Standard Operating Procedures SOP for Your Cannabis Business

If you’re thinking of starting a cannabis retail business, you’ll definitely want to prepare and implement a set of Standard Operating Procedures (SOPs) to help ensure you have a reliable and repeatable process for running your store and selling recreational cannabis products to customers. A well-run store with solid procedures will have benefits such as regular repeat customers, employee retention and higher revenue for your business.

When applying for an Ontario Cannabis Retail Operator Licence (ROL) or Retail Store Authorization (RSA), it is not required to submit SOPs (and therefore many applicants choose to submit the bare minimum documentation.) However, just because SOPs are not needed for application submission, it doesn’t necessarily mean they are not useful and essential to the successful operation of your cannabis retail business. Remember, going above and beyond the required measures often results in a greater chance for success!

Keep on reading for more information on what SOPs are and why the experts at Cannabis License Experts recommend having them for your cannabis retail business.

What Are SOPs?

Simply put, SOPs are “control” documents that provide specific, step-by-step instructions on how to perform a particular task or procedure, to ensure it is conducted consistently time after time. SOPs are used to demonstrate compliance with the regulations or company policies, and to document how tasks are completed.

SOPs should never be difficult to read, or vaguely worded. They should be brief, easy to understand, and contain actions or steps that are simple to follow. SOPs should be the basis for training new employees, and they should also be reviewed and updated regularly to ensure they are relevant and compliant with the most recent regulations.

Anyone can write an SOP if they have the knowledge to do so. However, it is generally a senior official of a company or a department who reviews and approves SOPs once they are written. For cannabis retail businesses, any employee or even the Retail Manager can be involved in preparing SOPs. The Retail Manager, or another senior manager, would typically provide the final approval and sign off to make the SOPs effective.

Once SOPs are reviewed, approved and signed off, all employees should be trained on them. For example, if a new SOP was prepared on customer reception and entry into the retail store, the entire customer service/sales team at your store should be trained and evaluated on this new procedure.

Writing SOPs for your business

A good SOP should be organized into some or all of the following areas:

• PURPOSE – Identifies the intended use of the procedure in a clear and concise manner.

• SCOPE – Identifies when the procedure is to be used.

• REFERENCES – Where any applicable references in the body of the procedure can be cited, such as regulations or other SOPs.

• EQUIPMENT & MATERIALS – Where any equipment and materials necessary to perform the procedure should be listed.

• RESPONSIBILITIES – Identifies any positions having responsibility for the activity being described.

• PROCEDURE – Lists the specific steps required to perform the procedure.

• RECORD MANAGEMENT – Identifies any necessary forms to be completed and/or location of associated files.

• REVISION HISTORY – Tracks the history of procedure revisions.

• AUTHORIZATION – Signature of approval indicating that the procedure has been reviewed and approved by management.

What Your Cannabis Retail SOPs Should Cover

Your cannabis retail business will rely on proper record keeping, demonstrating compliance with the regulations and performing tasks consistently and efficiently. Therefore, your cannabis retail SOPs should cover some of the following tasks:

• Employee Hiring Procedure
• Store Sanitation and Maintenance
• Product Receipt and Storage
• Inventory Control
• Point of Sale Procedure
• Quality Control
• Recall Procedure
• Customer Reception and Management

SOPs often overlap, and they will contain information that is specific to how your store is run.  Some SOPs will have to follow regulations very strictly (such as customer reception, because photo ID must be checked at ALL cannabis retail stores). Other SOPs will be more flexible, and  will depend on the software/technology your team is using (e.g. POS software, record keeping software etc.).

Below are some examples of SOPs you may want for your business, and what they cover:

Customer Reception and Management

This procedure would outline how customers enter the store and what specific steps need to be taken prior to allowing entrance. For example, a security guard/store employee would need to be checking customer’s ID (which would involve specific steps on checking their age, the expiration date of the ID, and the validity of the ID). Once all entrance criteria have been met, the security guard/employee would proceed with directing the customer to the sales floor when it’s their turn to enter.

Point of Sale Procedure

This procedure would cover specific steps on how employees would conduct sales transactions for customers purchasing cannabis products at the store. A well-written procedure would cover steps from greeting the customer, and up until cashing out.

Product Receipt Procedure

This procedure would cover product delivery and receipt by the cannabis retail store. Since this procedure involves the movement of cannabis products, there would definitely be some steps on record keeping and security to ensure said products are tracked safely and securely.

Employee Hiring Procedure

This procedure would cover the steps on how the Retail Manager or other upper management staff would hire new employees, or “budtenders” as they’re often referred to, to work at the retail store. Licensees must obtain criminal background checks from employees as part of the hiring process. This is an important step that could potentially be missed if not captured by a thorough SOP.

Cannabis Storage and Handling

This procedure would cover product placement into secure storage after it has been safely and securely delivered by the delivery service and received by retail store employees. Under the regulations, cannabis products in the store must be stored security at all times. Storage areas must also be under video surveillance at all times.

