You have a lot of things to deal with as a cannabis business owner, and one thing you may overlook is data retention requirements. Most areas require to keep certain records and documents for a certain number of years. Not keeping these records can land you in trouble, including fines and having your license suspended or taken away.
What Records & Data Do You Need to Keep?
It varies from state to state. It can include but is not limited to:
- Inventory management
- Seed-to-sale tracking and movement
- Pesticides and care routines (for cultivators)
Keep track of all cash transactions. Given that cash is the most common payment method, this is essential. Cannabis-related businesses are not permitted to claim credits or deductions for sales of cannabis-related products. However, they can deduct some costs for sold goods if they are related to other legitimate business operations.
Some states demand that this data be stored digitally. Other states want both, while some others prefer paper copies. If there is a random inspection, you don’t want to fall behind or leave out crucial information. Even if you strictly adhere to the law, it might still cost you your business.
Additionally, having a backup of everything is incredibly beneficial. If there is a dispute surrounding your company or if state officials question your business practices, you could land your business in deep trouble. You won’t be granted a second chance if you don’t keep accurate, thorough records.
Importance Of Video Data Retention
Depending on your state, regulatory bodies can mandate storing video surveillance footage anywhere from three months up to two years, with requirements for storage only increasing. On-premises storage can become expensive and challenging to maintain.
Because practically every state that has legalized cannabis has record-retention laws, and some of those states charge huge fines for not having all of those documents organized and easily available. For instance, California mandates that all cannabis business owners save any paperwork related to commercial cannabis activity for a minimum period of seven years. The consequence for not doing so can land the business a fine of up to $30,000 per violation.
The guidelines in Oregon state include a mandate of recordkeeping requirements. A cannabis licensee must possess and maintain records that clearly reflect all financial transactions and the financial condition of the business. The records must be stored and maintained for a three-year period. It must be made available for inspection if requested by an employee of the Commission.