Andrew Kline, Director of Public Policy, National Cannabis Industry Association
Andrew Kline is NCIA’s Director of Public Policy. Andrew leads NCIA’s substantive public policy efforts, striving to prepare and protect the state-legal cannabis industry. He will leads NCIA’s Policy Council, a group of NCIA members focused on influencing federal and state public policy.
Kline most recently served as President of the National Association of Cannabis Businesses (NACB), the first self-regulatory organization for the high-growth cannabis industry. At the NACB, Andrew led the creation of national standards for the state-legal cannabis industry, oversaw its standards governance board, and led day to day operations and strategic planning.
Kline previously worked an Executive in Residence at American University’s School of Public Affairs where he taught graduate-level courses in public policy and law. He also served as senior policy advisor to then-Senator Biden and Vice President Biden, and spent fourteen years as a federal prosecutor.
https://thecannabisindustry.org/
http://thecannabisindustry.org/policy-council/andrew-kline/
andrew@thecannabisindustry.org
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now, here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Are you a CEO looking to scale your company faster and easier. Checkout Thrive Roundtable thrive combines a moderated peer group mastermind expert one on one coaching access to proven growth tools and a 24/7 support community created by Inc. Award winning CEO and certified scaling up business coach Bruce Eckfeldt. Thrive will help you grow your business more quickly and with less drama. For details on the program visit Eckfeldt.com/thrive. That's E C K F E L D T.com/thrive.
[00:01:06] Welcome everyone. This is Thinking Outside the Bud. I'm Bruce Eckfeldt. I'm your host. And our guest today is Andrew Kline and he is Director of Public Policy for the National Cannabis Industry Association.
[00:01:17] We're going to talk with him a little bit about what's going on in the cannabis space in terms of policy and the kind of the government regulation, federal, state, and how things are shaping up. Just for reference, we're recording this the end of April. And so we are in the midst of our covered 19 pandemic, obviously impacting not only business, but really everyone in the world right now. And so I'm going to talk a little bit about how, you know, the cannabis industry has responded and what's the state of cannabis right now, how things are playing out, and then how this is going to kind of reshape the industry, reshape the agenda for the cannabis industry in the coming months and quarters and most likely years. So I'm excited to have this. Obviously, it's a horrible situation we're in from a pandemic point of view, but fascinating from an industry and business point of view and how things are playing out. A lot of interesting responses from the states and how companies are kind of keeping the business going, keeping the industry going. But, you know, it is impacting things.
[00:02:13] So with all of that. Andrew, welcome to the program. Thanks for having me. Yeah. So let's find out a little bit more about you and your background. How did you get into cannabis? How did you get into public policy? Give us the backstory.
[00:02:24] Sure. So I spent most my career kind of bouncing back and forth between law and policy. I was a federal prosecutor for about 14 years back in D.C. and also did a stint on the Senate side of the Senate Judiciary Committee working for then Senator Biden in the late 90s, did some policy work for him when he was V.P., did some policy work at the FCC, and also led to global policy for the Go Daddy operating group before they became a publicly traded company.
[00:02:56] So so I've been kind of, you know, in between law and policy for my whole career. And I was just kind of minding my own business, working at the FCC and got a call from a recruiter asking me whether I might be interested in running a new self-regulatory organization for the cannabis industry. And so I ended up doing that for about a year and a half, which is how I got into the industry. I've been with NCAA for about a year now.
[00:03:21] And what what was it like to kind of go from these very kind of traditional established kind of industry?
[00:03:28] You know, communications has been around forever to cannabis, which. Well, you know, the industry has been around for a long time. You know, not on a legal side.
[00:03:36] How what was it like? I guess give us some of the insight in terms of, you know, as he got into cannabis, what was surprising, what was not surprising over the changes you had to make or the things you weren't necessarily expecting?
[00:03:46] Yeah. You know, it's I guess I didn't really know what to expect going in, but there have been some things that I've been very excited and pleased about and some things that I've found to be frustrating and exciting side. You know, this is this is the democracy at its purest form. Right. Thomas Jefferson would be doing backflips if he could see what's happening to this industry. And that's a super exciting to be a part of. You know, it's a new industry, but you've got some serious entrepreneurs. And, you know, we're creating public policy from whole cloth, which is just crazy exciting for me as someone who loves doing this work. It's just, you know, having a blank slate, having, you know, major issues to work on, like too easy and safe. Banking and scheduling has been super fun, you know, on the frustrating side. It's a new industry. It's the cannabis industry. And so, you know, not everyone is trying to go above and beyond what they're required to do and, you know, behave in a professional way. And so that can get frustrating sometimes.
