The Truth About Sustainability
There’s quite a bit of confusion about what sustainability means for a cannabis business. Too often, businesses still view sustainability as something extra they need to do to satisfy the public, governments, investors, and their employees.
The truth is sustainability is another tool for ongoing improvement of the business to build resilience, reduce costs to drive profitability, and strengthen the company’s reputation with its customer and its role in the local economy. Healthy cannabis businesses create a healthier cannabis industry.
Businesses, through their activities and relationships, impact people positively or negatively as a result of its impacts to the economy, the environment, and its employees, customers, and community. Understanding these impacts and acting to create more positive impacts while reducing negative ones is intention of a well-thought out sustainability plan.
For example, sustainability reporting in accordance with the widely accepted Global Reporting Initiative framework is designed so any business can understand its impacts to the economy, the environment, and people, including impacts on their human rights (you can find the GRI standards here.)
Sustainability goes beyond reducing environmental impacts, which is where most companies limit their attention. Rather than being at the effect of external factors, sustainability directs attention and actions internally which increasingly is being shown to lead to greater customer satisfaction, efficiency of operations, employee enthusiasm, community support.
This month’s newsletter highlights several widespread pain points for cannabis businesses including, inventory management (impacts to a business’ profitability and potentially reputation), putting people in the right positions to succeed and reduce employee turnover (impacts to people), and training to development employee skills and operational efficiency and resilience (impacts to people and cost reduction). The first step to develop a tailored sustainability plan for any business is to identify and assess its potential impacts to the economy, environment, and people, so it can then prioritize and plan actions to reduce the negative impacts that result in costs to the business and improve the positive impacts that create value for the business.
Author:
Jack Palis
Lead ESG IMPACT Manager and East Coast Regional Manager
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Talent Optimization: The Future of Employment
High turnover rates among entry level positions continue to plague the cannabis industry. Two factors that disrupt employee engagement and productivity are poor job fit and poor team fit. Companies create business strategies but hardly ever look at the critical component of hiring the right people. Talent Optimization is a discipline that can help leaders close the talent gap. Intentional and strategic hiring can create a major paradigm shift in the dynamic of the company. Amazing things happen when you put the right people in the right jobs. Employees begin to understand how they operate, how they make decisions, what environments they thrive in, and the innate ability they have to make choices that are in alignment with their motives, values, and drives.
The NCRMA is proud to partner with Predictive Index, who believe that people are the heart of your business. They utilize four behavioral analytics to create a more intentional and strategic approach to building teams: Diagnose, Design, Hire, and Inspire. When these four activities are intentionally and strategically executed, you align your business with the data you need to close the talent gap once and for all.
Check out the NCRMA website to learn more about our Cannabis Talent Optimization Certificate Program!
Author:
Stephanie Sandoval
Academy Coordinator
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National Cannabis Risk Prevention Services Names Jeffrey Pogue As Director of Finance
Jeff Pogue’s forty plus years of experience includes strategic planning, business processes, financial statement preparation and review, cash flow management, liaison with banks and auditors, consolidations, problem solving, communications and diplomacy.
His diverse career has included positions such as Accountant, Senior Accountant, Internal Auditor, Internal Audit Manager, Assistant Controller, Controller, Director of Finance, VP of Finance and Chief Financial Officer. Jeff has had increasing and varied responsibilities working in a broad range of industries with both public and private companies, such as services, utilities, cable, healthcare, manufacturing and most recently transit. He loves to collaborate with others to resolve issues, create efficiencies, develop strategic plans and simply mentor others to better understand what financial
data can tell you about your business.
Jeff graduated with a BS in Accounting from Villanova University and is a Certified Public Accountant licensed in Pennsylvania. With a team-oriented approach, high integrity and a strong commitment to quality and customer satisfaction, Jeff stands ready to assist NCRPS clients and the NCRPS team.
Jeffrey Pogue
Director of Finance
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Putting the Right People in the Right Places...And Keeping Them. The Backbone of Operational and Organizational Health
Acquiring and retaining talent have long been the keys to business success, but finding and keeping that talent isn’t always easy, especially as the workforce continues to change. Fortunately, there are steps cannabis business operators can take, and questions they can ask, to learn how to find and use these critical keys.
