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What is "Looping"?: A Colorado Cannabis Compliance Alert!

Cannabis compliance and looping

At Cova, we understand that legal cannabis compliance is likely the top concern of any dispensary owner or investor. As we have said many times before, “No license equals no business”.

The truth of that statement should be self-evident to every dispensary owner or investor after events transpired in Colorado last week leading to over a dozen arrests and license revocations related to the practice known in the community as ‘looping’.

Today we’re going to learn what looping is and how your legal cannabis enterprise can effectively protect itself from those engaging in this illegal and potentially dangerous technique.

What is Looping?

In a nutshell, it's a method that cannabis buyers use in an attempt to get around Colorado’s transaction limits at a cannabis dispensary, which state that a customer may buy and possess no more than one ounce of cannabis flower in a single transaction.

Essentially, buyers will ‘loop’ around the block after making one purchase, then come back in for a second one at the same location just a bit later. Dedicated individuals are then able to purchase and possess many times the legal weight limits specified in cannabis compliance law. In some cases, they may even rotate through multiple dispensaries in an attempt to further disguise their actions.

Who is Liable?

As of right now, it seems that law enforcement officials are treating the individuals who actually execute these ‘looped’ sales as responsible for them – meaning your budtenders could quite literally be placing their personal freedom on the line, and should definitely be trained and equipped to recognize and prevent it before it occurs.

Whether or not this will hold true in the future remains to be seen; dispensary managers, owners, or even investors could easily face legal consequences related to violating cannabis dispensary transaction limits in the future.

Regardless of their potential criminal legal liability, these individuals could additionally see their license to operate revoked for failure to follow cannabis dispensary transaction limits in their municipality, effectively killing their business.

How Can I Protect My Dispensary from Looping?

If the above information has you worried, have no fear – looping is both easily detectable and 100 percent preventable, as long as you have made the requisite investments into your operational technology and staff training programs.

The easiest way to ensure you stay compliant at all times with cannabis sales limit regulations is by selecting a POS system for your dispensary that automatically tracks purchases along with customer IDs, and warns budtenders if they are about to make a sale that would put them out of compliance – quite literally blocking anyone from being to loop through your dispensary.

Tracking cannabis dispensary transaction limits can also be conducted by hand, though it is significantly more time-consuming to do so, and you leave yourself open to unintentionally violating the law due to human error or miscalculation.

To put things in perspective, consider the total cost of renovating your location, applying for and receiving your cannabis license, training your staff, and all your other business expenses, relative to the cost of high quality POS tech that can perfectly protect you from these (and other) issues, and the choice becomes quite simple.

Cova Has Built-In Regulatory Compliance Features in All Major Markets

The best cannabis POS systems are configurable to work with the cannabis compliance regulations of all major markets and governments. The system tracks purchases on an individual basis, automatically monitoring cannabis dispensary transaction limits, and even making the necessary conversions between flower and concentrates/edibles automatically – ensuring that it is virtually impossible for your sales staff to violate local laws even on an unintentional basis.

To learn more about how Cova can help your dispensary stay compliant at all times and minimize this type of risk, subscribe to our blog.

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