In this episode, moderator Bethany Moore and David Vaillencourt, CEO of The GMP Collective, were joined by leadership from three cannabis trade associations: Chris Lindsey of ATACH, Aaron Smith of NCIA, and Mike Lomuto of MCBA.
In this episode, we discussed how advocacy organizations are driving change in the cannabis industry and addressing the concerns and needs of their members, as well as the current landscape of cannabis regulations and how advocacy efforts are influencing these regulations.
You can watch the full webinar recording here on our YouTube channel.
We received a many excellent questions both prior to and throughout the webinar and have compiled answers to as many of them as possible.
Disclaimer: The answers provided reflect the perspectives of the panelists or their organization, and do not necessarily reflect the views of The GMP Collective.
Currently, the landscape is a quickly changing one. What can a company do to remain flexible and listen to those on the ground level without just throwing an idea at the wall to see what sticks?
- ATACH – our suggestion is to identify the issues you care about and talk with the trade groups to see who lines up with those priorities. Trade associations help keep their member businesses up to date.
- NCIA – break free from any silos and stay connected with your industry peers and even competitors in order to be on top of leading industry trends, advance best practices, gain a competitive advantage over isolated operators in the industry. Trade associations are a great way to do that.
What are the key components for effective advocacy?
- ATACH – Know what you want, make sure it is achievable, be professional, and partner with those who can help you get there.
- NCIA – Know your ask and present it in a way that appeals to your audience (usually elected officials who are concerned with the greater constituency & getting reelected). Work as a coalition with other industry operators as well stakeholders outside the industry who have influence.
What industry guidelines or issues are you seeing, and regulatory information is available for Cannabis home delivery/auto coverage?
- ATACH – This varies a great deal from state to state. Home delivery is often far too restrictive, especially in light of the standards applied to opioid delivery by pharmacies. But this issue is very political compared with many other policy areas (having lobbied around it before). I have not yet run into issues with insurance for delivery in particular.
- NCIA – This blog post is a good resource from a member of our Risk Management & Insurance Committee on this topic.
What jurisdictions are implementing the most successful agent registration, testing protocols, and social consumption sites?
- ATACH – Nobody has done a perfect job of getting all three, but there are several states that seem to do a pretty good job compared with their peers. Colorado for testing and consumption sites, Oregon for worker registration and testing standards, California for social equity and worker registration, Mass for testing and social equity, and Nevada for social consumption and worker reg. To be sure, every one of these has at least some issues, but on balance these states do better than many.
How can the concepts of regulatory parity and tax parity help harmonize the US marketplace for cannabinoid products from marijuana and hemp?
- ATACH – This will be a key issue over the next few years as states calibrate to include hemp intoxicants (whether natural or synthetic), and figure out how to manage them relative to cannabis/marijuana products.
- NCIA – In addition to the efforts underway to regulate these products at the state level, federal legislation is expected to be introduced in Congress in the near future that would regulate them at the federal level (but still allow states to enact their own controls). We support sensible regulations that protect public health and safety and level the playing field in our industry but oppose efforts to prohibit these products under state or federal law.
Could reduced tax brackets be a way of encouraging licensed operators to get GMP, OSHA, and other environmental, health, safety, and quality certifications? (The more certifications you have, the less taxes you have to pay.)
- ATACH – They could, but I think it is more likely that states will set regulations and require licensees to adhere to them or risk losing their license in these areas of health and safety. But in topics like environmental caretaking, reducing waste, reducing power utilization, etc., those would be a good fit for tax incentives.
- NCIA – Agree with the above.
Aaron, how can you discuss competition with the regulated market without mentioning intoxicating hemp?
- NCIA – One of the biggest problems for legal cannabis is the competition from the unregulated market, which includes unregulated hemp products in some cases. As discussed, we are actively advocating for the regulation of hemp-derived intoxicating products. Download NCIA’s position paper on this topic here.
