Page 77 - BusinessWest August 18, 2021

Scott Foster says federal decriminalization of cannabis has gained momentum, but the timeline is still uncertain.
worry about in this industry are things that really do not matter. The amount of money this indus- try spends on packaging alone, that just goes in
a landfill, is awful, and it’s driven by these rules and regs — it has to be childproof, it’s got to have 57 warning labels on it. I feel ethically horrible about the mounds of packaging in landfills. And the burden it puts on mom-and-pop manufac- turers who are trying to make a really cool choco- late bar and the expense that’s going into that packaging ... it’s really tricky.”
It doesn’t help, she added, that many state reg- ulations can be challenging to interpret, mainly
because the CCC is going through the same growing pains businesses are.
“I’ve seen this in other states — the agency tasked with regulating and monitoring the industry has a very steep learning curve,” Sanders said. “One investigator will tell you one thing, and another investigator will tell you another thing. So they’re not always on the same page for specific rules.”
Many of those regulations address diversion of product, she noted. “We’ve spent millions of dollars building this business. The last thing we’re going to do is flush it down the toilet trying to sneak a pound out the back door. It’s just absurd.”
So are onerous background checks to get into the industry, keeping out some of the individuals — from communities that have been inordinately affected by the Drug War — who should be able to enter and prosper, she added. “Regu- lators and business owners should be partners to build a better business and
correct things that need correcting, understand- ing everyone is doing their best.”
Those challenges are strictly state-level, but others on the federal level are just as burden- some, and boil down to the fact that the U.S. government still classifies cannabis as an illegal controlled substance. That means most banks and credit unions have avoided doing business with cannabis operators, though that’s slowly changing.
“The federal illegality is a big challenge, and it doesn’t stop with the banking issue,” said Pat-
rick Gottschlicht, chief operating officer of Insa. “That’s been extremely detrimental to us, but that carries across to other companies that we can work with — payroll processors, ERP [enterprise resource planning] companies, any big national or international software companies, accounting firms, security vendors ... they can’t work with us because of that federal illegality.”
“The whole idea was to regulate cannabis like we regulate alcohol, and we’re not doing that. Actually, they’re going way above and way over the top, and I don’t think that’s helpful to the industry.”
That has started to shift as more professional services and banks are opening up to this indus- try, though many still won’t, and many that do are startups themselves, with less at stake, said Peter Gallagher, Insa’s CEO.
“There’s no playbook for this industry,” he added. “There’s been a lot of trial and error to get to where we are. In the early days, there weren’t a lot of professionals willing to take the career risk to enter the industry, so it was hard to find tal- ent to come in and help grow the business. But, again, you’re starting to see that shift as more states legalize and you see the social proofs play out. People’s friends are getting into it, talking
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