Nancy Warner, Founder, CEO Assurpack LLC

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Nancy Warner, Founder, CEO Assurpack LLC

Nancy Gruskin Warner, is the CEO and founder of Assurpack. Nancy has a degree in package engineering and over 30 years of experience in the pharmaceutical industry, specifically in contract packaging, including expertise with materials, design, function, regulatory compliance and manufacturing. In 2012, Nancy co-founded Mina Pack, a contract packaging company providing specialty unit dose contract packaging services to pharmaceutical and HBA companies.Nancy was involved with Mina Pack until November 2015.

Previously she was director of sales at Sharp Corporation, director of sales at Reed-Lane, and national accounts manager at PCI. Prior to that she was manager of package engineering at Sterling Drug, package development at Polaroid Corporation and packaging specialist at Life Savers.

Nancy is a member of NCIA (the National Cannabis Industry Association) and the 1st chair of the Packaging and Labeling Committee, and Women Grow, a networking organization for women involved in the cannabis industry.


[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt.

[00:00:30] Welcome everyone. This is thinking outside the bud I’m Bruce Eckfeldt. I'm your host, today I'm here with Nancy Warner. Nancy is founder and CEO of Assurpack. Nancy has a background in package engineering with over 30 years of experience in the pharmaceutical industry space. We're gonna talk a little bit about what she's doing in the cannabis space today. Nancy welcome to the program. Thank you for having me. Yeah so I always like to have guests start by just giving a sense of their background. Everyone's got an interesting story in terms of how they got into the cannabis space. Give us a sense of professionally kind of where you started and how things led up to doing what you're doing today.

[00:01:05] So My background is that I am a package engineer by degree and have spent my career in the packaging industry for most of my career.

[00:01:13] I was in the pharmaceutical packaging industry starting out at a pharma company as the manager of package engineering and then transitioned over to the supply side the supplier side and worked in business development for some of the major pharmaceutical contract packaging companies working with Big Pharma small generic pharma virtual pharma and as a contract package. We worked with every aspect of their industry were an extension of their facility so we handled every thing from development of the packaging through manufacturing through distribution so the bulk product would come to our facility and we would actually do the packaging. We were controlled by the FDA and DEA like a pharma company.

[00:01:53] So I have a pretty broad background and would just you know I'm always curious about the details of some of these industries like what goes into packaging like what are the weather variables or the facets that you're looking at when you go at sort of designing packaging for a product like this.

[00:02:09] So from the pharmaceutical perspective it's very specific.

[00:02:12] And it starts with a very functional attribute which is providing the shelf life and the attributes of extending the shelf life and also giving you the marketing information that you need and also providing child resistant features. Automation is very important in the pharmaceutical industry and compliance. There's just a range of things that have to be considered when developing a package.

[00:02:34] So this is actually the sort of the degradation of of the material itself of the actual chemical in the drug.

[00:02:40] Sure. Figuring that expiration day the expiration date you get on the on the outside of your package is determined by testing the product in the package. So the package contributes to providing that shelf life.

[00:02:51] And then obviously you know when you're dealing with very large production volume stuff it's got to actually be produced. So how does it all go together in a way that is consistent and is going to have a high quality process. Got it. So let's talk a little bit about. I'm curious what you've been able to kind of transfer or parlay from the pharmaceutical industry and the experience you've had into the cannabis space and what like what's applying for you what's not applying. Like how how is it similar. How is it different.

[00:03:18] Ok. So going into the cannabis space I had to basically reverse engineer a lot of the pharmaceutical type of packages that I'm familiar with so that they were on a smaller scale lower volume semi automatic process because the volumes are just not there yet. In the cannabis space we talked about volumes on the pharmaceutical side what are what are the units multi-million volumes and running high speeds of 300 packages a minute in the pharmaceutical industry with multi-million dollar packaging lines that you invest in as opposed to running tens and hundreds of thousands in the cannabis space. So it's very different. So what I did and my basic idea was taking a business model that is existing today and that was the institutional pharmacy market and that's a market that supports places like nursing homes and prisons and they prepackaged the product into these blister packages. We call them bingo cards and there are small scale businesses across the country that do this. They actually buy the pharmaceutical products packaged them package it per patient individual monthly basis and then supply that To that end location and they have small scale equipment preform components and it's done on a local level. So in my mind that was a good business model for the cannabis industry because they have to package what they produce in their own facility cannot cross state lines.

[00:04:45] So there was no economy of scale from a packaging perspective.

