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Ep.294: Joshua Laterman, NACB

Cannabis Economy Podcast
Ep.294: Joshua Laterman, NACB

Ep.294: Joshua Laterman, NACB

Joshua Laterman joins us and shares that the new National Association of Cannabis Businesses see themselves as a self regulatory organization for cannabis. Joshua notes that the mission of the organization is to safeguard the survival of members through the voluntary adoption of standards. The team comes from regulatory background. The play is to the executive branch of government and the team has federal experience- a former federal prosecutor, a former chief of staff in the DEA, former white house counsel. The team also has cannabis folks on board including past guests Ean Seeb and Adam Orens. And for folks in the space who are wondering, the NACB is participating on the NCIA policy committee.

Transcript:

Speaker 1: Joshua Laterman. Joshua Laterman joins us and shares that the new National Association of cannabis businesses sees themselves as a self regulatory organization for cannabis. Joshua notes that the mission of the organization is to safeguard the survival of members through the voluntary adoption of standards. The team comes from a regulatory background. The play is to the executive branch of government and the team has federal experience. A former federal prosecutor or a former chief of staff and the dea former White House counsel, the team also as cannabis folks on board, including past guessing and CBE and Adam orens. And for folks in the space who are wondering, the NACB is participating on the Ncaa Policy Committee. Welcome to cannabis academy. I'm your host Seth Adler. Check us out on social with the handle can economy. That's two ends in the word economy. Joshua Laderman got a millennial mindset right off the bat.

Speaker 3: Yeah, I think Josh was my child name and now I'm trying to be a bit more of a grown up, you know, you can tell who's calling me by, whether it's Josh or Joshua. That's my friend Joey, who's Joe now. And my friend Benji who's been. Now Joey will, except Joe. Actually Joe will accept joey. But uh, Benji really, he doesn't like it. So of course, since we're childhood friends, that's all we call them naturally. That's our business. I mean that's, that's our, our uh, not only are right but our duty. Right? Fantastic. So you have rights, you have duties a n a, C, B. Right. So I see anytime I see a new association come out, I'm like, okay, well who, who were the new guys, but then I kinda looked and, and uh, spoke to your team about the fact that you've got some real folks both from outside the industry and inside the industry that are behind what you're doing here.

Speaker 3: Sure. Yeah. So the, the NACB, the National Association of cannabis businesses and our website is NACB.com. Sure, yeah. We are the only self regulatory organization for us cannabis and we will safeguard the longterm survival and growth of our members through the voluntary adoption and enforcement of responsible standards of conduct. And maybe we can talk about a self regulatory organization later. Sure. You brought up our team, so it will be, I could give you a little background lease. Sure. So we're in the elevator pitch part of this. Let's do it. Absolutely. So you know, myself, I've been a general counsel and an advisor to family offices to a publicly traded bank and two private equity companies. So I've been serving financial services and dealing with hyper regulation for most of my career is good. You know, we looked at the industry and we felt that a novel way to progress would be to focus on the executive side of the government.

Speaker 3: Sure. And so we assembled a team with some terrific federal experience. Notably our president, Andrew Klein, is a long time federal prosecutor, were advised by the former chief of staff of the Drug Enforcement Agency, the former head of the department of Justice, former White House counsel. Great. And all of these lawyers and former regulators have a belief that through self regulation we can provide a successful solution to cannabis right now. Yeah, absolutely. With the kind of a experience that you're bringing to the table, we can see that this is different. Just Kinda set folks mind at ease about the relationship between you guys and Ncia so that we know that everybody's kind of friends here. I mean sure. So to be an effective advisor, we need to have the federal expertise and we really need to have deep cannabis expertise. Right. And EMC has been one of our advisors for three years since inception.