Site Security and Surveillance Procedure

This procedure would outline exactly what is required by the regulations in terms of physical security. For example, Ontario’s cannabis retail regulations dictate that video surveillance recordings must be retained for a minimum of 30 days and be made available to the AGCO upon request. A well-written procedure should also cover how to handle security breaches and attempted product theft.

Product Recalls & Emergencies

This section would cover the steps to handling a product recall and other emergency procedures. These situations are not very common. However when they do arise, you’ll want to ensure your team knows exactly what must be done, as public health and safety may be at risk. This includes steps for proper record keeping, product recollection and destruction (if necessary).

Record Keeping and Inventory Control

This procedure would cover the steps on how your store would comply with the record keeping requirements of the regulations and how inventory would be controlled. Ideally, much of this information would be collected and tracked automatically, using a record keeping/POS software. Therefore, this SOPs should correspond with the software your store will be using and include operational steps so that employees know exactly how to ensure sufficient records are kept and inventory maintained.

Why Your Cannabis Retail Business Needs SOPs

After your cannabis retail store has secured all the necessary licences and authorizations, and has passed the necessary inspections, you’ll be ready for opening! As mentioned above, there are many rules and regulations you must follow when operating your store, such as the following:

You Must:

• begin selling cannabis at your authorized store within one year of getting your Retail Store Authorization, and Continue to sell cannabis.
• open only during permissible hours: between 9:00 a.m. and 11:00 p.m. on any day of the week.
• display the official cannabis retail seal. The seal must be placed where people can easily see it from outside the entrance to the store. The seal must be at least 17 centimetres wide and 20 centimetres long. You can choose to post the French version of the seal, or the English version, or both.
• remove the seal as soon as possible if your Retail Store Authorization is revoked or not renewed.
• post your Retail Store Authorization in the store in a place where people can easily see it.
• only sell cannabis that has been made by someone who is authorized under the Cannabis Act (Canada) to make cannabis for commercial purposes. Private retailers can only purchase cannabis from the Ontario Cannabis Store (OCS).
• keep records of specified information and activities.
• have measures in place to reduce the risk that your cannabis will be redirected to the illegal market or illegal activities.
• record all sales.
• make information about the responsible use of cannabis available to patrons.
• obtain criminal background checks from employees as part of the hiring process.
• ensure all licensed managers and employees successfully complete the required Board approved training program (CannSell) prior to their first day of work.
• request identification of anyone who appears under 25 years old and be satisfied the person is at least 19 years of age prior to allowing them to enter the store.
• display your cannabis and accessories in a way that they cannot be seen by a young person, even from outside the store.

You should not:

• sell cannabis or cannabis accessories to anyone who is under 19 years old.
• allow anyone who looks under 25 years old to enter the store, unless you first request identification and are satisfied the person is at least 19 years of age.
• sell cannabis to anyone who is intoxicated or appears intoxicated.
• sell more than 30 grams of dried cannabis (or equivalent amount of another kind) to a person in a single visit.
• hire anyone who is under 19 years of age.
• sell cannabis or cannabis accessories from a display that allows self-service, or from a vending machine.

As you can see, a well-written, comprehensive set of SOPs can help your business run smoothly and more importantly, in compliance with the applicable regulations. Without a fulsome and effective set of SOPs, you drastically increase the chance of mistakes and non-compliance at your site. Here are some more reasons why your business can benefit from SOPs:

• SOPs ensure consistency and high quality – Whether you have new hires or different individuals performing the procedure, SOPs will ensure the task at hand is performed the exact same way, every time, resulting in a consistently high-quality service and performance.

• SOPs can help your company save time and money – By establishing streamlined procedures, employees will save time in performing tasks, as the SOPs will outline exactly how to perform the procedure without any confusion or delays. As the saying goes, “time is money!”

• SOPs ensure compliance – no matter who is performing the procedure.

• SOPs create a safe workplace – If your employees do not know how to perform a certain task, they may take it upon themselves to guess at, or simply not perform the task at all. This presents a liability for your business, because the employee may perform the task unsafely or inconsistently. Therefore, SOPs help eliminate liability.

We hope the information above has helped to clarify what SOPs are and why you need them for your cannabis retail business. Remember, investing time and money into a complete and effective set of SOPs can save your company from unnecessary errors and non-compliance down the road. This will ultimately lead to a successful and profitable cannabis business in the future!

How we can help you

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs and more! Our team is equipped with professionals who have extensive experience in the Cannabis, Pharmaceutical, Natural Health Product, Food and Medical Device industries.

We leverage years of cannabis quality assurance, operational and cultivation knowledge with real-life hands-on experience. Our team has the experience of submitting over 125 cannabis license applications under ACMPR and the Cannabis Act with no refusals to date! This speaks to our team’s dedication and due diligence to help our clients succeed. Through trust, transparency and respect, our team will work with you to achieve your goals of getting your cannabis business licensed and legalized.