[00:04:45] Yeah, well, we talk about crafting public policy. What are we really doing? I mean, with with your position now, how do you wield your influence? What is the work that you do? Where do you spend your time?
[00:04:55] I mean, give us a sense of really what it means to be in a position like this.
[00:04:57] So I lead something called the Policy Council, which is a group of about 35 right now, entrepreneurs, scientists, lawyers, doctors and others who want to influence public policy in the industry. And together, we do a number of things. We produce white papers of import to the industry. So by way of example, last October, we released a white paper on how we think cannabis should be regulated at the federal level once the scheduling happens. In January, we released a paper on, say, vaping I led. Safe, a task force, and over three months we did a lot of work trying to communicate authentically and on the deaths and injuries that were occurring as a result of the illicit market products. And so we do a lot of those white papers. We're in the process of finishing up a white paper on intellectual property. Another one on the illicit market. And then another one on environmental sustainability. And then I'm sorry I missed one. Interstate commerce. And then in the pipeline, we have a paper on taxes, paper and ethics, a paper on gender parity and a paper on the medicine of cannabis. So the white papers take up quite a bit of time, but we do a lot of other work as well. For instance, we do file public comments. So right now we're working on comments to the DEA on research. We're working on comments tonight on dosing. A few months ago, we submitted comments to the FDA on CBD rulemaking so that work is ongoing. We also support our government relations team. So we draft legislation. We provide technical assistance to congressional staffers. We interpret legislation and put things into plain English. We opine on whether new pieces of or existing pieces of law make sense or whether we want to think about modifications or amendments. We produce some events.
[00:06:45] So in February, I produced an illicit market summit where I brought together law enforcement, state, local and federal law enforcement with cannabis entrepreneurs, both multistate operators and some craft companies, technology companies and social equity experts to talk about the illicit market and how the private sector and the public sector can start to collaborate to try to stamp out what is a problem for for consumers, a problem for licence holders and a problem for law enforcement. So that's at a high level kind of what we work on, you know, the nitty gritty kind of changes from day to day. But there's so much going on. It's not like there's a lack of work.
[00:07:24] Exactly. And the purpose or the intent of all this is to really create a well regulated, successful, profitable industry that is serving sort of the benefit of consumers in general. Kind of good of public health.
[00:07:37] Exactly. And so we're we're creating a library once cannabis is a schedule, the federal government's not going to really know what to do. And so we're we're creating a library of research and writing for them to rely on.
[00:07:50] Interesting. And sort of coming out of 2019 or the end of to tail end of 2019 coming into 2020. What was kind of on your agenda in 2020, 2021? Luber the kind of top things that you hope that would be addressed or that you saw coming down the pike.
[00:08:06] So personally, my agenda was has always been d scheduling. So I'm sort of myopically focused on that and finding a path for us, whether it's on the more actor or something else. You know, simultaneously we do work on the more incremental approaches. So, you know, safe banking is always at the forefront of our priorities to Aidi is always, at least in the back of our mind. But there hasn't been a vehicle to pursue tax reform other than the Trump tax package, which we did try to get to 80 included, and we're not successful.
[00:08:39] So that was kind of the agenda. Obviously, we're in the midst of this pandemic and, you know, things are kind of impacting business, you know, six or eight weeks ago as an order started to come down from governors. And I mean, Spalatin, that shelter in place kind of shut down non-essential businesses. But as as we've seen, cannabis has been deemed essential business. And I think eight of the nine areas where the adult uses in place and I think most of the medicals have all been deemed essential services, essential central businesses from a policy point of view. Now, what's your take on how this has played out of what have you been surprised by? Do you think that I guess what do you like in terms of how things are played out and maybe where are you critical of how people have kind of treated cannabis in this situation?
