Navigating the complex world of government regulations can feel like trying to find your way through a dense, ever-changing labyrinth. For cannabis entrepreneurs, this challenge can be particularly daunting, as the rapidly expanding industry often seems to be outpacing the government’s ability to adapt. You’re not alone in feeling this way – many of us have struggled to keep up with the regulatory landscape and find our footing in this budding sector.
But what if we could shine a light to help guide your path through this maze?
That’s why I invite Niccolo De Luca who is a renowned lobbyist in the state of California. He is a personal friend and has helped me through so much. Let’s dive into the intricacies of Assembly Bill 2020 (AB 2020), a game-changing piece of legislation that allows temporary sales of cannabis at special events. We’ll take you behind the scenes and share our personal journey of getting this bill passed – the hurdles we encountered, the strategies we employed, and the lessons we learned along the way.
Whether you’re an aspiring cannabis entrepreneur just starting out or a seasoned industry veteran, this is to equip you with valuable insights into the importance of local government support for bills like AB 2020, as well as actionable strategies you can apply to navigate your own business through the ever-evolving world of cannabis regulations.
Niccolo De Luca’s Journey
Niccolo grew up in Oakland, where he learned the importance of community and civic engagement. He worked at Oakland City Hall for 15 years under three different mayors – Elihu Harris, Jerry Brown, and Ronald Dellums, and gained valuable insights that shaped his approach to advocacy.
Now, Niccolo is a registered state and federal advocate at Townsend Public Affairs, where he works with municipalities. His experience in city government gives him firsthand knowledge of the challenges his clients face. Although he now lives in Sacramento with his family, Niccolo’s Oakland roots remain strong, and he continues to draw upon his experiences there to make a difference in his community.
Advocates vs. Lobbyists
It is essential to differentiate between facts and fiction, romanticism and reality in the cannabis industry – just as it is with advocates or lobbyists. Advocates, who are often preferred over lobbyists, serve as an extension of their clients in Sacramento and Washington, D.C.
They function like staff members, working diligently on the frontlines to navigate bills and legislative issues, tackle regulatory matters, and liaise with the Governor’s administration, Senate, and Assembly – and, of course, their counterparts in Washington, D.C. In essence, this is who Niccolo is and what he brings to the table.
Why Cannabis Businesses Must Retain Lobbyists?
Individuals or businesses often retain lobbyists, or as they prefer to be called, problem solvers, to act as an extension of themselves. Over the past 10-15 years, cities have been hiring advocates to work on, stop, or change legislation, as well as secure funding. When an individual or business has an idea that requires state legislation for clarification or permission, they turn to lobbyists who specialize in various fields such as healthcare, education, or municipal work.
In Niccolo’s case, his work in Oakland and experience with cities like Oakland and Berkeley, which have long-standing cannabis programs, led him to become known as the local government expert who was industry-friendly. He became well-versed in how cities can successfully implement cannabis programs and navigate permits and regulations. His expertise proved invaluable when working on different iterations of bills in collaboration with various stakeholders.
In essence, individuals hire lobbyists to help them solve problems or serve as guides through the complex regulatory and legislative processes.
The Importance of Being the best person to work with
In the early days of cannabis legislation, Assemblymember Tom Ammiano from San Francisco, who was a stand-up comedian before becoming a legislator, was a forward-thinking advocate for cannabis bills. Back then, it was challenging to even get a committee hearing. When Niccolo first approached Ammiano’s office offering help with their cannabis bills, Curtis, one of the staffers, was initially hesitant due to the challenges they had faced with public safety. However, Niccolo reassured them that his work with Oakland and Berkeley aligned with their goals and could contribute positively to the conversation.
This collaboration eventually led to Assemblymember Rob Bonta and the Attorney General pushing for medical cannabis regulations in 2015, before Proposition 64. These regulations aimed to provide clear rules of engagement for cities, allowing them to decide whether or not to participate in the cannabis industry. It also addressed how long-time cultivators and retailers could be grandfathered in if they had city approval.
Niccolo expressed gratitude for the role that cities like Oakland and Berkeley played in pioneering cannabis policy. As early as the 1990s, these cities were focused on ensuring access to medicine for those in need, regardless of their ability to pay. Their commitment to helping people and recognizing the benefits of cannabis has had a lasting impact on the industry.
How Advocates can help you sell weed at Festivals?
According to Niccolo, his team is fortunate to have great clients and long-term relationships built on trust. Elected officials often come up with ideas without knowing the exact legislative details, and Niccolo enjoys talking with people in the field to understand what changes they believe are necessary. The team at Townsend collaborates to refine ideas and identify opportunities for improvement, such as Proposition 64, which was initially silent on special events but offered the potential to support small businesses in the cannabis industry.
