Warren Lab founder on mergers, mistakes, and advances in the cannabis industry

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ABKO LABS LLC: Amy Brown, founder and CEO of Cannabis Testing and Safety Compliance and a native of Birmingham, transitioned from financial services to marijuana before Michigan legalized recreational use. As consolidation in the cannabis industry continues, Warren-based ABKO has agreed to be bought by Premium CBD Labs of Madison, Wisconsin, who wanted to expand into Michigan to start a larger company testing cannabis and hemp.

How did you get into the cannabis business?

So I worked in the financial services industry for almost 30 years and graduated from law school. I was really just ready for a new chapter. The (2016 Medical Marijuana Act) had just passed in Michigan. My friend was a caregiver under the (previous rules from 2008) and my father was a chemist. So the three of us discussed over a beer, maybe we should do a laboratory. So we started looking at it. At the time there were very few laboratories and since it focused on safety and health issues it was very attractive to me. At this point I started a whole new training.

Where have you been in the financial services industry, what did you do?

I have done financial planning for wealthy and very wealthy families. So a lot of estate planning, a lot of company valuations and the like. I did that in Cleveland and then in Chicago.

What was ABKO like when it started and can you talk about transitioning to recreational sports?

The story of getting it going has a couple of complex parts. Michigan works by the state approving you, but you must also be approved by a community. As a laboratory, one of my challenges was the buffer zones to residential areas. Since a laboratory property is not a commercial property, these are definitely different requirements for the property. So I worked with the City of Warren and we got the buffer zone removed.

In the beginning we had a team of people, I had some setbacks when I started. They drink from a fire hose. I had to voluntarily stop taking samples at some point and retooling my team and retooling my operations, which was tough, and it happened right when COVID started. When I brought in samples again, adult usage (permit) was much faster than originally expected and my city hadn’t registered yet. It took another 14 months to get my adult use license.

What was it like adding adult use? Has the way you work changed at all?

It enabled me to reach a few customers who had mainly switched. It’s exactly the same test with a few minor differences. For example, you can have more total yeast and mold in recreational products than in medicinal products … Operationally nothing has really changed for us.

Can you talk about how the business has grown?

We were definitely the busiest when we first opened because we were the first laboratory (licensed under the Medical Marijuana Act of 2016). … At this point in time, nurses were still allowed to sell on the licensed market, so they served a completely different source of income and a completely different group of people. Much more laboratories have opened since then, so growth has been very sporadic. When I wasn’t fit for adults, I’ve had some very lean times. Now … we’re getting back up and one of the things I ran into when I was scattered too thin and the problem is the things I needed help with, none of that was a full time job. So I spoke to my lawyer and he was working with a group (Premium CBD Labs) that wanted to open a lab in Michigan. We got to know each other, clicked and decided that we would just work together. You will come on board as a partner in ABKO. So at no point did it go as I expected. But no, it’s great, they are a fantastic group …

Can you talk about how this will look for you in the future?

The benefits are that we have access to the Wisconsin laboratory manager. He has a deep knowledge base. So it really made it possible for us to improve on what we can do in the lab. And on the flip side, (Premium CEO) Jeff Hagen is another partner and he will be able to take away a lot of the CEO-like responsibilities from me so that I can focus more on continuing to grow the business and it gives me the freedom to do some of the other things that I enjoy doing. For example, the sales page, I enjoy meeting cultivators and seeing what they do. And we really want to try to play a more robust role in the business cycle (between producers and retailers).

Would you like to share something else about your cannabis experience?

I think the most important thing about starting a cannabis business is that you literally have no set of rules. There is no easy way. (In other industries) there are best practices that you can look up, that you can find, there is a manual. With cannabis, you have to build it from scratch.

If you could go back, would you still build the plane while you were flying?

If I had to do it all over again, I would have found a lab manager and just given him the property. Someone with some cannabis experience. I see the value of it. In my head I pictured this as a role someone could grow into. Only growth takes a long time. So I would do it differently. I would have a laboratory manager as a partner from day one. I was adamant about accepting investor money because I felt that being the first lab to be approved (under the 2016 law) was crucial for me, and because of that, I felt that all investors would be an anchor holding me back. I would do it differently; I would get investors.