach. We need to recapture the trust of the banking community and the overall business community in general by becoming better and more responsible business people ourselves. In the end, it is the best public relations we have to ensure that medical marijuana becomes legalized and that we all benefit.

Dana Cawthon is chief executive officer and co-founder of Corporate Results, a full-service consulting firm specializing in the needs of dispensary owners, MMJ manufacturers and supporting doctors.