What are Standard Operating Procedures for Cannabis?
As with almost every business, standard operating procedures for cannabis business operators ensures consistency. In an industry characterized by strict regulations and corresponding infractions, SOPs in the cannabis sector contribute to many operators’ success.
From bookkeeping to inventory management and everything in between, SOPs are crucial for success in any business. But in cannabis, it becomes increasingly important as operations lacking organization and processes rarely last.
Standard operating procedures promote consistency and help business operators uncover where and when something goes awry. This documentation explains the specifics of repeatable processes and procedures, including how to do something, when to do something, which materials you’ll use, and what data you’ll need to record.
Your cannabis SOPs control your processes and encourage you to use the resulting data to improve them. In this guide, we explain how to create cannabis SOPs, several types of cannabis SOPs, and some tips for writing effective SOPs for your cannabusiness.
How to Create a Standard Operating Procedure for a Cannabis Business
Sometimes a template can make it easier to create your SOPs. However, if you’re starting from scratch, a few considerations will go a long way in creating your cannabis SOP template.
What Should You Include?
You’ll first need to think about what your cannabis standard operating procedure template should highlight. Consider your business’s operations and how standardizing certain activities will benefit your business, your team, and your customers.
Who Will Use It?
Next, you’ll want to consider who will use your template. If you plan to fill out the template on your own, you’ll have no trouble understanding the format. But if you have a team or manager planning to collaborate on the finished draft, you’ll need to take them into consideration.
Think from your team’s perspective. Will they understand technical or in-depth instructions? If not, make your template as simple to follow as possible. The key here is to write in a way everyone will understand the processes you plan to standardize.
What Procedures Can You Standardize?
It’s also important to analyze your procedures. Think about what will add to your team’s successful implementation of your SOPs.
While you can make more processes efficient, others might not be as simple. Some processes might already be as efficient as possible. Others might be overly complex to standardize. Analyze your procedures and determine which will or won’t work for your SOPs.
How Will You Format Your SOPs?
Your SOPs should be as simple to follow as possible. Here’s an example of a clean aesthetic for cannabis SOP formatting:
- __________ Standard Operating Procedure
- Title of the procedure (e.g., Growing, Harvesting, Inventory Management)
- Executing Person, Role, or Position
- (e.g., Manager, Inventory Specialist, Budtender, Buyer)
- Date & Supervisor’s signature
- Why are you outlining this process? What do you hope to accomplish?
- Define technical terms you’ll use in these instructions for easy understanding.
- This is where you’ll explain how the executing individual should complete the process.
- Step-by-Step Instructions
- This is where you’ll provide the executing person with easy-to-follow step-by-step instructions to get the job done.
Types of Cannabis SOPs
Depending on your business, you’ll have different types of cannabis SOPs. Throughout the production process, it’s crucial to keep your SOPs simple while still breaking the process down into smaller, more manageable processes.
As a cannabis business operator, you’ll need to meet any regulatory requirements in place. Each state will offer its own set of regulations, so it’s essential to conduct some research to determine how you can best avoid an infraction in your state before creating your business’s SOPs.
Love this post? Check out our other article on accounting for cannabis growers before you leave!
Cannabis Cultivation SOPs
The standard operating procedures for cannabis cultivation involve the equipment you’ll use, the production environment, managing the plants at each growth stage, and controlling the environment. These are some of the details you’ll likely include if you create cannabis cultivation SOPs:
- Medium you use (e.g., soil, hydroponics)
- Lighting schedule for each strain (e.g., autoflowering vs. feminized)
- Environmental controls (e.g., temperature, humidity, lighting)
- Pruning and defoliation frequency and method
- How to handle problems (e.g., pests, pathogens, nutrient deficiency)
- Nutrient formulas and application frequency
Cannabis Manufacturing SOPs
While cultivation is a big part of cannabis production, manufacturing demands its own set of SOPs. Between storage, packaging, labeling, and post-harvest processing, cannabis manufacturing SOPs are essential in this industry.
The legal demands for packaging and labeling differ between states. Most areas require tamper-evident, childproof, and opaque packaging. The material of packaging materials for cannabis also should not permit microbial contamination or break apart, as well.
The labels for cannabis products also should include information about the product. This can include the manufacturer’s name and location, ingredients, potency, batch number, and health and safety warnings.
With cannabis manufacturing SOPs, you’ll have a plan for labeling control. You control the detail that goes into the labels, as well as the verification process for accuracy. There should also be a system in place to retain copies of all labels just in case there’s a problem.
Cannabis Dispensary SOPs
SOPs for cannabis dispensaries focuses heavily on inventory management. As a dispensary operator, it’s essential to simplify processes, automate inventory management, and take precautions. Here are our tips for cannabis inventory management SOPs.
1. Use FIFO (First In, First Out) for Inventory Accounting
While standard in food production safety, the FIFO system also works with cannabis. Keep your inventory as fresh as possible by pushing the first products you purchase out first.
These are the steps to follow for effective FIFO inventory accounting:
- Find all products with the earliest use-by, best before, or expiration dates.
- Toss damaged and expired products.
- Stock your shelves with the products expiring soonest facing out.
- Put the newest products towards the back of the shelves.
- Sell your oldest inventory first.
2. Use an Inventory Management Software
While it won’t replace a reliable accounting team, inventory management software can help you keep track of your inventory. You’ll need a Point of Sale (POS) system in place, as well.
The idea here is to find software that integrates with the government’s reporting system. This helps to make automated compliance reporting as easy as possible.