Can you borrow safety data from phytocannabinoids and attribute them to converted and synthetic cannabinoids?
- ATACH – Partly. Because hemp is in the production chain, testing should include the usual contaminants testing panel we get for marijuana. But because consumer products also go through a synthetic conversion process (e.g. CBD to D8) which can introduce synthetic byproducts, testing should also include a synthetic contaminants testing panel.
All THCs are not equal – some are phyto-cannabinoids, others are made in a lab. Should they have the same manufacturing regulations?
- ATACH – Definitely not the same, and should not be treated the same. Synthetic THC should be regulated like a lab-derived product, rather than an ag product.
Since some states have not banned, but do not require testing of industrial hemp products with high levels of psychoactive cannabinoids like delta-8 and delta-10, do you feel that licensed multi-state vertically integrated organizations are pivoting to producing these hemp products?
- ATACH – I don’t have particular insight into what these companies are thinking, but my sense is that they are hedging their bets.
So the delineation is easy for the “intoxicating” cannabinoids, but what about the “non-intoxicating” cannabinoids? Should all cannabinoid products be regulated the same? And, if not, why not? What would be the difference? What would potentially be the same?
- ATACH – I would start with analogs of THC and cannabinoids that are used for similar purposes as THC. In other words, list specific molecules, and reference any new ones that are created that are used similarly.
The entire industry will be impacted by DEA setting Dec 3rd for Schedule 3 administrative hearing. What are your thoughts?
- ATACH – While we had hoped the DEA would simply adopt the rule, we knew this was a possibility and we are prepared for this fight. Some think this is a political decision, but others think this is just the DEA crossing T’s and dotting I’s on such a big change to federal law. It’s important to keep in mind that this hearing will be limited to looking at the steps the federal government has taken and what is required to do (which we think it has done) – not the merits of legalization or a debate over benefit or harm from marijuana.
Have any state marijuana control boards expanded their purview to synthetic THC?
- ATACH – Synthetic is definitely included in several states. I’m not sure if any of them decided to include synthetic at the agency level. I suspect that that is being driven by legislatures. Other states are silent on natural/synthetic, and so it creeps in that way and I think regulators default to trying to include it so that it is at least captured.
Are there any conversations with USDA regarding not allowing dual hemp and cannabis farming licenses in the several states that have USDA operated state hemp programs?
- ATACH – I know this is a serious concern in some areas, but I am not aware of any direct engagement with USDA on the issue so far other than (very likely) some individual companies that were impacted.
How would the taxation of cannabis beverages work?
- ATACH – At the state level, I would imagine it would be fairly straightforward, since they regulate servings and potency. My concern would be situations in which states fail to recognize the different form factor and market for beverage, and unfairly assume too much and lump them in with other products which could create an unfair burden on bev. At the federal level, we very much want TTB (fed alcohol regulators) to also oversee infused beverage, and they do federal tax enforcement for alcohol already. There the issue is keeping the burden as low as possible, since states already tax the crap out of cannabis products.
We also need clear definitions of what a synthetic. Is that things like spice/K2 made in a lab, or does it include D8/D9/etc converted from naturally produced CBD using heavy solvents in a lab? What about cannabinoids made from yeast?
- ATACH – We use the DEA definition, which is when a substance is subjected to a chemical process which creates an analog of a controlled substance. Turning a non-intoxicating molecule into an intoxicating one is a synthetic process. This is distinguished from extractions, which simply pull active ingredients from a plant, and then unwanted substances are removed from the extract.
Social equity does not exist in hemp – how do you suggest we deal with social equity parity?
ATACH – This is a prime example of why regulatory parity needs to be a priority. Hemp interests need to join the work being done ending the war on cannabis and reducing its long term impact communities of color.
Thanks again to everyone who tuned in. Catch up on all of our past webinar episodes on our YouTube channel, and be sure to register for our next webinar in September.
