Head Magazine was looking forward to attending the National Cannabis Industry Association (NCIA) Southern California Social, which took place on the rooftop of the very cool Andaz West Hollywood Hotel in Los Angeles. This was our first event with NCIA and it did not disappoint.
The attendees represented many areas of the industry and were of all ages and backgrounds. This eclectic group kept the place humming.
Everyone was super friendly, valuing the opportunity to meet others in the industry to see if there were ways to help each other, or just to have fun with people in the same field. The hors d’oeuvres were yummy and there was a bar for those who wanted to partake. The fee to attend was a reasonable $50 for non-members and $75 on the day of the event
The National Cannabis Industry Association is the largest trade association representing legal cannabis businesses in the United States and is the only one working to advance the industry on a national level.
There are a myriad of ways they help service the budding and burgeoning small to midsize cannabis entrepreneur. There are webinars on a variety of topics ranging from tips on raising capital to state-by-state governmental regulations and much more.
They have a Cannabis Caucus series with experts and regular podcasts covering all kinds of interesting topics. And, of course, there are the meet and greet socials in cities across the country, including New York, Miami, Boston, Denver and Washington, DC, among others. See the schedule here.
NCIA also has a potent Political Action Committee (PAC) that supports candidates who support the laws and positions that are vital to the future of cannabis and its associated legal industries. The value of a well organized and active PAC can not be overstated in the cannabis industry.
A major event is the upcoming 11th Annual Lobby Days taking place May 16-18, in Washington DC where many members gather and meet with lawmakers to advocate for issues important to NCIA members.
In order to make this event meaningful and successful, NCIA offers participants online training before the event so they can make the most of their meetings with governmental allies. There will also be opening and closing receptions to take advantage of networking opportunities with fellow entrepreneurs from all over the country.
As the cannabis industry grows and huge players enter the business, who is looking out for the small to mid–size entrepreneurs?
That was the impetus to forming the National Cannabis Industry Association according to Aaron Smith, Co-Founder and Chief Executive Officer of NCIA. Aaron had the vision and saw the need in 2010.
Following is a wide-ranging conversation with Aaron Smith and Head Magazine Editor and Publisher Charlotte Parker, covering many topics including how NCIA started, upcoming legislative and business and challenges, and the future of the industry.
Charlotte: Hi, Aaron. Thank you for joining us today at Head Magazine.
Aaron: Hi, Charlotte. Thanks for having me.
Charlotte: Tell us about the National Cannabis Industry Association.
Aaron: NCIA is the industry’s trade association that represents small businesses in cannabis across the country. We started NCIA back in 2010, believe it or not. That was a time before a lot of people were talking about the industry. Just having seen the opportunity to really build an industry when we were on the precipice of Colorado and Washington about to enact laws.
We started NCIA to represent the business interests of, at that time, medical cannabis operations and now, of course, we’ve expanded to adult use. Our members comprised not just retailers, our cultivators, manufacturers, the plant-touching businesses but the myriad of ancillary products and services in the industry. Really anything you can think of in the cannabis space. We’re proud to represent them in Washington, DC, with a full-time team of lobbyists.
Charlotte: What is the mission of the NCIA?
Aaron: The mission is to advance a responsible and sustainable and inclusive cannabis industry. Really what that means on a day-to-day is that we have a lobbying team in DC that is educating lawmakers and regulators and policymakers on the issues affecting our industry.
Some of the big issues for us are fixing the banking problem so that cannabis businesses have access to the financial system like any other. Reforming 280E of the tax code, which is a provision that really cripples our industry when they’re paying effectively on their gross receipts federal income taxes. Then, of course, de-scheduling cannabis, removing it from the list of controlled substances, and legalizing it coast to coast.
Charlotte: Let me get back to that. I have some questions for you about the legalization situation, but what are the benefits of being a member of the NCIA?
Aaron: First and foremost, the benefit is you have the assurance that you have a representative in the nation’s halls of power. Every industry has associations working on their behalf. There are thousands and thousands of lobbyists in DC, and if not for our members, NCIA would not exist.
