 We have already started working with several clients for the next round of the New Jersey ATC cannabis application which are due August 15th. In the last ATC round, we were proud to have scored an average of 91% for our clients with a high score of 94%. We are currently helping with the security build out of a NJ Cultivation and Dispensary from the last round of licenses. Remember, an applicant can only apply three times in the State and needs to be aware of the new rules from the NJ Department of Health. We are ready when you are to help. https://nj.gov/health/news/2019/approved/20190603a.shtml 
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When it comes to designing the security for a cannabis facility it is very important to strictly follow your state and city security rules and regulations in order to ensure you are in full compliance. Finding a security consulting company within the cannabis arena with proven experience like Sapphire Risk Advisory Group, to say the least can be a challenge. So, when the time comes to choose a cannabis security consultant, it is important to do your research in learning about their experience with previous cannabis facility designs. Get Help From An Expert The cannabis industry is a new market within the United States that has been estimated at $7.06 billion in 2016, medical marijuana emerged as the largest marijuana type segment in 2016 and is estimated to be valued at USD 100.03 billion by 2025. With these type of projections the industry seems very attractive to investors of all kinds, making the licensing competition very fierce. With this high demand it creates a large possibility of hiring a security company that has very little if any experience in the cannabis industry. Ask Before Designing Tony Gallo Managing Partner at Sapphire Risk says, “you cannot design your facility in a vacuum”, meaning that first you need to know your states minimum requirements followed by what the customer wants and furthermore what the city, county, or local sheriff might require. In order to accomplish a understanding of these requirements Gallo recommends to “just ask” before designing i.e. the state may not require the facility to have a security fence along the property line, where as the city or local sheriff may want to see the fence in order to alleviate any concerns of easy access to the public during non-business hours. Next the customer may want a fence line that has barbed wire running along the top, this is not permitted in the city of Las Vegas, as Gallo recommends to “just ask”, you would not be aware of these requirements or even wants from the customer. Another issue that gets overlooked when designing a cannabis facility is something as simple as the city ordinance for outdoor lighting, states Gallo. Outdoor lighting ordinances or codes are a great tool for ensuring that municipalities implement good, safe outdoor lighting. A well-written ordinance, with proper lighting installed, will save the public money and increase safety. Thousands of cities have adopted such codes and they can be a great tool for a community to use to control light pollution, including glare, light trespass and sky glow. If you or the security consultant that is helping you through the design of your cannabis facility is not aware of the local lighting regulations, can cause problems in the final stages of the inspection process to get your license finalized. This could be a costly mistake that could have been prevented by just asking. To sum it up
Gallo says, your best tool to have during the process of obtaining your license is to make sure that you are using a vetted security consulting company in the industry. Are you interested in a Security Audit for Your Cannabis Facility? Contact Us for A Quote: https://www.sapphirerisk.com/connect.html The last few years have been quite the ride for cannabis entrepreneurs in California. As the market has evolved, so have the risks for businesses. We appreciate Andrew Mukthar reaching out with this article about their experiences and advice in California. The post discusses newer topics du jour in the cannabis industry, such as inversion (e.g. sales to other states) and requirements from the Bureau of Cannabis Control and California Department of Public Health. It's a long read but worth it.
