In the latest episode of the Cannacurio Podcast from Cannabiz Media, my co-host, Amanda Guerrero, and I discuss Virginia hemp licenses and regulations, new license data coming from California, Washington, Florida and Alberta, Canada, and more. We also speak with Kim Stuck, the founder of Allay Consulting, a seed-to-sale cannabis and hemp compliance consulting company.

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Cannacurio Podcast Episode 17 Transcript

Amanda Guerrero: Welcome to the Cannacurio podcast powered by Cannabiz Media. We are your hosts, Amanda Guerrero and Ed Keating. On today's show, we're joined by Kim Stuck, the founder of Allay Consulting. Kim is a long time cannabis industry veteran and a Jill of all trades. She is the cannabis hemp compliance expert, and we are so excited to have her on the show today.

But as always, before we jump in with Kim, let's see what new updates Ed has for us today from the data vault. Ed.

‍Ed Keating: Thanks, Amanda. So I was recently working on a blog post about some Virginia hemp dealer licenses that we have in the app. And as I often do, I went back to the application that they need to fill out to get that license, because you can always find a lot of things about which direction the regulator wants to head in. And I was a little startled to find like three specific points that they put in there to sort of warn license holders.

The first is the Department of Agriculture in Virginia will forward a record of each dealer registration to the local law enforcement officer, the chief law enforcement officer. In addition, they'll notify the Superintendent of State Police about all the locations of all the industrial hemp dealerships. And then finally, the Commissioner of Agriculture may advise the Superintendent of State Police or local law enforcement whenever a dealer deals any cannabis with a concentration of THC that is essentially hot hemp, greater than 0.03%.

So I think it's terrific that we have Kim here today, since she's a compliance expert to help us navigate through this and other things that we may find in the data vault.

‍Amanda Guerrero: Yeah, that seems so specific. And especially with the law enforcement, I wonder if that's common, and I'm so excited to get her perspective on this. Thank you for that update, Ed.

Today, we're joined by Kim Stuck the founder of Allay Consulting. Kim, welcome to the show. Thanks so much for joining us.

‍Kim Stuck: Yeah. Thank you so much, Amanda.

‍Amanda Guerrero: Of course. We're so, so happy to have you on the show. You know, I've known you for quite some time here, just because I'm local to the Colorado market, but I'd love it if you could share just a little bit more about yourself with our audience. How did you start Allay and how'd you get involved in the industry?

‍Kim Stuck: Yeah, so previously I worked for DDPHE, which is like the Denver local health department. I was a restaurant health inspector and then cannabis became legal while I was there, recreationally legal, so this was, I think, 2014. And they needed a team to take on cannabis and actually regulate it the way FDA would regulate it, making sure that edibles and tinctures and things like that were actually safe for human consumption and just make sure that those kitchens were running at a standard that wasn't going to poison anybody or hurt anybody or make anybody sick.

So it was a really cool opportunity for me and I absolutely loved it. I got to really crash course and learn a whole lot from the industry while I was a regulator.

And then in 2017, after much thought and prep, I decided to start my own consulting company. I just felt that I could do a whole lot more for the industry. I kind of fell in love with the industry. I absolutely love my industry so much and the people in it. And I just realized that I could do a lot more good for the industry as a whole if I was not a regulator and doing more for them. So it was really exciting.

‍Amanda Guerrero: Yeah. I agree. You have such a very interesting background that gives you such a key insights into how to actually help these businesses.

And before the break, Ed and I were discussing the Virginia hemp, language that was added to this bill, and we'd love to kind of get your perspective. It seems odd to me that the program is spelled out so clearly, especially regarding law enforcement involvement. Is that common for hemp programs that you've seen or worked with over the last few years?

‍Kim Stuck: Yeah. So this particular writing isn't in a whole lot of other states, but it makes sense. So you have to think about, we're in this industry and we understand this industry. We understand that hemp growers are not trying to grow THC. They are really trying to grow whatever they're trying to do. Usually high CBD, high CBG, high CBN, those kinds of things are really what they're selling along with textiles and hemp cream and things like that. When you come from outside of the industry and from a more biased perspective, because for years and years and years, all of these people have been told that cannabis is just going to ruin our society and it's terrible for people and THC is very demonized.

And so they're really afraid that hemp growers are going to grow a high THC plant and sell it on the black market. And I think that that's really where these regulations come from. So they're just essentially telling growers, if you're going to grow something that is outside of what you are allowed to grow, the police will know about it. The local law enforcement.

And that's their way of just making sure that nobody is going to be doing anything that isn't above board. I don't think it's necessary by any means. Most people in the industry are like, “That's ridiculous,” but most of our hemp growers are doing a good job of keeping those numbers down and should be okay.

