There are only two more episodes of season one left of the Psychedelic Invest Podcast. We certainly hope you’ve subscribed by now.
On the ninth episode of the Psychedelic Invest Podcast, Kimberly Stuck of Allay Consulting joins to talk about regulation and compliance in both the cannabis and psychedelics industries.
During the conversation, host Bruce Eckfedlt asks the hard-hitting questions we all want to know about the future of plant medicines.
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Transcription
You’re listening to the psychedelic invest podcast where we speak with founders, CEOs, investors, advisors, experts, and thought leaders in the brave new world of psychedelics and entheogenic medicines brought to you by psychedelic and best bring you unparalleled psychedelic investing data and analysis. Psychedelic invest is the industry’s leading resource for those looking to invest in the burgeoning psychedelic industry. For more information, and to access all of the podcast episodes, check out our website at psychedelic invest.com/podcast. And now here’s the host of the psychedelic invest podcast, Bruce exiled.
Welcome, everyone. This is the psychedelic invest podcast. My name is projectile, I’m your host. And our guest today is Kimberly stuck. She is CEO of La consulting, we’re going to talk to her about the work that she’s been doing in psychedelics and really as kind of an extension offshoot of the long history that she’s had in the cannabis space and really kind of looking at the regulatory side and what companies really need to get right in order to not only be a quality company, but be compliant on all the different areas that companies need to be compliant in, you know, when you’re dealing with these kind of products. So we’re excited for the conversation. I think that you know, psychedelics are a little earlier than cannabis is from a regulatory point of view. But it’s fascinating to kind of see what’s similar, what’s different, what seems to be shaking, sort of shaping up and checking out in terms of the process and where we might be going with psychedelics, because I think we’ve got a lot to kind of figure out, there’s a lot of stuff that is going to be developed over the next couple years here and kind of understanding what the facets are, and what might come into play is going to be important for folks that are building businesses in the space. So with that, Kimberly, welcome to the program.
Hey, Bruce, how’s it going?
It’s great, I’ve just got fun to have you on here. And it’s fun to talk about this side of the space, because I think, you know, everyone’s focused on kind of the benefits of psychedelics and all the wonderful things they can do to help various kind of mental health and other conditions and stuff. But we don’t always kind of consider or think about the practical business side. And one of the big ones in that space is the regulatory structures, and how are we going to make sure everything is compliant and safe and you know, produce in the right ways. And, you know, that’s your area of expertise. So I’m curious to kind of get your take on the space, what you’ve been doing, and then certainly kind of compare and contrast with the cannabis industry. So before we get into really what’s going on psychedelics right now, why don’t we get to know you a little bit a little about your background, you know, the work that you’ve been doing in cannabis, how it’s been translating into psychedelics, give us a little of the backstory and the journey that you’ve been on?
Yeah, definitely. So I originally started in the cannabis industry in 2014. Back when Colorado became adult use legal before then there weren’t a lot of regulations in place, the MVD had some regulations. But you know, they didn’t really have anything for health and safety. So they kind of looked to the Health Department. And before then, I was a wholesale food and restaurant health inspector for the city and county of Denver. Got it. So they kind of went, Hey, we don’t know what to do with this, the MVD kind of looked at us and said, Hey, like, help us out with this. We don’t know anything about food safety. We don’t know anything about public health. Like we need you guys to help out. And we went, Okay. Now, what do we do? It was a really interesting time to be a regulator because it is very, I mean, it’s not very often that in a completely new industry is born right in front of you. Yeah. And so we went, Okay, we’re gonna take what we already know about food safety, learn as much as we possibly can about the cannabis industry, and about, you know, all the processes involved, and all of those kinds of things. And then we’re just going to, you know, evaluate it based on risk, right. And so that’s exactly what we did. It was a total crash course, I knew nothing about cannabis, other than I grew up in Colorado, and you know, it was around me a lot. But I didn’t know anything about extraction, or solvents or testing or pesticides. And so, you know, thankfully, the industry kind of took me under their wing and taught me everything that I knew back in the day. And so throughout that process, I was there as their marijuana specialist for a little over three years. And it was, you know, it was amazing. I fell in love with the people I fell in love with the processes of the plant. It was all new and exciting. And just I could see it going really, really far. And I also saw a pattern when it came to understanding compliance and understanding regulations. Many of the people in the cannabis industry is you know, they don’t come from a regulated market. You know, they’re not used to reading regulations and interpreting them and then knowing what to do even after interpreting them correctly. And so I saw a huge gap and I saw a lot of people struggling and unfortunately, a lot of things were disposed of and you know, it was a rough job. And so I thought to myself, you know, how do I help these people and I just remember one of my bosses I was trying to kind of give advice or leave the operator to It was the right answer. But you know, as a regulator, you’re not really allowed to do that. You just kind of have to get roll. Yeah, yeah. And so it was really hard to bite my tongue and do that. And I remember my boss looking at me saying, You’re not a consultant, you can’t do that. That’s what consultants are for. And I went, but there are no consultants. And I went, Oh, maybe that’s what I should do. And so that’s what I did in 2017. And yeah, it’s just been great. We’re now a team of five, we have a location in Denver, still, that will probably never go away. And now I’m out in Portland, Oregon. And as you said, we opened a psychedelic division in the beginning of this year, and it’s just been kind of, you know, crazy. Ever since then. It’s been awesome.