We are the only organization that represents small cannabis businesses. That’s number one. Number two is we have a myriad of ROI, benefits that provide direct ROI such as access to events that are free for members.
Educational opportunities that help promote best practices for members, access to exclusive data, industry data, and metrics through our website, through BDSA’s platform, and a listing in our member directory so that members can find one another. It’s a place where those in the industry go looking for products and services from the most forward-thinking. I like to think the most forward-thinking folks in the industry are those who are invested in the policy reforms that are going to make our industry viable long term.
Charlotte: I know you have a lot of events. What are some of the events that you have coming up?
Aaron: We have a series of industry social events, which are casual evening events that bring our members together to connect with one another, hear about what we’re doing. We have a series of those coming up in cities like New York and Miami and Chicago and Seattle, Denver, and a few others in the coming months. The event I’m really excited about is our 11th annual cannabis industry lobby days coming up May 16th through 18th in Washington, DC.
This is an event like no other event in cannabis. It’s more of an experience than an event. It’s an opportunity for our members to come out to the nation’s capital for two days. We set up meetings with members of Congress and their staff. We keep them very busy for two days going across the capital complex, meeting with various members of Congress, talking about the issues that affect them in their day-to-day lives.
Our lobbyists are there, talking on behalf of the industry and our members every day. It’s really powerful when they once in a while can actually hear from the people directly affected by federal policy. That’s what lobby days is about.
It’s also a great way for members to come together and meet people from across the country that have similar concerns and interests in a really unique experience where you’re working together toward a common goal. We have some fun evening events happening during the two days as well, but it’s so much more than that.
Charlotte: Sounds wonderful. I can tell you that I attended the Los Angeles Social, and it was a wonderful experience. It had such a good vibe and everybody there was completely interested in networking. They were open and friendly and there were people of all ages and all backgrounds. It was just really one of the best events I’ve been to in a long, long time.
What prompted you to start this organization in 2010? What was going on in Aaron’s mind that had you do that?
Aaron: I’d been working in the cannabis reform space for Marijuana Policy Project at that time for about five years of MPP and doing some other work before that. I’ve been working on this issue and just started seeing different issues emerge that in the early days, it was just make it legal and don’t put people behind bars anymore. That was how simple the message was before we got to a point where there were actually regulations for how marijuana legalization looked in any state.
As time went on, California had a number of medical cannabis collectives that were operating effectively like businesses in their state. Colorado had just, I think in 2009, had just implemented a law that allowed for-profit medical marijuana operations to develop in that state.
What we started seeing where there were just issues that the traditional advocacy groups weren’t as interested in working on like the tax code and how it affects marijuana businesses or access to the banking services and how that affects marijuana businesses.
The other organizations were doing great work then and continue to do great work now, but those were niche issues that were more important to the business side of the whole cannabis ecosystem.
That ecosystem is growing and the business side was growing and growing really rapidly. We were seeing that it was going to, very rapidly in the future. There was really just a vacuum. There was nobody there to represent all these businesses on the national scale and so we, we being me, and our partner at the time, Steve Fox, who also is the co-founder of NCIA decided to break off and do this organization.
We brought probably 18 or 20 top industry people together to form the first board and these folks from all over the country and just grew from there.
Charlotte: What’s your background? Tell me a little bit about yourself, your history.
Aaron: I’ve been working in cannabis reform pretty much my whole adult life. I got arrested for possession of cannabis when I was about 17 years old, so I wasn’t even an adult yet. That shaped my thinking on the war on drugs and the role of government in our personal lives. It was a violent situation with the officer. That led me to, in college, started looking into various political movements. Libertarianism for one was one thing back in my early optimistic days. At that time also, Prop 15 was on the ballot in California since the late ’90s.