What actions must I take?
Possible solutions to this problem are multiple and interactive in nature. Mounds of information exists that advise actions such as such as trust, empowerment, communication, honesty, giving credit, taking blame, team development, flexible work hours, work from home, etc. All of these can be important in a given situation. Their complex integrations, however, are mainly dependent on specific situations and cultures. Given this, the ongoing discussion of steps to be included in the solutions is presented more in the form of a checklist or roadmap than a specific prescription of a cure.
NCRPS, with its focus on occupational and organizational health, clearly details the beginning steps in this roadmap following:
Leader Self Awareness
Research has revealed the number one core competency that separates good leaders from the rest of the pack as self-awareness.
Leaders need to know their weaknesses to improve their own self-awareness before they can accurately address the issues involving their employees. Such weaknesses are difficult to identify individually because as the boss, one doesn’t regularly solicit or accept candid feedback from others. Such inaction causes weakness to perpetuate as our nature is to pursue issues in the areas where we are most comfortable.
Create an execution culture
As simple as it sounds, good people like performance and success. As Bossidy details in his classic “Execution: The Discipline of Getting Things Done”, several key characteristics of an execution mentality include:
- Having the right people in the right places
- Creating single point accountability
- Promoting robust dialogue and emotional fortitude without fear of retribution
Driving the three execution mainstays into the action line of a company creates an atmosphere of expectation, evaluation and contribution. True talent is attracted to such work place environments as it allows them to immediately be themselves, to contribute to progress and to respectfully speak their minds and/ or participate in real work at an active level. Such a culture must permeate from the top and throughout the complete organization. When it does, employees become truly satisfied and are then less likely to seek alternatives independent of pay rate and other forms of monetary compensation.
Emphasize the behavioral side
The resume: the scripture of cognitive skills that defines the candidate. The one page of information that primarily —and sometimes solely —determines some candidates’ right-of-passage into the interview process.
Unfortunately, resumes typically only describe one’s cognitive skills. The true determinants of TAR, however, lie in a large part on the behavioral side. We are born with a specific behavioral pattern that drives our needs and determines what motivates us. Understanding these patterns and working these needs and motivators into a person’s area of job responsibility attack the true reasons why employees are attracted to or leave companies. This information is “the other side of the resume” and often contains the keys to a true and effective TAR process. A key step in the use of the behavioral side in recruitment and retention is the construction of a behavioral job description for the position being filled. Doing so assures a succinct marriage of the cognitive and non-cognitive expectations as determined by the adjoining members within an organization. Results of this exercise deliver the attainment of the “right people in the right places” execution driver. Accurate behavioral assessment also creates self-awareness defined earlier as a primary TAR component.
Difficulties will continue for businesses who don’t represent talent acquisition and retention as a top priority in their strategic plans.are in for a difficult decade to come. The available candidates/available jobs ratio has decreased by a factor of 15-20 times over the past 20 years. Additionally, the millennial generation now fills over 70%percent of the available jobs. Only companies whose TAR strategy aggressively addresses these factors will truly succeed
TAKE ACTION NOW: NCRMA
Author:
Rocco Petrilli
CEO
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Adding Value: Employee Satisfaction in a Difficult Market
At a time when many cannabis businesses are feeling the squeeze from competition and price compression, the question arises of how to continue to add value to employees when wage increases are not on the table. For many companies, a permanent wage increase is a difficult sell right now, but employees that feel undervalued often leave, and the cost of turnover can’t be excluded from the equation. Training and education can add value to your employees and organization when the budget won’t allow for wage increases.
Years ago, in a conversation with an employee on my team, he expressed frustration that he hadn’t gotten a raise recently. He felt undervalued, and said that he needed to either be compensated appropriately or that the company should provide additional training and development. This was a stellar employee, but we were in a cash crunch so there was a freeze on raises. It got me thinking, so I asked him if he would like more ownership of his projects, and I created training courses related to our goals as a company for him and other employees. He took hold of the opportunities immediately, and the response from nearly all employees that took the training classes was very positive.
Additional training allows the employee to continue to make personal career progress during times that are lean for the company, while also increasing the overall knowledge base of the organization. In addition, allowing employees the opportunity to cross-train in additional departments adds to their skill set, but also gives the company as a whole more flexibility and fosters interdepartmental communication and understanding.
