Host: Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Guests: Tai Duncan of Cresco Labs & Geoff Trotter of Regennabis
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
So I talk with people a lot about staying power in the cannabis industry and now that we’re seeing that we’re in our second, third and fourth wind within the space, the recipe for longevity is getting pretty clear. Organizations who are not thinking about how they impact people, planet and profit are not here for the long game. I’m Jen Lamboy, I’m the Director of Strategy here at Hybrid Marketing Co. We’re a business outcomes focused cannabis agency. We also work in the hemp space as well and we’ve been here since 2015.
We focus primarily on driving revenue, reducing risk, reducing cost and that’s why I’ve invited these two, Geoff Trotter and Tai Duncan, they’re incredible forces within the cannabis space, specific to ESG. So Tai is the VP of Corporate Social Responsibility at Cresco Labs, as you know a leading multi state operator who started focusing on an environment, social and governance framework in recent years. And Geoff Trotter is the co-founder and CEO of Regennabis, a company that is building a software as a service solution for managing and reporting on ESG initiatives specifically. So thank you both for joining me. I’d like you to jump in and give a little bit of an intro, a little more about you and what you’re doing within the space
Tai, if you want to start.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
Sure. Thanks, Jen. Glad to be here with you all today. So as you mentioned, I’m at Cresco Labs, I’ve been here for four years now running the corporate social responsibility program. And at Cresco that work now includes corporate philanthropy, employee volunteering as well as social equity in our social equity education development program seed initiative.
So the ESG work is relatively new to me. I started at Cresco last year and my background prior to coming to Cresco, I’ve been an attorney for 15 years working in a variety of different jobs from financial services to nonprofit management as well as in the sports industry and startups. And so I’ve sort of always kept the connection to community engagement throughout all of those jobs. It’s been sort of the thread throughout all of it. I’m delighted to be here today and excited to be a part of the cannabis industry in this growing space.
Geoff Trotter, CEO of Regennabis
Great to be here too, Jen. Thanks so much for the invitation. Wonderful to be on this platform here with Tai too. Regennabis is a sector agnostic professional services company. We go to market in three business verticals: advisory, technology that you referenced, and convening.
Our integrated approach is designed to help companies deliver to their strategic, financial and operational goals through the successful build out, as we believe, and implementation of an environmental, social and governance framework which in turn will help them transition to become a regenerative business. I’ll just add from our perspective, a regenerative business goes beyond sustainability to actively seek to restore, renew and revitalize the systems it operates within. So while a sustainable business aims to minimize its negative impact on the environment and society, a regenerative business takes this a step further by aiming to create a series of positive impacts and actively contribute to the regeneration of economic, governance, natural and social systems holistically. Hence the name “Regennabis.”
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Well, should we, how can we dig into this? This is a conversation, I travel throughout the US, I go to a lot of conferences, we talk about regenerative business, we talk about ESG, we talk about CSR. A lot of folks really don’t even have an initial framework for it. Do one of you want to jump in and just give us, hey, what are we even talking about here?
Geoff Trotter, CEO of Regennabis
Let me unmute first. Rookie rookie mistake.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
We could keep it a mystery, too.
Geoff Trotter, CEO of Regennabis
Been doing this for three years and I still tell you old dogs, new tricks. Anyway, ESG and you know, in terms of defining it, I think it’s from our perspective very important that we just understand the positioning of ESG versus say sustainability versus corporate social responsibility and philanthropy, etcetera. Fundamentally ESG is really about risk and risk mitigation. Any company, public or private, big or small, really needs to get a handle on the increasingly regulated risks or market driven risks around environmental, social, governance factors that if you’re not addressing are going to trip you up at some point down the line. And so it it’s fundamentally an internal process driven by a set of external variables like a a series of environmental factors, greenhouse gas emissions, how you deal with water and waste etc. through the social factors by you know how, how are you performing around diversity, equity and inclusion, what about labor practices etc.
And then governance, what does your board look like, what does your C-Suite look like, what is your pay gap looking like etcetera. And so fundamentally it’s a focus on this externally driven and then internal response to how you will show your shareholders principally, but all other stakeholders how you are setting about mitigating these risks over a period of time. And that’s essentially what we’re addressing here. We can talk a little bit more later about the sustainability piece and the corporate social responsibility piece. But ultimately ESG is about risk mitigation and demonstrating your performance around that risk mitigation.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
And I think of it as really, and there’s an evolution in Canada’s industry specifically, but also I think in business in general. You know ESG has been something that we’ve heard about for a while in financial services and other industries and CPG generally. But I think it is newer to Canada’s businesses in terms of putting a focus on it. I think the evolution, I think of it like community engagement. It’s positively impacting identified communities, you know, through activities including volunteering, activism and financial support.