Speaker 3: Really, I think he is one of the most thoughtful guys in the industry and also among the most honest, we also have on our team the head of the marijuana policy group, Adam Orens, he's an economist based in Denver. We Know Adam, Adam's done several years of demand and impact studies, so we look for cannabis experts who have an objective perspective now with respect to the NCIA, huge respect. You know, we have met with Aaron and his team and they have done a ton of terrific stuff for the industry. They are a supporter of ours. They offered us a seat which we accepted on their policy committee, but we all are very different in terms of how we go about our business. The NCIA is a terrific lobbyists advocate and also hold some tremendous conferences where there's a lot of information being exchanged for us. We are a self regulatory organization.

Speaker 1: Joshua Laterman. Joshua Laterman joins us and shares that the new National Association of cannabis businesses sees themselves as a self regulatory organization for cannabis. Joshua notes that the mission of the organization is to safeguard the survival of members through the voluntary adoption of standards. The team comes from a regulatory background. The play is to the executive branch of government and the team has federal experience. A former federal prosecutor or a former chief of staff and the dea former White House counsel, the team also as cannabis folks on board, including past guessing and CBE and Adam orens. And for folks in the space who are wondering, the NACB is participating on the Ncaa Policy Committee. Welcome to cannabis academy. I'm your host Seth Adler. Check us out on social with the handle can economy. That's two ends in the word economy. Joshua Laderman got a millennial mindset right off the bat.

Speaker 3: Yeah, I think Josh was my child name and now I'm trying to be a bit more of a grown up, you know, you can tell who's calling me by, whether it's Josh or Joshua. That's my friend Joey, who's Joe now. And my friend Benji who's been. Now Joey will, except Joe. Actually Joe will accept joey. But uh, Benji really, he doesn't like it. So of course, since we're childhood friends, that's all we call them naturally. That's our business. I mean that's, that's our, our uh, not only are right but our duty. Right? Fantastic. So you have rights, you have duties a n a, C, B. Right. So I see anytime I see a new association come out, I'm like, okay, well who, who were the new guys, but then I kinda looked and, and uh, spoke to your team about the fact that you've got some real folks both from outside the industry and inside the industry that are behind what you're doing here.

Speaker 3: Sure. Yeah. So the, the NACB, the National Association of cannabis businesses and our website is NACB.com. Sure, yeah. We are the only self regulatory organization for us cannabis and we will safeguard the longterm survival and growth of our members through the voluntary adoption and enforcement of responsible standards of conduct. And maybe we can talk about a self regulatory organization later. Sure. You brought up our team, so it will be, I could give you a little background lease. Sure. So we're in the elevator pitch part of this. Let's do it. Absolutely. So you know, myself, I've been a general counsel and an advisor to family offices to a publicly traded bank and two private equity companies. So I've been serving financial services and dealing with hyper regulation for most of my career is good. You know, we looked at the industry and we felt that a novel way to progress would be to focus on the executive side of the government.

Speaker 3: Sure. And so we assembled a team with some terrific federal experience. Notably our president, Andrew Klein, is a long time federal prosecutor, were advised by the former chief of staff of the Drug Enforcement Agency, the former head of the department of Justice, former White House counsel. Great. And all of these lawyers and former regulators have a belief that through self regulation we can provide a successful solution to cannabis right now. Yeah, absolutely. With the kind of a experience that you're bringing to the table, we can see that this is different. Just Kinda set folks mind at ease about the relationship between you guys and Ncia so that we know that everybody's kind of friends here. I mean sure. So to be an effective advisor, we need to have the federal expertise and we really need to have deep cannabis expertise. Right. And EMC has been one of our advisors for three years since inception.

Speaker 3: Really, I think he is one of the most thoughtful guys in the industry and also among the most honest, we also have on our team the head of the marijuana policy group, Adam Orens, he's an economist based in Denver. We Know Adam, Adam's done several years of demand and impact studies, so we look for cannabis experts who have an objective perspective now with respect to the NCIA, huge respect. You know, we have met with Aaron and his team and they have done a ton of terrific stuff for the industry. They are a supporter of ours. They offered us a seat which we accepted on their policy committee, but we all are very different in terms of how we go about our business. The NCIA is a terrific lobbyists advocate and also hold some tremendous conferences where there's a lot of information being exchanged for us. We are a self regulatory organization.