‍Ed Keating: Yeah. I mean, the way I look at it is - somewhat similar - is that the regulator is communicating very clearly how they want to regulate this crop and it may come across heavy-handed, but it's not ambiguous. So, if you think about the regulator and the hemp farmers, it's really a transaction essentially between the two and this is how they want to just make sure that it's clear.

So, yeah. And it'll be interesting to see how that plays out. I don't imagine we're going to see a lot of violations in that state, but I might be wrong.

‍Kim Stuck: Yeah, things happen. No, it's okay. Sometimes things happen. I hope that there won't be any violations, and then knowing where hemp growers are at, that's pretty common. So even in Colorado, the local police office and different state regulators, they all speak to each other. And so they all know where the addresses are of all of the MIPS in Denver or in Colorado. And that's really common, but that list isn't usually shared with the entire world. It's usually just internal agency, just so everybody knows.

‍Ed Keating: That makes sense. That makes sense. Now I'm just taking a step back in terms of compliance consulting, how do you define it? Because compliance can be really, really broad. And who do you work with? Is it people who have a license? They're trying to get a license, people who may have lost the license. How do you define your market?

‍Kim Stuck: Yeah. So you're absolutely right. Compliance is a word that could mean financial compliance or whatever. HR compliance. We don't do any of that. We really stick with what we know. So when we say compliance, we're thinking more of a federal level of compliance with cannabis. So FDA, OSHA, fire code, we also do GMP certification assistance and ISO certification assistance.

So really what Allay Consulting does is health and safety, QA for product. And then obviously, worker safety because OSHA, as I'm sure you know, can fine very heavily, and you want to take care of your workers. So it's a really important thing that is starting to be really common.

‍Ed Keating: So in terms of those specific types of regulators that you work with, as I remember from my days in publishing, certain states can go above and beyond what the FDA says. That's usually the baseline for OSHA, sorry, OSHA. It's like the state of Washington, if I remember, has a rather comprehensive safety set of rules. So do you have to manage that as well, in addition to the sort of standard OSHA regs?

‍Kim Stuck: Yeah, absolutely. So each of our clients is in a different state. I think we're in 19 different states at this point, and we can work in all 50. So we usually work towards that baseline OSHA standard.

Most of our clients don't have anything implemented when we first walk in. So we usually go to that OSHA standard when we're working with worker safety and then whatever their state standards are, if there's more needed, then we will help them get to that point as well.

‍Ed Keating: Oh, that makes sense. That makes sense. So, one question I had that came to mind now that we're still sadly in this COVID situation is, is a lot of your work onsite and if so, what has that been like in terms of COVID?

‍Kim Stuck: Yeah, that's been interesting, but honestly, we are only based in two States right now, or our "offices" are in two states right now. And we work in all these other states. So usually if somebody wants a one-time audit, we do like to be on-site. That's the preferred method, obviously, but once COVID hit, I really care about my team. I don't want them getting sick, and I would hate to be the person that goes in and gets everybody's sick in one of our client's facilities.

So we started doing virtual audits, and essentially, we use Skype or FaceTime or something like that. And they walk us through the facility and we do the same thing. We write a report, all of our other stuff that we do though, we create documentation, SOPs, HASSOP plans. We do safety plans, hazard communication plans. All of that we've really worked out to do remotely because we're not only focused on, “Hey, these are the things we can do,” but we also want to limit the amount of money that our clients have to pay. I mean, we don't want to have to fly out all the time because that can get really expensive.

So we've worked a really good system where we can do most of what we do remotely. And so that really worked when COVID happened. Almost nothing changed except for those onsite audits, and now we're just doing them virtually if we can.

‍Ed Keating: Got it. That makes sense. That makes sense. Now, in terms of regulators, you listed a lot that you cover. You have the certification for all that, but I'm sure our listeners would like to know, what are the most common problems that you're asked to solve. I mean, you've got clients in 19 different states with 19 sets of rules and regulations, but what's the overlap like?

‍Kim Stuck: Yeah. So I mean, for the most part with our stuff, FDA and OSHA, those are federal regulations. So people, a lot of the THC cannabis clients that we have, because we also work with the hemp cannabis clients and they're becoming federally legal. So hemp has to start worrying about FDA and OSHA very, very soon. And if they get in compliance with, 111 or 117 CFR for FDA, they're going to be in really good shape when those regulations start coming out because the FDA is not going to reinvent the wheel and dah, dah, dah. So right now that's for the hemp side, they're all calling us because they want to get in compliance before the FDA and OSHA starts knocking on their door.

For the THC side, I feel like a lot of people are really interested in the certifications, GMP and ISO certifications. They look really good when a facility does that. With THC, they're only statewide, they're not going federal yet, so it looks really good when they are getting compliant with those federal standards and can put, “We're GMP certified,” on our website and all this stuff. So it's almost they're a little more about marketing whereas the hemp side right now is a little more about, “We just want to make sure we're in compliance so we can keep the doors open when all this comes to fruition.”

