Society, as a whole, has come a long way, but still views women in positions of power quite differently than they do men. I’ve run across infuriating levels of misogyny running this company and the day-to-day grind of having to constantly defend my position as someone who is qualified to do my job is exhausting at times. Men and women could both stand to look at their habits regarding the authority and expertise of women. Our training to be more trusting of male authority figures is deeply ingrained and I think we can all work on it.
As a part of my series about strong women leaders in the cannabis industry, I had the pleasure of interviewing Katie Stem, CEO of Peak Extracts.
Eastern Washington native Katie Stem started her first business at age 22 while in the Americorps VISTA entrepreneurial division. A graduate from Carleton College in 2002, majoring in pre-med and literature, she has extensive business and management experience, as well as more than 10 years of laboratory science background. While working for Washington State University and Oregon Health & Science University, she experimented in the fields of physiology, pharmacology and neurology using natural products and pharmaceutical interventions for human diseases. In 2010, she completed her degree in traditional Chinese medicine and became a nationally-certified licensed herbalist and acupuncturist. Stem’s skills as both a scientist and herbalist are invaluable to Peak Exacts in formulation, R&D, and educational outreach. A medical cannabis patient since 2004, Katie has been heavily involved and connected within the community since the early days. Her battle with Crohn’s disease led her to explore alternatives to dangerous biologic and immunosuppressive drugs. Cannabis has been a powerful tool to manage her disease and she is a passionate educator and advocate within the industry. Stem maintains an acupuncture and herbal medicine practice in Portland that she’s had since 2010.
Woman-owned and operated Peak Extracts was the first adult-use edibles producer licensed in Oregon and currently holds a position as the #2 cannabis chocolate manufacturer in the state. Originally founded in the Oregon Medical Marijuana Program in 2014, Peak Extracts is locally owned and based on principles of quality and integrity. Every Peak product is made using a proprietary in-house Terp-Lock™ extraction process that retains the character and effects of the original material. Peak’s hypoallergenic topical salve Rescue Rub is critically acclaimed and based on an exclusive combination of traditional Chinese herbal medicines used to treat inflammation, pain and blunt-force trauma. Peak Extracts’ vaporizer cartridges feature a focus on CBD, terpenes and CBG and are the only CO2 cartridges available in the market that retain 95% or more of the original terpenes and flavonoids. Peak Extracts’ best-in-class creations are found in more than 150 carefully selected retailers across Oregon. Find Your Peak — http://www.peakextracts.com
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the cannabis industry?
My pleasure! I became a medical marijuana patient based on the advice of my gastroenterologist in 2005, in order to manage my Crohn’s disease/IBD. It was a small community of patients back then and we often traded recipes, plants or infused products to experiment with what was best for us. I have years of laboratory science background, including isolation chemistry and pharmaceutical research. I started playing around with the different strains in edible form and found profound therapeutic differences among them. So, I began making my own strain specific chocolates. In 2010, I graduated with a degree in Chinese Medicine and that led me to develop our topical, Rescue Rub, rounding out the beginnings of our company. We were the first edibles and topicals producer licensed for Recreational sales in Oregon in 2016 and have been adding to our product line ever since.
Can you share the most interesting story that happened to you since you began leading your company? Can you tell us what lesson you learned from that?
When we were trying to get our large extraction machine approved by the City of Portland, the first several inspectors showed up and said things like “Where’s the man who’s going to operate this machine?” and “How are you ladies going to handle this big thing?” (Mind you, we’d already been operating the machine all by our wee selves for years). We finally gave in and paid a gigantic, red-bearded man to be there during the inspection, to cross his arms and look confident. We, of course, immediately passed that step of the process. The lesson I learned was that sometimes, no matter how ridiculous or unfair a situation feels, you just have to go with what will solve your problem.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
It’s very embarrassing because I certainly knew better after working in labs for so many years, but one time during the medical days I was cleaning out the machine using 100% ethanol that already had a fair bit of cannabis oil dissolved in it. I squirted some into the collection cup and it rebounded and made a precise and direct hit onto my eyeball. I furiously rinsed it out and wondered whether I would get drunk or high. The answer, I can report, was both. Luckily, it didn’t last long and everyone has worn goggles ever since.
Do you have a funny story about how someone you knew reacted when they first heard you were getting into the cannabis industry?