[00:09:24] By and large, you know, everyone who has a program has deemed cannabis essential one way or the other. Right. They may not have used that exact language, but they're either allowing both recreational and medical or just medical. They're allowing curbside or allowing delivery. But everyone is doing something like there isn't a state that has a medical program that isn't offering cannabis in some way. So that's a big win, I think, for the industry. And I think a sign that things are headed in a very positive direction. You know, look, at the same time, not only have states been deeming cannabis essential, but the federal government has done nothing to move the ball forward. So and that has applied during the covert relief packages just as as much as as applied elsewhere. I mean, on the relief packages, you know, we've been really busy trying to lobby for for SBA loans and grants and also for safe banking. And we're. And now what about to enter phase five? I think right now I think there've been this is gonna be the fifth relief package. And so we're hoping we're going to get something in this time. But so far. Blocked, you know, and it's frustrating because we're operating in an all cash environment. Cash is dirty. We're operating in parking lots and cash. It's dangerous to be exchanging cash and parking lots. So we need banking.
[00:10:41] And, you know, we're we're we did twelve billion dollars annual sales last year. We're doing more than most other industries to help financially. And so, like, why shouldn't we be treated the same as other industries? Why should they be eligible for loans? We're not.
[00:10:57] Why do you think that is? I mean, what is really the kind of the blocher or the the thing that's holding this up on the federal scene?
[00:11:04] It's a great question. I look at this through sort of a biased view, probably because I'm a I'm a lifelong Democrat. But if you really look at things right, I mean, the Democrats passed safe banking in the House by an overwhelming margin and the Democrats passed the more act through the House Judiciary Committee. And the Republicans have done nothing. They've been, you know, not moving at all on safe banking. And so I hate to sort of politicize it, but it does feel to me like if the Democrats were in charge of the White House and the Senate that things would look very differently right now.
[00:11:35] It's it's just an underlying real kind of belief issue or policy issue. Or is this, you know, looking at reelections and constituents and houses gonna look there? I mean, I'm I'm just curious if when it really comes down to the debates and the votes that are being cast or not being cast, is this kind of mechanics in that they just they don't have? Well, they personally may feel like this is a good thing to do. They just it's just not ready from a constituent point of view, from a public kind of opinion point of view or. Or is it just there's other things on, you know, on their minds or other things they have to get done. And so this doesn't make it onto the agenda or doesn't you know, it doesn't get the political force that it needs to to really pass.
[00:12:13] Yeah, I. So I think it really has to do much more with individual personalities than anything else. So, you know, if you look at most recent Gallup polls and Quinnipiac polls, medicinal cannabis polls at 90 percent and recreational cannabis polls at sixty six percent. So, you know, you'd be hard pressed to find any public policy issue that's polling with that.
[00:12:34] So I don't think it's the politics. I think it's Mitch McConnell and Mike Crapo who have antiquated views. And, you know, just like we saw with impeachment and other issues that have arisen, sometimes I think Mitch McConnell is not thinking, hey, what's in the best interests of the country or what to my constituents want. It's more about his political future, his viability or his own personal preferences. That's my suspicion.
[00:13:00] So until there's some real kind of seismic shift in the power structure there, it's gonna be a tough process.
[00:13:06] I think so. I mean, you know, look, I guess time will tell right over the next few months. You know, is it possible that McConnell will decide to move. Safe banking? I guess it's possible. I really don't understand what the delay is. Right. I mean, you've got the American Bankers Association. I mean, all these, you know, mainstream organizations supporting safe banking like this. No, there's no political downside for him. The only downside is whether or not he believes that cannabis should be legalized or normalized.
[00:13:33] Yeah, well, you're not going to I mean, it's just that the tide is shifting. It's not like you're going to put it back in the bottle. So it just seems it's does seem silly to to hold that up when holding it up actually causes real issues and not not just for the industry, but really for the general public. And banking becomes complicated and it just doesn't seem to be any real hopeful side of not doing it quickly.
[00:13:56] Yeah, I agree.
[00:13:57] So how else do you see this kind of playing out in terms of changing the agenda, or how is this whole kind of covert thing going to change the agenda, shape the industry, change businesses, impact businesses in the coming weeks, months, quarters? You know, like I said, probably years at this point. But how do you see this kind of impacting things?
[00:14:14] Well, I guess my hope is that Congress will look and see. I'm not an economist, but I've got to imagine that in light of the fact that, you know, these states are spending incredible amounts of money on health care right now and they're not collecting any tax revenue that they're going to be in a world of hurt or insane. And you look around at the industries that are doing well. Cannabis is one of a handful. So I'm hoping that's gonna be a signal that, you know, hey, it's time to really let unleash the cannabis industry and let them really thrive.
