Some organizations view risk management as merely slowing down and planning before proceeding, while others make it a key organizational building block.
Risk management in the cannabis industry is still new, and underdeveloped, according to one expert on the topic.
And the industry’s next steps must be to see the value in better, and more sophisticated risk management, in order to grow.
For our latest podcast we spoke Rocco Petrelli, chairman of the National Cannabis Risk Management Association. The NCRMA offers education to its members, as well as insurance.
Following are takeaways from that conversation.
Petrelli, who helped launch the NCRMA when the industry was still in its infancy, said the group’s membership has grown in size and complexity.
“We still have a pretty wide diverse cross section of members of the vertical,” he said. “And according to their structure of ownership, we do have a couple of the MSOs that have joined and are actively participating. Others have joined and are not actively participating.
He said the core membership is still made up of mid-range companies, primarily those with independent ownership and that have “found themselves in somewhat more of a survival mode in the current state of the cannabis market.”
Petrelli gave a state of risk management in cannabis on the podcast, talking about the need for more sophistication in the industry’s practices and more clarity about what are some of the practices to follow.
Of course, as his organization focuses on education, he believes better education is the best way to improve those practices.
“We continue to offer the educational syllabus through the NCRMA Academy, which now has seven different curricula and over 45 separate courses that deal with various areas of risk,” he said. “We continue to expand that offering based on what we learn from our members and based on what we learn from the risk assessments we do in the business.”
Among the biggest emerging risks in the cannabis industry are of talent optimization, product liability coming from contamination and cannabis occupational health and safety, according to the organization’s findings.
The last one is important from a twofold standpoint, Petrelli said.
“Not only from taking care of situations that cause injuries, but also taking care of things on the ergonomic side like repetitive motion,” he said. “We’ve done a lot of work with biomechanics and bioanalytics to be able to identify the impact of repetitive motion, for example, in trimming and in pruning.”
Lastly, he was asked if the general state of risk management in the cannabis industry has advanced enough to catch up with say, the automotive industry, from which Petrelli came.
“Still light years away,” he replied.
“Cannabis needs one thing right now, and that’s profitability,” he said. “And profitability does not come from the revenue line. Profitability comes from the cost line, and cost comes from risk management. Not only the practices that risk management teaches you, but it also installs a culture and a level of discipline and a level of accountability in a company that makes that company improve so you have more successful companies that then create a successful market. And then when you have a successful market with those aspiring to be best in class, some of those companies become market leaders and they raise the bar for everybody else.”
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