The DSA sees this as important legislation given that the US Department of Labor is currently finalizing a rule on independent contractor status under the FLSA, which could result in confusion regarding direct sellers. 

“The independent contractor status of direct sellers has been vital to the business model for decades,” said Joseph N. Mariano, DSA President. “This legislation recognizes there is bi-partisan support that direct sellers and real estate agents are true independent contractors. As Congress and the Administration debate the merits of independent work in our recovering economy, we hope that the independent contractor status of direct sellers and real estate agents will continue to be supported.” 

The post DSA Supports Legislation Defining Independent Contractor Status for Direct Sellers  first appeared on Direct Selling News.

It’s been called the gateway crop. Thanks to its stalks topped with five leaves, hemp shares the same signature look as its intoxicating relative, the marijuana plant. And it’s true that both are varieties of cannabis sativa, a subtype of the cannabis plant, but their differences are much greater than their similarities.

Hemp stands tall, a willowy plant reaching 16 feet high with skinny leaves, while marijuana is a short, fat bush that usually tops out at five feet. And, most notably, hemp doesn’t contain high quantities of the psychoactive ingredient Tetrahydrocannabinol, or THC, like marijuana. Hemp’s THC content is less than 0.3 percent, while marijuana’s THC can be five to ten percent or more. Meaning: Marijuana will get you high. Hemp won’t.

“People think hemp is another word for marijuana,” says Giles Good, the Co-Founder of HALE, a wellness company that sells hemp oil extract products. “It’s not. The use of the words hemp and cannabis as synonyms for marijuana has to stop.”

“Marijuana will get you high. Hemp won’t.”

Why the obsession over nomenclature? Because one simple word means the difference between legal and illegal when it comes to cannabis.

“Cannabis is the species of the plant; think of it as the umbrella,” says Garrett Graff, Senior Attorney at Hoban Law Group, a firm specializing in Cannabusiness Law. “Citrus has many different types of citrus. So too does cannabis. It has one that is marijuana, and that is the psychoactive species. A separate subspecies of cannabis is industrial hemp. Under Schedule 1 of the Controlled Substances Act is marijuana and THC–not CBD, not hemp. Marijuana, not cannabis, is what is defined under federal law as being illegal.”

So while hemp is cannabis, it’s not marijuana, and that makes all the difference.

Change is in the Air

Even without the mind-altering THC compounds, many still confuse hemp’s derivatives, like cannabidiol, called CBD, to be categorized together with marijuana under the Controlled Substances Act as a Schedule 1 drug—the same class reserved for intoxicants like heroin, ecstasy and LSD. And although CBD is a compound that can be derived from marijuana, it is the marijuana that is the distinguishing factor rendering it illegal. If sugar is derived from marijuana, it would be illegal as well—not because it’s sugar, but because it’s derived from marijuana.

With federal and state officials still struggling to fully understand that important difference, any companies seeking to enter the hemp and CBD space will almost certainly face an uphill battle. “Hemp is not marijuana, and that’s the fight and the education you have to engage in with regulators at the state level,” Graff says. “They just don’t understand yet.”

But change is on the horizon. On September 28th of this year, the DEA announced that FDA-approved products containing CBD derived from cannabis that hold no more than 0.1 percent of THC would be categorized as Schedule V drugs, a class that includes household names like Robitussin AC and Codeine. This announcement, spurred by the approval of Epidiolex, a drug used to treat rare forms of epilepsy, does not legalize all CBD oil products, but the landmark decision means doctors could prescribe CBD drugs and have them filled by a traditional pharmacy, rather than referring patients to a medicinal marijuana dispensary. And a proposed amendment to the 1972 Controlled Substances Act that appears in this year’s Farm Bill would exempt hemp from being subject to regulations that relate to the high-THC marijuana plant, further expanding on the 2014 version of the bill which allowed for the domestic growth of hemp for the purpose of state pilot programs or for academic research.

“Domestic hemp farming has been legal in roughly 40 states under state programs since the 2014 Farm Bill,” Good says. “The real question was whether the trace amounts of THC in hemp oil extracts was also legal. The 2018 Farm Bill should resolve that issue once and for all.”

