Attributed to: Kim Stuck, CEO and Founder of Allay Consulting
Thankyou for talking to to CLR Kim.
For those readers who may not have come across Allay before can you elucidate a little about your business and what you do in cannabis, can you give us a quick precis before we jump into the topic in hand ? 
Happy to!…….. Allay Consulting is an operational compliance consulting firm that mainly assists clients with consumer safety, quality assurance, and worker safety. We help hemp, cannabis and psychedelic companies become compliant with FDA and OSHA standards, and assist them with getting certifications such as cGMP, GACP, ISO 9001, ISO 22000 and Organic certification.
Whether a business involves CBD, THC, derivative cannabinoids, or psychedelics, Allay Consulting serves these industries to ensure regulatory compliance across all operations. Allay works with cultivators, manufacturers, retailers, investors and other stakeholders across the U.S. to develop customized strategies and avoid compliance pitfalls.
We’re talking about state rollouts and how cities and counties react to state legislative changes on regulating adult use cannabis and medical cannabis
On this issue, do these rules apply equally to medical and adult use? Do counties and cities ban medical cannabis ? Does state legislation allow them to do that ?
For us, it has been a distinction that has never been really clear, what is your experience?
This is a hard one to answer because it really depends on the state and county you are in.
Every state is doing things completely differently. In many states they are allowing counties to opt-out of allowing medical or retail sales, even in states that are more mature markets such as Colorado and Oregon.
If an jurisdiction believes they will not benefit from the legalization of cannabis, then they can choose to not allow the sale of it in their city or county.
Many areas decide after a bit to opt-in and start selling eventually, but that only happens every once in a while. Usually they see the tax revenue that other counties are getting from cannabis sales and it changes their mind a bit on allowing it.
With regard to local decisions on adult use, in most states when regulation first occurs it is usually a 50/50 split between those cities and counties that say yes and those that say no – what is your experience?
That sounds about accurate.
Out of Colorado’s 64 counties, 33 have opted out of recreational sales completely.
That being said, every state is very different. In Mississippi, for example, a more notably conservative state, 83 cities and 17 counties have opted out.
When it comes to the population densities of those cities, it is much less than a 50/50 split between opting out and opting into the medical program. All states have their nuances and rules that differ, so it’s hard to give a blanket statement for how things will turn out in the end.
Here at CLR we notice after legislation comes into play and things settle down after the initial flurry of activity that there is rollback with more of the no’s becoming yes’s rather than visa versa. Would you say that is a fair assessment and do you concur that in the main it is revenue-raising opportunities brought by cannabis that really bring local commissions into play.
Absolutely. I think many counties and cities are worried about their community being affected by things like teen use and crime rising. But in more mature markets, when cannabis is regulated correctly, we don’t have those kinds of issues, at least not as bad as previously thought. Once an opt-out county or city sees their neighbors start to benefit from cannabis sales, many of them then decide to move forward with it. Sometimes they just want to see if the sky falls in first, then when it doesn’t they decide to go for it.
You indicate that over time you have discovered workarounds in the jurisdictions that say no. Can you give us an idea what these workarounds may be and in which states businesses have a better opportunity to enact successful workarounds.
Workarounds for not being able to sell in opt-out counties? Not really. If you can’t have a license in a certain area then you just can’t have a license.
I will say that many companies will put a dispensary right outside the border of an opt-out county and usually do very well.
As we all know illegal inter-state trade just keeps growing, has anybody actually applied a value to it yet?
Not that I know of.
Is law enforcement completely swamped by volumes?
I think that government officials are just swamped in general. We have seen a lack of good cannabis regulation due to the lack of bandwidth. After Covid we have seen a decrease in people wanting to be police officers, health inspectors, and even firemen. It’s just hard right now, and everyone is understaffed. I don’t think it’s necessarily due to inter – state trade.
…and if I walk into a store in NYC and see a branded CA/ OR product for example, how are both the supplier and the retailer getting away with selling it?
First, make sure the dispensary is an actual licensed dispensary. Unfortunately, right now many are not actually licensed and regulated, and therefore aren’t going to be following the rules that they should be or that licensed facilities are abiding by.
Sometimes they may be saying that a certain cultivar is from Colorado or California, but many times they are buying seeds that the genetics originated from in those states, but were actually grown in NY.
This is just how some companies market. If you are finding actual products that have CO or CA labeling being sold in a NY dispensary, that is against the rules, and I would guess the dispensary isn’t licensed and is buying product from other states and illegally bringing it into NY.
If they are saying that the product is being produced in the state it is being retailed how can the consumer or law enforcement for that matter test the veracity of that assertion?
There are track and trace requirements the state has in place to prevent this from happening. BioTrack will keep track of all cannabis in NY from seed to sale, and all has to be accounted for in the software to ensure nothing is sold outside of the licensed businesses or across state lines. This is very similar to all other states.
What examples can you give our readers of companies that have been prosecuted for operating illegally in this manner?
Sweet Leaf in CO is a good example. They practiced something called Looping. They were found selling to people in a way that allowed products to be sold from their dispensary across state lines. There was an intricate investigation, they were found guilty, and faced some harsh consequences.
We know a number of states have introduced and passed inter- state trade legislation – OR, WA, CA. Does that actually mean anything?
States can agree to allow interstate sales between them, but it doesn’t happen often. It means that you can get permission to sell into these other states as long as you are compliant with the regulations allowing it and are tracking everything compliantly.
This could be something that might happen more often, but the hope is federal legalization will open up the state lines eventually.
Do these states have to wait for Federal legislation before their intrer-state rules and regulations can actually work?
Not necessarily if they are written well, but it will definitely make it easier if federally legal.
Is there any legislation of any sort with regard to trading cannabis state to state before the House in DC at the moment.
Not for this specifically, but any federal legalization would open up sales between states unless written to specifically not allow it.
Are you aware of DC telling states who have introduced legislation to watch what they are doing and tread carefully?
They are primarily leaving the decisions for legalization to the states right now. If there is ever a problem that would need the assistance of the federal government, however, then they could get involved.
Are there any workarounds? If so, who has found them and what are they?
Selling outside of states is not allowed in almost all instances. I don’t recommend any workarounds. I recommend always following regulations to prevent the loss of your investment and prevent black eyes in the industry.
Do you think there is any change on the horizon, might Congress, for example, write and pass a specific bill like SAFE… although we are still waiting on an answer on that after 5 + years of effort!.
On Inter-state trade or do you think we’ll have to wait for that big mysterious omnibus cannabis bill!
It’s hard to tell how long it will take, but eventually cannabis will be legalized on a federal level. It might take another 5-10 years, but it’ll happen.
I am optimistic that a banking bill will be passed soon to try to help the industry out on that front. The lack of banking access has been going on for far too long, and is hindering the industry and endangering cannabis workers.