Speaker 3: You have to be credentialed to obtain the highest level of membership in our organization. Sure, and even if you pay, but then you do something naughty. We're going to let you know when we might kick you out so I can get kicked out. You can get kicked out or behavior for poor behavior. Look at that for the benefit of the whole. Absolutely. So our organization is about bringing the best in the industry together. Wanna obtain legitimacy and really have nothing to hide. I'm not without diving too far in because you know, we're on the way in. As you and I have this conversation, this is kind of brand new, but I love the fact that you can get kicked out, right? Because I'm all about safe patient access with a sensible regulations, you know, that's how I see this whole thing. If I'm a dispensary that's been operating for some time, no matter the state, right?

Speaker 3: So it could be Colorado where I absolutely know what the heck is going on, or it could be I just got a license in Pennsylvania. What can I expect that I need to do to make sure that I'm in good standing as far as this self regulatory approaches concerned? Sure. So thematically we believe that the federal government would like to see a certain profile of the most legitimate business and we also believe that buyers of your business or investors or sources of capital or looking for a certain profile so that they can understand you and value you. Sure. And this perspective comes from me from having been doing m and a transactions for 20 years. We know how to value and look at the risk in a business in cannabis, it's a bit hard to figure out who to trust, what the right numbers are.

Speaker 3: Sure. Right? So that's where we come into play and I would suggest that there are three components that we're in the process of fulfilling. We want to know whether you're in compliance with your state and I point out that you're in compliance when you file, but who knows what happens between your filing and your renewal exit. So we'd like to check in and make sure that's going the proper way. Then what is somewhat unique about us is we also have a set of proprietary national standards and the standards are meant to reflect what the federal government and the existing regulators would say if they gave us some details. Right. So, well, how do you mean please, please. Yes. So I think we all agree that the state law is somewhat incomplete in most of the states are of varying quality. Sure, right? Yeah. The state law is also meant to govern state issues, but as we're seeing in the present context, there are a number of federal issues with real concerns that come from the dea and the Department of Justice Treasury, the FDA, and now I would suggest that if the industry continues to grow at this pace, you will see more federal interest and more federal regulation.

Speaker 3: So what we're doing right now is we're writing that into national standards and saying, if you want to be successful, you want to be the most legitimate. You want the government to feel that you are responsible actor. You want other businesses to give you capital and to work with you, you need to show these higher level of standards. Right. And I would imagine, and, and please correct me, uh, this is how federal looks at alcohol. This is how federal looks at tobacco. This is how federal looks at tomatoes. This is how federal looks at pharmaceuticals. Sethi. Totally get it. You totally get it. And so we know as experts from financial services and hyper regulation, yeah, the type of data you need to show how to present it, and we're quite confident that's the path to legitimacy. But of course, nothing happens instantly. Sure. As far as self regulation is concerned, I'm all into it.

Speaker 3: I've, you know, I'm running this a dispensary that we talked about and um, you know, I, I love what you're saying. Um, this sounds like it's going to take me a whole lot of time. It sounds like it's going to be expensive. I'm just trying to keep up, man. I'm trying to keep my doors open. What do you say to time and expense as far as these self regulatory standards are concerned? Absolutely. This year we're not charging anyone anything. If you are a business which meets these standards, you should please reach out to us, we'd love to talk to you and credential you. That would be free and it's somewhat easy in the future and we haven't put out our pricing yet. We're going to put very favorable pricing out in a tiered structure. So if you are a small business as you're describing, we're going to charge you the lowest amount.