And then CSR social responsibility is more programmatic. I think of that as the policies, decisions and actions that hold a company socially accountable. How are you a good corporate citizen? How do you contribute resources to the communities in which you operate. How are you ethical and obeying the law. And then to the next level I think of it is ESG, and there it’s more analytic than the others, you know. So the way I think about it and that you’re trying to provide useful information to a wide variety of stakeholders through ESG initiatives.
So where a company, I think most CPG companies and retailers are at that sort of like we do CSR work, you know we find opportunistic investments and initiatives to become involved with. We become excellent at those things that we do over and over again and that’s sort of where they are. But then to increase your competitive advantage, you have to think about sustainability as a core pillar and then looking at it as an advantage and sort of how do we evolve the work that we do in the way that we think about our work beyond sort of the traditional activations in communities, which are I think important to maintain, that’s part of a large part of the essence social. So you don’t want to lose that kind of work, but it’s part of the bigger picture. And I think you know, Geoff, you made a really great point that you can do good and do well, but at the end of the day, it’s like how do you go to the next level and actually put something good back into the community that is going and back into the world. It’s going to make your company stand out from other companies, but also make you a company that creates a lasting positive impact. And that’s where I think that the goal should be in my opinion for cannabis companies in all industries at this point.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
I feel like as an industry maybe more so than most, there’s such a strong focus on the social piece, on the equity piece and and a lot of the players within the industry are not MSO’s, if you think about just the number of folks. And so for someone who’s building a business now or maybe they’re a mid size organization when we’re talking about you know corporate responsibility that also can kind of factor into the smaller organization. So you know, what’s the importance for a small to mid size company maybe who wants to get acquired down the road, maybe wants to get back to the community, what’s outside of a competitive differentiator, what’s the value of getting started with that with an ESG initiative program..
Geoff Trotter, CEO of Regennabis
I’ll dive in there. I’ll come back to something that you said right at the beginning of this session. You talked about the long game, and the long game I think when an organization puts ESG processes and then sustainability and its own social responsibility right at the heart of its business, you know it bakes it into its DNA from day one, is giving a very solid indication that it intends to be around for a long period of time. And so right from the get go that just tells you that if you are interested as an investor potentially in an organization, if you cannot see any evidence of any of that, then you’re better off taking your money down to Vegas frankly because this is not a long term play.
And so I think right there that’s, from our perspective, the great bellwether. So if you’re a small business or a startup or you’re building this out, I think the next thing to understand is that it, you know, people might say oh it’s a nice to have. It’s more than a nice to have. It’s a must have because you have to also understand that your business will not operate in isolation. Your business as a small business will likely be feeding into a bigger business and in turn will feed into bigger businesses.
It’s the food chain of business. That’s just how it is. And increasingly you only have to see groups like Amazon, Google, and a bunch of others that are going beyond what is even regulated right now in the United States in terms of demanding from their suppliers more transparency around how they are dealing with environmental, social, governance factors. So you might as well get going on this right from the get go because if you don’t you’ll be permanently in catch up mode and you’ll just get found out and caught out. And these bigger players, CPG businesses, they’re not going to put your product on their shelves. It’s really as simple as that.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
I think you bring up a good point too about getting started now because it’s a lot harder to try to go back and figure things out than it is to start from the beginning. And so I think it’s important businesses get started to make this part of the core when they’re getting going. I mean it can be difficult because it can cost money and they require other resources. But I think it’s a good investment to start at the beginning as I say. So I mean in our industry it’s becoming increasingly important to investors, to customers for talent attraction and retention.
So when you’re looking to hire, no matter what size of your business, increasingly talent wants to understand things like what are you doing for the environment, what are you doing for the communities in which you operate for your employees, how are you governed? Those are important questions. And in terms of licensure, we see this, you know, it’s kind of our team is responsible for navigating the host community agreements. It can be benefit agreements and license applications, but there’s a compliance piece of it too that we’re having to report on these things. Increasingly in different states the regulators are starting to require more information and more proactive work when it comes to sustainability practices. So better to be already in the habit of that than trying to figure it out, you know, as things are coming your way. I think also it does demonstrate your beliefs and values as a company. And so as you’re thinking about building your business up and you’re talking about the core of who you are, this should be part of it. I mean that that to me seems like it shouldn’t be an add on to Geoff’s point. It’s not a nice habit. It’s anything that’s going to be not only required but also a competitive advantage.
And I think it helps, you know, we talked about mitigating risk. There’s an increase in governmental regulations as well. And then it’s an industry standard now or it’s totally becoming an industry standard. And I think from just a basic business governance standpoint, it aids in reducing siloed aspects of your business too. Because one thing I’ve learned through this process which we’re still very much, you know it’s an ongoing process, is the data gathering.