Someone reading this is probably thinking, “How do we know who wants to be developed, and who is just trying to get out of work for a day?” The answer I have found useful is to have the employees fill out a very brief application about why they want to take on the additional training or project. This small step is usually enough to separate out the ones who want to be there. This won’t be practical in all situations, and every workplace is different, but I have seen initiatives like this bring new energy into entire departments. Training courses from NCRMAcademy or another qualified training provider can expand the knowledge base of your human capital at relatively low cost. Adding value to your employees adds value to the entire organization, and additional training is a value-add that continues to pay dividends long after it is completed.
Author:
Andrew Hatch
Director of Product Safety
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Perils of Cannabis Inventory
There are a lot of shared problems operating cannabis businesses, but inventory issues are arguably the most common. In the lean manufacturing system, where waste is defined as “something that adds no value”, inventory is identified as one of seven wastes. Lean Manufacturing Tools describes inventory waste in this way:
“Inventory costs you money, every piece of product tied up in raw material, work in progress or finished goods has a cost and until it is actually sold that cost is yours. In addition to the pure cost of your inventory it adds many other costs; inventory feeds many other wastes.
Inventory has to be stored, it needs space, it needs packaging and it has to be transported around. It has the chance of being damaged during transport and becoming obsolete. The waste of Inventory hides many of the other wastes in your systems.” (http://leanmanufacturingtools.org/77/the-seven-wastes-7-mudas/)
From state-to-state inventory violations tend to be the most common fines, in the cannabis industry. These violations are typically for not properly reporting inventory and not reconciling actual inventory to the virtual seed-to-sale tracking system’s inventory.
While manufacturing waste and fines and violations are concerns for any business the biggest perils associated with inventory are criminal in nature. Inventory that is not well tracked is vulnerable for theft, embezzlement, and diversion of product into the black market.
The issues compound very quickly, if inventory discrepancies happen day after day, it becomes nearly impossible to identify what exactly went wrong. If a business does not catch an inventory discrepancy with in 48 hours the likelihood of identifying the issues drops dramatically.
To control waste, fines, and criminal activity every cannabis business must button up their inventory controls. Every process involved in producing, moving, and selling product should be clearly defined with responsibility assigned to specific personnel. While many states do not require daily inventory reconciliation it is best practice to do so. This requires businesses to count every plant and product daily and verify the virtual tracking numbers match. Many businesses see daily inventory reconciliation as too time consuming and burdensome, but the consequences are too high to not know exactly what your inventory is every day.
Author:
Alex Hearding
Chief IMPACT Officer
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DEA Clarifies Stance on Hemp-derived Delta-9 THCO and Hemp-derived Delta-8 THCO
On February 13th, the DEA issued a statement clarifying their stance on hemp-derived Delta-9 THCO and hemp-derived Delta-8 THCO, stating that they consider them both Schedule 1 illicit substances under the Controlled Substances Act. These products were being sold under the assumption that the law allows for their sale because they are derived from legal hemp, but since these cannabinoids do not occur naturally in the plant they are to be considered synthetic THC, which is prohibited under the Act.
There are good reasons to be cautious with these two compounds. Delta-9 THCO and Delta-8 THCO are relatively new to the market, so very little study has been conducted as to their safety. There is no federally-mandated safety testing of hemp products, so these products are often contaminated with heavy metals, pesticide residues, or harmful microbes and their byproducts. Many reports of negative effects have been received by the FDA, with a range of symptoms including hallucinations, vomiting, tremor, anxiety, dizziness, confusion, and loss of consciousness. In addition, Munger et al. found that vaporizing THCO products creates ketene gas as a byproduct, which can be lethal at a concentration at 5 ppm or greater (2022).
The announcement has consumers concerned and producers scrambling to pivot. More research into novel cannabinoid health effects is needed to determine the actual level of risk for consumers, but we aren’t quite there yet. Until then, producing products that contain novel cannabinoids carries serious risk, both to the consumer and the operator.
Author:
Andrew Hatch
Director of Product Safety
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New Membership Structure Launched for The National Cannabis Risk Management Association
NCRMA is proud to announce the launch of our NEW membership tiers designed to give our members MORE! All membership levels include basic benefits of association membership, original and curated industry news raising awareness of risk issues and best management practices, access to webinars and meetings, discounts on partner products and services to help your manage risks most effectively, and much more.