Many supporters of the changes found in this new Farm Bill believe the broader legalization of hemp and CBD oil products is the logical choice, especially when considering hemp’s rich American history.

America’s Past Relationship with Hemp

America’s preindustrial era, before plastic and synthetic materials became available, lauded hemp as a vital material known for its exceptionally strong and durable fibers. When the English navy used 10,000 acres worth of hemp to construct ocean-worthy sails that helped them beat the Spanish Armada in 1588, it paved the way for the Virginia Assembly in 1632 to order that every planter sow hemp seeds in their fields. As a result, hemp was grown throughout the American colonies and used for ropes, bedding and clothes, but its popularity increased as the rapport between Britain and America eroded, leaving America stranded by boycotts of British imports. As fighting ensued in 1775, the American navy depended on hemp products to survive, using hemp ropes, sails and cords on its ships.

But with the end of the American Revolution came the end of America’s dramatic demand for hemp. Although it remained a domestic cash crop for a time, it didn’t take long for the versatility and ubiquity of synthetic fibers to lessen the hemp plant’s appeal. Hemp was not irrelevant, but it was no longer unique, and the cons of the psychoactive properties found in its lookalike relative began to outweigh hemp’s resilience and usefulness. What was once a staple in the farming community quickly became illegal as state by state, and then the federal government, criminalized cannabis throughout the 20th century.

“We have a short memory about hemp in our society.”
— Giles Good, Co-Founder of HALE

Why hemp was included in legislation with its THC-rich marijuana plant relative, naming it a psychoactive hallucinogen and illegal to cultivate or possess, is a question with a variety of theories for answers.

Some believe hemp was included because it posed a threat with its five-fingered leaves, looking too much like its relative the marijuana plant, and making it easier for marijuana growers to hide their prohibited crop within its tall stalks. But scientists dispute this, explaining that the cross-pollination of the two would so drastically lower the THC levels in the true marijuana plant that it would destroy the high its growers chase.

Historians cite what they believe to be the lobbying of petrochemical companies, like DuPont, who allegedly used their influence to levy prohibitive tax laws and eventually ban hemp altogether in an effort to undermine what they saw as a threatening competitor.

Whatever the catalyst, the domestic growth of hemp has been federally regulated and marginalized since the Marijuana Tax Act of 1937, with the exception of a brief lift on the ban in 1942, when domestic hemp was again necessary to meet the demand for war supplies during a shortage caused by the Japanese occupation of the Philippines.

“We have a short memory about hemp in our society,” Good says. “The acceptance of hemp goes all the way back to our Founding Fathers who encouraged the Colonists to grow hemp for fiber to support the Revolutionary War effort. We can only hope that as time goes on and people come to relearn the difference between hemp and marijuana, the stigma will subside.”

America’s relationship with hemp is complicated. It’s legal, but also not, and the grey areas can be confusing. What’s certain is that America loves hemp—as long as its imported.

Differing Opinions Abound

The United States is the largest consumer of hemp products in the world, but the United States is the only industrialized country that restricts hemp farming, read a resolution passed without objection in the U.S. Senate in June of this year. It went on to describe hemp as having “great potential to bolster the agricultural economy of the United States.”

The total sales for the U.S. hemp industry last year exceeded $700 million, with almost a quarter of those dollars spent on hemp-derived CBD oil products.

“This is the greatest education opportunity of our lifetime, that I’ve seen so far, in terms of health and wellness product.”
— Steve Wallach, Youngevity Chief Executive Officer

So, if the domestic growing of hemp is still widely illegal, where is the hemp coming from? Canada, mostly. A recent Congressional Resource Services report listed the United States’ northern neighbor as supplying 90 percent of all annual hemp product imports, followed by China and Romania. Canada, whose commercial hemp industry only became legal in the late nineties, saw annual retail sales of their locally grown hemp seed products reach an estimated $40 million last year, while using only one percent of their available farmland.

But not all analysts have agreed in the past that hemp is the cash cow it appears to be. A 2000 USDA study reported that U.S. hemp markets would “likely remain small, thin markets,” and opponents say the intensive process required to harvest and process hemp would be a stumbling block for domestic profitability.