When you’re bigger, as you grow, as you’re in multiple states and Berkeley Integrative especially, there are a lot of different people that have the information you’re looking to track and to build on. And so if you are starting out smaller or if you’re one part of this ecosystem, it can be easier to gather that information to have transparency between different departments, different teams, different employers and stakeholders. If you’re working on these kinds of initiatives, you now are working across compliance and IT and finance, all the different parts of your business and working with your vendors in that same way, I think.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
I think so. You know, we’re a highly regulated industry at least in the US of course we’re talking about compliance, also even in the realm of legitimizing this industry. I think what’s important about what you’re saying too is think about if you’re a US based, and Geoff you and I had a conversation about this maybe last week, I gave you a quick call because I had a question about this. So what we’re seeing on the marketing side is some, and this is just a simple example, but some beverage organizations, so THC, even hemp derived beverages who are based here in the US, what they’re seeing is the opportunity if they’re not already growing revenue abroad, maybe in the UK specifically. And so I had called Geoff last week and said how does, you know around the topic of ESG, what are some differentiators for folks who are US based organizations who are waiting for regulation to kind of happen or evolve in the US and they still need to be generating revenue.
Geoff, can you explain what you shared with me about like why is, why is again, why is it important? And I don’t want to beat a dead horse here, but why is it important if you’re looking in international markets as well?
Geoff Trotter, CEO of Regennabis
Cool, you’re putting me on the spot. I’m now going to try to remember what I did last week. What I say is old dogs, new tricks. I’m telling you it’s not so easy. Well, but fundamentally the issue here is that, and again as I referenced just earlier, small companies are not operating in isolation and now countries are not operating in isolation.
So just frame that for a moment. Whilst the SEC here in the United States is setting out delivering regulations around the “E” principally aspect of ESG. I mean if you look at California as a state, they’ve even moved ahead. They’re ahead of the curve of what the SEC are doing. They’ve already come up with their own state laws.
But at an international level, the European Union is so far ahead of where the SEC is right now and therefore you know it’s already law in the European Union. So things like corporate social reporting directive are already in play. And what that really means is that if you’re a typically, this would then mean a large cannabis company with aspirations outside of the United States. You’re not in Kansas anymore Toto, you’re in a different world and in those places you really have to knuckle down and demonstrate that you really are on top of these risks because it’s law.
And I think it’s important and it’s just to pick up on Tai and Tai’s background, increasingly, what we’re seeing at Regennabis, when we talk to organizations, we are seeing an increased play of folks with a legal background operating in the ESG and straddling the finance function because increasingly, this is so important, you have to be aware. And funny enough just to belabor the point, one of the 26 general issues that we talk about in terms of covering from an ESG perspective is systemic risk. And part of systemic risk going forward will for sure be geopolitical scenarios. And so if you’re not aware of what’s going on in other jurisdictions, and it’s one thing to understand here in the US from state to state, but from country to country you’re going to get tripped up and you’re license to operate will not be granted and so you really need to begin to think a little bit more holistically about other jurisdictions and the cannabis space. Not to sort of pick on anyone in particular, but I will, Boris Jordan last week came out and it was quite a positive statement that he made about the transition into Germany etcetera. But I hope that someone’s bending his ear and saying oh by the way there are some different rules in Germany. And so if they haven’t already embarked on the journey around really building out their ESG performance, they’re going to need to like yesterday.
So that’s some of the difficulties if you like that we’re blessed with.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
So maybe the bigger, biggest, yeah, biggest question I think for folks might be how do you actually start? So what I want to maybe cover is what kind of qualifies under, you know, if your organization’s volunteering, is that the same as like a full blown ESG program? What really kind of defines each of those buckets, What falls into, maybe what actions kind of fall into those buckets? And then I want to follow up with actually how do you get started? I think that’ll help also just kind of put some framework around the possibility of getting rolling if you’re not already rolling on this.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
That was a lotof fun. It’s sort of the way that we have broken down. I mean thinking about these buckets, it’s like, you know, the environmental piece, you know, it’s greenhouse gas emissions, energy consumption, waste management, recycling, water management, air and water pollution conservation, packaging for us in the cannabis industry, those kinds of things. The social diversity, equity inclusion, compensation and benefits of employees, social equity work. Our community engagement general volunteer will fall under that social category, corporate culture and workplace health and safety also. I think of it in that social bucket and then employee engagement as well. And then for governance it’s board diversity and governance, it’s executive compensation, ethical conduct, compliance with all the regulations, risk management, public policy and advocacy.
So just some of the ways that we’ve bucketed. I’m sure that Geoff has some corrections on that and also you know expansions on it. But I think the way that we, I think knowing what you don’t know is sort of the beginning of it. It’s understanding doing a materiality assessment, so understanding risk under the areas environment, social and governance, what areas of your business may be at the highest risk for having problems. And then if those things do come to happen, what is the magnitude of the issue that may result from those risks? And then you know, thinking about where are we at as a baseline?
I mean most companies probably don’t even know where they are. They don’t even have the data to know where they stand. And so the first step is understanding, is to gather that information. So sustainability assessments, materiality assessments that we go across all three areas and then getting that baseline to understand, and part of it too is the inclination to boil the ocean, to say “we must know our entire environmental footprint. We must know how we impact all areas of social and governance.”
