Business processes refer to related tasks and activities to accomplish a business objective.
Business processes are involved in every commercial cannabis business. The risk posed by business processes is specific to each commercial cannabis business; however, certain business processes are more vulnerable to illicit cannabis market risks.
The illicit cannabis market risk in business processes varies for each commercial cannabis business. Risks within this driver are primarily attributed to business processes that touch the cannabis product or inventory management of the cannabis product.
When applying a risk-based internal control environment, it is essential that the control activities reduce the identified inherent risk.
Inherent risk
In general, illicit cannabis market risk related to the business processes risk driver is realized through complicit, forced, or coerced employees that are cannabis plant touching or weak inventory management.
Control activity
These inherent risks are best managed through formal control activities that establish effective inventory management and ethics and whistleblowing control activities.
The following sections examine the risk factors, red flags, and mitigation techniques for these issues.