Compliance Matters: An Insider’s Perspective on How to Stay Up to Date on Cannabis Regulations

Columns | <b>Cannabis Voices</b>

Regulations and compliance are sometimes deemed a necessary evil, but consumer and employee safety are at the heart of those rules. The cannabis industry faces unique challenges when it comes to compliance because each state has their own rules. Federal regulation would certainly simplify matters, but until then Kim Stuck, CEO and founder of Allay Consulting, offers some practical advice for how to stay ahead of potential issues. Here, Stuck shares her background in regulatory work, the cannabis industry, her new blog coming out in Cannabis Science and Technology next month, and more.

Can you tell us about your career in the cannabis industry and how you went from a state regulator in Colorado to your current role as the CEO and founder of Allay Consulting?

Kim Stuck: I started in the industry when I was a restaurant and wholesale food inspector for the Denver Department of Public Health and Environment (DDPHE) in 2014. At that time, cannabis adult use just became legalized and we were tasked with regulating cannabis as well. It was very exciting to be a part of a regulatory agency and see a new industry just appear out of nowhere. I was extremely interested in the cannabis industry and wanted to learn everything I could, so I volunteered to be one of the investigators to learn as much as possible about cannabis. After a while we realized that cannabis was very different than regular wholesale food facilities and they needed more time dedicated to them. I became the first “cannabis specialist” for the department shortly after. During my time as a cannabis specialist, I fell in love with the industry and noticed that there weren’t many people on the industry side helping companies navigate the strict, and sometimes grey, regulations of the industry. I decided to launch my own consulting firm dedicated to helping the industry navigate compliance in 2017 and the rest is history. We now have a team of five, locations in Colorado and Oregon, we work in all 50 states and even a few other countries. We really focus on state compliance, product safety, and worker safety the most. We specialize in state regulations, US Food and Drug Administration (FDA), Occupational Safety and Health Administration (OSHA), fire code, current good manufacturing practice (cGMP) Certification, International Organization for Standardization (ISO) (9001/22000) Certification, good agricultural practices (GAP) andgood agricultural and collection practice (GACP) certification for cultivations, organic certification for hemp, and much more.We have amazing clients, a wonderful team, and we work for the best industry in the world. I couldn’t be happier with the way things turned out.

How did moving to a consultant role change what you were able to provide to people in the industry?

Stuck: I think there is one thing that non-regulators don’t understand; when a regulator is in your facility evaluating your compliance, all they are allowed to do is tell you what they observed, what the violation is, and what regulation it refers to. They are not allowed to tell you how to come in to compliance with the regulation, they put the onus on the company to come up with the solution to become compliant. Many times, owners would beg me to just tell them what they needed to do, and I wasn’t allowed to tell them, even if the solution was ridiculously simple. It makes it very frustrating for both the company and the regulator, but those are the rules due to liability issues. I was once told by a superior that “our job isn’t to solve those problems, that’s a consultant’s job.” I looked around and realized there weren’t any consultants supporting this industry, and it dawned on me that maybe I should be one. As a consultant I can do all the things that regulators do; evaluating the facility, finding violations, explaining the regulation, but now I also can give them options on how to solve the issue based on all of my past experiences. It was an amazing feeling of freedom to become a consultant and be able to actually help people, instead of being unable to do anything for them. So happy I do what I do now, it is amazingly rewarding.

What are biggest regulatory challenges for cannabis and hemp? How can those challenges be overcome?

Stuck: This is a hard question since things change so quickly in the industry and different states are in different places when it comes to maturity of the industry. Newer states that are coming online are struggling with state regulations and becoming compliant with them, and more mature markets are starting to realize that they need to start thinking long term in regards to federal legalization, getting into compliance with FDA and OSHA. Ways to overcome these challenges are going to be different for every company, but having a good business plan with a budget for compliance and compliance assistance is a great way to get ahead. If you are thinking long term about federal regulations then I recommend becoming compliant now and getting certifications such as cGMP (manufacturing), GACP (cultivations), and ISO 9001 (all license types). Getting these certifications now and not waiting until the last minute to worry about federal compliance is important. These certifications are not only good from a “getting ahead of the competition” perspective, but they save you money in the long run by mitigating risk of recalls and disposals, and help reduce employee turnover as well.