We must have all the information and we’ll make decisions and act on those. And we saw in the last few years a couple of cannabis companies, you know, putting out these incredible ESG reports. But then it becomes difficult to do all those things because it does cost a lot of money and it requires resources and people. And the environment has changed so much in the cannabis industry and the world. So it can be tempting to make major commitments.
But I think that the baseline understanding and the understanding from that point, like if these are the highest risk areas, you know talking to our internal, external stakeholders, community members, getting a wide cross section of folks interviewed for the materiality assessment then of these top, let’s call them three to five issues maybe, where does this fit into our plan for the next 1, 3, 5 years? Because at the end of the day trying to do everything ultimately leaves, most times, people doing hardly anything.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Sure.
Geoff Trotter, CEO of Regennabis
Yeah, I think that’s what Tai has just pointed out there is just perfect. Please understand what is material to your business. And I’ve dropped something in chat, I don’t know if anybody else can see that in chat, but we can distribute it. SASB, the Sustainable Accounting Standards Board, which is now an integral part of the International Financial Reporting Standards Group. So we’ve gone from non financial standards to financial standards and that’s a great indicator of where this is going. But if you look at sasb.org and specifically standards, they have a free tool called the materiality map.
So they’ve assessed 78 different sectors, and in any one of those sectors and across any one of those sectors, there are 26 general issues across ES and G that they have identified as being material to a company in that sector. So if you’re in the cannabis space, I would say first and foremost if you’re really not sure what your materiality assessment is, go to that map. Then secondly, ask yourself the question, what license type do we have in the cannabis space or license types? Because if you have only, if you’re vertically aligned or let’s say you’re right across, you’re totally integrated seed to sale, then you have licenses across those five types, everything from growing to selling in a dispensary. It’s possible then to look at each of those five sectors and determine the overlay of those 26 general issues and that will tell you what you should be focusing on.
And then within that you can begin to say these are the things we need to be capturing. Where do we capture this stuff? Well, we know companies that thankfully no longer keep it in books and on pieces of paper. They stick it in Google Sheets, Google Docs, they’re using Excel. Some we’ve seen are using project management tools like Asana, etcetera.
These are great because there are a myriad of ways in which you can capture this data and once you understand what it is that you need to be capturing then you can set about doing that. Fundamentally, the reason we decided to then build something that we’re going to call ESG XL, you can already find at esgxl.com. But anyway, ESG XL is because we are aiming to bring excellence around ESG reporting across those 26 general issues. So no matter which sector you’re in, we can help you further identify your materiality assessment on what needs to be captured. And we’re creating an SaaS platform that will do away with the need for sort of somewhat disenfranchised Google Sheets, Google Docs, Excel spreadsheets, pull it all into one and then make it easier to to see dashboards ongoing.
Because if you’re in human resources and you’re tracking your DEI play, which you really ought to be doing, I’ll come back to that in a moment. But if you’re doing that and it’s on some other sheet within, you know, within your HR function, you really want to be able to sort of share that right across the group and be able to see how your organization is performing across all of those material factors. And ultimately what we’re looking to do is to make it easier for communicators within organizations to identify the points that the Charlie Bachtells of this world are going to be asked when it comes to investor relations questions in quarterly earnings calls. You might well have been asked some of that this morning because I saw your third quarter results came out and this is what we’re aiming to do. So you know, even if you’re wanting to get into some roleplay, if you want to be a, you know, in a small kind of a startup and you want to be a future Charlie Bachtell, imagine the kind of questions folks are going to be asking you and see about answering those questions within your own organization before you go public.
That’s how we would anticipate helping folks get off the ground and get this all going.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
How does the org chart look on your side with Cresco Labs around like what types of folks are on your team? Just, you know, yeah, give us some insights on what that looks like.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
Well, this is the fun part, right? It’s sort of, I call my job a fun mix of like whack-a-mole and a scavenger hunt. Sometimes you’re trying to map all the different things across operating in eight different states, you know, being vertically integrated. So it is a fun and complicated puzzle.
But our team at Cresco and this corporate social responsibility is for people and so we are responsible for all of the CSR work. But what I’ve learned is that engaging the different people within the company that are not on my team has been the key to all of it, honestly. So I think finding outside resources, people, you know, as consultants who can help you to kind of synthesize this, you know, talk about Geoff’s technology, talking about, you know, folks who are doing this work on their own or in companies doing, you know, sustainability assessments or doing materiality assessments. Like I need to work with outside folks to help me to just gather the information because I can’t do it all myself. But also I think what I found is people are on our company because you know our core values do support this work.