Money isn’t the plant’s only draw, and advocates tout environmental advantages to adding hemp to the American agricultural calendar. Hemp’s drought-tolerant properties and ability to grow in tough conditions has appealed to farmers who boast about the forbidden plant’s deep root systems that help loosen the soil for plants that follow it. Unlike tobacco and traditional crops, hemp does not deplete the soil of its nutrients, but instead restores nutrients to the soil through phytoremediation. And uniquely, it does not require pesticides or herbicides, making it an excellent rotation crop that could break disease and pest cycles without a negative environmental impact.

For opponents of hemp’s legalization, hemp is a risk not worth taking, believing the plant to be too similar to marijuana to be safe. Risky or not, industry experts don’t see the momentum for this niche market slowing down anytime soon. Market analysts expect the rise of hemp and CBD products to only increase in popularity and usage, although the projections for revenue vary widely. The Hemp Business Journal announced their projections for the U.S. hemp industry value as $1.9 billion by 2022, but a recent report by cannabis industry analysts The Brightfield Group projects that CBD will be a $22 billion industry by 2022. “It has been flying under the radar but is set to explode, having profound impacts on CPG and pharma,” their statement read.

“That’s great disparity, I’ll grant you that, but I’ll take either number,” Graff said. “Either way that shows great growth in this marketplace.” Even The New York Times has chimed in about CBD’s speed of acceptance, stating “It’s hard to understate the speed at which CBD has moved from the Burning Man margins to the cultural center.”

Will CBD Deliver?

Where there’s revenue potential, you’ll find entrepreneurs anxious to take their own bite out of the market share. The allure of an untapped product niche on the table has served as a carrot for many direct selling companies who have now appeared on the scene, selling supplements, creams, skin care lines and holistic wellness products formulated on the foundation of hemp.
Like any new product development, choosing the right delivery systems for hemp and its CBD extract will prove imperative for companies entering the space. With hemp’s versatility, the options are only limited by a formulator’s imagination, as delivery can be topical—creams, serums, oils—or internal—pills, capsules, sprays, inhalation, tinctures, sublingual application or strips placed on the tongue.

The trick, scientists are discovering, is creating a formula that is highly bioavailable, or readily absorbed by the body.

“A lot of the delivery systems­—creams, pills, oils—majority of that is not bioavailable to you,” says SS BioMed Chief Science Officer Dr. R. Scott McKinley, PhD. “If we could increase the bioavailability of it we could get it into the human quicker and at a much higher dose. I can’t help but think that would be beneficial. Plus, we would need less of it.”

Why Customers Can’t Stop Talking About Hemp

Network marketing companies are discovering that while the cannabis market is unconventional, the controversy it inherently brings with it can be a plus. Kannaway CEO Blake Schroeder, who touts his company as the first in the direct selling industry to sell hemp-derived products, recently told Direct Selling News, “What we’re trying to do is be a professional company in an unprofessional space. Everybody has a viewpoint, whether it’s positive or negative, educated or uneducated, about cannabis. It’s the easiest thing in the world to talk about, and it’s something people want to talk about. It’s in the news every single day.”

And Kannaway’s revenue stats support that. When Schroeder joined the company in March of 2016, Kannaway was reporting $83,000 in monthly revenue. By July of this year, the company’s monthly revenue had rocketed to $5 million. There are a host of variables that could affect this revenue bump, like a more qualified leadership team or better marketing tools, but if the buzz about CBD wasn’t present, those higher revenue numbers wouldn’t be either.

What began as an eccentric business opportunity has now drawn a flood of investors and entrepreneurs, sending vibrations of excitement across the industry and encouraging pop-up organizations to flash onto the scene with surprising speed. This spontaneity has some executives worried that the reputation of quality hemp-derived products will be tainted by competitors following a get-rich-quick model, with no longevity or stability built into their business plans.

When people focus mainly on getting rich, bad decisions can be made. The direct selling industry wants to raise the bar on safety and quality while building trust and focusing on building brands that care about people, products and the planet. It’s about wellness, not money.

But among these budding companies are organizations who have been planting roots long before they entered the direct selling industry and are striving to make a name for themselves through quality control and reputation.