You now can choose the membership levels that best fits your company’s budget and interest level. Each level comes with variable access to courses in the National Cannabis Risk Management Academy, complimentary courses upon signup, discounted fees for our new Professional Cannabis Risk Manager certification exam, and discounts to future conferences and networking events.
The three tiers now available are:
- Risk Partner – Includes all basic benefits above, plus two complimentary courses on risk management and insurance, and 20% discount on all certification programs, continuing education courses, conferences and networking events. Normally $29.99/mo, NOW $9.99/mo.
- Risk Professional – Includes all basic benefits above, plus three complimentary courses on risk management and insurance, and 35% discount on all certification programs, continuing education courses, conferences and networking events. Normally, $99.99/mo, NOW $49.99/mo.
- Risk Expert – Includes all basic benefits above, plus complimentary access to the PCRM certification, all NCRM Academy courses, continuing education, exam and certification renewal fees, and networking events. It also includes a 75% discount on our annual user conference. This membership level also includes participation in NCRMA’s Referral Program. Normally, $199.99/mo, NOW $129.99/mo.
NCRMA is committed to delivering the highest quality content and value to its members, including cannabis industry news, webinars, member meetings and networking events, and interviews via our Chronic Risk podcast. As membership grows, more member value and benefits will be offered, all with the purpose of making the cannabis industry safer, more secure, and sustainable.
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Benefits of the PCRM
There are a lot of places now to get educated in cannabis and its operations. You may ask yourself, what are the benefits of the NCRMA’s Professional Cannabis Risk Manager certification and why should I get it?
There are many professional roles this certification will help including: cannabis operator, compliance and safety officers, quality managers and even roles adjacent but outside the industry like insurance brokers and banking professionals. Whether you are a seasoned professional or a student looking to get involved in the industry there are multiple reasons to get your PCRM.
- As the only operational cannabis risk management risk credential the PCRM validates your technical knowledge and commitment to quality and safety.
- Adding the PCRM to your professional profile demonstrates that you can successfully manage risk in the emerging industry. It gives you knowledge of the major risks facing the industry and how to manage them.
- It shows your current or future employer that you will create value for their organization and helps you stand out and elevates your status in a crowded field.
Author:
Alex Hearding
Chief IMPACT Officer
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The Sharks are in the Shallows... and We're Gonna Need a Bigger Boat
Ethephon contamination in Nevada, HLV in Massachusetts and California, CBD unregulated and out of control.
The phrase, “You can pay me now or pay me later” is one many of us remember and use. It’s from the FRAM oil filter commercials in the 70s and 80s. The implied meaning of the phrase in the commercial is basically you can pay some money now for a good oil filter or, if you don’t, you’ll pay much more later when your car breaks down.
The commercial no longer airs but the concept holds true in many areas of life and commerce. Cannabis is no exception. Operators in the cannabis industry have balked and resisted the value of risk management and prevention. Arguments include “we can’t spend money on things that don’t impact our sales” and “we are in cannabis…risk is nothing new to us.”
The latter is absolutely true. WE ARE in the cannabis risk business and WE ARE risk takers. Being a risk taker, however, does not remove our responsibility to reduce or eliminate risk whenever possible. This is EFFECTIVE risk management. And contrary to the above, EFFECTIVE risk management does impact your sales…and your profitability.
This edition of the NCRPS newsletter, Chronic Risk, launches a series of articles that deal with cannabis product risk and more importantly cannabis product safety. We at the NCRPS have continually maintained that product risk is the threat that could take the legs out from under the cannabis industry. No, we are not part of the naysayers that live on LinkedIn or the doomsday cannabis crowd. We are a team of cannabis experienced risk managers whose passion is to work with the industry to use EFFECTIVE risk management to ensure its profitability and sustainability.
Don’t get caught by the thought that you can’t afford EFFECTIVE risk management. Don’t cut corners to save dollars in critical areas of your cannabis business. Remember the FRAM guy or better yet, Quint the boat captain from Jaws. He was a risk taker too…
Author:
Rocco Petrilli
CEO
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