Yeah. So a couple of questions on that. I mean, so one is, from a regulatory point of view, let’s just kind of look at cannabis. I mean, you’re dealing with a kind of brand new market, you know, trying to figure out what should be regulated, how it should be regulated? You know, what’s safe? What’s reasonable? What helps develop the industry? I mean, what’s your kind of take on what worked and what hasn’t worked? So well, in terms of regulating cannabis, you know, over the last, you know, half decade, decade? And what are the kind of the learnings that you feel, either, you know, are being kind of considered on the psychedelic side, or maybe should be considered on the psychedelic side? You know, and what can we take away from that? We’ve done a lot of work in cannabis, can we apply some of this stuff to the psychedelic space?
Oh, absolutely. And, you know, the good thing is, is we failed, absolutely, miserably, miserably in the beginning. So we have a lot of things that we’ve learned from, and I would love to say that the psychedelic regulatory side is kind of looking into that into those mistakes that we made. Sorry about that, everybody. And you know that, but they’re not. One of the things that really concerned me was, you know, when the council was put together to write the regulations in Oregon, which is the only state that has a therapeutic legal market for psilocybin, obviously, there aren’t any licenses out for it, yet. They’re writing the regulations as we speak. But really, every single person on that council that they put on that council to write those regulations are all regulators. So there are no growers. There are no extraction specialists, there’s no chemists, there’s no, you know, there’s no people who know shamans, no, you know, and we really screwed that up in cannabis back in the day, because we didn’t include that variety of people with different backgrounds and understanding of the industry. And what’s going to happen is they’re going to put out regulations, they’re going to fail miserably, and then they’re going to start bringing those people in. So it’s just kind of a waste of time, I think, when they don’t include those kinds of backgrounds. And I’m hoping that maybe they bring some people on, I don’t know, in a consulting format, I don’t even care how they do it, as long as people’s voices are heard. Yeah, because you can’t put a bunch of people in a room writing regulations for psychedelics that have never been around it or done it or understand anything about it. And there are a lot of OGS in this industry, a lot of people who have been around in different countries, you know, that understand this, even chemists, you know, there’s actually more scientific evidence for psilocybin than there is cannabis, believe it or not. So we’ve been studying this for a long time. And so, you know, I think that they can use those people as a resource. And as of right now, I’m not seeing that, but I have a feeling it’s gonna happen.
Yeah, it’s gonna happen. I’m curious what comes into play? I mean, it feels like there’s many kind of regulatory angles to this, I mean, everything from a kind of a food safety angle to, you know, manufacturing processes angle, there’s, you know, OSHA, you know, employee safety, what are kind of the categories that come into play when you’re dealing with, you know, producing products that are going to be consumed in some way, shape or form?