When an idea is sufficiently developed, Niccolo approaches friendly offices with great staff, like Assembly Member Bill Quirk’s team. After discussing the concept of special events and ensuring that public safety and a permitting process would be included, Quirk’s team expressed interest. Throughout the process, Niccolo kept key stakeholders informed and worked with other lobbyists, like Amy Jenkins, who represents industry clients.
The objective was to change state law to allow temporary sales at special events if approved by the local jurisdiction. While some people understood the concept immediately, others required more convincing. To pass the bill, two-thirds of the Senate (30 members) and Assembly (60+ members) needed to support it. This meant gaining the backing of both Democrats and Republicans, as well as public safety organizations and the League of Cities.
From the inception of the idea to Governor Brown signing it, the process took ten months, with both high and low moments along the way. The experience demonstrates the hard work and collaboration required to bring about meaningful change in the cannabis industry.
How Niccolo is committed to making changes to Proposition 64
In the early stages, there was a somewhat naive idea about how the process of amending Proposition 64 would unfold. The belief was that if industry leaders took the initiative to make tweaks, others would follow suit and help to improve the legislation. While that didn’t quite happen as envisioned, the industry still has the opportunity to identify specific areas they want to focus on and fight for improvements. If more prominent players adopt this mentality, the cannabis industry will be better off in the long run.
Meanwhile, it was essential to provide support throughout the legislative process. To that end, Blum became the first cannabis sponsor of Outside Lands in 2017, helping festival organizers and sponsors become more comfortable with cannabis involvement. The following year, an education-only event was organized to give legislators a visual representation of what a well-regulated cannabis event could look like. The goal was to dispel outdated stereotypes and demonstrate the potential for an elevated, informative experience that could coexist with events like Outside Lands. This collaboration played a crucial role in helping advance the cause and foster a more supportive environment for the cannabis industry.
The Importance of Support from Cannabis Businesses and Networks
The foresight in demystifying cannabis and removing misconceptions was a valuable tool, especially during the 2015-2018 period when certain perceptions negatively impacted the industry. Fast forward to 2023, people are now more familiar with the industry. What helped during the process was the support from numerous cannabis businesses and the network that was created. Assemblymember Quirk initially had only a few supporters, but with the network’s help, that number grew to 30-40 businesses from various sectors.
These businesses highlighted the economic benefits of the industry, such as increased hotel stays and restaurant visits during music festivals. Legislators began to understand the potential of the cannabis industry, and some cities saw it as a new revenue source after the state removed redevelopment agencies in 2010-2012. However, the taxation on the industry has grown excessive, hindering its potential.
Proposition 64, a voter initiative, had a different process compared to state legislation. Once finalized, it could not be changed unless it went through the legislature. In contrast, state legislation is more flexible, with opportunities for changes throughout the process until the final hearing. This flexibility allows for more give and take, making it easier to address concerns and improve the legislation.
The Challenges Faced by Cannabis Businesses in Obtaining Permits and Navigating Complex Regulations
Tiffany DeWitt provided a clear and articulate explanation of the complex process of applying for permits in cities and the challenges businesses face, such as securing funding, identifying property, and dealing with insurance. The process can set businesses back by two years, both financially and timewise, before they even deal with the state.
A cannabis manager for a municipality compared the scrutiny faced by cannabis businesses to that of coffee shops, which don’t have to undergo the same level of examination despite being in similar retail zones. Legislators may not have fully grasped the intricacies of the process and the bureaucratic steps involved, given that they have to review around 2,000 different bills a year. However, there seems to be a growing appetite to help small businesses and address the issues that have led to some businesses closing all their California locations.
The Government
Unfortunately, government tends to lag behind, which means businesses often have to drag them along in order to create change. The slow pace of government can lead to the demise of many businesses before any necessary adjustments are made. As a result, more businesses may shutter or turn to the black market, ultimately undermining the government’s objectives.
Interestingly, there are parallels between the cannabis and tech industries, with both moving at impressive speeds to overcome obstacles and achieve their goals. The resilience and adaptability of these businesses stem from the sharp minds working towards an end goal. However, the government struggles to keep up with its rapid pace, which remains a challenge for industries looking to thrive within the regulatory framework.
The Body of Work as an Advocate during Prop 64
Assemblymember Bill Quirk was a well-liked author who supported the cannabis industry by providing cities the option to allow temporary sales at special events with security requirements. His efforts led to the bill passing through several committees, gaining bipartisan support in the Assembly. This was a peak moment as the bill cleared the Assembly, and there was optimism about its chances in the generally more progressive Senate.
However, challenges arose when the League expressed concerns, which were addressed through negotiations and amendments. Although the League didn’t offer support, they agreed not to oppose the bill. In the Senate Business and Professions Committee, with a favorable chairperson and industry-friendly Senator Nancy Skinner, the bill advanced. As the Senate floor vote approached, it became clear that more time was needed to secure the necessary votes. Despite the challenges, Amy Jenkins played a crucial role in this process, deserving recognition for her efforts.