 Clean Technique, Inc. (L-R) Kevin Wong, Robert Parvere, Tym Wowkand Tony Gallo. (Photo by Amy Porter) *This article by Amy Porter originally appeared in The Westfield News on May 22, 2019. Sapphire Risk was fortunate to assist the marijuana processing company with their city council permitting hearing* WESTFIELD, MA – The Planning board convened a public hearing Tuesday for a special permit and site plan for Clean Technique, Inc., a marijuana processing business to be located at 32 Char Road, close to Airport Industrial Park Road. Rob Levesque of R.Levesque Associates said the request is for reuse of a light industrial building for a scientific-based cannabis processing facility. Levesque said the plan proposed nomajor changes to the structure and site. The site is zoned Business B, which is allowed for marijuana production. The special permit is required because the property abuts a residential neighborhood within 300 feet and is on the aquifer. Levesque said the closest residence is 240 feet from the business. Other abutters are Industrial and Rural Residential zoned. The founders of Clean Technique, Inc., were present at the public hearing and spoke to the project. At the hearing and in the narrative in his application, biochemist/engineer Robert Pervere said Clean Technique is comprehensive scientific facility dedicated to the extraction, isolation and purification of therapeutic compounds within cannabis into a pharmaceutical quality cannabis oil, which will eliminate excess materials with no inherent value or that with no inherent value or that will pose a threat to health. Parvere said the group wants to use their strong scientific and academic backgrounds to increase the quality of legal cannabis currently making its way into the Massachusetts market. He said the team has a combined 36=plus years in life sciences, pharmaceutical and health care businesses, with extensive research and development, quality control, sales and marketing experience, most recently with Fortune 500 companies. He also said the team has been the best of friends for more than 20 years, and shares a passion for the cause of ensuring quality to protect consumers. Planning Board questions centered on practical matters such as security and transportation, many of which were answered by Tony Gallo, a security consultant who said he has designed security systems for 50 cannabis facilities. He said there would be 49 cameras installed and five security monitors for managers and the security team. He also discussed security access procedures and outdoor lighting, which he said would be pointed downward, and fencing for the rear of the property which abuts residential zones. Gallo said the company would use F350 cargo vans for a daily delivery of their product, which would be transported out in high density plastic containers. He also said transportation is addressed in the security plan provided to the Planning Board. Many questions were also addressed to the security of the ethanol on the premises, which Parvere said would be used in the winterization of the product to purify the oil, and not in the extraction. They anticipate using eight gallons per week, or 35 gallons per month of the ethanol, which will be stored in sealed containers in a fireproof room away from other materials. Cheryl Crowe, who served as chair pro temps at Tuesday’s meeting due to the absence of William Carellas, asked whether they had backup power for the ethanol storage. She said she lived in that area of town, and in recent years had lost power for multiple days. Parvere said generator backup for the storage room was not in place, but said they would add it to the plan. Philip McEwan said the submitted plan is for existing conditions, and they don’t expect to change anything in the building. He said since the building is located on the aquifer, and has a lot of impervious cover, he would like to see what little is left maintained. Also addressed were concerns from the Planning Board about vapors, air filtration systems and disposal of waste product, which the team said is wooden fiber. Also addressed were anticipated hours of operation, and numbers of employees, which will be eight to start with a potential of up to 20 employees. Existing parking at the business is for 30, plus two handicap spaces, City Planner Jay Vinskey said. Kevin Wong, sales and marketing vice president for Clean Technique then gave an impassioned address to the Planning Board. He said Parvere and he had 18 years between them in the Life Sciences field, and their main interest is to bring the pharmaceutical-level quality control into cannabis production. Wong described it as a proactive approach to fill a gap prevalent in the industry. He said both he and Parvere have young children, and from a business and personal standpoint would not feel okay about negative impacts on the community. Wong said they plan on building a scientific company of exceptional quality to fill a significant need. “We want to hear what you want to say. Give us this opportunity, and we will not disappoint you,” he said. Opening the hearing to the public, a Bucks Pond abutter who wished to remain unnamed, said she was concerned about safety in the neighborhood, where there are many children who ride bikes to trails in the back of the properties. She said she was concerned about fires, and didn’t think the building was large enough to contain flammable liquids. She said she was also concerned about the environmental impact on Bucks Pond and its wildlife. The neighbor also said she was concerned about increasing truck traffic, adding that she has difficulty exiting her driveway due to tractor trailers who stop along the road at all hours and said the road at all hours, and said she has called the Westfield Police Department a number of times about it. She said she didn’t believe the driveway of the business was large enough for a truck turnaround, since it had been divided into two properties by the previous owner. Bernard Puza asked team members how often Clean Technique would have tractor trailers coming to their business, and they said never. Mariah Kurtz, a Southampton Road resident, spoke in favor of the plan. “This sounds like an excellent opportunity for jobs,” she said, adding that traffic comes along with being a resident in an industrial area. “This sounds like a very innocuous use,” Kurtz added. She said the cannabis business comes with a stigma, but speaking as a young person, she was in favor of this proposal and its opportunities. “She is absolutely correct. This is the lowest kind of use you could put in that building,” McEwan said. The public hearing was continued until June 18. Crowe said she would like to see a more detailed drawing of truck access and turn radius on the property, and of the fence towards the abutters. She also requested plans for back-up generators. Vinskey asked that they look at whether there would be any opportunity to remove impervious surfaces. Following the meeting, Kevin Wong said the team chose the space because it’s a laboratory. He said although the business would be for recreational use, “If you’re going to get this cannabis product, everything should be medical,” Wong said, adding that quality control is a pressing need in the industry. https://thewestfieldnews.com/quality-control-is-focus-of-proposed-marijuana-processing-company/ Today the NJ Department of Health is releasing the Rule Adoption notice for N.J.A.C. 8:64 that will appear in the May 20 New Jersey Register. This rule contains readoptions, amendments and repeals largely in line with what was proposed last summer. The rule adoption is attached, and please refer to the Register on May 20th for the final version.
