Green Wise Consulting’s Pamela Epstein has built her business and reputation on providing solutions to the biggest challenges facing the industry.
Pamela Epstein is omnipresent in the best way possible, and not just because the knowledgeable, energetic, engaging, and attractive cannabis lawyer and consultant is a frequent speaker on the trade show circuit. In addition to all that, she simply comes up a lot in random conversations among industry peeps. This was driven home again during a recent chat when her name was mentioned and my colleague exclaimed, “I keep hearing people talk about Pam Epstein!” I laughed. Why not? This is cannabis. The cream is supposed to rise to the top.
But Epstein is well-known also because, with a centeredness that seems to belie her youth, she is a mover and a shaker, a passionate and motivated straight-shooter who shies away from the “e” label when asked if she thinks of herself as an entrepreneur. “I don’t think I would call myself entrepreneurial, but I think others, when they see how the business has evolved, would say that’s entrepreneurial,” she said with precise modesty. The business is Green Wise Consulting, the expanding full-service firm Epstein founded a few years ago as she was transitioning from a career in environmental and land-use law into the nascent cannabis industry. Like so many who have settled here, her pathway into the business was personal in origin.
“I had severely debilitating migraines that would send me to the hospital two to three times a month,” said Epstein in early December. “I would bring my laptop [to the hospital] to try to work to meet my billable hours, but it was a very self-defeating situation. I was sick all the time. But I also was fortunate to be living not in Tennessee, or in New York even, but in San Francisco.” Her neurologist happened to be studying the endocannabinoid system, and after asking Epstein a series of probing questions about her medical history, suggested she try cannabis as a solution.
She visited Sparc and had a wonderful experience with a budtender who listened to her story and suggested some options as she figured out what worked for her. She began a regime of tinctures, and the migraines went away. “Cannabis saved my way of life as I knew it by allowing me to be an active participant in work,” she said. It also changed the sort of work she wanted to do. “I left the firm I was at and went to Arizona,” she said.
Arizona was just getting its cannabis program underway and didn’t offer many options for patients. “This was around 2014, and I could not get what I needed,” explained Epstein. “But if I did procure the tincture I needed across state lines, I would be a criminal, and I was an officer of the court. I thought, ‘If I can’t advocate for myself, and advocacy is what I went to law school for, who do you advocate for in life?’ I started to do advocacy work in Arizona.”
In 2015, Epstein returned to California and settled in Los Angeles, where she quickly realized her land-use degree would be very helpful in establishing credentials in the cannabis industry. “I understood the issue from a different lens than you do with an affirmative defense,” she said. “It is very different to approach a city and ask them to participate in a land-use environmental conversation than it is to ask them to allow an affirmative defense solution.”
Now she was consulting for clients in two states and decided it was time to make things official. “I started Green Wise Consulting in 2015, when I was in between Arizona and [Los Angeles]. My project manager and best friend let me set up in her apartment, so I had an apartment in Arizona and her place here.” Business started to blossom when cannabis applications began in earnest. “I had a bunch of cities I was working with, and I had my clients. I was trying to get everyone on board. It just grew from there.”
Epstein also became affiliated with the Hoban Law Group, which became an integral partner in her journey. “Green Wise is my future, though, and so my time with Hoban is naturally coming to an end. Green Wise is now a business with employees and divisions, a labor of love, and I would not have gotten there without the help and strategic support of a lot of people.”
One reason Green Wise is such a labor of love must be because it so closely mirrors Epstein’s priorities. “Green Wise specializes in a solutions-driven approach,” she explained. “We’re always driving a solution. We provide a Cheesecake Factory-like menu of solutions to cities along with a new ordinance, and we tell them, ‘We’re going to take the guesswork out of this. Here is a MAUCRSA-compliant ordinance that deals with testing, packaging, and labeling, everything. Now, what are your concerns? If you are going to dip your toe into cannabis, how would you want to do that? We have people who want to come in and talk to you about it, and residents who need a service.’ It’s a service-driven ask, which is much different than going into a city during public open comment period and saying, ‘I want to discuss something.’
”Distribution has been a neglected license type because cities have been dealing with storefront dispensaries, cultivation, and manufacturing.”
Epstein also is proud of her 99-percent success rate in getting clients’ applications submitted and deemed complete—a significant accomplishment considering the complexity and variability of the application requirements imposed by the 482 cities in California, each of which must carve out its own rules. And the work never ends. When we spoke in early December, Epstein was up to her eyeballs getting clients’ permit applications submitted on time as the cities’ differing deadlines loomed with sadistic urgency. The challenge was manifested in the fact most municipalities simply did not have their act together, including massive and essential markets like Los Angeles, whose final regulations would not be issued until the week after we spoke.
In the face of such uncertainty and chaos, what sort of companies could be interested in entering the space? “Big publicly traded companies want to come into the space, and then you’ve got the mom-and-pops spending their entire livelihood,” said Epstein. The opportunities, she added, were “across the board.”
The “First-To-Market” Curse?
The impending regulated market in California could hold unforeseen problems for companies with established brands, explained Epstein. Like many others, she sees choppy waters ahead for brands that, for one reason or another, are ill prepared. “Most people would be surprised that some of the brands they identify as critical parts of their cannabis rhetoric, that they go to and trust, are not ready,” she said.
For some of these companies, the realities of regulation are only now starting to sink in, along with the commensurate panic. “It’s the cost of compliance being so high, and the failure of a lot of these business that capitalized on being first to market in California and built market share without building the infrastructure needed to compete in a highly regulated market,” she explained. “That is then associated with significant growing pains, because they have to get to market to service the market share they have, which makes them desirable acquisition targets.”