Yeah, so literally, everything that you just listed are all things that my company helped people with, right. So we’re we’re essentially doing the same thing in the cannabis space. We deal with FDA regulations, OSHA fire code, you know, GMP certification, ISO certification, organic certification. The other thing that we work on in cultivation is gap good agricultural practices, and JCP, which is the same thing, just a different acronym. And there are already regulations, that third party accreditation, you know, services give certifications for mushroom growers, right. So we’re not reinventing the wheel here. In fact, any clients that we have right now who are getting into the psychedelic space, obviously, there’s no licensing, there are people who are growing lion’s mane. And they’re like, hey, what can we do now? That’s going to prove that our product is the safest on the market and help us get an application better, right? Because when you put it in an application, it really makes you look good. If you have a lot of these good certifications are following In good agricultural practices, you’re testing to a standard that they want to see. And so they’re getting geared up for that kind of thing. And I think that’s the greatest thing that you can do right now, especially since there are no actual regulations to follow on. But yeah, you know, understanding testing standards, understanding, you know, how to clean and sanitize things, and making sure you’re documenting those things. So those are the kinds of things that are really going to be important. And then a lot of people even in the cannabis space, really forget about the worker safety side. Yeah, you know, OSHA is knocking on doors, we actually got a lot of clients through COVID, because of OSHA, because of complaints, and then they’ll go in to do an audit of the facility and find all kinds of OSHA violations. So people really need to start thinking about those kinds of things as well. You know, if you’re injuring your workers, it’s going to be a problem. So yeah, it’s all of those things, you have to take into account. And it can be very overwhelming and a lot to think about, especially this early on in the game. But if you’re already kind of thinking about those things, then you’re probably ahead of most of your competition already.
Yeah, yeah. I think a lot of people end up seeing this kind of the regulatory side as being quite onerous and difficult and requiring extensive documentation and just being like this huge overhead to running your business and in either of these spaces. I mean, can you give us some kind of maybe break it down? So it’s not quite as daunting or maybe not being those kind of overly burdensome process? And what’s really involved when you deal with, you know, becoming compliant with some of these regulatory issues?
Yeah, I wish I could say that. It’s not complicated. And it is it’s a pain. But one of the things that people in the cannabis industry constantly say to me are, we are the highest regulated industry in the world right now. And I can’t help but go, No, you’re not? No, you’re not. They have to deal with their state regulatory body, that’s 90% of all of the United States cannabis, right. They haven’t even dealt with FDA standards or OSHA standards yet, or International Fire Code, or ISO, which, you know, ISO 22,000, you usually need to sell internationally, right? So really, they feel like they’re very regulated, because they’ve never been regulated before. And yes, some of those regulations can be a little tricky. None of them are very well written, for instance. And so they’re kind of hard to understand. But they don’t even know what’s coming yet. You know, when the FDA starts getting involved in the CBD industry is starting to kind of see how this is going. If you haven’t seen the news lately, with the FDA, you know, not allowing them to the supplements, and you know, that kind of thing. We’ll see what they kind of land on and decide on but when that happens, it’s going to change a lot of things. And a lot of companies are not going to last, because they didn’t build their facilities, or their structure of their company in a way that the FDA is going to be okay with. So, you know, thinking about those things, and yes, it’s very complicated. But starting with something, like GMP certification is kind of the best way that we have found for people to go, you know, looking in getting one of those third party audits and, you know, trying to figure out, you know, first step, second step, third step of that process, and breaking that down. Because if you look at the whole picture, like an iceberg, it’s very overwhelming. Yeah, we try to explain to our clients that we’re just gonna break it down into little monthly bites for you. Because if you look at the whole thing, you’re like, Oh, my God, I’m never going to be able to get this done. It’s way too much. But if you do it month by month, and just chip off little pieces, all of a sudden, you’re at the end of it, and you’re like, Oh, well, that wasn’t so hard. You know. And once you’re used to following these guidelines, and used to filling out the documentation, and you know, you’ve trained your staff really well, they get used to it, and then it’s like, not such a big deal. And you think about it, every wholesale food manufacturer in the United States does this, you know, they all have to be under those FDA regulations. You know, they have to do all that documentation as well. So it’s certainly not impossible.