Speaker 3: We want to be inclusive. Okay. Alright. So we are, even though we're finance guys were here for the little guy as well, right? Absolutely. I mean we want to raise everyone up. Maybe the early businesses will not be able to obtain the highest level of credentialing right away, but we're here to help bring you to that level at a reasonable rate. Mind you, a theme of what we're going to do is to take code the laws of the different states and converted into software technology. Uh, so that is coming hopefully in January, if not earlier. Really? Yes. And as a general theme, if you've seen this in banking or financial services, new laws are made and for a period of time you require a whole compliance team of people to interpret them and to help you abide by them. Sure. But then someone, perhaps Bloomberg or some other provider comes along a year later and says, here's the APP now.

Speaker 3: You don't need that whole team, right? It's going to be cheaper to handle it. You're going to have an auditable record and you can reduce your costs and increase your compliance. That's what we aim to do. That's what we're trying to do. All right? So then how do we have you man, right? I mean, you're leading this regular life you got, you're in the right places with the right people it sounds like, and then you, you, you, you come in to, to this ridiculous thing, right? Sure, sure. So where are you from? So I'm a New Yorker by. I'm 48. I've got three kids. Family is very important to me. It's a. One thing that's quite interesting is as we sit here today, we are facing Nyu langone medical center. Yes, we are. I am a pediatric leukemia survivor and a lot of that has shaped my vision of wanting to deliver medicine if it's appropriate for people who are going to benefit.

Speaker 3: I really feel I have an empathy for the cancer patients in particular. I see the miracles that happened with epilepsy, but I'm not taking a position on that. It's very motivating for me. I gotcha. So how did I get here? Well, I was the general counsel for a public bank. We went through the credit boom, the credit bust. I heard about that. You heard about that, right? And hypothetically it might've been the stuff you saw in the big short that my bank was facing all the time. So take it on stock that I am a child of hyper regulation. I've been in front of the federal government in times of crisis and I think I have a good feel for how to work with the federal government. Usually it's in a confidential way. So that is a hallmark of the NACB is that we're hiring people with former federal expertise who understand the tempo and dialogue to be effective with the government.

Speaker 3: And then after I left my bank I wanted to learn more about data and technology. I really thought that after the credit crisis banking would be locked up. And so I was fortunate to be offered a position by the Texas Pacific Group. It's a large private equity owner, really a terrific education. And they sent me to Milwaukee, which is where my family currently is. It's a big jump from New York at a milwaukee. Absolutely. But you know, go brewers, brewers, brewers, go beer, go dairy, the whole thing. The whole. Yeah, the whole shemale uh, so in Milwaukee we turned around a data business and we sold it to corelogic, a major public company in there. I got a really good education in how to use data and how to collect it in a strategic way to gain insights. You mentioned the kind of what I like to call the economic apocalypse and you were there, man.

Speaker 3: Can you give us a sense of in September and October, right, of 2008, where you are and what you were doing so that we really understand, you know, that is when the proverbial shit hit the proverbial fan. Sure. With pleasure. Of course. I need to speak in the hypothetical because as a general counsel, I can't talk about the specifics of the work I did. Got It. So let's pretend it's the big short. Sure. Okay. So now in the big k directed by the fantastic, fantastic. And we love Michael Lewis. Sure. Um, so in the big short, there's a lot of discussion about toxic assets, right? The securitization, the value of securities that were based on real estate. No one knew what anything was worth. No one knew if it was toxic or if it actually had growth opportunity. So you might expect someone like me too, I've been in a position where I need to help value all of my books of business.

Speaker 3: And to do that, you would need investment bankers. Perhaps if you really wanted to get a good valuation, you'd get two teams to analyze the same book. You might not even be surprised to discover they come up with totally different answers. Well, folks that have cannabis tested understand exactly what you're talking about. Yes, yes, yes, but so back there and you know, during the crisis, the goal is the same during the crisis is what we bring to the table now, which is we're able to recruit the best advisors. We bring advisors from cross disciplinary perspectives and we listened to them all as we try to come up with a solution which could be achievable and beneficial for businesses and also serve the federal interests. You said that you kind of got out of banking because you thought that it was going to be locked up.