[00:04:48] So the biggest hurdle for that particular business model was getting a child resistant package because those packages for the institutional pharmacies do not adhere to resistant. So I have a relationship with a manufacturer who developed one of the best child resistant blister packages that's used in the pharmaceutical industry. I approached him and I said Would you give me exclusivity to market your package in the cannabis industry. And he said yes because he knows I know what I'm doing and I would protect his IP and do it right. And so that was the package and how I started my business fascinate.

[00:05:30] I'm curious about the actual the mechanics or the engineering of proofing itself. I think there's always the joke of you know the parents going that can open the childproof things to give to the kids to figure out how to open it. What do you actually do or what are the mechanics or the things that you do to make something child resistant or child proofing from a packaging point of view.

[00:05:52] Well there is a standard and the standard is created by this Consumer Product Safety Commission who is the government agency responsible for overseeing and regulating child resistant packaging. And there is a protocol test that is required that we submit are to a third party authorized ACM certified testing agency that we give our PAC hedges to to test. And there are two parts to the test. One is that the testing children and the children are of a certain range of age and mix of boys and girls and it's evenly distributed between the ages and the sexes. And then the other half of that test is a senior friendly test where we check we actually test seniors. So you have to pass both parts of this test. You have to pass keeping children out while allowing adults to get in. It's a very challenging challenging proposal to try and have this do because of something that you can create a package and the testing is quite expensive. And so if it can run 10 to 20 thousand dollars per package so it can get expensive when you have multiple packages I've tested at least 15 to 20 packages since I started my business well.

[00:07:04] And this is sorry this was a federal agency that does this.

[00:07:07] Yes. But what's interesting is that all the states who are regulating marijuana are calling and referring to the CPAC guidelines. OK. But the CPAC which is a federal agency has no standing in the cannabis industry. Yeah. So it's ugly. Yeah it's it's it's it's adjusted position because that's the standard and there is no other standard really for what is considered to be child resistant. And so we are all testing this package through the CPAC guidelines and testing and going through the same agencies that Big Pharma uses for this this type of package testing to make sure I understand.

[00:07:44] So the states are basically saying we're going to use this packaging standard at a state level to say whether or not something is child resistant trialed sort of tamper proof and then the federal agency is basically saying we're you know hands off we're not we're not correct. We're not getting involved in sort of really certifying anyone in the marijuana space because obviously the federal regulation issues.

[00:08:13] Correct. Correct.

[00:08:14] So almost every state that has legalized marijuana either medically or for adult use has required child resistant packaging as part of that legalization process which is the right thing to do.

[00:08:29] Yeah.

[00:08:29] So they're baking it into their into their regulations in terms of the industry. So how does that show up. That means that any anybody who is selling in dispensary cannabis or I guess a THC based product in a dispensary is state law required to put it into a child proof container or packaging of some sorts.

[00:08:56] Yeah well we can't. We can take it a step further back in the chain and the the goal is to have the manufacturers who are producing either infused or edible products or various different products to pre package their products in a child resistant package before it gets to the dispensary. There are also options within certain states that if that those products are not already in a child resistant package when they arrive at a dispensary they have to leave the dispensary in a child resistant package and there are these packages what they call exit bags which are child resistant zipper bags that many dispensaries use and many states are using but especially on the edible and infused product side it really needs to be done at the manufacturer level so that the dosing and the child was the same package is is already in place. Think about it like going to CBS and getting a non child resistant package of Advil or Tylenol and putting it into a child resistant bag What do you do when you get home you throw out the bag and get the package right. It's just consumer behavior. So if this industry doesn't really adapt the same model that you know you keep it in the primary what we call the primary package where the product is in the package directly as the child resistant package which is really the intent of child resistant packaging.

[00:10:23] I guess whereas the industry at this point if you kind of look across the states and that sort of what's been adopted what dispensaries are doing what manufacturers of of cannabis products are doing.

[00:10:34] What percentage or what level of products are using packaging at the different levels.

[00:10:41] Well in states where it's required it's a hundred percent so. So if you look at Colorado where a lot of this start at ground zero like a lot of us call it the regulations they work very hard and I think they did a great job of coming up with sensible regulations.

[00:10:55] So of all the products that are manufactured in Colorado come to the dispensaries for the most part in child resistant packages so they're doing it at point of manufacturing. Yes they at this point.

[00:11:08] And so what else goes into this packaging. So we've talked about the sort of childproof trial resistant ones are you like however you looked at some of these other things that you were looking at pharmaceutical in terms of expiration date in terms of sort of the efficiency and the cost of the actual packaging process. What are some of the things you're working on from a packaging point of view on those factors as you know the big pushes and branding in the cannabis industry.

