Papa & Barkley wanted to be poked and prodded.
No, this isn’t a reminiscence from a consensual Folsom Street Fair encounter but the regulatory philosophy for one of the cannabis industry’s leading balms. When Papa & Barkley elected to make the city of Eureka their home, they decided their best shot at longevity was to be proactive.
While many companies might have made efforts to limit their contact with state regulators, Papa & Barkley welcomed them with open arms.
“We told the city that we’d be their guinea pig,” Chief Compliance Officer Jon O’Connor explains. “We told them to come in as often as they wanted. We told them to poke at us. We said we’d work with them because we felt it was important to demystify the process and to show them what we were doing.”
In the larger narrative of the cannabis industry, state regulators have often been made out as boogeymen — enforcers of the law eager to uphold the latest version of the rules, however impractical they may be. As changes to requirements for packaging, testing, or tracking within the industry are announced, many cannabis companies have found themselves in a race against the clock to adhere to new compliance deadlines.
In the midst of this mayhem, Papa & Barkley decided the best course of action would be to help regulators as much as possible. Once the company had a research and manufacturing license, it started to offer tours of their facility to local officials, regulators, and staffers.
“Even before we had applications to file with the [Bureau of Cannabis Control] or the California Department of Public Health,” O’Connor says, “we were hosting tours of people from Sacramento — 15 to 20 people at a time. We’d put them in lab coats and send them in.”
The results speak for themselves.
At a time when numerous businesses in the Emerald Triangle fear for their future thanks to expiring temporary licenses and a massive backlog from the BCC on permanent license approvals, Papa & Barkley aren’t pushing the panic button. Of their seven state licenses, six are either permanent or provisional, meaning they won’t be subject to the great culling currently occurring as smaller (or less prepared) companies find their licenses expiring and must consider halting operations.
Indeed, many of the small businesses in the cannabis trade — especially in cultivation — simply don’t have the resources for an O’Connor. While he now has a staff of two working alongside him, his tenure as Papa & Barkley’s sole staff member focused on compliance is still a luxury many operations can’t afford.
“I really feel for the small mom-and-pop operators,” O’Connor concedes. “It’s a lot of paperwork and a lot of work for them.”
As part of O’Connor’s efforts to keep Papa & Barkley compliant, he estimates that he speaks with every relevant regulatory agency three to five times a week. Such efforts may seem excessive, but part of the reason for such constant contact is the simple fact that regulators are learning about the cannabis industry at the same rate as everyone else.
“They’re confused about all the things we’re confused about as well,” O’Connor says. “We’re all in the same place. Regulators really are trying their best. They don’t have the answers, but if they’re trying to find the answers, we can help.”
At the moment, numerous cannabis companies facing the licensing crunch are trying to decide what their best course of action will be. Is it to continue operating outside of compliance until their permanent license is approved or do they shutter their doors and hope they have the funds to weather the storm until they’re cleared to resume business?
O’Connor’s advice is simple: Pick up the phone.
“I think my advice for the industry is to talk to as many regulators and local officials as you can, as often as you can. Also, take a step back and see what you can do for your community. How can you influence positive change? All of these licenses go back to local municipalities and jurisdictions, so, if you’re doing good for your community, whoever’s in charge of cannabis locally will make sure your business sticks around.”
The option to be contentious is also available, although in O’Connor’s estimation, such tactics are about as effective as yelling at a bank teller because you’re displeased with Wells Fargo’s business policies.
Regulators have a checklist, O’Connor says. “If you have a conversation with them about why that checklist is bad, they have no power or influence as far as getting it changed. Our approach is to be extremely transparent with state regulators and to be extremely proactive with them as well.”