I’m just curious how you see this playing out because you know, psychedelics are going to be my guess, or at least the way that things seem to be kind of trending. You know, cannabis is being you know, very kind of rec, dominant right now, and yes, we have medical programs, but they tend to be overshadowed and overwhelmed by the adult use side, the rec side about it just doesn’t seem like psychedelics are going to be that path, right? It’s going to be more of a therapeutic kind of model, pharmaceutical model. How does that change the regulatory structure or the scope of the regulatory side, and we’ve got production and processing, but we also have, you know, clinics and therapeutic environments where we’re going to be using these things. So what comes into play when we start looking at the sort of the regulatory aspects of psychedelics? Yeah, so
this is the question, right? Yeah. So I think that you need to, you know, learn how to crawl Before you know how to walk, right, and we did this in the cannabis industry, most states have medical legalization or we’re seeing what other states were doing before they decided to pull the trigger on their own recreational market, or the, you know, the adult use market. And so I think what Oregon is doing is very smart. They’re they gave their self themselves, you know, they decriminalized, right. And then they gave themselves enough time to write those regulations. Because if you launch something without a set of regulations in place, you run into the issue that we had in Colorado, where I would walk in and brownies were wrapped in cellophane, and they didn’t have any dosage, and you just had no idea what you’re getting in a dispensary, you know, back in the day, and so they they saw that they recognize that was an issue. So they gave themselves, you know, a year or so to get these regulations together, they put the council together, that kind of thing. So you know, they’re building those regulations. Now it is, you know, based on what they’ve released to us, it is therapeutic only. So which means that, yes, there will be growers and extractors and that kind of thing, but you have to have a prescription for it. And you have to take it in a setting thus far, with a licensed therapist, or somebody who has to take a class, they haven’t quite like drilled it down yet. Because there are shamans who have been doing this for 40 years, they probably know how to handle somebody on a bad trip way better than a licensed therapist. And so, you know, I’m wondering what that’s gonna look like. But, you know, I think that that’s beneficial. And I think it’s a good way to start, because I think a lot of people who’ve never been around psychedelics or understand it, they kind of might think that there’s just going to be random, crazy tripping people in the streets and not gonna, like burn the hell out, you know, burn the entire city down, you know, which we know, there’s already tripping people in the street, and everything’s fine. But you know, so I get it, I understand where they’re coming from. And I, you know, they’re just taking it slow. And I think that once they see the benefits in psychedelics, because my Lord, there are so many. And I think it’s really going to help a lot of people like so much. And I’m just so excited about it, I think that this is their way of really taking it slow and seeing if the sky falls. And if it does, then they’ll retract or keep it the way it is. And when it doesn’t, in my opinion, they might do something different. They might open up for therapeutic use at home, right, where you can get a prescription and take it home with you and do it at home, or micro dosing, which we’ve seen amazing things for, you know, with micro dosing, it’s been amazing for a lot of people, especially PTSD and depression. And so you know, that might be an option later. And then, you know, maybe later down the line, there will be a recreational side to it. But honestly, I’m not 100% Sure. We’ll just see what happens. But that’s kind of the natural progression. And we saw it in cannabis and the way that the regulations were written in cannabis. Yeah, put that medical market kind of on the backburner. And you’re right. There’s a lot of people who just are like, hey, just buy recreationally from us, because the medical keeping track of patients and also the medical side, and a lot of states doesn’t have as much testing as the recreational side, which makes zero sense to me. You know, there’s just a lot of weird things that they kind of screwed up. And that’s okay. We’re learning. Yeah, and so, you know, we’ll just kind of have to see where they go. But I think that it’s a great start, it’s a step in the right direction. And I think, you know, especially for people who have never use psychedelics, it is going to be good to have someone there with them to help them through that process. I think it’s going to be really beneficial for a lot of people.
Yeah, because with cannabis, it’s a pretty singular kind of grow chain supply chain, right? Where we’re taking cultivars we’re, you know, cultivating, producing biomass processing that and various products getting into consumer shelves, psychedelics, is it kind of a mixed bag, right, we’ve got some plant based psychedelics, we’ve got laboratory based, I mean, how does this break down? Or how do you see this breaking down from a regular point of view? Is it going to be very different based on the type of kind of product you’re working with? Or how does this shape up from your point of view?