[00:11:34] So everybody is looking to create their own unique brand and branding is a marketing function and marketing and branding are graphic and visual visual aspects of what the packaging has to support. So we do a lot of customization and a lot of creative packaged what we call package development work to help support the branding efforts of our customers. So when I started the business we had most of almost everything was custom engineered and designed every every package we did. And over the past couple of years I've focused on developing some standardize what I call state anodized products that can be customized easily. So it's more of an inventory item that we can provide for customers and then provide custom supporting packaging or labeling for those and that allows us to have a bigger broader customer base and to work with companies who don't necessarily have the volume to commit to equipment that they would need for some of these other customized type of packages to produce in their facility.

[00:12:38] And so just to give us a sense of where are you now as a business what's the last couple of years been like what have been some of the big the big opportunities that you've been able to capitalize on. What are some of the challenges in making this whole thing work or producing this kind of packaging solution for the industry.

[00:12:56] Okay. Well it's it's astronomical growth.

[00:13:01] It's really it's amazing to be part of this growth and this opportunity and to be maybe at the right place at the right time and have some great packaging solutions. There are many packaging companies in the cannabis space. My business model is to have packages that are unique to my company so there are other solutions that people can use outside of my packages. But if they want to use the packages that I provide then they're only available through a share pack and so that's that type.

[00:13:30] I've looked at this it's challenging as far as inventory growth and ordering cycles.

[00:13:39] It's not that sophisticated many of these products are new there's no history. So it's very hard to manage that aspect of this of the business. And so we have to take on some of the inventory risk for our customers in anticipation because there's just no basis of how to how to predict when California came on board last year with full legalization.

[00:14:03] And as of July 1 they were required to use child resistant packaging. And so all of a sudden there's a tremendous volume because California is such a huge market. So it's been very interesting.

[00:14:16] Yeah it's certainly I mean you know no pun intended but the growth in the sector is it has provided unique challenges to a lot of businesses. In fact several people I've spoken to kind of talk about you know we talk about what's the one thing they wish they did differently over the last couple of years.

[00:14:33] A lot of them said grow faster just because it's been such a challenge to sort of keep up with the industry growth even though they're growing at you know two to three times a year. Because the market is going so much bigger they're still they're actually shrinking in terms of the market they're their market percentage like they're leaving so much on the table leaving so much room out there that they sometimes they wish actually grown faster.

[00:14:56] What.

[00:14:58] When you look at your growth and you look kind of back at the last couple of years and anything that you would sort of do differently or things that you've learned about the process now that you've kind of been in it for a while that you know if if I had a magic wand and I sent you back to you you would change or you'd think maybe differently about no regrets. But in terms of insights.

[00:15:20] Well I think staffing this business has been challenging and it's it's a push pull. You know I don't want to commit to taking on staff when I'm really not sure where the volumes are going and how big this is getting and maybe had I had a crystal ball I would have staffed a couple of years ago in anticipation of what's happening out. But you know when you're starting a business and cash flow is really tight and you don't want to overcommit and I'm pretty conservative in that way. So I've just been doing whatever I can do it to just man in a reactive way as opposed to a proactive way.

[00:15:54] Yeah. Do you I'm curious because I've I've spoken to a couple of people that have come out to the pharmaceutical industry and I've gone into the cannabis business. Do you notice a difference just in terms of kind of culture and approach and kind of this risk management and things like that in terms of your history in pharmaceutical and things that have helped you and have been real assets for you in terms of the cannabis and then you know maybe things that have been more of a challenge that you know that that that's the way it was done there but here maybe it doesn't serve you so well.

[00:16:21] Any insights on that.

[00:16:22] Well I can tell you that many of my manufacturers in my supply chain are pharmaceutical packaging companies. OK. And the challenge is to work within their system which is geared towards pharma and my customers are not pharma and I need to be very quick in terms of my response time and my lead times and the planning cycle is very short. Every every customer has an immediate need. Everything is an urgent need. There is no preplanning. So it's hard to have constant crisis management within your business and to work with manufacturers and suppliers who are used to being in a more consistent demand. Well planned out industry. And so that's been very challenging.

[00:17:05] Yeah I can see that.

[00:17:06] I mean I came out of the tech space and the whole kind of agile software development movement was was very much a response of that kind of shift from big waterfall.

[00:17:15] You know a three year plan projects to you know basically delivering software every two weeks and being very kind of fluid and iterative about how you approach it with these very high highly dynamic markets with changing customer needs and you know competitive forces and stuff. So it sounds like very much that same dynamic.