“What separates us from the rest of the pack is the boutique nature of our product as a result of our verticality,” Good says. “Our roots are literally in the ground. We started as hemp farmers and evolved into extraction, formulation, wholesale, and eventually network marketing. We control every step of the process from soil to oil.”

A Natural Fit For Direct Sellers

Cannabis has never been mainstream for the direct selling industry, but with the emergence of new legislation and drug laws that prove more favorable to companies selling it, a growing number of startups as well as established companies have begun announcing their entry into the new market trend.

In fact, in its most recent study, Direct Selling News has identified at least 25 direct selling companies that already have entered the CBD space and will sell $300 million worth of cannabidiol-related products in 2018, making direct selling the largest channel of distribution for the rapidly growing CBD product sector.

For existing health and wellness companies, adding a CBD oil or hemp product to their existing portfolio aligns well with the missions their companies already espouse.

California-based Youngevity International, a wellness company founded in 1996, is one of the first conventional direct selling companies to throw their hat into the cannabis ring. “We firmly believe in plant-based nutrition, and hemp (CBD) oil perfectly complements our product development philosophy,” says Youngevity Chief Executive Officer Steve Wallach. “Entering this market, which is growing almost exponentially, also should offer a tremendous advantage to our many Distributors around the world.”

Q&A with Steve Wallach, Youngevity Chief Executive Officer

When considering the implications of entering into such a controversial and legally complicated product niche, Wallach says he began consulting with legal experts as early as four years ago and received differing opinions about whether or not the hemp market was the right next move for Youngevity. Ultimately, Wallach says he believes the direct selling channel is the ideal vehicle for bringing hemp and CBD oil to market.

“Part of the challenge is the legal landscape out there because confusion is rampant,” Wallach says. “I actually love that about this category because it’s what our channel does. I see our channel as an education platform; I always have. From that standpoint, this is the greatest education opportunity of our lifetime, that I’ve seen so far, in terms of health and wellness product.”

Still A Lot of Work to Do

The wheels are turning but until—and only if—the new Farm Bill legislation passes, will hemp and all of its derivatives be clearly separated from its ties to marijuana and a Schedule 1 classification under U.S. drug laws. In the meantime, education remains the single most important element for creating a foundation of success within the hemp market.

“We can’t expect everyone at the federal level, we can’t expect everyone at the state level, to be on board on day one,” Graff says. “This is a crop that many haven’t even seen within their generation or within their lifetime.”

A recent report by cannabis industry analysts The Brightfield Group projects that CBD will be a $22 billion industry by 2022.

Pick up the printed issue in which this article is found.

That means maintaining investors and funding supply chains remains delicate. State regulators and third-party retailers find themselves bound by the gray area that lies between hemp and marijuana, making business as usual difficult for companies seeking to partner with hemp-related companies. With the passage of the Farm Bill, the tiers of development behind the scenes could accelerate with the clearer understanding that would accompany hemp regulation and education.

The new Farm Bill would help generate momentum and clarity for state regulators to embrace hemp regulation and help third party retailers and service providers—like banks, merchant processing and insurance—that don’t understand the distinction between hemp and marijuana. It would help propel the growth and development of the industry, ramping up production, cultivation, investment and development of infrastructure.

The DEA’s loosened regulations on low-THC cannabis and the proposed Farm Bill, with its hemp-friendly language, is paving the way for an entirely new niche market of pharmaceuticals, nutraceuticals and natural care products.

“The hemp farming language in the 2018 bill has overwhelming bipartisan support,” Good says. “We don’t see any argument being advanced from any direction for going backwards, especially now that the FDA has acknowledged that CBD can be formulated into a syrup and prescribed by physicians to treat illness.”

Will an end to prohibition lead to a modern-day gold rush? Only time will tell. But with the potential for a $22 billion market up for grabs, the starting gate is beginning to get crowded.

Cannabis: A Safe Investment?

An article in the Wall Street Journal in September of this year compared the rise of the cannabis market to the internet in the late 90s: compelling and crowded. Investors smell blood in the water, and, like sharks, they’ve begun to circle, pouring money into speculative opportunities. But if history is the greatest teacher, then it’s important to remember that no market is a guaranteed bet.

Among the five dominant companies in Canada, the market value has risen from $4 billion to nearly $40 billion in the past year.