Speaker 3: My sense is it's not. Is that true? And if it's true, are you surprised? I am surprised by how quickly the market's unlocked and I'm also a bit nervous about the return of securitizations that is happening. Once again, talk about that. Well, you know, we're in an administration that's having a lot of deregulation and the. I don't take a position on that. Sometimes deregulation is terrific. This is certainly their point of view. You can't read too much into anything but that much we know. That's right. Yeah. And so the markets tend to shift in and overreact and I think that right now they're being freed up. There's a lot of business that's going on, profits are on the rise, but of course securitization is going to return. It appears to be happening. And so I wonder whether we're going to eventually be making some of the same mistakes that we have before. It's kind of a tough call. Um, and these are going to be your thoughts. I wonder how you see what we're doing because we like to kind of cover general interest stuff as well. And since you have knowledge in this area, when I turn on Bloomberg, which I do a because it's the least polished, it's the least politicized television that I can find.

Speaker 3: I hear folks talk about the Fed from every kind of point of view. I hear what folks say about how they see what the policy is. Can you lay out as general counsel what you're seeing and how that kind of affects any business? You know, we happen to be talking about cannabis businesses, but where are we? Well, let me take it to the cannabis business there. So I would say that there is a common thread of concern amongst all the federal regulators and that is the fact that in the trailing 12 months, legal cannabis has generated in excess of $7,000,000,000. Right? It's also fact that cannabis remains a controlled substance we've noticed, right? Yeah. So technically if you take account of his dollar and you put it on the federal wire system, and for those of you who are unfamiliar with the federal wire system, you can be any type of depositary institution.

Speaker 3: You could be a credit union, Estate Bank, Federal Bank. The moment that a depositary institution moves a dollar whether to settle your check or your credit card or to balance balances. It touches the federal wire system that is by federal law, money, laundry. And so everything that happens next is about enforcement risk or mitigation. And so when you asked me about the federal government, I'd say they have a very reasonable concern, which is the money is growing. It's not getting banked that creates public safety risk and we learned that from nine slash 11 that you need to watch out for cash economies. This is a growing cash economy and it needs a solution in order to fulfill federal priorities. And that's how the Bank Secrecy Act has something to do with the Patriot Act. Yes. And a on and on and on as far as fed policy, specifically interest rates, you know, uh, kind of going up and you know, them trying to figure out their balance sheet as inflation doesn't happen, meaning meaning wages aren't growing, where are we as far as just, you know, the overall financial picture of the US and globally from, from your perspective because you're a guy that knows more than the next guy, you know, you're being very kind and not.

Speaker 3: I'm not so sure about that, but I think I'm going to duck this question because you know, what I see in the administration is a desire to free up business, right? Businesses reacting to that, their capital markets deals that are being done. Yeah. But it's also hard to understand the direction of where the administration is going and if we become more isolationist as a country or we take a stand on trade situations, that's over my head. Go ahead. I got you. Okay. I'm just doing what I'm doing, man. You know, I got the kids in what I'm saying. That's your point of view. I got the kids in Milwaukee, right? We got a bigger house than we would in New York. Everything's wonderful rice. You get to be outside a little bit more. I would imagine we're outside. It's very family oriented. My son is becoming a hockey player.

Speaker 3: Uh, it, it was the first time I ever stepped off the New York treadmill. And uh, so it's been really enriching for my family. Milwaukee has been a great place to launch a startup because it is quite affordable. Uh, there's no Chinese food, which is something that element on a regular basis, but that's where you're going after this, right? Absolutely. Yeah. Three final questions. I'll tell you what they are. I'll ask you them in order. What's most surprised you at work along the way? And we did talk about a specific point in time in history of business, right, and just economies and you were there. So I, I wonder what the answer is, what's most surprised you in life is the second question. And then on the soundtrack, your life, Joshua one track one song that's got to be on there, but first things first along the way here you've had some interesting, uh, you know, times in business and you're, you're asking for more of that.