[00:17:32] Well it's been very interesting because I have gotten some inquiries through my Web site from some major consumer product company isn't pharma companies. And my response to them is basically I'm not set up to support your business because I'm not. I would need a staff of 100 people to really work with those types of companies not just to support the kind of business model that they need. You know in terms of all the different departments that have to support that business.

[00:17:56] So you're getting contacted by pharma companies for using their music packaging you've developed for pharmaceutical products.

[00:18:02] No for the new packaging I've developed for the cannabis industry. I've got it. So they they want to get it. Basically they want to get out of the cannabis game. Now they want the unique the unique child resistant packages to be creating. Yeah because pharma their packaging is not what you would consider creative and practical and very functional and practical. Yeah. So what's been very interesting and really a lot of fun is that the cannabis space is demanding much more creative packaging solutions child resistant packaging solutions for products which has not existed before because it's child resistant packaging was for the majority it used only in pharmaceutical products.

[00:18:39] So this is a an interesting not uncommon kind of conundrum that sort of successful growth companies get into which is once they get some traction a lot of times they get all these different opportunities and know people come at them with Hey we could use your product here or we could use your service here.

[00:18:54] And I think as you know founder and entrepreneur it can be a little distracting. It's like how do you choose like which opportunities to go after and which do you not. I mean it sounds like you've done a fairly good job of being able to say look at some of these opportunities Hey look no you know I'm nine. This is not the best move for me right now even though it's potentially really shiny. Really interesting. It would be easy to change that. How I guess what's giving you the clarity or how have you been able to kind of look at that produce say hey look great opportunity but it's not for us right now.

[00:19:25] Well having been in business development and working with large corporations for most of my career I understand what's involved and the challenges of dealing with big companies as a small business. The other aspect of this is that in the cannabis space because of the banking issues and our customers don't have credit that there are there aren't really terms available for us to offer our customers. You know we're starting to and there's other companies who are starting to do this. But if I were to deal with big consumer product company or Big Pharma who want 60 90 day terms I'm just not set up to do that.

[00:20:00] So from a cash flow you just don't have the kind of standalone business alone it does not makes.

[00:20:05] So even even if it was significantly profitable but having to do a run of a million units puts you in such a cash deficit for that 90 days that it's not feasible it's not worth it.

[00:20:15] I'd rather have 25 more cannabis customers than one big consumer product company.

[00:20:20] Yeah it's interesting that the whole credit issue is actually making it easier for kind of service providers for the cannabis base because everything does have to be on immediate terms. There's no know because there is no banking no financing it actually improves your cash flow strategy.

[00:20:35] It's an amazing thing. It's easy to call some of the terms that some of the big companies we worked at I call them that never

[00:20:44] Put them like that maybe never. Yeah. Been on outside yeah.

[00:20:50] This space is so fraught with these kind of funny nuances because of the banking issues it's like it creates this funny cash flow thing. The other thing I find is that I think this is a really good example where my guess is that a lot of companies who would be normally would be moving into this space pretty quickly but because because of the cannabis legality issues gives them pause because they don't want to taint the rest of their business so they don't. It creates these kind of wide open markets and there's this really high growth space. Mean what's your you know not that I'm looking for any hard prognostications on what's going to happen but as you look forward in this industry and particularly in your market what happens when the federal and federal legalization kind of works itself out and stuff. I mean you expect that the the pharmaceutical or the big the bigger pharmaceutical players in the space are going to come in pretty quickly are they going to do acquisition. I mean are you. How are you kind of thinking or positioning herself for that and when do you think it might occur based on what you've seen.

[00:21:46] Well I don't think it's going to occur very quickly. But I will say that that's most likely going to happen whether it's big pharma big alcohol Big Tobacco. They're all on the sidelines working on this. They're ready and as soon as they can they will we'll be in the space. I would like to be out by the time having having left that corporate career and having had that experiences for so long that becoming an entrepreneur and having my own business in this space and then having the freedom of being in this new wild market has been so much fun and it really is a creative endeavor. And I started I had no idea what would happen when I started this. There was just no way to predict as I basically did not want to work for anyone else again.

[00:22:31] Not an uncommon story for a lot of entrepreneurs. You know this is like I get fed up with the current jobs and write working.

[00:22:39] The other thing is I would have loved to have done this 10 years earlier when I was 10 years younger. It was to at this point in my life but that was there was no matter what.

[00:22:47] I'm curious because I just being a lover of entrepreneurial stories like what has been difficult that like whatever you found as being more challenging or that if you were 10 years younger would be easier to do.

