Here’s what you need to know about cannabis record keeping in 2024:
Most states require 5-7 years retention for all records. Key areas include inventory, finances, staff, compliance, testing, and security. Digital records are preferred, but some states still accept paper. Records must be easily accessible for inspections. Non-compliance can result in hefty fines (up to $30,000 per violation in CA).
Tips:
- Use state-approved tracking systems
- Implement digital record keeping
- Conduct regular internal audits
- Stay updated on regulations
- Train staff on compliance
| Record Type | What to Track | Retention Period |
|---|---|---|
| Inventory | Plant counts, weights, transfers | 5+ years |
| Financial | All transactions, especially cash | 5+ years |
| Staff | Applications, training, reviews | Employment + 2 years |
| Compliance | Licenses, taxes, audit results | 5+ years |
| Testing | Test results, dates, lab info | 5+ years |
| Security | Visitor logs, camera footage | 90 days – 5 years |
Proper record keeping is critical for cannabis business compliance and success in 2024.
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Main Record Keeping Areas
Cannabis businesses must track several key areas:
Tracking Inventory
Document plant counts, harvest weights, product transfers, and sales records. Keep these for at least 5 years. Use a state-approved system like METRC.
Money Records
Track all cash transactions, vendor payments, sales records, and employee salaries. The IRS requires reporting cash payments over $10,000.
Staff Records
Keep job applications, training documentation, performance reviews, and disciplinary actions for each employee.
Following Rules and Licenses
Maintain records of taxes paid, license fees, and compliance audit outcomes.
Product Testing and Quality
Document test results, quality checks, testing dates, and lab information.
Safety and Cameras
Keep visitor logs, security camera footage (typically 90 days), and maintenance logs.
"I don’t think I can stress the importance of good record-keeping enough." – De Lon Harris, Commissioner, Small Business Self-Employed, Exam
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Tips for Good Record Keeping
Computer vs. Paper Records
| Aspect | Digital Records | Paper Records |
|---|---|---|
| Security | Encrypted, harder to tamper | Vulnerable to theft, damage |
| Access | Quick, remote access possible | Limited to physical location |
| Space | Minimal storage needed | Requires physical storage space |
| Editing | Easy to update and track changes | Time-consuming, hard to track edits |
| Cost | Initial setup costs, long-term savings | Ongoing paper and storage costs |
| Compliance | Easier to maintain and audit | Can meet legal requirements in some cases |
Digital systems offer clear advantages for most cannabis businesses.
Keeping Records Safe
- Use strong encryption for digital files
- Implement access controls
- Regularly back up data
- Use fireproof safes for paper records
- Train staff on data security
Getting Ready for Checks
1. Create a Compliance Binder
Include all licenses, contracts, and vendor records.
2. Use an Audit Checklist
Cover areas like signage, security, and inventory.
3. Train Your Team
Hold regular sessions on compliance and audit procedures.
4. Conduct Internal Audits
Regularly review your records and processes.
5. Leverage Technology
Use ERP software to maintain accurate records.
Rules in Different States
Cannabis record-keeping rules vary across the U.S. As of 2024, 25 states have legalized recreational marijuana.
| State | Recreational Status | Possession Limit | Record-Keeping Highlights |
|---|---|---|---|
| California | Legal | 1 oz | 7-year retention of all commercial activity records |
| Colorado | Legal | 2 oz | Similar to California, focus on inventory tracking |
| Florida | Medical only | 20g (medical) | Strict medical records, no recreational framework |
| New York | Legal | 3 oz | Emphasis on digital records for easy auditing |
| Ohio | Legal (as of Dec 2023) | 2.5 oz | New regulations being developed for 2024 |
California mandates a seven-year retention period for all documents. Oregon requires detailed financial records for three years. Video surveillance storage requirements range from three months to two years.
"The cannabis industry’s regulatory environment is as dynamic as the plant itself. Businesses must be proactive in adapting their record-keeping practices to stay compliant and competitive."
Wrap-up
Good record-keeping is crucial for cannabis businesses in 2024. The industry is changing rapidly, with potential federal reclassification on the horizon.
"Criminal records for marijuana use and possession have imposed needless barriers to employment, housing, and educational opportunities." – President Joe Biden
To navigate this complex environment:
- Implement digital record-keeping systems
- Conduct regular internal audits
- Stay informed about regulatory changes
- Train staff on compliance
"Proper recordkeeping and accounting are essential for success in the cannabis industry." – Sandy Suchoff, CPA