I found so many of my colleagues who are excited to help who are saying hey, we actually do track this in our team, you know manufacturing. We do have this data or we have these utility bills you can access and sort of this collaborative all hands on deck effort. It’s kind of how we’ve been doing it. So when you’re a smaller operating team, it’s kind of the same thing. I think that you’re just, even though our company is large, we don’t have a massive group that’s doing ESG work. Specifically, we’re leveraging each of the skills from each of our different teams to get the data that we need to understand where we stand with respect to ES and G.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Well, that kind of really plays into the point that you made earlier about if you are a smaller organization maybe you have the luxury of operating in a single state and building the framework within your single state before you expand into a couple of others or throughout the US or into international markets.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
I think as you mentioned before, you know volunteering, it’s like, I don’t think you have to jump in and do everything all at once. But certainly we started out, you know, just like what are the commitments we’ve made in the states in which we operate and our host community agreements, community benefit agreements and let’s make sure we’re doing those things. And then beyond that, what are our, you know, folks who work at our retail locations? When we ask them what matters in their communities, what are they saying? What are they seeing?
Like literally go outside of Sunny Side. What do you see happen? Like what? What are the needs in your community? OK, cool. Then we’ll talk to the groups. They’re helping make those things better, like we’re not going to do to ourselves, we need community partners and we have to listen to communities first. And so I think it’s absolutely fair to start where you can and if it is volunteering, if it is called philanthropy, if it is just making connections to community members, being part of Chambers of Commerce and sort of learning what’s happening in the business industry around you, I think that that’s a fair starting point. And then making sure that as you are growing your business that tracking your environmental impact, tracking your social impact, tracking your governance initiatives, your compliance work and making sure that you can match the risk, the materiality piece and what you’re actually doing. Those things often come together when you have the data to do that.
That’s, I think, a great starting point. I don’t think that, you know, most people are not gonna be able to just invest and have a whole team for ESG right away or or at all, you know.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Well, you’re reminding me. You’re reminding me too, of the value of community. You think about states like New Jersey, where the community voice is a big part of whether or not you get a retail license. Or I think about New York, where New Yorkers are locking arms with New Yorkers and that the value of community is really driving A) if your business can even exist, and B) if it’s going to be successful within the state.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
And it’s so much easier, I think to go to the next level if you have a foundation. So you know when New York is asking about increased regulations or sustainability and environmental impact and recycling other things, if you’ve already been doing work in the community and you already have connections there and you already know ways to get involved meaningfully. It’s not like all hands on deck panic fest because you have a foundation to build on there and you understand OK, well what are the composting laws or what can we do these facilities or are there ways for us, it can be small things, you know, like encouraging employees to bring reusable cups and things to the office. And you know, there are ways to create spaces that are environmentally friendly and that are starting to help your business to make small impacts and then the kind of lights that you use at the facilities. There’s a lot of different things that companies can do, but if your foundation is weak, it’s hard to do anything on top of that, you know?
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
So as a larger organization, does Cresco Labs, or are you seeing others within the space, have the initiative or bandwidth to even address legislators and help governments kind of form while some of these laws are being written, are you all able and are you seeing others really kind of impact how that’s getting authored?
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
I am seeing that. I think that the companies that, I mean, as I’ve mentioned that are here to stay, are ones that want to have an impact on a larger scale. They’re not just trying to get their customers in and out of the store. You know, they want to make sure that they’re engaging with legislators, that they’re trying to push for safe banking reform and things that are going to help the industry to grow in ways that we can continue to build the businesses that can give back and can do more. And so I’m seeing that certainly with larger businesses who have the bandwidth for it.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
I just mentioned that the world I came from prior to this is if we’re talking about highly regulated spaces is oil and gas. When you look at some of the larger operators who are helping to drive standards around air quality, water contamination, you know, whether or not it’s to drive out the smaller organizations. But they’re working hand in hand with the government to say hey let’s go ahead and lift the bar so that operators in Colorado are actually much cleaner and safer for the community.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
We see that with social equity too, I think because as each state, you know, moves from medical only to adult use, social equity has been a large part of a lot of those laws in the transition. And so understanding what some states did well, other states didn’t do well, sort of, you know, can we, if you operate in multiple states, you had the impact as an operator to be able to say, well, in our state we did this, it did or didn’t go well. Here’s what worked or didn’t work. As we moved to this next state, what do we think would be a better fit? Because you know, if only one of us is winning, then we’re not all winning.
It needs to be that the community is winning, that the customers are winning, that the businesses are winning. We want businesses to open. We want everyone who wants to be in this space to be able to thrive in this space, and it’s not, I think the idea that there’s scarcity versus abundance is a problem that I see a fair amount of communities in the cannabis industry and across. But I’ll see a lot of people saying, well, if this company’s working with that nonprofit, we can’t work with them.
Well, what sense does that make? If we have the resources and we have the need and our communities have the need, we should all be giving to the causes that are, you know, doing the best work in our communities.