‍Ed Keating: And with those GMP certifications, those ones that are sort of more nationally recognized or even internationally, does that position some of these, like on a hemp side, these cultivators to be in the right space for like an export license at some point, like they're seeing it as a way to sort of expand their marketplace.

‍Kim Stuck: Yeah, absolutely. In fact, we already have clients that won't buy oil or plant matter from anybody that isn't GMP certified just because they want a GMP certified product, and they want to make sure that everything that they're putting into their facility is to that same standard.

We don't have a lot of growers that are GMP certified yet, but we're working on it. Some of them are coming through, but mostly manufacturers are concerned about it. GMP is kind of the base level of certification. Most people who have ISO 22000 and 9001, those are the ones that can export eventually.

I mean, obviously right now, things are kind of up in the air, but eventually it will be a global market. And those are the certifications you want to go for, if that's what your goal is.

‍Ed Keating: So with the FDA coming in and with your background in food and that type of compliance, I'm curious how the regulatory framework, through your eyes, through your prism, is similar or different to other things that you've dealt with. Like, “Oh, they're handling this just like they did Echinacea. That's the route that CBD is going to go down.” Are they getting to that point yet, or is it still a lot of new regulations and stuff that you haven't seen in other places before?

‍Kim Stuck: Yeah, no, definitely. So what we did in the city when I was a regulator was we took already existing regulations and applied them to the cannabis industry. Obviously, we ran into a lot of things that are very different from every other industry that there is because cannabis is very unique in itself. The way extraction works, the way the plant needs to be handled. With oranges, you can take the oranges and wash them before processing or doing something with it. With cannabis plant, you can't do that. So you have to put things in place. I mean, that's just an example.

Food safety is food safety. I think that what they're going to do eventually is apply many of the already existing food safety regulations to the cannabis industry, and then, maybe have a small chapter that is just cannabis that will take care of some of all the issues that we're finding that are different from other industries.

‍Ed Keating: Yeah. I mean, that makes a lot of sense. I know a few years ago we wrote a book on sort of all the compliance data that we learned in looking at all the states as we gather data. And as I looked at a lot of the advertising regulations, I realized that they just sort of took it out of another playbook. I mean, they just sort of erased it and put in cannabis and they were just trying to protect children and youth from advertising they shouldn't see, and we see that in other places. So it seems like the regulators are pretty savvy about that. You don't need to always reinvent the wheel.

The last question I wanted to ask, at least for this segment, is kind of a case study. So one of the things that Cannabiz Media does is gather news about the 100,000 plus licenses we have in the database.

And we tie it back to whatever company might've been in the news. And about two weeks ago, we reported that an Oklahoma-based company called Moon Mix was asked to shut down and was fined over half a million dollars by the Oklahoma Medical Marijuana Authority. Apparently they had products that tested way above the legal pesticide limits. And the regulator said that these guys hadn't tested and on 15 occasions had bought marijuana without first obtaining test results, so they got shut down. So if Moon Mix had been your client before this, not after, before, how would you advise them so that they didn't fall into this really bad situation of potentially losing their license?

‍Kim Stuck: Yeah. So I've seen this a whole lot. In fact, I was part of most of the investigations in Denver, Colorado that resulted in recalls due to pesticide contamination because that was one of the things that we ran into that honestly, in the beginning, we didn't even think about, because that's very different than an apple plant or an apple tree or something like that, these pesticides being used and them being dangerous to public health. And so this is really common.

We have a very strict testing rule. We actually implement into our client's facilities exactly what they should be testing. We have manager approval for every single time a COA comes in and nothing can be used unless that COA is actually correct and there with the product. This sounds like a case of, “Hey guys, we want to save some money because testing is very expensive or maybe it just fell through the cracks.”

Testing is definitely hard to do because it is expensive, and sometimes if you're not managed correctly or don't have a good batch number system to track and trace everything, that's when you run into issues. So we like to implement those kinds of things right away and that kind of thing.

And a COA is essentially just the testing results. It's really important that we have those and have them and keep them for a really long time. So we can have all of our clients keep all of their COAs for a really long time.

‍Amanda Guerrero: That's actually perfect because Ed and I we're just slacking each other wondering what does COA stand for? So thank you. Thank you for clarifying that Kim. Now, in terms of Allay bigger picture here, you guys recently opened up a new office in Oregon. Why Oregon and any plans for other state expansion this year?

‍Kim Stuck: Yeah. I mean, it's, it stands for Certificate of Analysis. I apologize. I should have just said that, but yeah, it's just the testing results is what a COA is. Yeah.