The rule codifies the following changes that are already in effect:
That does not mean we are not allowing for satellite locations. Consistent with the EO6 Report, the Department will still consider applications for satellite locations, but they will continue to be done under the waiver authority at N.J.A.C. 8:64-7.11. Instead of adopting the language as proposed, the Department is in the process of developing additional rule-making on satellites that will present a more consistent approach and better elucidate the relationship of satellites to endorsements. We intend to circulate something in concept to you all very soon, and get your feedback in advance of the formal rulemaking process. If you have any questions at all about the Rule Adoption, please don’t hesitate to ask.  As we all know hemp is now legal nationwide for agricultural production. With Sapphire ubiquitous presence as a leading cannabis security and hemp security company in the industry, we have met a lot of amazing individuals and have learned about their ideas. One is Eric McKee; he is involved heavily in the hemp industry and building Hempcrete houses and buildings. He has also helped in the research and design of the product.
The IsoHemp Hempcrete blocks are particularly suitable for remodeling or new construction projects of all kinds, for adding a second wall to existing walls on the inside or from the outside, as well as industrial partitioning and for apartments. Hempcrete blocks allow you to achieve very low-energy and passive house standards, with all necessary certifications per current European regulations. Thermal regulation Like most insulating materials, Hempcrete blocks use pockets of air to slow down the conducting of heat inside or outside. But additionally, Hempcrete blocks naturally regulate the temperature of the building thanks to their excellent ability to store accumulated heat. These insulating blocks with high thermal inertia protect from cold winters (keeping the heat inside the house) as well as hot summers (avoiding overheating of the living space). As a true thermal buffer, Hempcrete walls keep the indoor temperature constant and significantly reduce the impact of changes in heat between day and night. Humidity regulation Thanks to its high permeability to water vapor, the Hempcrete blocks act as a water buffer and offer a constant and healthy indoor climate for the occupants. The relative humidity level is thus stabilized (from 50% to 55%). They can be used for:
Acoustic Insulation Whether IsoHemp Hempcrete blocks are used for interior walls or partitions, external and ambient noise will be significantly reduced. In terms of sound insulation, Hempcrete blocks acts as a real sound barrier and can lessen most acoustic waves, thus protecting you from noise pollution. Protection and fire resistance IsoHemp Hempcrete blocks meet all current standards and provide a simple and effective solution to your construction site, whether for industrial or community Hempcrete buildings (nurseries, schools, etc.) or residential Hempcrete homes. With an excellent reaction to fire (Class A1 for the coated block), it offers up to more than two-hours of fire resistance depending on the finish and the width of the block used. Health and environmental qualities The Hempcrete block meets the strictest requirements of sustainable development: it is manufactured using a very energy-efficient process, using 100% natural materials (limestone and hemp) that are sourced locally. Building or renovating your home with Hempcrete blocks can sustainably save more than 2 tons of CO2. That's one way of improving your carbon footprint inside your Hempcrete house. With this new product Hempcrete suppliers will create a new sustainability not only for the individuals who use this product but also the struggling farmers throughout the United States and other countries. Now that it is legal to grow as an agricultural product, we should begin to see more Hempcrete technologies applied to a variety of industrial sectors and reduced costs both short term and long term for Hempcrete construction projects. Sources: De Mahieu, Jean, Managing partner. IsoHemp Natural Building. IsoHemp, 3 April 2019, https://www.isohemp.com/en. 25 March 2019 Eric McKee of Wnder LLC in Colorado When most people say they have been involved in an industry for five years, they usually are considered new to that industry. In the cannabis industry, five years is considered a lifetime because as we all know the business of cannabis is really no more than ten years old. Back when I started, there were two types of people in the cannabis industry. The first were people who knew the value of the plant and how it can help and the second were those who felt there must be a way to turn this plant into a business that makes money.