The Medical Marijuana Initiative had some exposure to that, but it plugged into work from organizations like normal Marijuana Policy Project first as a volunteer and then ultimately ended up working on this professionally as a organizer and a lobbyist in California, working on improving the medical marijuana law at that time as well as doing some initial push for legalization before starting NCIA.
Charlotte: Very cool. I see that you go also state by state, not just federally, but you go about the various states with cannabis entrepreneurs. What is your focus in the various states?
Aaron: We’re not doing any lobbying in the states. We’re lobbying in Washington, DC, but we have committees that are made up of members from all across the country that help to promote best practices uniform regulations in the states.
We work with an organization called CANNRA, which is the Cannabis Regulators Association. They’re like us, but they represent regulators. We work with them to the extent that we can, to advance uniformity in the laws so that you don’t have labels for the same product that look different in every single state. It’s a difficult enough economic time and industry to be in without having those issues.
Then, of course, we will advocate for, encourage states that have already moved to legalization to advocate for themselves on the federal level so that we can finally get federal legalization. Which to me, a big part of that is going to mean interstate commerce and ensuring that places like California and Oregon can become national leaders and exporters of cannabis, outdoor-grown cannabis into states where there’s supply problems even now. That’s the long game there.
Charlotte: I want to ask you about that. Are you concerned about federal legalization? In other words, it might stop the various situations going on in the states. Are you concerned about the equivalent of big pharma and big tobacco taking over? Because the whole focus of the NCIA is the medium to small entrepreneurs. Is there a concern about actual legalization as opposed to decriminalization?
Aaron: Yes, I’m glad you asked that. It is a concern. If we don’t do this right, this industry could evaporate and be co-opted by big pharma or maybe big alcohol. I’m under no illusion that under any circumstances, alcohol and pharma will have a place here.
Charlotte: Oh, clearly, but the fear is that they’ll just take it over.
Aaron: Right now, those are the conversations that are happening in Congress early on. We’re not going to pass legalization in the next year or two. It’s not going to happen. But in the next five years, I think we may. It’s really important that members of Congress understand this. Many of them are understanding this concern in that if you,– for example, one thing we oppose is re-scheduling.
Charlotte: You do have to get it off of Schedule I.
Aaron: Getting it down to Schedule 2 or 3 would arguably could almost be worse because it would open the door for pharma and nobody else.
Charlotte: I see what you’re saying.
Aaron: I’m hopeful that there’s been enough progress in the states ahead of the federal government, that the odds of that– every day that goes by and every state that comes online with a new law, the odds of just the rescheduling as an attempted fix become lower and lower.
It’s still a concern, but we make sure that I think certainly on the Democratic side of the aisle, I think there’s a really pretty deep understanding by now that rescheduling isn’t the answer and that it won’t fix the state-federal conflict. That’s what is a big concern is all of these states have already implemented these laws, created these industries.
They’re dependent on the stream of tax revenue from these industries that they’ve created. Doing rescheduling would not only not resolve the conflict with federal law, it will present additional conflicts.
Charlotte: What is the best possible outcome for the medium? What should be done with the scheduling?
Aaron: We think it should be removed from the list of the scheduling altogether. Various cannabis products should be regulated appropriately. We have a white paper we put out. We recommend four federal regulatory lanes.
One of them would be pharmaceutical products created by pharma that go through the FDA trials like any other pharmaceutical. That’s one. That’s perfectly fine, like Epidiolex and that path. Then you would have psychoactive cannabinoids, which would be your edible products, your flower, your vape products that are found in dispensaries, those should be treated more comparably to alcohol.
We recommend that be regulated by the TTB, which is the Tobacco Tax and Trade Bureau at the federal level. Then you have products like cosmetics and topicals and non-psychoactive consumables, and those should be regulated by the FDA, but in a manner more like nutraceuticals or cosmetics in the case of those.
Charlotte: Tell me a little bit more about your PAC.
Aaron: We have a political action committee, the NCIA PAC. The PAC supports candidates for federal office that support the industry. I think this is the number one thing that the industry really needs to understand is that we can’t just sit on the sidelines and expect good things to happen in Congress because it takes a lot to get anything to move in Congress. We’ve seen that.