[00:22:56] This is a tremendous amount of work. I have never worked this hard in my life and I I've worked hard. And as an entrepreneur it's nonstop you know and and starting it and doing everything. So your mind is never at ease you know because you're constantly having things even when you're trying to like put it aside you still in the back of your mind having a lot of stuff going on. So it's a big company with a lot of requirements I could have a marketing person I could have a you know multiple people doing many different aspects of what a business needs. But I don't have that type of staff. So it's just tremendous amount of work has a lot of fun because I love doing all these different things but at some point you have to have a structured staff and you have to delegate and you have to move on and then your role becomes very different than it was in the beginning.

[00:23:41] Yeah I think that's one of the one of the key things people don't appreciate. I think until they've kind of gone through the entrepreneurial journey just how different it is. Like know when you're when it's just you and you're getting initial traction when you kind of start working with the first couple people when you start scaling up like each one of those stages is a major transformation for the CEO. For the founder CEO as they go through those cycles and quite honestly sometimes they don't make it. I've seen a lot of companies that kind of cop out or struggle at a certain level because the leader is either unwilling or unable to make those make those tonight.

[00:24:12] No one can be good at everything you know and I bring a certain skill set and a lot of expertise in many areas to this business but not in others. So I seek out help well I can and I think I'd like to delegate my daughter and my husband would say otherwise.

[00:24:28] Yes. Delegation is in the eye of the receiver.

[00:24:33] Interesting. So the audience here or you know various people that are kind of different assets this business but for the earlier stage folks for the people who are either thinking about starting a cannabis based business or you know have started and are kind of in the early stages of it. Any particular advice thoughts things that you would advise them on or make sure that they consider either doing or thinking about as they are growing their business.

[00:24:55] Well I would recommend trying to find a niche where your skill set brings some sort of value and something that is needed in the candidate space and because the cannabis industry is so large and it's growing so fast. I think there's a lot of opportunity but I think knowing what you know how to do and applying that as opposed to say Oh I think I would like to be a grower you know I know nothing about agriculture growing plants I all my house plants are dead but I want to I want to be a grower. And it's interesting for myself having come from the contract packaging industry where I handled drug product for many years and understand the risks and what was involved with that. Having dealt with class do drugs with DEA and all those issues my choice was not to deal with the product. You know I think there's opportunities both sides. So you have to focus on exactly what you need are what your risk tolerance is. And just go for it.

[00:25:47] And I think that's a great point and something that you know I hear again and again is that people keep focusing on. Well I'm gonna I'm gonna grow I'm gonna extract I'm gonna dispense you know but there's so much to this industry you know other than this core kind of chain where it needs everything you know it needs banking solutions these marketing and these packaging needs consulting needs training when there's all these things that we need cannabis specific solutions around which makes this market so much bigger than just the core you know people that touch the plant site. Any particular areas like if you exited this business and you were looking at starting another thing and the cannabis space what opportunity is or what kind of nuggets have you seen out there that hey look there may be some good opportunities for people to go in and try to start developing some solutions or some products. And in terms of this kind of broader cannabis business market.

[00:26:35] Well I think the industry that I come from the country packaging industry is a very unique model and I think could be a great model for the cannabis industry and somebody with experience and an entrepreneurial leaning will. And there are some companies out there but not that much. And because you can do it still on a small scale on state by state basis that you could get your feet wet without having to invest too much you know as far as I'm sensing a trailer set up that I can drive from state to state. Well there are companies doing that. There's companies with Pac Cadena let's say they're making transdermal patches and that equipment is very expensive. So there is a company out there that has it on a truck and they go from location to location and they'll run somebodies production for the year and then go and drive to the next place. Because not one company alone in the cannabis space can afford it as that kind of money in that equipment and it's time.

[00:27:27] So if we can't take the product to the equipment we'll bring the equipment to the product and people are doing that. Yeah fascinating.

[00:27:33] That's why I love the space so many interesting things going on. There's a bit of pleasure we're at. We're hitting time here.

[00:27:40] If people want to find out more about you about the company and and what you're doing what's the best way to contact you or get more information you can contact us at info at a sure pack dot com and I'd be happy to talk to you and tell you more about the company and myself if you're interested and I appreciate it.

[00:27:56] I'll I'll make sure that those that email is in the show notes and on the page for people listening. Again this is a pleasure. I'm looking forward to hearing how the business continues to do. And I'm sure it's going to be an exciting ride. So good work.

[00:28:08] Thank you so much. I appreciate the opportunity to speak without your listeners

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