Over the years, I have seen this industry continue to grow as well as the people involved in its growth. Some of the changes in the industry have been very good and some not as good but all these changes have affected the way people look at this industry now and into the future. When I look at this industry, I see what I call various “generations” of cannabis business people. These business generations are involved in one part of the business or another and I do not believe that one generation is better than another nor do I believe that a person can’t be a combination of several generations. Also, one generation’s mission is no more or less passionate than another generation’s. It is just the type of person you are in the business side of this great industry. Generation 1 – Old Time Hippie You have been in the marijuana, pot, weed, cannabis industry before there was an industry. You are very much an activist of the plant and have dealt with the underground and law enforcement concerns during your time in this business. You feel the “devil’s lettuce” is more important than the money but some money for all your heartache would be nice. Gen 2 – Pick and Shovel You entered the cannabis industry to help cultivators, dispensary, processor, manufacturing etc. owners with their desire to grow in this industry by selling the services or products that they will need to be successful. Much like the people who sold the ax picks, blankets and shovels to the gold miners during the gold rush. You would not consider yourself a Gen One but you do love this industry. Gen 3 – Entrepreneur You are in the industry to make money, lots of money. You are willing to do whatever is needed to make money in this industry but when the money is gone so are you. You are here for the business of cannabis and not as an activist. A true entrepreneur. Gen 4 – Investor You are willing to put your money where your mouth is. You look to invest in the industry but only if there is a return on your investment. The Cannabis industry is just another product that could make money for you over time. The only “green” you care about is the green in your bank account. Gen 5 – Reality Star Your desire is to communicate a positive image of the cannabis industry to mainstream society. You may be an activist one day and an entrepreneur the next day depending on your following. Having people recognize you when you walk into an expo or conference is more important. Making money or growing a business is not the main goal, rather you want to popularize your brand. That brand may be general or specific to a niche, but your media presence is the key to success. Remember, these generations are for the business of cannabis, not for those who are not in the business but understand the medical value of the plant. So, who are you in this industry? This article was originally posted in Cannabis Business Executive, available here.  Previously we have written about educating your seasonal staff and taking steps to limit your vulnerability to theft by your seasonal staff. But as the employer-employee relationship changes during this age of the “gig economy”, the attitudes and interests of your temporary employees should be taken into account.