Most people’s initial reaction is to make fun of me for being a stoner, and ask if I’m high all the time. The great irony is that most of us in the industry used to be consumers in our twenties, but at this point are far too busy to use on a regular basis. I rely on cannabis when I’m in a Crohn’s flare, but otherwise there’s just too much work to focus on! My favorite story along those lines was that a friend of mine from college began teasing me, and then realized that he regularly consumes our brand. He didn’t realize I ran the company, and it quickly became apparent that he eats FAR more of our chocolate than I do. We both got a good laugh out of it — he’s an attorney and claims to need it to deal with his colleagues. Luckily, I love who I work with, but I’m glad I can help other people’s jobs be more tolerable.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Kate Black, my fiancée, started this company with me in 2014. We met and became friends in 2009, and got together in 2011. Even back then, we knew that the strongest aspect of our relationship was our ability to work as a team. She works so hard and takes care of so many things that are out of my depth, and we would never be where we are without her.
Are you working on any new or exciting projects now? How do you think that will help people?
There are several projects that I am particularly passionate about right now. We recently launched our Rescue Rub line nationwide and I am thrilled at the feedback and endorsements we’ve been getting. As someone that has suffered from digestive problems my whole adult life, I’m especially excited for our next set of products on the hemp side. We’re releasing our full line of strain-specific edibles and tinctures for nationwide distribution, including a few that have very unique and promising cannabinoid profiles, such as high CBG, high CBN and Sour Space Candy, a USDA-certified organically grown strain out of Southern Oregon. We’ve already done an informal clinical trial with that product and people have been reporting a positive impact for a variety of ailments.
Ok. Thank you for all that. Let’s now jump to the main core of our interview. Despite great progress that has been made we still have a lot more work to do to achieve gender parity in this industry. According to this report in Entrepreneur, less than 25 percent of cannabis businesses are run by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and/or c) society to support greater gender parity moving forward?
Individuals can take the initiative to research women-run companies and use their dollars to support them, and voice their support on social media, interpersonal networks, stores they frequent and conversations with their health care providers. Companies should make an effort to put women in positions of authority, and support them in continuing education to prepare them for promotion. Part of the issue of disparity is that most women weren’t mentored or supported enough at the beginning of their careers in cannabis to be in executive or management positions now. We recently hired a floor manager, and with over 100 applicants, only four were female and they had no experience with managing in the cannabis space. As a company, we’ve had to focus on promoting from within, or hiring women who have expertise in different fields, and then train them about the cannabis industry. Society, as a whole, has come a long way, but still views women in positions of power quite differently than they do men. I’ve run across infuriating levels of misogyny running this company and the day-to-day grind of having to constantly defend my position as someone who is qualified to do my job is exhausting at times. Men and women could both stand to look at their habits regarding the authority and expertise of women. Our training to be more trusting of male authority figures is deeply ingrained and I think we can all work on it.
You are a “Cannabis Insider”. If you had to advise someone about 5 non intuitive things one should know to succeed in the cannabis industry, what would you say? Can you please give a story or an example for each.
- The packaging rules and regulations could change at any moment, so it’s important to weigh buying in bulk vs. being able to make minor tweaks to verbiage or design elements. We’ve heard so many stories of 500,000 units of wasted packaging because of something as simple as the state requiring us to change the wording of the “do not drive” warning.
- Familiarize yourself with 280e and potential pitfalls. Expenses such as marketing, design, legal fees etc. are not a write-off for the business. There are creative ways to structure multiple businesses to avoid some, but not all, of the problems, and you have to prepare for an effective tax rate of close to 100% of your annual profits because of the current regulations.
- Demand in the market can surprise you. Because this is a new industry, there’s no long-term studies or focus groups. We delayed release of our tincture line because there were already several competing products on the market, however it is now our biggest seller. Through our reputation and unique approach, we managed to enlarge the market for tinctures when I assumed it was largely saturated. There are still products yet to be produced that could become household essentials.
- Assume that you will be fighting against state, county or municipal bodies to make your facility safe, licensed and compliant. Many people are still skeptical of cannabis, or make assumptions about the kind of people that go into the industry. Patience, endless research, and hiring experts (it’s best to find people who’ve done similar work in other fields) is key to put their minds at ease. Being female can make this problem much worse, and don’t be afraid to hire men (or borrow them!) for crucial meetings or inspections.
