By Bart Schaneman
A new self-regulatory organization aims to tackle a problem plaguing the cannabis industry: a lack of industrywide standards governing areas such as packaging, accounting and public safety.
It also hopes to play a role in resolving another issue: federal government interference.
“Our hope is that if our members can set standards that are higher than what they’re required to do in their states, the federal government will stay out of their way,” said Andrew Kline, president of the National Association of Cannabis Businesses (NACB), a membership group that launched last month.
NACB – a division of First American Holdings, a technology and business services company – is a for-profit company.
Speaking with Marijuana Business Daily, Kline detailed his plans to draft standards for cannabis businesses.
He also offered advice on how to keep U.S. Attorney General Jeff Sessions from targeting states with legal marijuana programs.
Kline understands how the Department of Justice works, having served as an assistant U.S. Attorney in Washington DC and as a senior adviser to former Vice President Joseph Biden when he was a senator.
Where do you see the industry needing help the most in terms of standards?
There’s an endless list. But we’re going to start with things that affect public safety.
Advertising as it relates particularly to minors. Packaging and labeling as it relates to minors. Preventing underage sales to minors. Preventing drugged driving. Preventing diversion across state lines. Procedures around edibles in terms of packaging and advertising. And then also accounting and financial integrity.
But by and large our initial focus is going to be on public safety.
Our objective is to get people in compliance with the Cole Memo so we can demonstrate to the federal government that our members are doing everything humanly possible to make sure that minors don’t get their hands on edibles or anything else.
How will the Cole Memo – and the Justice Department’s own stance toward cannabis – play into your work?
We’re going to be baking the Cole Memo into our standards.
We don’t yet know if the Sessions Justice Department will embrace those standards, whether they will change them or do away with them altogether.
But we will be paying close attention to what the Justice Department wants. And we will be as responsive as we can to the needs of the federal government. That’s in everyone’s best interest.
One of the major challenges for other groups has been getting the entire industry to agree on how standards should look. How does your group plan to get everyone on board?
Our goal is to have 20 founding members by the middle of July with some diversity in membership. We’ll be relying on our founding members to develop our first national standards.
Then we’re going to have a notice and comment period, and we’ll publish them much like the way the Office of Management and Budget does when a new rule is coming out.
People will have the opportunity to write us via email and tell us their concerns or provide us with their comments. We’ll take them into consideration, and there’s going to be some judgments on our part in terms of what we think makes the most sense.
But we’ll be seeking the input of experts in the field. We’re not going to do this in a vacuum.
Do you envision any overlap with the National Cannabis Industry Association?
No, we won’t be overlapping. Yes, we will be collaborating with them. We view their mission as very different.
NCIA is a convening body, and they’re really good at what they do. They’re also a lobbying body and they’re very good at it. We’re not going to be doing either of those things. We will support NCIA in their mission.
We have accepted a seat on their policy council. We intend on coming to every one of their conferences and supporting their lobbying efforts. Our Chief Legal Officer and I spent a full day with them a couple weeks ago lobbying members of Congress on legislative priorities.
Why do you think your model will work where others have failed?
We’re a membership-based organization. People who are the most responsible in the industry will have the opportunity to join our organization.
But they’re going to have to abide by some standards that are maybe a little bit more arduous than what their state requires. In return, they’ll be able to get more legitimacy and hopefully will be able to keep the federal government at bay.
Through our technology and our website we’ll be making sure people actually abide by the standards that we create.
If you’re a member, not only will you have to agree and abide by the standards, but you have to agree that if we find you’re in violation of those standards you’ll no longer be a member of NACB.
Did the formation of the group come out of a perceived need in the industry?
Our founder, Joshua Laterman (CEO of First American Holdings), had a vision. He’s a former general counsel for publicly traded banks, and what he saw was that banks really want to do business with the marijuana industry but they really don’t know who to trust.
So now professional organizations who wanted to do business with the marijuana industry but are not really sure who to trust can rely on us to vet businesses for them.
We took a look around and saw there were a number of other self-regulatory organizations throughout the country that have found if they set their own standards and enforce them, that government regulators will stay out of their way.
Our hope is that if our members can set standards that are higher than what they’re required to do in their states, the federal government will stay out of their way.
At what point will you know if this venture is a success?
Our view is that at some point there’s going to be a domino effect. It may not be today. It may not be tomorrow. But it will come.
There will be a domino effect where companies feel like they have to be a member of our organization, otherwise they will be seen as outside of the mainstream.
This interview has been edited for length and clarity.
Bart Schaneman can be reached at email@example.com