[00:14:47] But I don't know, you know, that that's going to be the case on the on the Koven side.
[00:14:52] I tend to think that cannabis companies are going to start to have to take good manufacturing practices more seriously. So, you know, there are some already that go above and beyond what they're required to do.
[00:15:03] They're looking to the future when FDA regulates food and dietary supplements and pharmaceuticals and such.
[00:15:11] Containing cannabis. You know, they're going to require good manufacturing practices. So smart companies are getting ahead of the game and they're just saying, you know what, we're gonna do this now. We're not required to. But we're gonna do it. And to me that they're the ones that are going to have a business advantage, because if you're a consumer and you know you're concerned about products getting. Right. You're going to be asking those tough questions.
[00:15:32] Does that mean that I guess, how do you see the kind of the regulatory structure coming down? I mean, the FDA is going to be the entity in charge of this. But how are they going to go about doing this? Is this basically the same they would do any other industry? Is there anything unique about cannabis in terms of the strategy they're going to have to use or the process of the regulations themselves?
[00:15:49] So this is probably a question for another podcast, because it's a long, drawn out story.
[00:15:56] But, you know, last October, we issued a regulatory plan which bestowed upon FDA and TDB, which is the tobacco trade office that manages alcohol in the Department of Treasury.
[00:16:11] And so, you know, our theory was we should be regulating cannabis like alcohol, like tobacco, but like alcohol. There should be the state system should remain in place. Right. So one of the concerns I have with some of the proposals that we've seen to reschedule is, you know, what would that mean to the state legal system?
[00:16:29] We really want to make sure we retain the systems that are working for consumers. They're driving revenue for the states. The states have already figured this out. There's no reason to recreate the wheel. But the federal government has a role to play in inspecting facilities, making sure that good manufacturing practices are occurring. And so, you know, I do see a role for FDA, particularly on the non intoxicating side.
[00:16:53] So on the pharmaceutical CBD side of dialects and an Maryknoll, et cetera. And then also on topic GL's and patches and dietary supplements on the high THC side, you know, point three and above.
[00:17:09] I think, you know, there's a role for the TTP to play, making sure that the states are doing what they're supposed to be doing, that people are not making false claims.
[00:17:18] Their advertising is not appealing to children and they're not selling to children, all that kind of stuff.
[00:17:23] I mean, how does that look? Because as we ponder kind of this D listing federal legalization of the industry, how do you see kind of the states responding to this room? We've seen this put a lot of money and energy into these local markets and economy and licenses and regulating and setting these up. Do you see this really opening up on the federal side? And that will see states that some states are going to be great growers, some states are gonna be great processors, and you'll have a really fluid federal, you know, federal industry or national industry on this, or do you see the states kind of keeping some amount of control and maintaining sort of their economies within their borders?
[00:17:59] You know, it's a great question. I don't know that I can accurately read the tea leaves quite yet. But, you know, the interstate commerce side, there's no reason. You know, once cannabis is scheduled, I don't know why, you know, people in New York or Massachusetts wouldn't want the best cannabis grown in California, Oregon or Washington or Colorado coming east, especially if it saves them millions of dollars potentially in buildout. Right. Because when you're growing cannabis outside, you're not investing in the same kind of hydroponics and lighting and greenhouses that you are on the East Coast. So you're saving a ton of money and you're getting better product, you know, but that's growing outside Humboldt County, for instance, right now.
[00:18:41] So I would hope that businesses would want to facilitate interstate commerce. I think it would benefit everybody.
[00:18:47] But it is for the company that has done a big greenhouse build out in Vermont to be able to grow and grow cannabis there. Yeah, they're going to have to figure out how to transition at some point.
[00:18:57] Yeah, I think that's the interesting thing from a strategy point of view that I've seen as this question of this looming question of what happens when you get federal legalization and how does it change the markets and address up the addressable consumer and where you grow, how you grow, where you process all those things, you know, in terms of how potentially these U.S. companies kind of fare. I mean, you've a lot of companies where a fairly extended there were no reason a lot of capital to grow and scale quickly. You know, with COVA, capital markets are, you know, a little shy right now in terms of being able to continue to kind of fuel that kind of growth. You know, I think it remains to be seen what will happen in terms of availability of debt and equity financing on these businesses.