Yeah, especially from a health and safety side, it will depend on you know, everything is risk based analysis, right? So everybody has a different process in cannabis. Every single extractor has a different process, and I have a feeling that that’s the way it’s going to be in psychedelic for a very long time. And there’s always going to be a market for natural, there’s always going to be a market from for the psilocybin that comes directly from a mushroom rather than a lab, because there’s always going to be people that want the earth based medicine rather than a lab based medicine, but there is a lot to be said about the lab based medicine as well. There’s a lot less variables, right. It’s a lot more stable. There’s a lot less food safety issues, if you will, and maybe dosing will be easier. We Don’t really know, you know, so I think that there’s gonna be a market for both. And yeah, both sides of that will still be under the same set of regulations. But you know, there will be nuances of regulator will have to walk in ask the questions about their processes, and evaluate the risk based on that and just say, Okay, well, this applies to them, or this doesn’t apply to them. Because there’s a lot of things in a lab situation that you have to look for, that won’t exist in a growth situation as well, you know, they’re gonna have to figure it out as they go. And I wish there was an easier way for them to do that. But sometimes, you know, you got to go through the brick wall, you know, and just make get through it and learn it and figure it out. And I just hope that the consumers don’t suffer because of that process,
you know, cannabis, we’ve got this kind of crazy situation of state by state, you know, regulation and structures and, you know, vast inconsistencies in terms of, you know, how this market is developed. And, you know, because of kind of the federal situation and federal illegality, and, you know, psychedelics, I mean, do you see this playing out same way that states are going to enact or enable, you know, markets to develop, and they’ll have their own regulations? Do you think that the federal, you know, kind of structure is going to come into play sooner rather than later? I mean, compare and contrast that for me?
Hope is not a plan. Right? Well,
the next case is that, you know, we’re very unique culture here, we, you know, we believe in like state freedoms, and we believe that even in our liquor, right, alcohol in every single state is treated differently. I believe that that’s the way that obviously cannabis has already gone. And I believe that’s the way that psychedelics are gonna go as well. I mean, in Oregon, they literally decriminalized all drugs this last year, which to people in Texas, like I have family in Texas, that is insane to them. They’re like, you live in a state where drugs are decriminalized? And I was like, Yeah, you know, they send you to rehab instead of sending you to prison, which I think you know, could be very beneficial. We’ll see what happens. Yeah, but you know, I digress. But yes, it will be based on every state because it’s already started going that way. Even two counties, Oakland, right, Denver, those are decriminalized areas, but that doesn’t mean that the state is decriminalized. And so you know, you kind of have to know where you’re going where your markets are. And, you know, I think each state is going to have to progress on its own. It’s annoying, especially for companies that are growing, right? If I start up psychedelic company in Oregon, right, and we grow, and then another state comes online, I have to, you know, change my labels and learn all the new regulations of the new state and make sure everybody’s following the rules there. And it is it’s very cumbersome. Thankfully, that’s where we thrive my company. You know, that’s how we help people do that. But it is kind of cumbersome. And it would be much easier if the federal government wins. Okay, FDA is regulating this OSHA is regulating this. You guys don’t have to do anything. That would be incredible. But I just don’t see that happening. Yeah, unfortunately. Yeah. So what does it look like right now in terms of working with, you know, companies that are, you know, either in, you know, the sort of early stages of the psychedelic market or thinking about getting involved? Like, What work are you actually doing with them? How do you engage?
So yeah, so people who are really early on, obviously, I have a lot of people that are in the cannabis space that are reaching out and saying, Hey, we’re thinking about this, I have a lot of those free conversations, right, because I know that a lot of them aren’t going to get into it, I want them to understand the risk, you know, associated. And if they’re really good players, I want them to be in the psilocybin industry. That’d be excellent. Um, most of our clients that are in psilocybin, like I said, are people who own mushroom facilities where they grow other kinds of mushrooms, and they’re trying to get their facility ready to launch into psilocybin once it’s allowed. Yeah. And that’s really, as far as I go. It’s gone. I’ve done a couple, you know, helped with a couple business plans for you know, psilocybin companies, you know, teas and chocolates, and you know, those kinds of things, which, you know, there’s definitely going to be a market for I think it’s great. But everything kind of, you know, we get to that point, okay, this is the idea. And then we’re stopped because we don’t know anything about how it’s actually going to be licensed yet. Those regulations aren’t out yet. So I can’t really give them any more than Hey, we can prepare you to this point. And then we just have to wait. It’s like a hurry up and wait situation. And it’s definitely frustrating, but, I mean, that’s the way it was with cannabis as well. You know, this is like not you know, in every state that comes online, this is always the way it goes. And once it does, then, you know, we can help them. You know, we’ll obviously learn the regulations inside and out. And then we’ll start building facilities with them that are in line with GMP and gap so that they don’t have to, you know, when it does become federally legal Because I do believe that all of these things are going to become federally illegal at some point, they’ll be ready for when FDA and OSHA come in. And not only that, but when you function as a company following those bigger guidelines, they tend to do better as a whole, there’s less turnover, people are less frustrated, there’s more pride in the product, and people trust the brand, there’s less recalls, there’s less disposals, you know, just all kinds of good things come out of that. And so, you know, that’s where we would really focus, but we would essentially come in train their staff write all their documentation and SOPs, you know, start from there, and and then kind of go from there and grow with them. So it’s pretty awesome.
