What the hell do you do when you’re running a business that the government has over 75 sets of laws governing? In the U.S., the federal government has one set of laws concerning the Schedule I controlled substance. In addition, every state in the union also has its own particular bunch of laws concerning marijuana within its borders. Most states even have two different groups of cannabis laws, one for medical and one for recreational. Now how do you go about putting long-term plans in place when the laws governing your business are contradictory and vague?
One alternative is start governing yourself. Like settlers in a new land forced to self-organize or face total chaos, the U.S. marijuana industry has formed the National Association of Cannabis Businesses. The self-regulating organization aims to implement its own regulations which will be non-legally binding, but will create new standards and practices across state lines.
The NACB comes in the tradition of self-regulating organizations (SRO’s) in other industries, including the Financial Industry Regulatory Authority (FINRA), a non-government group which regulates the NASDAQ, the American Stock Exchange, and the New York Stock Exchange, as well as the Distilled Spirits Council (DSP), which oversees the alcohol industry.
The DSP in particular is an inspiration to the new cannabis group. “Cannabis cannot be so insular that we miss an opportunity to learn from other highly regulated industries how to make our own better,” Ean Seeb, a member of the the NACB advisory panel Denver Relief Consulting co-founder, told The Cannabist. “Similar to cannabis, those founding SROs represented a substance that was legal and then made illegal through prohibition. When prohibition was overturned, these groups helped spirits navigate the new regulatory and taxation landscape.”
The group’s slogan is “Be ready,” as in “be ready and start regulating yourself so that the federal government doesn’t feel they have to do it for you once it legalizes your product.
For the moment, the NACB is based in Colorado and, to an extent, on Colorado. Among the group’s seven founding members are three Colorado cannabis businesses. “The state has been at it longer than anybody else, so it provides the largest window into what works and what hasn’t worked,” NACB president Andrew Kline said. He added that “testing standards it developed are replicable in other states as we see in Oregon, for instance. But it’s also scalable to a national level.”
Kline himself is a former assistant U.S. attorney and Washington insider, who has served as a special counsel in the Federal Communications Commission’s enforcement bureau and as a senior advisor to Vice President Joseph Biden.