Health Canada just announced this week that a new exemption license for Licensed Producers and Applicants of Medical Marijuana, under the ACMPR, will be available for application to reduce the amount of security features necessary within medical marijuana operations. While saving money on initial and existing operational expenses is certainly an attractive carrot to nibble on, there are serious consequences that can happen as the result of this seemingly tasty treat. It’s really not as satisfying as one might think it is. There are some key elements to consider when deciding between whether or not to apply for this exemption or not.
The exemption states that, if approved, an operation could move forward with less physical hardware such as vaults and video cameras which usually make up some of the larger security related expenses. As ideal as this sounds, LP’s and applicants will still be required to secure the perimeter area, interior areas, access/entry points and all areas of the facility except for the cultivation, processing, and related rooms. When it comes to vaults, their pricing ranges according to the security level designation and can incur costs from $10,000’s of thousands for a lower level vault to 100,000+ for level 10. Our friends at International Vault have shared some valuable insight on this topic that you can check out here. Many LP’s have already invested millions of dollars into their operations and set up while new applicants are on the brink of doing the same as they enter into the medical marijuana field. Many have shareholders and external investors that also have a vested interest in the day to day operations and overall success of the site and business.
The Liability Risk
Truly, this sounds like a liability nightmare from our standpoint since any business with ample valuable product and inventory must take carefully calculated steps in order to secure their investments properly and to meet basic insurance requirements. A good place to start would be on the frame of thought, “How will this impact my insurance?” and “What would my underwriter say?”
More risks to consider include the liabilities at the workplace with regards to ‘health and safety’ issues and the potential loss of product or unintentional/accidental loss of product through not following ‘good business or operation practices’ or the site’s Standard Operational Procedures. Remember that this is an ‘exemption’ application and what that could mean in the very near future, or even years out if things change quickly or if the government decides to change or revoke the program, is that this could very negatively impact your operation by incurring a lot of unnecessary expenses, it could interrupt operations as new policies are implemented and given a sharp timeline to execute which could result in profit loss and unfortunate delays. This could also mean that if one of the situations mentioned above actually happens, which is very likely, then Health Canada could revoke the exemption and have all operations fall back under the current ACMPR standards or an updated version thereof to address whatever issue arose as a result of the exemption. This is a costly risk to weigh carefully before making a move in either direction. The concern to consider is how saving a dollar today may in fact cost you three dollars tomorrow in unforeseen expenses.
With that said, there are ways to reduce expenditures in a way that doesn’t leave operations vulnerable to possible misplacement of product and/or unmonitored illicit activity within the processing and cultivation rooms, in weighing out Work Safe concerns and liabilities, in addition to ensuring that the monitoring of operational practices are congruent with the standards laid out in the legislation.
At Tri West Integrated Solutions, we strive to ensure that our partners and clients are as educated as possible so that they can make the best decision in meeting their security needs as they move forward with the exemption or by remaining compliant with the current ACMPR standards. Ultimately, it’s imperative for your operation to always be in compliance with new or existing insurance standards as well depending on the size of the site. There are several factors from compliance to insurance to operations to health/safety to the exemption itself are all things to look at equally when making such an important and weighted decision.
The new regulations specifically talk to the storage area(s) for current Licenced Producers or Applicants which were previously the ‘vault’ as per the Security Directive are now ‘secured rooms or areas’. What is now optioned is to forgo the requirements of a physical vault and the Licenced Producer or Applicant MUST have at a MINIMUM is as follows:
Things to consider under the new regulations for the storage room(s) in place of the vault:
The new regulations specifically removes the requirement for 24/7 visual recording devices and motion detectors within the areas where cannabis plants are cultivated, propagated, harvested or trimmed and/or where seeds will be present. The Applicant or Licenced Producer is still required to meet the following:
Things to consider under the new regulations for the rooms with plants or seeds:
As such, Tri West Integrated Solutions is willing to offer a complimentary site evaluation to help identify risks and offer guidance as to which direction might serve your operation and pocketbook best so that if Health Canada ever chose to suddenly revoke the exemption, change the regulations, or new insurance standards require new layers, your investment is still protected appropriately.
Contact us today at 1-877-890-5663