Geoff Trotter, CEO of Regennabis
Yeah, that’s a very interesting point that you just made too, Tai. That you know, from my time in the not-for-profit world, I had, I recall not ever having been in a more dysfunctional space because of this, always this battle between abundance and scarcity. And so we had these, you know, when I was working in the nonprofit space, there were some other organizations who were pretty much looking to drive the same kind of changes. But boy, would we not ever speak to one another. And it just seemed to be an odd and lost opportunity.
And so when we look at you know, some of the groups that are I think very successful around driving social equity programs and or awareness and advocating for social equity, you know, look at the work that Toi Hutchinson is doing, Kalico Castille, Shanita Penny, as you know. So driving a lot of change there. And then at the policy end, you look at folks like Saphira Galoob, I mean these, these are all angels working in this space. They’re really just doing some incredible work. But I do get a sense that at least some of those folks are, you know, working together.
And I think we need to work together in the cannabis space because it is an embattled marketplace. There are so many other factors that are against this industry, whether it’s insane tax laws or just the fact that they can’t even get their heads around intrastate commerce, you know, and here we are years later, we’re still waiting for federal legalization. It is for me, you know, why would anybody want to be in the cannabis industry right now? But thankfully people are, and the ones that are in it for the long term understand that there is a very real and a very much needed social equity play. And you know, I’ve said this before, I’m always amazed that there is so much pressure on the cannabis industry to come and respond to the social equity play.
Yet for 404 years in the United States, there’s hardly been any social equity requirement on any other industry and yet it still continues. So everything is put on the doorstep of the cannabis industry, social equity this, social equity that, rightfully so. It also means then from our perspective when we talk to companies outside the industry, we say to them that if through the materiality map assessment that that DE and I is not material to your sector, then we say make it material to your sector, get on the front foot, cricketing term, be more assertive, go beyond compliance and report out on it because we fundamentally believe that that will be a differential here in the marketplace. It’s not a differentiator here in the cannabis space. It’s a must have.
So unless you can demonstrate your smarts in that space, it doesn’t make any difference whether you’re on top of your greenhouse gas emissions or your everything else around, your governance is good. If you’re not nailing that, you’re not moving forward. So I’ll get off my soapbox.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Now I know the word dysfunction comes up and also I think within the same, you know, within the same vein, so does passion for this industry, this industry provides whether you’re into, you know, supporting the planet, social equity, whatever, whatever exists in the world and and you’re saying it really falls on the backs of the cannabis industry as well. I think that’s why a lot of us are here. It’s not only is it fast pace and you know our work is ahead of us and that mountain kind of keeps. I don’t know if it’s growing or moving, but those of us too who have kind of locked arms together, we, you know, making partnerships, making introductions, working with folks who really share the same values. I think that’s what this industry does offer, I think about two, you know, just 280E is one, and I don’t want to go too far on that. But you think about, there’s organizations within the cannabis industry who are donating lots of money and really not seeing the tax value. They’re doing it because that’s who they are as an organization and kind of really getting clear on the values why you’re in this space while you’re doing the work that you’re doing. I think a lot of us are already there.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
That’s a great point. I think that we’ve learned that a lot of folks don’t even understand that part, right? That’s like, well, if you’re not federally legalized then why are you paying all these taxes? That’s a great question. But also when you look at me and you say well XYZ, yeah, XYZ, you know CPG company gave me $20,000. I’m a non-profit. I’m like, I love that for you, like that’s, I’m happy they did that. They also have the tax write off associated with that, that cannabis companies don’t have, yet here we are still giving. And so I think that there’s also that piece that you know there will always be someone criticizing you for what you do or don’t do. But I think that if you can focus on what your company values are and do the things and listen to the community to understand what the needs are there too, then you’re going to win.
Everyone’s going to win. But if you’re trying to chase whoever’s, you know, criticizing you or judging you or whoever wants to sell in that, it’s like there isn’t actually enough to go around, unfortunately. I mean there’s, you know, until we get better banking laws, it’s just harder than people maybe realize for the cannabis companies that do exist to get more capital so that they can give away. But meanwhile we have social equity businesses, if they want to remain minority owned, they can’t open, they have licenses they can’t use because they’re unable to raise the capital to get going. And so it’s the complexities here that are largely financial at the heart of it that make a lot of this work that we want to do feel like it’s the right thing to do.
That feels like a competitive advantage, very difficult to actually put into play. These things all require money. And if you’re a publicly traded company like you know as you mentioned for our earnings call today, it’s like people want to understand where your dollars are going. And at the end of the day, we are a cannabis company and we want to do good work in communities. And I think I believe that we do that work.
And I believe that we have people who are committed to doing that work. And I talked to some folks in talent acquisition and I said are you hearing people asking what we do in communities in interviews? And they said yes, we actually are having folks interview with us and say but do you care? And when I interviewed one of the questions I asked, I was like so, you guys say you care about community and diversity, but like is that only outsiders that matter? Like do you care about it for our company? Do you care about it for like, how do you care? What’s an example of that? And my whole take was like, this is my interview. You all might be like she’s not for us. But I wanted to know.