As any good planner will tell you, it’s never too late to plan for the future; especially for any retail stores that hire temporary employees for those busy seasons. It is not sufficient to rely on staffing firms and temporary employment agencies to do all the work. With all of the new faces around retail stores, security becomes of greater importance. Simple preparation practices can help limit the amount taken from businesses. If You Don’t Want the Crime, Do the Time Over 75% of employees have stolen from their place of employment. Not limited to inventory, this could include time spent by employees conducting their personal business or inventory from your store while still on the clock. A higher percentage of theft, 42.7%, came from employees rather than by shoplifters, 35.6%. These numbers can become higher for businesses once temporary employees enter the fray. The Quick Shift Quickly building a good rapport with temporary employees can be crucial. When businesses hire for special seasons, they would typically like to rely on the same people each season. It can be tedious to retrain new seasonal hires every time that time of year comes, so you want to have a familiar face around. It also important to remember that they are helping you. Temporary employees may not have the sense of loyalty that a full-time employee may have to you. This makes building the good rapport not only a necessity, but also an immediate need to change that sense of loyalty after you hire them for the holiday season or whatever occasion. Employee Hide and Seek When searching for new employees, there are ways of finding the best employees for your business. Before even hiring someone to join your staff, it is important to perform a screening of these potential job holders. Background checks help to find any glaring red flags that a prospect may never let you know about. Also, it can let you know how honest they really are. If, during the interview process, someone fails to mention something from their past that comes up in a screening, you know they have a lower chance of developing loyalty and accountability. Once you find someone loyal, it is important to make all expectations clear. Keeping Everyone Accountable Clear expectations can help employees stay on target. When employees know their jobs and know what is expected of them, they are less likely to stray from those expectations. Policies should be established on Day One and help maintain status quo when upheld consistently. Whether responsible for something like a minor violation or something as serious as theft, employees must know there will be consequences to actions. Another way to keep everyone accountable is to have employees work together on accomplishing tasks. Buddy System Whether swimming in the lake at Camp Hope or working on an assignment, it is important to have a buddy system. When working with a partner, two things can be accomplished. The first is that when working together, partners are more likely to hold each other accountable. They will work together to accomplish their goal as both would like to receive credit, rather than letting each other down. Also, with the consequences lined out from your expectations, they are more likely to keep each other in check. This helps reduce any possibilities of theft when they know there are another pair of eyes on them. One important factor to consider when placing co-workers together is the friendship level of the two. If the pair is close, they will be more likely to cover up for each other or take chances that unfamiliar duos would not be comfortable doing. Private Eyes are Watching You The final step to helping with temporary employees is to allow for anonymous reporting. When employees can report suspicious activity anonymously, they are more likely to report it. One for the sake of being seen by their peers. Employees don’t want to be seen as a “snitch” for telling on a fellow employee’s activity. Secondly, if employees know that anyone can report them, they may be more inclined to not perform illegal activity. The more eyes on each other, the better. Keeping a Permanent Hold on Temporary Employees With the seasonal times that come every year, businesses will take on additional help along with the additional risks of losses by new employees. But the disadvantages of employing temporary staff should not outweigh the advantages. By following a few simple steps, businesses can ensure that they will be secure from any theft from their temporary employees. By screening ahead of time, it becomes easier to select the right candidates for the job. Once on the job, setting expectations and assigning buddies will help keep everyone together working on the common goal and know what happens when they veer from that path. Finally, it is important to allow everyone to report things anonymously because they may be more inclined to report something that may not always be caught on camera. Through all of this, a good rapport can be built between employers and employees, and the risks of theft become temporary as well. Employee Theft In the retail industry, also commonly referred to as internal theft, occurs when individuals steal from the company where they are currently employed. While other types of retail theft often garner more attention, employee theft typically causes the most damage to retailers on an annual basis, carrying the greatest financial loss and a substantial impact on the business. In most situations, retail customers only have access to merchandise on the selling floor—which is protected by the sales team, loss prevention personnel, and various anti-theft systems and controls. Employees, however, have greater access to more systems, more products and more areas of the store than customers. They have access to merchandise in the stockrooms, receiving, or shipping areas where CCTV surveillance, EAS tags and other anti-theft devices may be less effective. According to data from the U.S. Chamber of Commerce, 75 percent of employees have admitted stealing from their employers at least once, and 38 percent admit to stealing from employers at least twice. The FBI refers to employee theft as the fastest growing crime in the U.S., costing businesses about seven percent of their expected margins. The problem becomes so dire for some businesses hit with employee theft that about 33 percent are pushed into bankruptcy due to losses from theft or fraud. Reports collated by Statistic Brain indicate that more than 28 percent of business losses ranged from $100,000 to $499,000, and 25 percent of losses exceeded $1 million. These figures are disturbing because they demonstrate that business losses due to employee theft are not trivial. The median value of cash or goods stolen was placed at $75,000. In 2014 alone, more than 1.2 million shoplifters and wayward employees were caught in the act, according to a study conducted by Jack L. Hayes, a loss prevention and inventory shrinkage control consulting firm. More significantly, these numbers were generated from 25 big retailers, suggesting that the problem is more widespread and the losses more substantial if small to medium retailers were included in the mix. According to several studies, losses from employee theft outpaced losses from shoplifting. Employee Theft Methods Employee theft may be difficult to detect because the perpetrator is an insider familiar with the system. Additionally, these employees have access to the keys of the kingdom because of their positions and their reputation as dependable team players. These are a few of the methods commonly used to steal from the company.
