MJBizMag July 2020 - 94

Head Start
the result of " determined grassroots
people who went to Washington to tell
their story. "
Farmers called on their congressional
representatives and eventually began to
see results. Legalization took a first step
with a provision in the 2014 Farm Bill
allowing a pilot hemp research program
overseen by states.
Then, through that reform, a story
could be told on Capitol Hill of " real,
verifiable success and real products, "
Wilcox said.
But Saphira Galoob, founder and CEO
of The Liaison Group, a Washington
DC-based cannabis lobbying firm, said
marijuana companies also need to think
about their " local influencers, " which
include community leaders, chambers of
commerce and social or service groups.
Reach out to those constituencies,
Galoob advised, and let them know you
want them to feel comfortable with your
presence in the community and that
you're committed to be a good corporate
citizen.
It's not just about meeting expectations
but exceeding expectations and, when
something goes wrong, about being
transparent, cooperative and conciliatory,
she said.
" The more we normalize ourselves, the
more normal we become, " Galoob said.
Ancillary companies also can be a
powerful and credible advocate for
reform.
In fact, support from the American
Bankers Association, National Credit
Union Association, real estate groups
and others helped tip the scales leading
to the U.S. House of Representatives'
momentous passage of cannabis banking
reform in 2019.
Hemp Industry Daily Editor Kristen
Nichols contributed to this report.
Learning From Hemp Legalization
Marijuana companies can look to the
hemp industry for guidance on how to
prosper after eventual federal reform.
Cannabis companies have become
more professional over the years
and are used to a patchwork of state
regulations. But the combination of
state and federal oversight will put
many businesses to the test.
The nationwide legalization of hemp
via the 2018 Farm Bill has translated
into a protracted period of rulemaking
as well as federal and state scrutiny-
not to mention slow access to banking
services.
To survive and thrive in the postreform
world, cannabis businesses will
need to be well-run with strong skills,
business savvy and patience.
" Expect constant change and more
regulation, " said Diane Czarkowski,
co-founder of Canna Advisors, a
Colorado-based firm that provides
a range of consulting services for
marijuana and hemp companies.
Experts advise businesses to
anticipate changes now by adopting
the highest standards from other
heavily regulated industries.
" The coin of the realm going forward
is going to be following best practices
and being a responsible industry
participant-whether you're a
hemp company producing CBD or
a (marijuana) company with THC
products or a company involved
in both markets, " said Michael
Bronstein, co-founder and president
of the American Trade Association of
Cannabis and Hemp.
Jeff Smith covers
regulatory and government
issues for Marijuana
Business Magazine.
92 Marijuana Business Magazine | July 2020
Don't Expect Anything in a Hurry
It's great to be positioned to hit the
ground running when marijuana is
legalized federally, but don't expect
federal regulators to do the same.
Based on U.S. agencies' movement-or,
in some cases, lack of movement-since
the legalization of hemp, federal
marijuana policy development is likely
to be a gradual process.
The U.S. Department of Agriculture
spent nearly a year developing interim
final hemp rules.
As of mid-May-17 months after
legalization-only 15 states had
received USDA approval for hemp
production plans under the interim
final rule. More than 20 states were
opting to follow 2014 pilot rules.
" It's going to take years for (hemp)
policies to be put in place, " said Geoff
Whaling, chair of the National Hemp
Association in Washington DC.
The banking industry also has been
slow to offer services to hemp
businesses.
It takes time to understand a new
industry, and bankers need to
feel comfortable in assessing the
risk, Whaling said. Many financial
institutions still view the nascent hemp
industry as too risky to serve.
" It took us seven months to get credit
unions to accept our business, " he
said. " It took (the U.S. Treasury
Department) almost a year to tell the
banks they could serve us. "
Expect Additional Oversight
The U.S. Food and Drug Administration
and other federal agencies will
scrutinize the marijuana industry after
federal reform-although how quickly
that happens will depend on the kind
of legislation that passes.
" We know that all the various
operations along the supply chain
might have unique oversight from the
federal government, " Czarkowski said.
Marijuana companies should
anticipate how federal oversight might
impact their business and implement
those changes now, before they are
mandated, she said.
Bronstein's trade group currently
is working with a dozen state-level
organizations, regulators and industry
to develop standards for testing,
transport, quality management, track
and trace, security and more. The
goal is to develop uniform standards
to cover every state that has an adultuse
or medical marijuana program,
Bronstein said. Such standards
would smooth out the regulatory
bumps that will come with federal
legalization.
Even after federal legalization occurs,
marijuana businesses should expect
a continued patchwork of state laws
and regulations, which likely will
complicate cross-border commerce in
some regions of the country.
- Jeff Smith
MJBizMag July 2020

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