Look how hard it is to get infrastructure passed or bills that you would think or the debt ceiling and all these things that have nothing to do with cannabis that you would think would be a no-brainer. It’s hard to get anything done. It takes a lot of resources and a lot of effort.
It takes having political influence and ensuring that our friends are getting elected and re-elected to Congress, friends of this industry. The PAC does this, anyone who’s a member of NCIA can donate to the PAC, and then those donations get passed along to members of Congress and candidates for Congress that are supportive of our issues.to I think that that’s just one component.
Another thing people need to do is understand that they should be contributing directly to candidates that support the industry. They should be showing up to events, making their voice heard. Of course, be a member of the association.
There are so many other things that industry leaders need to be doing if they’re truly going to be invested in this industry. Every other industry does it. It’s sometimes baffling to me, it seems like this industry is less politically involved than most, even though we have the most to lose and the most on the line. The industry, by the way, is illegal still.
Charlotte: What is the temperature among the politicians? Are there champions for this?
Charlotte: Who are they?
Aaron: There’s a growing list of champions. We’ve got some of them, somebody like Congressman Blumenauer from Oregon has been carrying this issue for decades. He’s one of the biggest champions on the Democratic side, along with California’s Barbara Lee. Many of the Democrats have really also moved into the champion category in recent years. On the Senate side, you have Cory Booker, you have Chuck Schumer, who’s the Senate Majority Leader himself, introduced a really comprehensive cannabis reform bill last year. I would consider him to be even a champion at this point.
On the Republican side, there aren’t as many, but this still is a bipartisan issue in that we have far fewer opponents on the Republican side. We also have champions like Nancy Mace, who’s advocated for another legalization bill in the House, Congresswoman Mace, and David Joyce, Congressman from Ohio, who’s really been pushing on the banking issue. It really spans both sides.
The one thing I’ve noticed more over the years is not only have we seen more champions, the opposition has really quieted down in that there are still folks in Congress that are going to come out and vote no on anything Cannabis related, but they’re doing it very quietly.
It used to be they’d be lining up to give speeches on the House floor about how Marijuana is going to destroy our country and our youth and the sky is going to fall. You just don’t hear that anymore. You almost don’t hear any word from the opposition because it’s so far out of step with the voters, including Republican voters, who a majority of Republicans support legalization. That to me is really showing where the tipping point is.
Charlotte. I guess in closing, my question would be that in light of the fact that this is coming, what do you think is the best way to protect the lively creativity, and sustainability of the small to medium-sized cannabis entrepreneurs in the face of all of that’s coming?
Aaron: I think, it goes back to having a seat at the table, engaging. I think that right now if you look at who’s lobbying on federal legalization, it’s us, NCIA, which represents hundreds of small businesses. It’s Cresco, it’s GTI and it’s a couple of the very large companies that are also pushing for this. For the small businesses to sit back and think Cresco or GTI and Columbia Care and these large multi-state operators are going to have their best interest in mind would be a big mistake.
It’s really going be important that small businesses continue to not only be part of the association, but to engage politically to make their voice heard in not just the federal level, but the state, local level, because otherwise, they will be railroaded over in favor of larger companies who have– this is America and they have a right to also advocate for themselves politically, but they have a different agenda.
They’re going to be pushing a more protectionist agenda to keep the industry consolidated. We want to see a vibrant industry that’s open to any responsible entrepreneur who has the skill set to succeed in this industry, should be able to succeed in this industry.
Charlotte: There is such a liveliness and creativity in this field. It’s really amazing. I think that the work that you’ve been doing and NCIA is so important. I want to thank you, Aaron Smith, the co-founder and chief executive officer of the National Cannabis Industry Association for joining us here at Head Magazine.
Aaron: Thank you.
Charlotte: Continue the very fine, fine work that you’re doing.
Aaron: Thank you very much.