Kristina Etter   |   February 15, 2018

NACB: Reining in the Wild West

The current environment surrounding legal cannabis is riddled with inconsistencies, often being referred to as the “Wild West.” From state to state, not only does the legality of cannabis vary, so do the regulations and standards for cannabis businesses. To rein in these inconsistencies and provide the Federal Government with necessary assurances of high standards, Joshua Laterman founded the National Association of Cannabis Business (NACB) to address national standards and policy.
Before becoming a freelance cannabis writer, Kristina Etter, spent 20 years in corporate information technology with companies including Maytag Appliances, Wells Fargo Financial, and DuPont Pioneer. With a niche in mobile technology and…

During the NCIA’s Seed to Sale Show in Denver, I had an opportunity to speak with Andrew Kline, President of the NACB, about their mission as an organization, their partnership with National Cannabis Industry Association (NCIA), and why this self-regulating organization is critical for the future of the cannabis industry.

Image of Andrew Kline is courtesy of the National Association of Cannabis Businesses.

 

Andrew Kline: Real World Government Experience

Prior to joining the NACB as President in 2017, Kline served in the Enforcement Bureau of the FCC for three years. In addition, he taught Administrative Law and Public-Private Partnerships at American University’s School of Public Affairs. Kline also served as a Senior Advisor to Vice President Biden in the White House and as the Senior Counsel to then-Senator Biden on the US Senate Judiciary Committee, working as an Assistant US Attorney in the District of Columbia, and leading global public policy efforts as Deputy General Counsel at Go Daddy.

Today, Kline is excited to be a part of this once in a lifetime opportunity as the cannabis industry is forming. As a self-proclaimed student of democracy and history, Kline calls the industry,

“the purest form of democracy we’ve ever seen.”

Understanding the volatile nature surrounding cannabis politics, Kline believes popular opinion supporting cannabis legalization will eventually prevail, and it’s only a matter of time before the federal government wants to regulate and tax the crop.  According to Kline, the industry is too important to the economy for the federal government to shut down.

 

NACB and NCIA: Building Integrity Together

While the NCIA works to support cannabis business, lobby for law changes, and defend the industry, the NACB works with the NCIA in a different capacity. The NACB is a self-regulatory organization, whose mission is to provide a set of national standards which anticipate and proactively address Federal government priorities regarding public health and safety for the cannabis industry. Together, the NCIA and NACB are collaborating to draft policies and rules like legislation.

The NACB believes federal regulation will be more stringent than typical state requirements, as such, cannabis businesses should plan to do more than just meet state regulations. In preparing for federal regulation, Kline stated,

“Cannabis businesses need to error on the side of caution with more conservative, more restrictive standards.”

The NACB understands not all businesses are going to want to take this highly governed approach and anticipates that roughly 20% of businesses will qualify for this elevated level of control.

 

Delicate Balance

Understanding if the proposed regulations are too restrictive, businesses won’t want to participate, but if rules are too lax, it defeats the purpose, NACB lawyers are evaluating current rules and regulations across the nation to develop a common standard for all. Similar to federal government processes, these newly written standards will be publicized for comment before implementation. Ultimately allowing the members to agree on the final draft.

The first of these standards, Packaging and Labeling standards are currently available for review and public comment on their website until February 21st.  

 

Tech Tools Verify Compliance

Part of Laterman’s vision included a three-part approach to compliance and regulation: 

  • State Regulations – ensuring all state requirements are always met.
  • NACB Compliance – ensuring all national standards are always followed.
  • Due Diligence & Banking – demonstrating compliance over a period of time with a verified record of ledger.

Using blockchain technology, the NACB will launch technological tools to help cannabis businesses maintain a reliable record of ledger which can be delivered on-demand. This system will link into state systems, bank accounts, and other analytics flagging inconsistencies or areas of concern.

 

Now Inviting Ancillary Business, Too

The NACB wants to provide national standards, not only for businesses directly involved in cannabis but also to ancillary businesses. Through their Blue Ribbon Affiliate program, the NACB plans to offer recognition to ancillary businesses who meet a rigorous, 28-point NACB vetting requirement regarding ethics, integrity, and fair-trade practices.

Any entity selling a product or service to NACB members or other cannabis businesses can benefit from the Blue Ribbon Affiliate program:

  • Integrity Recognition – members gain recognition as a business operating at the highest ethical standards
  • Community Involvement – members also gain access and visibility into an exclusive cannabis community
  • Experienced Experts – NACB has an entire team of leaders, advisors, and affiliates to help its members.

So, whether businesses are directly involved in cannabis or working in a support role from an ancillary business, the NACB provides recognition for the best businesses in the industry.

 

Self-Governance is Critical

Kline best explains the importance of self-governance through comparison in the entertainment industry. The Motion Picture Association of America was formed to help regulate how we view nudity, violence, swearing, and even kissing in movies today. Their organization has been successful in keeping the industry under control and avoiding government censorship. Kline explained,

“Membership in the NACB demonstrates to the community at large you are going above and beyond… you’re not diverting; you’re not selling to minors… you mean business.” 

If you’d like more information about the NACB or the regulations and standards they are creating, visit their website at NACB.com

 

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