How hard is it to keep up with the various state regulations in the US? Do you also follow the international regulations?

Stuck: It is definitely difficult to keep up with all regulations in the US, but that is the main thing we focus on at Allay, so we are used to the extensive research required to do so. We keep informed with international regulations as well and always refresh ourselves when we take on a client in a new area. When it comes to product safety it is similar in most countries and states, same with OSHA, but obviously the cannabis regulations are very particular for each state. We have an internal system that works very well for us when it comes to keeping up with regulations. We rely on our Allay teammates’ knowledge, and have weekly meetings that keep everyone in Allay on the same page.

When a new state legalizes cannabis how long does it take for them to develop regulations and implement them? Have you been involved in that process for any specific states?

Stuck: The timeline for regulatory development is different for every state, some states take more time than others do, it just depends. I have been a part of many different states’ regulatory workgroups and have helped develop all kinds of cannabis standards. The good thing about now versus 2014, is we can look to other states programs and see what has worked for them and what hasn’t. We no longer have to reinvent the wheel, and can pick and choose what a specific state needs based on other state regulations. We can now learn from others mistakes in a way. I love helping states with new regulations and plan on doing more of this as the industry grows.

What is one thing you’d like the cannabis industry to understand about the need for regulatory compliance?

Stuck: I think most of them understand the importance of compliance to a degree, but many don’t understand that putting a compliance plan in place takes time and effort from the company and staff. Many companies think they have a good compliance program in place until something goes wrong, and then they pay for it, usually through fines, recalls, disposals, or loss of licenses. You have to be proactive and preventative when it comes to compliance. Having regular compliance audits from a third party is the best way to do this or becoming certified to a standard is another great way to stay compliant. Be ahead of the game so you aren’t surprised. I’m always amazed when an owner tells me how compliant their facility is until we conduct an audit. Owners aren’t compliance experts; they are experts on how to run a business. I recommend finding consultants that can write documentation and train your staff correctly from the beginning, because you aren’t always going to know what is compliant and what is not, and that’s okay as long as you put a compliance system in place that will.

What do you hope to see happen in the cannabis, hemp, and psychedelic markets in the next 3-5 years from a regulatory standpoint?

Stuck: I can’t wait to see the new THC cannabis regulations for some of the new states coming online this next year, like New York for instance. I love that it’s finally getting to the East Coast. Also, hoping to see safe banking and federal legalization eventually. Hopefully it is done the right way that doesn’t crush the already existing industry and help us run our businesses like any other business in the US.

I would like to see some regulations from the FDA for the CBD and hemp side of the industry. We have been without guidance for years now, and it’s becoming really frustrating for consumers and companies alike. It’s uncomfortable to not know what you can and can’t do.

I’m looking forward to seeing Oregon have a regulated psylocibin therapeutic market and how it will be beneficial to patients. It’s going to be interesting to see all the different moving regulatory parts that will need to exist. I am also hoping to see other states follow suit when they see positive change in Oregon.

We’re excited to announce a regular blog from you starting in the next month. Can you tell our readers what they can expect to learn each month?

Stuck: I am excited to be writing a blog regularly for Cannabis Science and Technology! I will be writing every month regarding compliance issues or topics that I am seeing in the industry. I want to help the cannabis industry be aware of different hurdles and compliance pitfalls that they might encounter and how to avoid them. Many of my topics will be encouraging thoughtfulness when it comes to regulatory compliance, product safety, worker safety, and psychedelic therapy.

Is there anything else you’d like to add?

Stuck: If anyone would like to learn more about me or Allay Consulting, be sure to visit our website at www.allayconsulting.com . If there are topics you are interested in and want to hear my opinion about just let me know in our contact us form.