- Do not expect to make money or get rich. This is the most competitive and tightly regulated industry out there right now, and the banking and taxation structure is literally put in place to eliminate our profits completely. There are companies that are successful, sure, but I don’t know of any that didn’t start with several million dollars in seed money or have been sweating it out 80+ hours a week for years, or both. Passion is an important thing to cultivate if you want to try to jump in, and finding people to collaborate with that share your values. There are some amazing, ethically driven people in this industry and they are more than willing to mentor and share insights with like-minded people, sometimes it just takes time and effort to figure out who they are. We made a few friends initially that turned out to be unethical, and we’ve had to pivot and become more discerning. We’re blessed to have found some honest, driven people that I can call when I have doubts about a business decision, and we can grouse about the industry when I’m having a bad day.
Can you share 3 things that most excite you about the cannabis industry?
- Because it’s essentially a brand-new industry, there are fewer entrenched ideas of who should do what, and there’s no system of nepotism where executives are handing dynasties of control down through the generations. I believe this is why initially there were so many women in leadership positions in the industry, although that has shifted as funding has come from more mainstream sources. We really do get to write the script from here forward, as it pertains to values and practices, and although that feels like a big responsibility, it’s also very exciting.
- There’s a constant thrill for me that I relate to the discovery of The Rosetta Stone — we’ve had this amazing medicine for millennia that was lost to us about 100 years ago, and we’ve rediscovered the key and can now again share it with society. It has the power to improve lives, and I speak from experience that it can reframe an illness from something beyond your control. There is great power in an individual’s ability to modulate their own health, and cannabis has so many things to offer for inflammatory conditions such as IBD. We’re in the midst of an opioid crisis and cannabis could be a part of the solution. It addresses pain, and emotional discomfort, but without the risks of overdose and addiction that opiates present. With a huge aging population in the U.S., it’s so exciting to be able to offer a safe option for things like arthritis, insomnia and anxiety. We hear feedback daily about how our products are improving people’s lives, and making them feel more empowered to take further steps to enrich their health.
- As someone who has spent the vast majority of my adult career in either the practice of medicine or research, the opportunities for innovation are what keep me hungry to work in this industry. We’ve just scratched the surface of the utility of the minor cannabinoids, terpenes, and other accessory chemicals present in cannabis. It truly is a unique plant with literally hundreds of pharmacologically active compounds, many of which are already established as extremely medically useful. For instance, I saw with my own symptoms that I was achieving greater benefit from vaporizing cannabis at low temperatures, which meant that I was getting a dose of THC-a. That led me to develop a THC-a tincture for our company, which has proven successful and useful for many people. We still have much to learn, but it appears that THC-a is a potent anti-inflammatory that affects TNF-a, which is cytokine commonly dysregulated in diseases such as Crohn’s disease. It’s moments like that which keep me driven to continue searching for more solutions and hidden treasures within the cannabis plant.
Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest?
- There’s a delicate balance between regulation/taxation and driving the price of cannabis and finished products to be so high that the black market thrives. We’ve seen this in Oregon, and elsewhere as new states come on line or implement unreasonable restrictions. There is no legitimate excuse for a legal agricultural product or it’s derivatives to be more expensive than something grown under illicit circumstances, so policy and implementation must be carefully strategized. Naturally, interstate commerce and or nationwide legalization would make this much easier by eliminating black market demand from neighboring states.
- There has been only a half-successful reframing of the cannabis industry as being accessible for people not in the stereotypical “stoner” demographic. Much more can be done to normalize cannabis as a consumable, and educate potential customers about possible uses and benefits. The aging population should be welcomed with open arms, as they stand to benefit the most from the medicinal benefits for conditions such as osteoarthritis. Targeting non-stoner demographics through advertising/marketing and education will go a long way to drive the industry forward.
- Sadly, misogyny in the cannabis industry is also on my list. The externally facing side, like “booth babes” at trade shows and the endless Instagram accounts of mostly naked influencers smoking, just reeks of 1990s beer ads and makes me feel like we *obviously* can and should do better. We should be targeting ads to educate and inspire, not titillate (and to only half our demographic at best!). Within the industry, there’s a great deal of skepticism directed towards female executives, especially when it comes to the more technical/scientific aspects like extraction and processing. As women try to find external funding, it’s a common story to be mocked, propositioned for sex, or told that 97% of money goes to male-run companies. It’s a new industry, it’s the 21st century, and there are no good excuses for this kind of culture. VC firms and investors should be funding women with equal measure for the very cogent reason that they can offer unique and profitable perspectives on a diverse marketplace of consumers.