That’s why all eyes are on Canada. The only country other than Uruguay to legalize marijuana, Canada is experiencing a flurry of activity among the 120 cannabis-based companies on their Canadian Securities Exchange. Among the five dominant companies in Canada, the market value has risen from $4 billion to nearly $40 billion in the past year.

For now, U.S. banks have remained hesitant because of heavy federal regulations, but leaders within the U.S. hemp and CBD market are hopeful. “The resurgence of the American hemp industry is already well under way,” says HALE Co-Founder Giles Good. “Once the hemp farming language in the 2018 Farm Bill is passed, banks and merchant processors can feel safe doing business with hemp companies without fear of losing their charters or assets and investment in the industry will increase. We’re already seeing an influx of money from traditional industries in anticipation of these changes.”

The post A Modern-Day Gold Rush? first appeared on Direct Selling News.

Protecting our independent salesforce and their ability to build a business on their own terms remains our lynchpin issue.

Joseph Mariano

DSA has made independent contractors’ prevalent in their initiatives. To ensure members are apprised of the most current developments, the Association launched the Independent Contractor Update. This monthly newsletter summarizes events impacting independent contractor status across the country and provides updates on what DSA is doing to position the state of direct sellers positively.

In July, DSA hosted the first Independent Contractor Practicum in Washington, D.C. Nicholas C. Geale, Chief of Staff to the United States Secretary of Labor, discussed the policy priorities of the Administration and Department of Labor to protect and encourage independent contractors. DSA continues to foster positive relationships with government officials to protect our businesses.

In addition to this participation by the Trump administration, the practicum convened leading voices from member companies and outside practitioners to explore updates on recent legal developments for independent contractor status, implications for independent contractors of the recently enacted Tax Cuts and Jobs Act and the association’s legislative initiatives. A range of specific issues relevant to direct sellers as independent contractors such as salesforce training, social media monitoring and contract enforcement were also discussed.

DSA also began an Independent Contractor Working Group under the auspices of the Government Relations Committee. This group of legal and government affairs professionals are examining the legal landscape of independent contractor law and how to differentiate direct selling from those new economy players that now utilize the independent contractor model. A specific goal is to analyze the environment in Washington, D.C. and state capitols to gain increased insights into ways that statutes can more clearly define distributors as independent contractors to keep providing the freedom and flexibility to operate their businesses.

Pick up your print copy of the September 2018 issue in which this article appeared.

DSA has already identified several critical independent contractor initiatives:

• Federal legislation to make clear that direct sellers are not covered by the rigid employment requirements of the Fair Labors Standards Act (FLSA).
• Efforts to clarify similar laws in the states:
  • Continue DSA’s long-standing efforts to have direct selling exemptions from state unemployment coverage;
  • Work as part of a coalition to overturn the recent “Dynamex” decision in California that changed independent contractor law;
  • Remain the leader of the national coalition of businesses devoted to preserving independent contractor status;
  • Engage in our public proclamations of the “Year of the Independent Contractor” and promoting direct sellers as the “original entrepreneurs.”

I am optimistic about the future. I know that by empowering direct sellers, our industry can play to our strengths and leverage our experience, entrepreneurial know-how and drive to innovate and capitalize on the market opportunities.

Our industry has much to gain by empowering direct sellers, and we look forward to embarking on the bold, ambitious initiatives that will preserve our distributors’ ability to continue to thrive for decades to come.

The post Year of the Independent Contractor first appeared on Direct Selling News.

One of the key points to be considered, the legalization of industrial hemp, is being carefully monitored by several direct selling companies looking to take part in what is expected to be a major boom over the next decade in the legal sales of cannabis products for both medical and recreational purposes.

According to recent data published by Forbes, citing Brightfield Group, the global cannabis market is projected to reach $31.4 billion by 2021. By end of 2017, the global market value was estimated at $7.7 billion, in which the U.S. held about 90 percent of total sales. While the U.S. is expected to account for only 57 percent of global cannabis sales by 2021—due to other countries that have or are in the process of easing regulations—the cannabis market is expected to continue to grow at a CAGR of 60 percent.