[00:19:37] To the extent that some of these businesses don't make it or get into a distressed state. You know, normally in an industry, you'd have kind of a merger and acquisition process. Things will get rolled up, assets we get sold. People would buy licenses. But, you know, in this case, it's I'm not sure. I just I don't see exactly how some of these assets get sold with the kind of regulatory restrictions, the lack of capital in space already. I mean, I guess from your kind of policy point of view, how do you see kind of the policies that are in place in the state kind of affecting how businesses are going to have to respond to correct their financial situation? Should they be in financial trouble in the coming months as things play out?
[00:20:14] Was the question about what what the states should be doing or about what companies should be doing?
[00:20:18] I think both. I mean, is there anything the states can do to help companies that are in financial distress? Right. You're gonna have companies that are affected by this that are that are not able to maintain kind of their. Financial position. And they're gonna be distressed, but there's regulations around how many licenses you can hold. Who can hold a license? You know, things like that that are gonna make it difficult for these people to find decent access or reasonable access to maintain asset value. Do you think there should be? The state should be doing things to help deal with that within their markets and help these distressed businesses?
[00:20:51] Yeah, I mean, look, I think there's some things that states can do. Number one, for instance, the governor of Colorado recently sent a letter to the congressman who represents Denver asking for SBA loans for Canibus businesses in Colorado. So it's certainly work that they can do there. The states themselves can offer small business loans. There was an article recently in Forbes magazine written by Adam Orrin's from the Marijuana Policy Group. And it lays out a plan for municipal bonds backed by cannabis, which I thought was a really interesting approach.
[00:21:28] So, look, you know, I think people are thinking creatively about it, but none of us should be resting on our laurels because, you know, this is a new industry and we need to propel it. Not not hinder it.
[00:21:39] Exactly. It's in some respects, it's like the worst timing we've gotten kind of gotten off the ground. We had some pretty good momentum. Things started happening. You know, there is, I think, some real inertia towards getting some of these reforms in place. And then, you know, the spend debit cards. And I think it has derailed a lot of this stuff or at least pushed it back, maybe in terms of some of these, not even a federal legalization, but even just the two 80 and the banking reform. I mean, I think a lot of people were hoping it was gonna be in 2020 or at least there's going to be some pretty big move in 2020. Do you think that's still going to happen? Do you think that's pushed out? Is that twenty one is a 22? I mean, what's your kind of sense of timing on some of these things, given kind of the focus and, you know, how disruptive the pandemic has been on the Hill?
[00:22:23] Yeah, yeah. I mean, you know, I just I just saw a few minutes ago that the Senate was supposed to be coming back into the session and the House decided that they were not going to come back into session. So it's not clear to me, you know, when the federal government's even going to be up and running again. And, you know, once this covert relief is behind us, they're going to be pretty far back right. In their legislative priorities. And I hate to keep harping on Mitch McConnell, but he has not exactly shown interest in passing legislation over the last three years. He's been more interested in judges getting confirmed. And so, you know, once the cold relief packages are behind us, there's going to be a long line of legislation that people want to see hit the floor. I imagine cannabis will be far behind in his priorities. So long story short, I'm not particularly optimistic that much is going to happen in 2020.
[00:23:15] I think it's going to mean a new president and a new Senate that's going to really translate into the kind of policy that we want to see implemented.
[00:23:25] Now, Andrew, there's a bit of pleasure if people want to find out more about you, about the work that you do. What's the best way to get that information?
[00:23:31] Sure. If you get on our Web site, it's the cannabis industry, dawg. Click on Policy and then Policy Council. You can see the library of work that we've produced.
[00:23:41] You'll see a four page description of how you can become a member.
[00:23:45] And you can see the bios and headshots of all the current members. And you can always shoot me an email at andrew@thecannabisindustry.org. Happy to talk.
[00:23:53] Yeah. I'll make sure that those are in the show notes. so people can get that information. There's been a pleasure. I'd you know, policy is such a huge factor. This industry is kind of shaped both historically and we'll be in the future. So, you know, it's gonna be interesting to see how things play out.
[00:24:06] I look forward to keeping in touch and kind of seeing how the pandemic impacts things and then how everyone responds. What happens with this election and the future of cannabis. But I really appreciate your time today. Thank you for being here. Thanks for having me.
[00:24:18] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidethebud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com/newsletter.