Speaker 3: What's most surprised you? I think that coming from the professional world of Wall Street and financial services and it had expectations that a lot of the support and world class advisors and services that we take for granted would be available in cannabis. And as I got deeper into cannabis, I saw that they in fact were not that the industry lacks proven advisors. Generally people are telling them that the sky is never going to fall. What I say to businesses is the highest lawyer in the land, the AG sessions, he is not so friendly to candidates and I would prepare for him. Right? That's the mantra of our business. The NACB is be ready and just, um, to point out when we are speaking though, we don't need to as podcast land knows no time. Uh, the Rohrabacher Farr amendment just did get passed through, so, uh, the Senate and Congress rejected, so congress rejected sessions call for the withdrawal of that so that he could go after medical marijuana businesses, which is nice.

Speaker 3: Well, I would say again, that you need to be very thorough in your evaluation. It was a voice vote last night, right? So there could be repercussions. Things could get pulled back. I certainly think it looks very positive, but it's not a done deal yet. Okay. See this. Now we know why we need you, man. What's most surprised you in life? Most surprised me in life. I think that I love to pay it forward. I love to be a mentor to people, to spend time with younger people who have been where I have been to lend any type of insights I've acquired over the course of time. I thrive on that. It develops very deep relationships and a lot of value in pleasure in my life and I'm sort of surprised that more people don't do that. Oh yeah. I guess if I were to make a call out, I'd say, you know, mentor some young people.

Speaker 3: Then the benefit of some of your advice. I've been very fortunate. My Dad's 87, he's a terrific New York City story and for my whole life I've gotten to sit at the knee of older gentlemen who tell me important stories which have helped on my career. Now quickly his story, just because you said terrific story, right, with pleasure. My Dad is 87. Still crushing it. Yeah. He, uh, his parents came through Ellis island. He grew up in the Jewish ghetto. Sure. No sneakers and then somehow went to city college of New York and played on the basketball team that won the NCAA and nit in the same year. Look at you. A feat that no longer can be done. Right. So, uh, you know, my dad was. My Dad's kind of a great driver. My family is the leading investor in our business. And, uh, before I launched it, I went to my parents and said, so what do you think?

Speaker 3: And my mom said, honey, I love it. It's huge. Let's do it. And my dad said, I don't hate it. Then there we go. Run away. By the way, when he was playing basketball, that's when Jews could play basketball. Six foot two Jews. Yeah, exactly. The year from the big juice. I'm not on the soundtrack of your life. One track one song that's got to be on there. I could walk on water and not get wet. I'm going to go with a Lenny Kravitz and, and, uh, and Maxwell in that song. Oh, look at that. Okay. You, you, when you said a Lenny Kravitz. I, for some reason I thought of let love rule, right? Well, that was the original one, right? Remember that? It was a CD that I had back in the day. Probably most of the people in the podcast are not familiar with that either. No, but if you're not, I mean, come on. If you like music, that sounds good. You should check that out. If you don't know what we're talking about, right? Absolutely. Joshua, thank you very much for your time. Thank you very much for what you have done and thank you very much for what you're about to do. Hey Seth, it's a pleasure. We love to come back and please everyone take a look@Nacb.com and let us know what you think

Speaker 1: and there you have. Joshua Laderman seems to have put together quite a team and of course some old friends, they're on the board playing nicely with the NCIA, self-regulatory. Seems like what we're going to need to do for the next little bit here, so appreciate Joshua's time. Appreciate your time. Stay tuned.

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Cannabis Economy is a real-time history of legal cannabis. We chronicle how personal and industry histories have combined to provide our current reality.