The Canadian market is expected to heavily contribute to the growing cannabis market due to the recently passing of the historic Cannabis Act. Recreational marijuana use will be legal in Canada come October 17, and those wishing to market and distribute hemp products will be required to obtain and LNHPN (Licensed Natural Health Product Number) from Health Canada.

Canada became only the second country in the world to permit a nationwide marijuana market, joining Uruguay as the only countries to legalize cannabis on a federal level. Uruguay legalized marijuana’s production, sale and consumption in December 2013.

Here in the U.S., nine states and the District of Columbia currently allow for recreational marijuana use, and 30 allow for medical use. On June 28, the U.S. Senate voted to legalize industrial hemp after a decades-long ban under marijuana prohibition. With the Senate passing of the Hemp Farming Act, the provisions of which were included in the larger Farm Bill, the non-psychoactive cannabis cousin of marijuana may finally become legal again to grow in the United States. However, the House farm bill does not mention hemp, which, because of its similarity to marijuana, is labeled a controlled substance.

What is the difference between marijuana and hemp?

The Cannabis sativa plant contains over 100 known cannabinoids, a class of chemical compounds that can alter neurotransmitter release in the brain. When found to have high tetrahydrocannabinol (THC) levels, the plant is referred to as marijuana. When THC levels are low, it is called a hemp plant, which has been widely used in several applications for centuries. Hemp can be used in everything from the production of fiber, to skin care products, to food. A by-product of hemp is cannabidiol (CBD) oil, which has been found to have wellness benefits and which currently makes up the highest percentage of the sales of hemp in the U.S. market. It is this use of hemp that direct selling companies are interested in.

Because selling American hemp is still largely restricted, parts of the market are highly reliant on products imported from China and Canada. Still, according to the Hemp Business Journal, the U.S. hemp market pulled in $820 million in sales in 2017. With growth projected at almost $2 billion by 2022, there is high optimism that American growers can secure a large part of this market.

The post Cannabis Legislation Will Open New Doors for Direct Sellers first appeared on Direct Selling News.

On Thursday, July 26, 2018, the Direct Selling Association convened its Independent Contractor Practicum to discuss pathways to protecting the direct selling industry’s most important asset— its salesforce.

Department of Labor Chief of Staff to the Secretary of Labor Nicholas C. Geale was among the leaders meeting with direct selling industry executives to explore how the Administration and Department of Labor are positively positioning independent contractors in the marketplace.

“We are committed to leading the discussion on how to address developments with independent contractor law in this economy by hosting events like the Independent Contractor Practicum and bringing the discussion to Washington. Direct selling is poised to be the retail channel of choice for U.S. consumers and it is important we are diligent in preserving America’s Original Entrepreneurs and the industry,” said Joseph N. Mariano, president and chief executive officer of the Direct Selling Association.

The Practicum agenda included updates on recent legal developments for independent contractor status, implications for independent contractors resulting from the recently enacted Tax Cuts and Jobs Act, and the association’s legislative initiatives. The event also focused on contract development, as well as recognizing social media trends that could affect independent contractor status.

The full Independent Contractor Practicum agenda and speaker information can be viewed here.

The post DSA Independent Contractor Practicum Kicks Off “Year of the Independent Contractor” first appeared on Direct Selling News.

I look back over 2017 with great pride at what the DSA team accomplished on behalf of our industry. We brought member company executives together to share their advice and concerns, to support our vital advocacy efforts, and to commit to ever-higher ethical standards in direct selling. We shall not rest on our laurels, though, for reflection affords an opportunity to pledge greater commitment to our priorities for the coming year, and beyond.

DSA’s ability to champion direct selling is strong because of the close working relationships we have with our member companies — and because of the relationships they have developed with each other through their membership in the association. At DSA gatherings and events, such as the DSA Annual Meeting in June and DSA’s Fall Conference this past November, executives from across our membership joined an array of policymakers and government officials to learn more about direct selling operations and to discuss areas of mutual concern and opportunity.