The right software will also lessen your chance of human error. Writing calculations on scrap paper just won’t cut it!
3. Analyze Data You Gather from Your Customers
Businesses become more effective when they know their customers’ demands. Of course, the same goes for cannabusinesses.
The right data will provide valuable insights; from knowing what your customers want to how much you need to order and the margins you’ll need to remain profitable, data will fuel your business’s growth.
4. Standardize Your Process for In-house Inventory Audits
In-house inventory audit processes ensure your business recovers lost sales, you make better ordering decisions, and would-be internal thieves and frauds are easy to find. You’ll also dodge inventory-related compliance infractions.
Full audits of your entire inventory each week can be tedious. This is why many cannabis business operators incorporate monthly cycle counting.
You can conduct accurate inventory counts by counting portions of your inventory during scheduled intervals as the month progresses. But you’ll still need to avoid having the same person counting your inventory and handling cash as this is a prime opportunity for that individual to steal from your business.
5. Prevent Employee Theft
While most people consider their employees honest, this isn’t always the case. Think about how much product you handle every month. It’s easy for these products to go ‘missing’ with so many ways to profit from dishonesty.
The Marijuana Retail Report claims as much as “90% of losses reported by dispensaries are due to employee theft.” With strict SOPs in place to secure your inventory, you’re minimizing the chance of employee theft.
Here’s how you can prevent employee theft:
- Initial background checks.
- Limited access to inventory stock.
- Employee identification to enter and exit limited access areas.
- Record staff as they enter and exit.
- Alarms, lighting, and video surveillance.
- Hired security to observe staff and customer behavior inconsistencies.
6. Properly & Securely Store Cannabis
An inventory manager is ideal to ensure cannabis storage is effective. However, sometimes, this isn’t an option.
Store all products the right way to keep them fresh for as long as possible. This usually means extracts and flower go in air-tight containers, perishable edibles in the refrigerator, and in temperature-controlled climates.
Keep your inventory secure too. Your state’s regulations should provide some insight into how you should secure your inventory to maintain compliance.
Cannabis Storage SOPs
Your SOPs for cannabis storage will touch upon how you keep your products separate from one another. You’ll outline whether the products demand specific environmental variables, such as refrigeration, humidity control, or other environmental controls.
You’ll also explain a cannabis storage SOP involving the security of your inventory. This should include how you’ll limit and monitor staff access to your inventory storage, as well as how you’ll pack and store your cannabis products.
Cannabis Testing Lab SOPs
For your cannabis testing lab SOPs, you’ll highlight your document testing procedures. Every cannabis product demands testing for a plethora of parameters, including microbial contamination, heavy metals, pesticides, and potency. It’s your responsibility to ensure sampling and criteria for acceptable limits are standardized.
You’ll also need to test the quality of your water in cannabis cultivation. If you’re not careful, your cannabis can take in heavy metals and other contaminants in irrigation water. Pests and pathogens can also become an issue without water quality testing. This calls for microbial testing to keep your irrigation water safe for your plants, team, and consumers.
Environmental monitoring is equally important for cannabis testing lab SOPs. This is how you’ll determine if fungi and bacteria are a problem in your production space. The areas that microbes can become an issue should be accounted for, with samplings to ensure the microbial levels never exceed safe limits.
Cannabis Sanitation SOPs
For cannabis sanitation SOPs, it’s best to explain the cleaning procedures and products you’ll use to maintain sanitization standards. You’ll create a sanitation schedule to outline when the cleaning should occur and which products should be used. These SOPs can also discuss cannabis facility and equipment maintenance.
Cannabis sanitation SOPs can also go over staff health and hygiene. It’s best to write your requirements to contribute to your overall sanitation plan as this will limit your risk of contamination. Even the shoes and clothing your team wears to work can impact the sanitation of your workplace.
Cannabis waste management is also an essential aspect of sanitation. This industry demands documentation for cannabis plant material and waste that comes into contact with cannabis in accordance with any local regulating forces.
Hazard Analysis and Critical Control Points (HACCP) for Cannabis
Regulations require documentation, and as such, you’ll want to document everything. Here’s a list of HACCP for cannabis:
- Describe your cannabis product.
Your product description will include what your product is and any metrics showcasing potency.
- Describe the intended use of your product.
While it might seem obvious to you, it’s ideal to outline how consumers will use your cannabis product or details regarding how to further process the cannabis material.
- Create a HACCP Flow Diagram.
This is where you’ll show your entire production process.
- Verify Your Flow Diagram.
Call upon other members of your team to analyze your flow diagram for its accurate depiction of all steps in your production process.
- Perform a Hazard Analysis.
Check for any potential hazards to health and safety within your flow diagram.
- Highlight Critical Control Points or Preventive Controls.
Identify where you can put controls and verifications to lessen risks or totally mitigate them.
- Create Critical Limits.
Your critical limits outline where hazards become out of control.
- Monitor Your Critical Limits.
As long as you stay within your critical limits, you know you’re okay. But by monitoring these limits, you can identify trends and keep critical control points in check.
- Outline Corrective Actions.
Corrective actions will be essential if a control point goes past its critical limits. These actions will correct problems should they arise.
- Determine Your Record-Keeping Methods
Documentation is crucial for success in the cannabis space. Regulatory forces want to catch you off guard. But with documentation, you can maintain any progress you make during your inspections and analyses.
Learn More With Northstar
Looking for more information on what cannabis SOPs can solve? Learn more about how you can avoid cannabis business problems with Northstar.