So Oregon, well, personally I love Oregon and was flying there fairly often because we have several clients out there. It's a huge, huge market for the hemp side of things. In fact, they have more hemp per capita in Oregon than anywhere else in the United States. And we were seeing a lot of trends of people not understanding the regulations or what's coming forward or not being ready for the storm that's coming. And so we, as a team, made a decision to expand to Oregon.

And I actually personally moved there because I was kind of trying to find an excuse to move there anyway. And it really worked out. So now we're out there. So our clients don't have to pay as much to fly us out to go to on-sites out there.

I'm not sure if we're going to continue to expand to different states and actually have locations. Obviously, since I've been out there since December, I've been pretty much just working from home because of COVID, but it's a really good market for us. We really love the state. There's a whole lot of people out there that needs help and stuff like that, just like every other state, but trying to position ourselves to make it easier for our clients and less expensive for our clients to see us more often is always a goal of ours.

‍Amanda Guerrero: Yeah. Understood. And Oregon is such a gorgeous place. I can definitely empathize as to why you'd want to move there. I do love Denver, Colorado. I am kind of biased. But as a current user, what would you say is your favorite feature of the Cannabiz Media platform?

‍Kim Stuck: Yeah, so we have a sales representative that usually is the one that's in there. I kind of leave stuff to him and he kind of tweaks around, but what I really like is the email templates. They're actually really easy to put together and you can really cater to whatever audience you're talking to.

You know, you can check a box that says, this is for THC cannabis people that are only doing manufacturing, and we can send an email to them that is about GMP, where they should be really focused on food safety or food safety plans or Kappa plans, which those are coming up, especially in Colorado, they're going to be required on the first of next year. So, we were kind of doing a push for Kappa plans trying to get those in. But yeah, I mean, I just really like how you can cater your message to the people that you want to reach out to.

‍Amanda Guerrero: Absolutely. And we'll definitely keep you updated because we'll actually be updating a bunch of records with individual violation recalls within the platforms. So I'd definitely stay tuned for that.

‍Ed Keating: Yeah. So right now I think we probably have 4,500 violations stored in the system, a lot from Washington. They do the best in terms of sharing that. Alaska also does a pretty good job. Other states, you have to ask for them or you'll never see them, so they're a little bit harder to get, but still often informative, and it's always interesting to see how big those dollars are on some of the fines.

But one of the last questions I have is looking ahead. So we have an election less than a hundred days away in November, and a number of states are contemplating med and or rec programs. And I'm just curious if there's anything on your radar yet. Like, is it too early because you haven't seen the regs or any thoughts as you look forward to these a handful of states or so that may be adding it as part of their regulatory infrastructure?

‍Kim Stuck: Well, I mean, I kind of think that cannabis is like Pandora's box. Every single election time that comes up every year, new states are going to come on board. I mean, they're looking at states like California and Oregon and Nevada and Colorado, obviously, that are making a lot of tax money and doing really great things for their state. And right now, the economic hardships that were going through were completely unseen with COVID and everything. I wouldn't be surprised if a whole bunch of states came online and started to legalize it because it's a really great way to get that economy back going and to get more tax money, instead of not bringing in as much because people are unemployed and things like that. I think it's a good alternative and I think it's a great time to do it.

Eventually it will be federally legal, as I've already said. One by one, each state is kind of legalizing and eventually the federal government will also jump on the bandwagon and get it done. It's just a matter of time and you just never know how long it's going to take.

‍Amanda Guerrero: Yeah, absolutely. Only time will tell come November, but thank you so much for joining us on today's show, Kim. It was a pleasure getting to know more about the kind of new age of GMP and FDA, OSHA certifications coming into the cannabis and hemp sector. And we really do appreciate your time today.

‍Kim Stuck: Yeah. Thank you so much for having me.

‍Amanda Guerrero: Of course. All right, Ed, let's take a look ahead. What updates do we have to look forward to coming from the data vault?

‍Ed Keating: So right now we've got a lot of updates coming. So the states that we're looking at now include California, where the CDPH has just responded to our request for updated information. They had been one of the regulators that had shut down a lot of their public information. So we've got a whole new batch of that coming in.

Also, Alberta, up in Canada, has changed how they disseminate information. It used to be the information would appear and then disappear after two weeks, made it really hard to stay on top of. So they've changed that. So we're updating that.

We also have updates coming in for Washington cannabis. And then on the hemp side, we got new information back from both Florida and we have additional hemp information coming in from Virginia too that'll include cultivators as well as processors.

‍Amanda Guerrero: Wow. Lots of updates coming from North America looks like. Thanks for the update, Ed.

Everyone, thank you so much for joining us on today's podcast. We're your hosts, Amanda Guerrero and Ed Keating. Stay tuned for more updates from the data vault.