State of the Cannabis Regulatory Industry

How digitalization helps agencies respond to COVID-19, ensure security, and provide more consistent public service

This is the first issue of a three-part blog series reflecting on the findings from recent cannabis program audits about the long-term management and scalability challenges of regulatory cannabis programs. All audits are anonymized.

It’s been about seven years since Washington and Colorado first legalized recreational cannabis use, kicking off a domino effect of new regulatory policies and programs across the country. Today, 33 states have legalized and begun to regulate cannabis production for medicinal use, and 11 of those are also regulating recreational use. The unique nature of this industry has caused some bumps in the road for many programs, particularly considering that this industry didn’t legally exist until 2012 and is still not legal at the federal level.

Though these programs are all still quite young, recent reports and audits allow us to begin to reflect on not just the challenges of launching a cannabis regulatory program, but also on how to improve, maintain and scale these efforts.

Over the next month in this three-part blog series, we’ll discuss these findings (anonymizing the audited agencies) across three key, inter-related areas:

• • Digitalization and Security – What are the right systems to have in place to store and protect your data?   

• • Partnership and Integration – Once you have the right systems and controls in place, how do you ensure that the right data is shown to the right people?

• • Transformative Civic Change – When you’ve got the right people generating the right data, opportunities and insights are revealed. How do you maximize these opportunities?

Managing regulatory cannabis programs can require some deep changes to ‘business as usual’ for many public agencies. However, these changes can have immeasurable positive spillover effects. In today’s blog, we leverage findings from recent cannabis program audits and address takeaways regarding digitization and data security.

Storage and security of cannabis regulatory data is everyone’s concern

As a key stakeholder in the cannabis value chain, local and state governments are responsible for a great deal of data and documentation – from business plans to personal health information (PHI). Inconsistent, unautomated and paper-based processes have caused trouble for some agencies.

Audits of two local cannabis programs in different states found that current procedures for processing applications and conducting enforcement activities could not ensure that data was valid and complete, despite using a checklist to track these processes and documents. A state-level agency, meanwhile, was cited for errors related to manual data entry and processing. Inspectors were mistakenly entering the wrong dates when conducting inspections, delaying the scheduling of future inspections and resulting in some dispensaries going nearly two years without a visit.

Managing and securing data digitally in the cloud rather than on paper also helps ensure resiliency and continuity of operations when disruptions occur, such as the COVID-19 pandemic. In cases of natural disasters or extreme weather destroying local physical infrastructure, the cloud ensures that data is secure and accessible.

Even today, with many municipal employees now ‘sheltering-in-place’ for their own safety during the pandemic, being able to continue working on a computer from home minimizes disruptions. The regulated community benefits as well; an uptick in delivery permits and licenses can further be supported with online applications (one Santa Barbara, California service has seen a 50% increase in deliveries since coronavirus-related shelter-in-place advisories took effect). New or existing customers can submit paperwork through the web, reducing in-office visits in a time when many municipal offices are closed to the public anyway.

The cloud is a key part of guaranteeing data security, another emerging trend. New technology meant to provide additional layers of security, such as track and trace programs, add more transparency but also potentially more risk; several track and trace systems have reported data breaches in recent years. It’s never been more vital that the public sector invest in proven and secure cloud-based technology solutions, especially HIPPA-compliant systems. Like using a badge to ‘buzz’ people into different parts of the office, cloud security ensures that the wrong people don’t get access to the wrong places in your files, down to the field level.

With the cloud, your IT department doesn’t have to worry about constantly maintaining and updating hardware in an ever more dangerous digital environment. Nor can your department’s data management systems be affected, if you share space on a central server, by other departments’ needs. It’s also worth noting that when everything is digitalized, life is just much more efficient! It’s quite difficult to keep track of important data when they are scattered in documents around an office and hidden in people’s ‘to do’ piles on their desks (which is also a PHI risk). With procedures virtualized from the initial application all the way to license issuance and beyond, processing and sharing information becomes seamless.

In our next blog in the series, my colleague Judy Steele, Director of Accela’s Center of Expertise will address fusing government silos to ensure that even with maximum security, the right information gets to the right people.

Accela Cannabis Regulation makes regulatory agencies more efficient and responsive with automated workflows and robust digitalized functionality.  Accela’s partner ecosystem of leading companies in the cannabis industry offers a full and secure end-to-end solution with Blockchain-empowered track and trace and HIPPA-compliant medical patient registry in the cloud. Learn more about these partner solutions on our cannabis partner ecosystem page.