Don’t Provoke The U.S. Attorney!
The United States Attorney in your area can be your best friend or worst enemy. Well, maybe not your best friend but definitely your worst enemy if your company shows up on the radar for activities that the United States government is specifically targeting.
As discussed in our blog on banking solutions for cannabis companies, the Department of Justice has outlined detailed procedures for banks to follow for its marijuana-related business customers. At the same time, the DOJ also identified eight priority areas for US Attorneys that will result in federal intervention at the state level if a cannabis company is illegally engaged in those activities. By fully understanding what the department is concerned with and making sure to create internal company policies to address those issues, you will avoid any unwanted involvement with the US Attorney’s Office or the federal government.
1. Preventing Distribution to Minors
The number one enforcement priority for the US Attorney for marijuana-related businesses is making sure that minors do not have access to any type of cannabis product. At a minimum, you must institute strict company ID policies and restrict access to manufacturing and production facilities as well as a comprehensive tracking system to identify the history of each of your products in the distribution chain.
Although not mandatory, it’s also a good idea to support or even create a minors prevention program to create good press for you and the industry as well as confirming your commitment to keeping products away from minors.
2. Preventing Revenue from Going to Criminal Gangs and Cartels
There are some basic steps you can take to prevent wrongful diversion of funds and create a proper paper trail if the US Attorney ever comes knocking at your door.
Background checks for all of your employees should be mandatory to ensure that none have a prior affiliation with criminal gangs. Also be sure that you are in compliance with strict accounting standards including the creation of detailed profit & loss and financial statements. You should also have extremely limited access to company bank accounts or cash to prevent theft as well as a comprehensive product and revenue tracking system and software to organize your records.
3. Preventing Diversion of Marijuana to Other States
This is a big issue and the one most likely to surface if proper measures are not in place. Because there are several states where marijuana remains illegal or limited to medical situations, there is a significant financial incentive to move product into those states for sale on the black market. This is bad! Repeat bad – to be avoided at all costs no matter how much profit is available. Getting caught selling marijuana on the black market or moving it into other states risks your entire business operation and its investment funds as well as creating significant criminal exposure for anyone involved or with knowledge of the illegal activities.
The simplest and most effective method to prevent improper diversion is to install a comprehensive seed to sale or product initiation to completion tracking system so that anything missing from inventory will be identified immediately and a message sent to all of your employees that it will not be tolerated.
4. Preventing Marijuana Related Businesses From Being Used as a Cover for Illegal Activities
Because many companies are forced to deal with large amounts of cash if they can’t get a bank account, criminals may try to use the opportunity to launder funds from illegal activities in legitimate cannabis businesses.
As with all of the issues addressed above, thorough precautions and security measures will prevent any problems from arising. Proper accounting, limited access to bank accounts, background checks for all employees and a tracking system that accounts for all transactions are just some of the steps you can take to avoid attention from the US attorney on this issue.
5. Preventing Violence and Use of Firearms
Background checks for all employees, education and anti-violence training programs and even the use of metal detectors are all measures that can be employed to ensure a safe workplace and avoid violent incidents that shed negative light on your company.
6. Preventing Drugged Driving
This is an interesting one particularly since there is no universal standard to determine what actually constitutes drugged driving. Regardless, it’s important to support Community Education programs and physician involvement to identify which drivers and situations are dangerous to society.
Another method of supporting this concern is ensuring that your customers know the strength and likely effects from your products so they aren’t surprised by its impact.
7. Preventing Growth of Marijuana on Public Lands
Okay, this this should be easy… stay out of the park! Parks, public lands or anything shared by everyone in this country is for pleasure not business anyway.
8. Preventing Marijuana Possession or Use on Federal Property
Once again, this should not be difficult although it’s admittedly hard to know where your product will end up after it’s been sold. At that point, it’s not your problem unless you sold a cannabis product to a minor who’s arrested in the middle of Yellowstone National Park. If you did, don’t pass go and head directly to number one above – keep all cannabis products away from minors.