Joining Forces in Cannabis Industry
In the world of advocacy, it’s common for people to collaborate when they see businesses, companies, or municipalities supporting a cause. This unity helps strengthen the collective efforts by leveraging each other’s contacts, ideas, and experiences. It’s like Voltron, where individually they are powerful, but together they form an even stronger force.
During the bill’s progress, a formidable coalition was built with the help of Amy, who managed to secure the last two votes needed in the Senate. Senators John Morlock and Scott Wilk joined the cause, and when the final votes were cast, there was a celebratory moment. Based on Niccolo, the advocates, careful not to appear overly triumphant, shared a heartfelt embrace in the hallway, signifying their hard work and collaboration had paid off.
Advocating for the Bill to Governor Brown and Celebrating its Success
The bill’s fate now lay in the hands of Governor Brown. The advocates were working tirelessly, briefing his staff and providing all necessary information. However, some lobbyists warn against falling in love with a bill, as it can lead to disappointment. One evening, the advocates had a chance encounter with the Governor at a dinner, where they took the opportunity to discuss the bill.
The Governor, with a straight face, told Niccolo that he was going to veto the bill just because they were working on it. It was hard to tell if he was joking or not. The next day, Niccolo tried to follow up without revealing the full story, unsure of the Governor’s true intentions. Eventually, Niccolo found out that he had just been teasing, and he signed the bill. Niccolo was thrilled to have made history and to see their hard work and dedication pay off. It was a labor of love, both rewarding and expensive.
Collaborating with the Bureau of Cannabis Control to Establish an Effective Permitting Process for Special Events.
Over the course of a year, Niccolo worked closely with the Bureau of Cannabis Control (BCC) to set up a permitting process for special events. It wasn’t as simple as getting the bill signed; he had to ramp up their efforts to ensure the smooth implementation of the new law. The BCC, though recognizing the importance of special events, had other priorities and challenges to address in the growing industry.
Niccolo shared his expertise, providing draft regulations and important considerations for the BCC to review. Drawing from their operational experience in the field, they helped the agency identify the critical aspects of organizing special events, such as entry points, vendor logistics, and product tracking. The collaboration aimed to ensure the new law was effective and efficient for everyone involved.
Navigating Government Agencies: Communication is Key
In Niccolo’s experience working with government agencies, it became apparent that open communication and collaboration are key to navigating the challenges that inevitably arise. When the leadership of two agencies, BCC and BCSH, hit a roadblock in implementing new regulations, they decided to take a 12-hour cooling-off period. After regrouping, they committed to working together to make the new initiative a success.
This situation highlights the importance of understanding that everyone involved is human, and that stress can affect the decision-making process. By clearly articulating the challenges and pressures, most people are willing to help and do the right thing. Advocates play a crucial role in translating and mediating between parties, providing valuable insights and guidance on how to approach the situation.
Working with government agencies can be a challenging but rewarding experience when all parties maintain open communication, collaboration, and a shared commitment to achieving their goals. Remembering that everyone is human and striving to help can make all the difference in creating successful outcomes.
Lessons Learned from Hosting Cannabis Events
Two key takeaways emerged from this experience: the importance of compliance and the challenges of balancing it with tight deadlines. Knowing the scrutiny that the project would face, every effort was made to ensure maximum compliance without cutting any corners. This was vital to uphold the trust of those who had vouched for and committed to the project. Despite the city of San Francisco and the State issuing permits just a day before the event, it was essential to maintain compliance, even at the cost of some operational setbacks.
For instance, the team had to load the product, check inventory, and set up POS systems on the day of the event, with only a few hours to spare. Despite the time crunch and surveillance cameras monitoring the process, the decision was made to prioritize compliance over speed. Consequently, Grassland’s opening was delayed until 2 pm that day, demonstrating the commitment to upholding standards while navigating the challenges that come with hosting such events.
If you want to learn more about Niccolo De Luca, check out this full episode:
Message from Niccolo
Niccolo would be remiss not to express his gratitude to Phil, who has had a significant impact on his professional career. Phil’s relationship with Niccolo’s father and the way he paid it forward with Niccolo is truly inspiring. Niccolo believes it’s essential to remember that everyone starts as a beginner, and it’s their responsibility to help the new generation by teaching them the right work ethic and the correct way to do things.
In today’s society, Niccolo emphasizes the importance of encouraging and supporting each other, whether it’s praising someone for a job well done or offering assistance when someone is struggling. Sharing the credit and supporting one another is vital, and Niccolo is grateful for the camaraderie he has shared in his professional journey.
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