Most employees are honest and hard-working people with honorable intentions. However, when employee theft issues occur, it can lead to significant concerns that can impact the store in many ways, reaching far beyond the financial losses caused to the company. It impacts retail sales. It impacts retail shrink. It impacts the company brand and reputation. It also impacts all the hard-working associates who give their best each day. Sources: https://losspreventionmedia.com/  Like banks and jewelry stores, cultivators deal in a high-value product and a cash-heavy business that can appeal to thieves. This makes it imperative to choose the right security system for your business, both in terms of meeting essential state requirements and getting the most value for your investment.
CHOOSING A SYSTEM 1. A monitoring system has a dual role: security & compliance Unlike in most industries, security systems for the cannabis industry must do more than protect against crime. If you run a convenience store and your cameras go down for a time, the risk is private and limited to your own desire to capture illegal acts on camera. If you are a grower, however, the stakes are much higher. Every state’s regulations spell out compliance requirements for security systems, some even down to the camera resolution required, so, at a minimum, reading and meeting these requirements is a must. Your insurance company may also have compliance requirements. 2. Find a security company that has experience with regulated systems You don't want to pay a lot for an expensive system that's not tailored to your state's specific requirements. Inquire about the firm's experience installing systems for heavily regulated industries and familiarity with state requirements. 3. Make sure they understand local requirements To comply with security requirements, local rules are just as important as state rules. In Colorado, for instance, the state requires off-site storage of 30 days of recorded video, while some cities require much more, according to Tony Gallo, Managing Partner of Dallas-based cannabis consulting firm Sapphire Risk Advisory Group. 4. Go 'beyond compliance' Doing the minimum to get a green light from the state regulators is not a good idea. “What the state needs to get your doors open is probably not what you want in real life in the all-cash cannabis business,” Gallo says. “Just because the state says you’re good to go does not mean you should stop there, because people can still steal from you.” 5. Inside jobs are more likely Realize that external dangers are actually not the biggest threats to your grow operation — internal/employee theft is. Despite this, the lion’s share of security assets invested in are meant to prevent people from breaking in, says Gallo, who spent 17 years as director of loss prevention and safety for a major company providing security for more than 1,300 high-risk businesses. 6. Create an environment that fosters honesty To minimize employee-theft risks, “establish … set policies, procedures and guidelines that will spot losses and be able to … identify who did it and how it’s being done,” Gallo says. For example: Where are your employees processing and tending buds? Do you have cameras and a visible video monitor posted there? Do employees know that recordings are being checked regularly? Think Twice Before Arming Employees It may surprise some that the advice Sapphire Risk Advisory Group’s Tony Gallo offers the cannabis industry — and other high-risk businesses — is that employees not be armed. He is blunt on this issue. “Could you kill somebody?” he asks. “Last year, two pawn brokers were killed because they actually pulled their guns, had the guns on the robber, but could not pull the trigger. So the robber shot them.”Even if you do fire, the outcome is often not good. “Do you want to get into a gun battle? What if you miss? What if someone else gets ahold of the gun?” he says. In Gallo’s experience working with high-risk businesses, the risks outweigh the benefits of having armed employees. “What do robbers want? They want the cash and the cannabis. Give them the cash and the cannabis, and go home and have dinner with your family,” he says. |