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Practical Compliance and Regulation Advice for Emerging Markets

As new states decide to legalize adult-use cannabis sales, regulators are tasked with guiding their constituents into uncharted territory. Many lawmakers pull from existing policies in other states, adapting them to suit the needs of their specific demographics. So why are there still so many bumps in the road on the path to legalization?

Cannabis & Tech Today spoke with Allay Consulting Founder and CEO Kim Stuck, a former cannabis regulator, to better understand some of the challenges that come with opening a new market and what citizens and regulators should know before adult-use sales begin.

Cannabis & Tech Today: How should emerging markets properly enforce regulations during the first year of legalization and why is enforcement often an issue? For example, New York City is dealing with many unlicensed cannabis vendors that aren’t being shut down.

Kim Stuck: New York is not the only state that’s had to deal with this. In fact, California has been dealing with this since the beginning, and they’ve been legalized for a long time. The problem comes down to enforcement and having enough regulators to get out there and do something about it. The government doesn’t have a budget to hire more people, and there just aren’t enough people with their boots on the ground to go out and shut down these non-licensed vendors. 

The other thing that happens is a lot of times the enforcement action they can take isn’t severe at all. When I was in Denver, we were allowed to do enforcement. If I showed up to a place, I was allowed to write a cease and desist. I was allowed to shut them down and make them leave. I could get the police involved if I needed to. I could write them tickets, I could fine them. We didn’t have this issue in Colorado like we did in other states because our enforcement action was really harsh. Whereas in California and New York right now, they don’t have that.

C&T Today: What’s a common area of compliance with which your clients have trouble?

KS: I feel like people are intimidated by the state regulations because they don’t speak regulatory language. If you’ve ever read regulations, they’re very hard to understand sometimes. It’s hard for people to wrap their heads around certain things, like what are they actually asking for? That’s what we help do, is educate in that way and get people ready for those audits and get people comfortable where they can sleep at night, and they don’t think they’re doing something wrong without knowing. It’s very hard because not only are you running a business, but you also have to adhere to all these compliance things, and you have to get your staff to be on board. 

Each company is different and they struggle in different areas. A lot of people want the Good Manufacturing Practice stuff. They think they can do it really quickly. I had a call the other day from somebody looking into getting it, and they’re like, “So can we get this done in three months?” I was like, “No, you don’t have any SOPs in place. You have no training.” It takes months and months of work, and it’s a lot of SOPs and it’s a lot of boring writing and training. I think people struggle anywhere that they don’t really know what something is, but they know they want it. 

This article first appeared in Volume 5 Issue 2 of Cannabis & Tech Today. Read the full issue here.

Author

  • Ebby Stone is a freelance writer specializing in cannabis, with a focus on the innovators and businesses shaping the industry.

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