I wanted the company to know where I stand on these issues and to hear where the company stood. And I’ve been pleased in the four years that I’ve been here that I do believe that our leadership is on board with these initiatives. And it’s not for publicity because we honestly don’t talk about the work we do in the community very much And our regulators know, certainly the communities know. But I don’t think that it’s hard for your cannabis company to talk about your good works without people saying you’re talking about your good works in a way that’s negative. So for us we’re like, all right, if our community knows, if the regulators know, if our staff feels that they are engaged, those are the wins.
And so we create programs and we have a volunteer champions program here where folks who are from different business units and different facilities are part of a group where they meet twice a month and they talk about the community engagement that they want to do in their different markets. And then those who reach 36 hours of paid TED offers, which we do have for most of our employees here subject to their collective bargaining agreements. Those who have them when they get to that level, they become high achievers, which is like our we have a cool T-shirt you get. So it’s like we kind of celebrate our volunteers and encourage the 36 hours of paid time off per year to be in communities. Like we don’t have to do that.
And I love that our company chooses to do that and I wish that others would continue to do the same thing because you get these kind of people who care and they work harder because they believe in the business. And so it’s a win-win all around when you have that kind of culture at the heart of it.
Geoff Trotter, CEO of Regennabis
Yeah, I I love the work that you guys do. And as you point out, it’s not immediately obvious. I mean the work that you’re doing under seed in your program there, you really have to go and look for that. I mean it’s not like you’re out there shouting from the top of the roof, but it’s such meaningful work and it’s integral, frankly, some people might say oh, but is it you know, is it? But understanding what seed, what I think seed does is creates an ecosystem and the ecosystem of more equitable ownership right across the board and making sure that there are economic capital flows.
So to those folks who can really then set about generating really good businesses, I think that that is something which kind of sets again a position around “we’re in this for the long term.” There’s one thing to identify and anticipate your market which is classic definition of marketing, but it’s to also satisfy. So identify, anticipate and satisfy. But what you’re doing here is creating an increased market size, but through a sense of equity and fair play. And I think that that is something that is very much missing programmatically from quite a lot of organizations. So hats off to you for all that work.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
I remember thinking it through, when I came to Cresco. We had just announced the launch of The SEED Initiative and my colleague at the time was running that program and it was like our first or second day in the office and she was going to this, you know, big lunch with our incubatees. And so we incubated a number of businesses, social equity applicants and helped them to get their applications written and provided free legal services to help them to, you know, review their applications and support their application fees. And two of the folks who won licenses, two of the groups that have licenses in Illinois, one a dispensary and one is a grower. We continue to support them and to be you know, to help them to get their businesses going in ways that are creative.
So part of it is you. With the Volunteer Champions program, we have volunteer hours built into our company’s core. Well, we can leverage our staff knowledge to help these businesses. It doesn’t cost dollars per se, but for example if you are a small business starting out, you don’t have to have say a marketing person or a communications person or an IT person. But we do and so we have sort of a matter expert program here where we have folks from different departments who get volunteer hours for providing that kind of information to the businesses that got social equity licenses through our own dispensary and craft grow programs.
So you know if you need help figuring out how to do a press release for your dispensary opening, we have a PR team that is top notch here. Our communications team and they can help and volunteer their time to help you figure that piece out. We’ve had folks on our team that, and a non-profit will come to us and say, hey, we need help building out a website or help, you know, creating a fundraising plan. We have staff that has that expertise. And so we’re able to share that sort of human capital in a way that creates a meaningful connection with our employees to nonprofits, to small businesses, to individuals.
We had maybe even 2 years ago, I think. But one of our facilities was getting rid of some old lighting from the cultivation. And we had a community garden in Chicago that was like, hey, we could actually use that. It ended up being really like a ton, like a truckload of material that we were no longer able to use. But they could use it and they couldn’t afford to buy that material.
So you think about how we get to be creative sometimes. And so there are ways to make an impact and they may be small, but they accumulate. And even like we do things like Pennsylvania, we do a lot of dispensary drives. So whether it’s fundraising dispensaries or collecting our coats or canned food and that sort of thing, it gets our community there. Who’s coming to the dispensary to engage with our staff, engage with our initiatives that we have and they can see the benefit of their work.
We’ll do a community cleanup and invite local people to come from the town to come join us. OK, we’re going to be on this day, our city side staff, this location will be you know, this park district cleaning up the space or you know come join us if you’d like. We try to find ways to engage that. To your point, Geoff, maybe aren’t publicized at times, but we do it a lot internally trying to share what we’re doing. Like this team did this, this team did that and like celebrating the engagement because it does matter.
I think our staff whenever I go into the suspension, they ask me, you know, oh you know, what part of the company do you work in? I’m like, oh, I’m on a CSR team. We do volunteering and stuff and they’re like, oh, I love that. I love that we do this. I love that we do that.
