Business Management, Security, and Inventory Control
Business fundamentals
Candidates should understand the economics of a cannabis business: capital intensity, licensing costs, taxation (including 280E constraints), banking limitations, insurance, and cash-handling controls. Know the difference between gross margin and net margin and how testing failures, waste, and shrinkage affect profitability. Understand workforce management, training records, and the importance of written policies.
Security and inventory control
Know the required security measures: access control, surveillance coverage and retention periods, alarm systems, and visitor logs. Understand inventory reconciliation: physical counts versus system counts, variance thresholds, and reporting requirements for theft or loss. Grasp the seed-to-sale system's role in tracking plant and product movement, and why manifest documentation is required for transport. Know diversion-prevention principles.
Traps in questions
- Assuming standard business deductions apply despite 280E limits.
- Overlooking surveillance retention requirements.
- Treating small inventory variances as unimportant when reporting thresholds exist.
- Forgetting manifests for transfers between licensed premises.
- Neglecting cash-handling controls and audit trails.
Rule of thumb
Apply the "reconcile and report" rule: any significant variance between physical and system inventory must be investigated and reported within the required timeframe. Worked example: a monthly count shows 15 g missing against a 10 g reporting threshold; the manager must document the investigation and file the required loss report, because exceeding the threshold triggers a mandatory report.