In September, DSA brought more than 125 member executives and salespeople to Washington, D.C., to meet with Members of Congress at DSA’s Direct Selling Day on Capitol Hill. We pressed strongly our advocacy priorities, including maintaining the independent contractor status for direct sellers and the need for federal anti-pyramid legislation. At time of writing, DSA efforts during 2017 have secured 27 co-sponsors of H.R. 3409, the Anti-Pyramid Promotional Scheme Act of 2017. Rest assured, we shall be ramping up efforts in 2018 to secure passage of this bill, and will continue to call upon the support of DSA members to that end.

Direct Selling Day on Capitol Hill was not the only time DSA’s presence was felt in the corridors of power. DSA hosted a briefing on Capitol Hill in March with the Congressional Direct Selling Caucus to discuss the value of direct selling to the economy, society, and millions of micro-entrepreneurs. In July, DSA’s Diversity and Empowerment Council hosted a Capitol Hill briefing on the significant and positive impact of direct selling on the Hispanic community. Influential leaders joined us at key events this past year. Helen Aguirre Ferré, White House Director of Media Affairs, spoke at DSA’s Board of Directors meeting in March, learning more about direct selling and sharing insights into the Administration’s policies on regulation, economic growth, and job creation. Lee Peeler, Executive Vice President, National Advertising, Council of Better Business Bureaus (CBBB), spoke at DSA’s September Board meeting, where he complimented DSA’s long history of active self-regulation.

The Direct Selling Education Foundation (DSEF), of which I am proud to also serve as President, has continued throughout 2017 to mainstream understanding of direct selling, and the Foundation’s work is bearing significant fruit. DSEF has partnered with more than 100 professors through its Academic Fellows Program, leveraging those partnerships to reach more than 15,000 students across the country.

The Foundation has also continued to drive academic publishing throughout the year, making a data-driven case for direct selling. DSEF’s Academic Fellows are producing significant research on the economic impact of the channel, why people become direct sellers, how direct sellers define success, ethical entrepreneurship, and other issues important to informing and educating opinion leaders, regulators, and policymakers.

The shifting political and commercial landscape presents myriad challenges and opportunities for direct selling. Just as we did in 2017, DSA and DSEF will continue to educate and to build constructive relationships with member companies, policymakers, and all who support direct selling — through the coming year and long into the future. It’s sure to be quite the journey, and I look forward to taking it with you. Happy holidays!

Joseph N. Mariano is President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.

The post 2017: A Year in Review first appeared on Direct Selling News.

In This Issue:
The Most Influential Women in Direct Selling
Bringing Gender Parity to Direct Selling 
Advocating for the Direct Selling Community 
Navigating the Millennial-Driven World
Sticking to a Winning Business Model
Leading with Passion and Commitment
Launching New Products and Segments
Recruiting and Retaining the Field
Direct Selling Icons

The role of direct selling leaders encompasses more than simply executing business strategies. In addition to overseeing their employees, independent representatives and customer base, modern executives are the voices of the business model itself.

The commonly praised elements of direct selling include a low barrier to entry, flexibility and earning potential that have given millions of people a path to entrepreneurialism. And there is much to champion, now that direct selling has grown into a $183 billion-a-year global business.

Still, nearly 165 years after the first U.S. direct selling company, Southwestern, was established, and although at least 10 U.S. direct selling companies are currently billion-dollar global brands, the channel continues to be plagued by misconceptions of its business model. The misleading past practices of a few bad actors have had a lingering effect, making some would-be first-time distributors wary of the segment and leaving some consumers suspicious of the business model. The U.S. Direct Selling Association requires all member companies to adhere to the DSA’s Code of Ethics, a prescribed code of conduct. The Code outlines behaviors ranging from complying with all pertinent laws to spelling out specific measures such as inventory buybacks. Cindy Monroe, Founder and CEO of Thirty-One Gifts, a handbags and accessories brand, believes that protecting consumers from bad actors in the channel should begin with the companies themselves. “For those companies that struggle to align with the DSA Code of Ethics and the requests of the FTC,” Monroe says, “industrywide legislation can help educate and bring awareness to best practices.”

Traci Lynn Burton, Founder and CEO, Traci Lynn Jewelry Traci Lynn Burton founded the Fort Lauderdale, Florida-based jewelry company Traci Lynn Jewelry, which she began in 1989 in Philadelphia and expanded into a national direct selling company in 2008.