It’s a connection that I don’t know that I, I don’t, maybe this happens in every you know, company. I’m hoping that it does but it makes me feel like we’re in a special place, that it’s supported from the top down, bottom up. Everyone seems engaged and involved with the community piece of it. Now the environmental side, you know it’s a lot to keep your arms around, right. But we felt like the social piece we could really do good work in first and start there and build that strong, and of course governance environment. You’re working them all the time.
But I think our social has been the anchor of our ESG initiative and it gives us the compass so that we have data around that we are able to then build out through our materiality assessment and sustainability assessments. Hopefully some baseline information will help us to continue to do good works in communities and do work that our stakeholders and our employees and our investors can be proud of.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
I’ll speak as the marketer on this panel and say consumers are also making more conscious decisions and supporting organizations with their buying dollar. And so while, you know, there is an effort to, hey, we don’t want to really toot our own horn, there aren’t, you know, you think about like track and trace technology organizations that are putting a QR code on their product so that you can look at where, you know, on the hemp side maybe where the farmer who created, you know, who grew the hemp that’s in your XYZ product, where that came from. So I do, I mean, I do think there’s a lot of value in, in elegantly sharing what you’re doing as an organization too, ’cause that doesn’t fall on deaf ears when it comes to the consumer.
Geoff Trotter, CEO of Regennabis
Yeah, for sure not. And in fact just to tie it all back from our perspective, it is one of the the five key drivers of why any organization should be involved in a programmatic approach to their ESG work. First, risk mitigation, first and foremost, that’s fundamentally what this is all about. Second driver is that it will drive access to capital and we will see that for sure come to force when and if the Safer Banking Act is passed or whatever. So access to capital, the social license to operate, we’ve covered quite a bit in securing long term customers and clients is exactly what you’ve just been talking about there Jen.
It’s critical that you know buyers, consumers will vote with their wallet and they want to see evidence that the organization that they’re purchasing things from not only they’ve got sustainable products and services, but at the very heart of their business they’re doing the right thing in terms of the planet and just broadly speaking around equitable business models etcetera. But ultimately the 5th driver will be about recruiting and retaining talent. And increasingly folks want to come into a workplace where they really feel that it’s all well and good. If you’re sitting in procurement and at the end of the day say, oh, I saved some money, I saved the business some money. But at the end of the day, they also want to know that they feel good about the office that they’re in or the office they’re connected to, whether they’re virtually, you know, involved in the business or otherwise.
And those five key drivers are what will make any business. But certainly the cannabis space, you’re going to be differentiated and that’s super critical. So the sooner you start the better and we’re happy to help.
Tai Duncan, VP of Corporate Social Responsibility at Cresco Labs
I think also, I mean so coming from a legal background, one of the things I loved about cannabis was that it didn’t have that the industry is, this is now, the industry didn’t have that sort of strict structure that came from law where it’s like you go to this type of law school, they go to this type law firm and then you put in your time, here you can’t. There were a lot of restrictions I felt, on being an attorney, and I think that as a black woman, there were a lot of restrictions put on me that I didn’t even always know were there. I just felt like there were a lot, there were a lot of barriers to me finding a career that was fulfilling to me. And I do find that the cannabis industry, in part because it’s newish in this form, necessarily that we have legacy market folks who’ve been doing this for a very long time. But in this regulated market, there’s a lot of creativity that you can have and make a real impact.
And so I do feel that we have not only an obligation to do better by people, I mean the history of the war on drugs and the way in which our country has treated this plant and those who consume, grow and distribute it, but also the fact that we have the industry that is still growing but it’s still green. I’m just full of it today. I just can’t help myself that there’s room for creativity. There’s room for us to be good citizens and to set a good foundation for the future. And I want there to be requirements across the country once legalization does come for us that are requiring companies who do better in these areas of environment, social and governance.
And so whatever we can do now to get that started I’m excited about and delighted to spend time with folks who also care about this work. So thanks for having us today, Jen.
Jen Lamboy, Director of Strategy, Hybrid Marketing Co.
Absolutely. Well, I also want to say I’m so grateful to share the space with both of you. You know we’re in this industry together and just you know, not only to know you but to know the work that you’re doing, the impact that you’re making within the industry is immense. And so thank you, thank you not only for joining me but for the work that you’re doing in the space. I want to go ahead and give folks an opportunity to look you both up on LinkedIn and and follow you, not only the organizations that you work for, but look up Tai Duncan on LinkedIn, look up Geoff Trotter as well.
Please start following them. They have so much to say, so much good work that they are moving the needle forward with. Also, I’ve also put together this on this little slide too. If you want to reach out via e-mail, Tai can be reached at community@crescolabs.com. Geoff can be reached at geoff@Regennabis.com.
So thank you both again for joining me. Lots of love, hugs and kisses. Thank you for the work that you’re doing in this space.
Geoff Trotter, CEO of Regennabis
Well, thank you too. Amazing. Thank you so much.