What are your thoughts about federal legalization of cannabis? If you could speak to your Senator, what would be your most persuasive argument regarding why they should or should not pursue federal legalization?
Fortunately my senator needs no convincing, as he is also of the opinion that Oregon could be a center for cannabis production in much the same way the Napa Valley is for wine. Our climate is ideal, and we have a rich history in Oregon of cannabis production. Besides which, our reputation for fastidious (and perhaps precious?) manufacture of craft products is a fine asset when dealing with such a nuanced product that is also quite expensive to generate. I believe nationwide legalization would be a boon for the economy and public health, in general. It’s probably something best left to the states as many are still skeptical, but it’s important that interstate commerce through (or over) states that opt out remain unfettered. We’ve already seen some interesting interference in places like Idaho, where they have deemed hemp-derived products to be illegal, and are intercepting them as they pass through despite that being blatantly forbidden by federal law. Interstate commerce between already-legal states would be a fine first step, but I think nationwide decriminalization is coming soon.
Today, cigarettes are legal, but they are heavily regulated, highly taxed, and they are somewhat socially marginalized. Would you like cannabis to have a similar status to cigarettes or different? Can you explain?
Cannabis absolutely should be regulated and tested in the interest of public safety. I’m all for a significant tax placed on cannabis products, as I think the economic boost is sorely needed. However, I think that the tax should be reduced or waived for medical patients (or products that are clearly designed for medical use). Although they are both commonly smoked, I feel that the comparison between cigarettes and cannabis ends there. Nicotine is a highly toxic and addictive substance, and has no legitimate medical use (although I would argue for it’s ceremonial use in certain circumstances). Smoking tobacco is well known to cause lung cancer because among many reasons, tobacco pulls radioactive compounds out of the soil resulting in exposure to radiation during incineration. The link between cannabis smoking and lung cancer is yet to be established, although of course smoking anything is bad for your health. Unlike tobacco, there are plenty of safe, popular and universally accepted ways to consume cannabis. Topicals, edibles, tinctures, transdermal patches, pills, and many others are already available, and it is reasonable to assume many more will be added on in the coming years of innovation. Cannabis is also a very medicinally promising substance, with pharmacologically active compounds that affect a myriad of physiological processes. Control of pain, inflammation, appetite, sleep, nausea, muscle spasm, cancer proliferation, the list of possible medical uses for cannabis and derivative compounds is vast. I can’t think of anything else that we embrace as a culture for both medicinal and recreational use that is as non-toxic as cannabis. I think it should be in a category of its own.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
The one that comes up most often is “Fortune favors the prepared mind” which Louis Pasteur said, but is a bit of a play on “Fortune favors the bold” from the Aeneid. Obviously, the cannabis industry has been about taking risks, as our business began when there was no recreational market in Oregon, and the constant specter of government interference was very real indeed. However, I truly believe that preparation, thinking ahead, and being able to pivot are what serve people most effectively in this industry. Things change quickly, and we lack support from usual channels. I constantly rehearse worst-case scenarios, not because I’m a cynic, but because I always want to be adequately prepared for the disastrous or unexpected. Conversely, I also frequently rehearse best-case scenarios (and many iterations in between) because the worst possible thing to be unprepared for is success.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
When we began this company, Kate and I talked about how if we could just pick one thing to accomplish, it would be to get Rescue Rub into the hands of everyone who has body pain. We’ve seen it do so much good. Even my parents use less pain medication now that they use it, and can sleep through the night. We met a Vietnam Vet who tried it on his peripheral neuropathy and for the first time since the early ’70s, was able to sleep with a sheet and blanket over his feet. He came to us crying tears of joy. Chronic pain affects so many people and our culture doesn’t have a great framework for dealing with it and supporting those who are suffering. Something as simple as a pain-relieving rub could make a real difference and I’m planning to keep trying to get it into (and on to!) as many hands as I can.
Thank you so much for the time you spent with this. We wish you only continued success!