Yeah. And I’m curious for a facility that’s doing, you know, calling it I guess, I’ll call it culinary mushrooms for human consumption. And so, I mean, what actually changes? I mean, it seems like they’re already doing whatever they need to do to produce safe, you know, products for human consumption, like what adds or what changes for some of those folks, when they start thinking about, hey, we can grow mushrooms, why don’t we grow psychedelic mushrooms? What what are the deltas,
so there is going to be a lot higher health and safety standards for psychedelic mushrooms. They might even require gap certification, which most normal mushroom growers do not have at this time. In fact, there are Yeah, there are really like low not low standards, that is not the way to say but they’re not as regulated. In fact, there are foragers that go out into the woods and just collect mushrooms and then take them to a facility and then they sell them, you know, the mushroom world is pretty loose. But when it comes to this sort of thing, because it’s a psychedelic, because, you know, people are scared of the sky following and they’re scared of people getting sick and going crazy. And all these things, they’re going to hold them to much higher standards. And also, it’s considered a medicine at that point. So of course, the health and safety aspect is going to be more important. And so you know, being ready for that, and like I said, a lot of these mushroom manufacturers right now aren’t really held to very high standards, or they’re not not high standards, but like health and safety standards rigorous, you want to be ready for it, and they don’t want to be tripped up or get fined, or you know, they want to look really good and shine. So getting those like third party certifications are just, you know, you put the stuff in place, you train your staff, you get everybody used to it, and then you blow your competition out of the water is kind of what we’re hoping for. Hello, yeah.
I’m curious in terms of what you’ve had to do as an organization to, you know, either learn or change, you know, going from, you know, kind of the cannabis market and kind of knowing how that world works and being you know, highly experienced in anti psychedelics like what have you had to kind of brush up on or learn in order to actually understand either the regulatory side or the, you know, the business process side, so we can figure out how to bring in kind of good regulatory standards around it, what have been your process?
Oh, my gosh, it’s been a mixed bag to tell you the truth. So we’ve had our eyes as an organization, my team is absolutely incredible. And we have been researching psychedelics for a very long time, in fact, even just a couple of years in to us, us owning the business. And so we’ve done a lot of research, I personally read like 60 pages a day about anything that I need to learn about, including regulations and other states and, you know, bills that are being passed and those sorts of things. And I’m pretty sure my staff reads even more than I do. They’re just on top of it. And so I mean, we have consultants that have, you know, attempted to grow on their own, you know, we’re really digging in, we also have been reaching out to a lot of really great people in the industry. We’re joining boards where, you know, trying to help anywhere we can we donate a lot of time to regulatory boards, and you know, consumer safety boards and things like that. So it’s kind of haphazard, if you will, because a lot of times these kinds of things are not easy to find. But every time I go to a conference, I was just in Chicago, just last week, I ran into so many people that knew so much about psilocybin, that literally I just tried to absorb as much information as possible. And I’m at that point where it’s a fire hose right now. But I’m so excited about it, that it’s great. You know, bring it on.
Yeah, no, that’s fine. Give me a little bit of pleasure. If people want to find out more about you more about LA what’s the best way to get that information?
Yeah, so you can always go to our website@www.la LLAY consulting.com or you can always email me at Kim period stuck Ste CK at La a lla. Why consulting.com?
Great. I’ll make sure that information is in the show notes. People can click there and get it can really it’s it’s been a pleasure. Thank you so much for taking the time today.
Absolutely. Bruce, thank you for having me.
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