To what does she attribute such shortsightedness? “I attribute it, to some degree, to being too big for your britches and thinking you can’t fail,” she said. “I think people miscalculated how difficult it would be at the city level. Oakland wanted to make sure they would be online, and they’re not online. People there are in process, and they’re like, what do we do?”
Distribution As Savior
A natural solver of problems, Epstein talks a lot about distribution, and for good reason. It is the lifeblood of any industry with products that need to get to market and will play an essential role as the cannabis industry transitions from black and gray to white. Epstein insists people need to understand the difference between working with a true distributor, as she calls them, and deciding to self-distribute.
“A distributor does your fulfillment for raw materials, clears your product for [quality assurance] and [quality control], and then works with retailers to get your product on a shelf they have access to because they have a myriad of brands,” explained Epstein. “That’s a true distributor and a distinction between a lot of the approach that distribution has done until now.” California will allow operators to self-distribute, however, and a lot of brands appear to be looking at that option, if only because distribution is also the forgotten license.
“Distribution has been a neglected license type because cities have been dealing with storefront dispensaries, cultivation, and manufacturing,” said Epstein, who also worked at one point for Hollister as a special city attorney ushering through that city’s cannabis ordinance. “A distributor hasn’t been as central until now, and because there have not been many options, that’s where the road to self-distribution came about, because we didn’t have these conversations and cities didn’t understand the role of the supply chain.”
The situation will lead to unintended consequences, warned Epstein. “The transition period places a high value on retailers and distributors, so if you are a permitted distributor come 11:59 p.m. December 31, 2017—if you backstop your product that is not an edible, not higher than the 100 THC milligram limit, and is available in the correct dosages—if it’s sitting in your warehouse, the product can still enter the market even if it’s not licensed in [the first quarter] of 2018. That is a huge benefit that a distributor has. Now, if a distributor is self-distributing or is a part of a larger organization, do they have enough inventory in their back stock to hold that much product?”
That’s just one potential drawback to self-distribution. The relationship with testing labs, another potential source of crippling bottleneck, also comes into play. “The distributor needs to contract with the testing labs, so think about it this way: A testing lab wants to contract with distributors with multiple brands versus self-distributors.” said Epstein. “If you are a self-distributor and there are contracts with large distributors with multiple brands, you’re always going to be second in line. So, is that 20 percent you have to pay to a distributor a good or bad thing when they have more shelf space in shops and clout with the labs? These are the things operators don’t think about when they say they used to do it all themselves under the old collective model.
”Most people would be surprised that some of the brands they identify as critical parts of their cannabis rhetoric, that they go to and trust, are not ready.”
Wheels Turning
When you talk with Epstein, you literally can see the wheels turning in her brain as she works to resolve the unique challenges that confront her and her clients every single day. The stakes could not be higher, and the 80/20 rule is operative. “Eighty percent of the businesses around today won’t make it, and only 20 percent of the businesses operating today that want to become licensed will get to the other side.
“It’s like a cannabis Thunderdome,” she continued. “California’s experience will be more aggressive than other states, because everyone is not starting from the same playing field. Some people have more to lose than in other jurisdictions, and there are also so many protocols to plan for that they can’t all get there unless they figure out how to work together.”
One solution? “The shared manufacturing license, the Type S license, is going to be a gift to a lot of manufacturing companies because the cost of compliance is so high,” she added. “It was very smart of the [Drug Policy Alliance] to look at Wonder Bread and the food industry and say, ‘This is how food products are made.’”
The comparison is apt. “Before Wonder Bread was large enough to run their facilities 24/7, most bakeries and food providers in that space would share processing facilities, so they could take the same equipment to make multiple brands while having protocols in pace to ensure safety,” explained Epstein. “It makes sense in this industry, because no one has the market share to run large processing facilities all day long.”
That’s just one solution to the challenges facing cultivators, retailers, and manufacturers in the cannabis space, but Epstein will be busy building a team looking for new solutions. “We’ll have three divisions going forward,” she explained. “A full law firm, Green Wise Legal, which has a corporate formation specialist, an [intellectual property] specialist, real estate attorneys, and myself and Damian Martin. I’m also bringing someone on from Northern California.
“Then there’s the consulting/application firm, which does community engagement, and then we have a business development firm, which cultivates opportunities and sometimes capitalizes on those opportunities with operators, but is completely separate from the law firm, which can have a right of first refusal to work with any of those deals, or they can say ‘we’re too close.’”
Epstein is open to engaging in development, as well, which is why the law firm is segregated. When asked if there is a type of cannabis business that appeals to her, she was quick to reply.
“I would love to have a showcase dispensary of what is a compliant operation,” she said. “I would love to be able to say that this is something Green Wise invested in because we did it right, and this is what it looks like when you do it right. To have some sort of proof of concept between saying to my operators why we invest so much in an employee handbook, why we vet so closely and play by the book. If you have a gold standard to show, sometimes it’s easier to get clients to walk a difficult pathway of compliance. To that degree it would be fun, and it would be fun to curate a cultivation that has my dog’s name. To have my brand on something.”
That’s the appeal and the reason why people like to talk about Pamela Epstein. Her heart and mind are in the right place. “What drives me is pulling myself up by my bootstraps,” she said as we parted. “I’ve had to do that my whole life. I graduated when no one was hiring lawyers, had to make a job at the Sierra Club, and founded the first cannabis law and policy clinic in San Diego, tacking some of the largest issues there. I learned humility while doing that. Don’t be too big for your britches. Be a team player. I also like to be challenged, and this space is nothing if not challenging. It’s also creative. You wake up every day to new issues and new clients with new concerns and dramas I’ve gotten to be a city attorney and never thought in my wildest dreams that I would ever get to do that.”