However, at the federal level, there currently is no legislation that defines a pyramid scheme, though many states have taken their own measures. That is why in August, Rep. Marsha Blackburn (R-Tenn.) and Rep. Marc Veasey (D-Texas) introduced the Anti-Pyramid Promotional Scheme Act of 2017. This bipartisan bill will better define the difference between a legitimate business opportunity and an illegitimate one.

Federal Legislation

Is federal legislation the best way to ensure a commitment to ethical business practices and, as a result, the protection of consumers? For Traci Lynn Burton, Founder and CEO of Traci Lynn Jewelry, the answer is yes. “We need to make sure that we have teeth in every policy, and you only get teeth when enforcement happens,” she says.

Burton says she believes that to get the bill enacted, direct selling needs to not only have a caucus, but also bipartisan support on Capitol Hill. This is particularly important in relation to minority communities. “We’ve got to engage all the caucuses, particularly the Hispanic caucus and the Black caucus, because in some instances pyramid schemes are in the minority communities. So we need to make sure that all of the players whose communities are hit hardest have a seat at the table.”

Cindy Monroe, Founder and CEO, Thirty-One Gifts Cindy Monroe launched Columbus, Ohio-based Thirty-One, an accessories company, from her basement in 2003. Now Monroe’s creation has grown to encompass nearly 1,000 employees and 65,000 consultants throughout the U.S. and Canada.

Burton, who is Vice Chairman of the DSA Board of Directors, also notes that the DSA itself is currently looking at enforcement policies.  “It’s not always enforcing ‘you’re the bad guy’; it’s ‘let us help you correct it so you’re the good guy,’ she says. “We can help with corrective measures before we go to enforcement.”

Another DSA Board Member, Angela Loehr Chrysler, President and CEO of membership savings company Team National, says she believes ethical business practices take more than legislation: It takes training, commitment and dedication by direct selling companies. “As an industry, we need to unify around the positive aspects of this legislation to protect consumers and our independent reps,” she says.

Reputation Is Everything

The education of independent representatives, consumers and, most important, direct selling watchdogs is a key part of protecting the reputation of the channel.

“Educating our consumers and sales consultants on the differences in a healthy, ethical direct selling company and one that avoids best practices is required before we will be able to change the perceptions of the business model,” Monroe says. “We must continue to shift the negative perceptions to business practices and specific companies.”

Angela LOEHR Chrysler, President and CEO, Team National Angela Loehr Chrysler took over at the helm of Davie, Florida-based services company Team National, the family-owned business, in 2007, and leads nearly 500,000 customers and distributors.

Chrysler says she believes that if you are only interested in short-term success, sound business practices can often be the first things sacrificed. When that occurs, Burton adds, old stereotypes can gain momentum.

“When something happens, everybody knows about it,” Burton explains. “It gets attention, and then it goes to the minds of those who were skeptical: ‘I knew it. I knew it was a pyramid scheme all along. Yes, this confirms it.’ So then it confirms some of the old thinking about the industry.”

To prevent against such instances, Burton says she believes each company needs to take a stand—not just with executives, but with the field—to ensure standards are properly maintained. That includes taking a hard look at incentives, and stressing that the company stands for integrity.

“We need to make sure we are always encouraging the right behavior in the field. That’s how our reputation stays intact, that’s how we grow our reputation,” she adds. “If we can make sure our voice is always heard, even at the grassroots level, then people will say ‘you know what, there’s always a bad apple out there, but on the whole I know my company does this and it was a great experience.’ ”

Portraying the Channel

Chrysler says she believes it is important for executives to model, teach and lead in ethical behavior, and to continue to share the positive contributions direct selling companies and programs make to the economy and in entrepreneurship in general. “Direct selling is a valuable part of making and keeping America great for all people of any age, race or background. We need to share often what we do and the difference we make,” Chrysler says. “We need to share that message regularly.”

She also adds that direct selling companies need to support the efforts of the DSA and the Direct Selling Education Foundation (DSEF) in sharing the positive messages and information on direct selling. DSEF currently is partnering with professors to teach direct selling entrepreneurship in their classrooms.

“We can help professors teach positive aspects of direct selling at a very young, impressionable age,” Chrysler says. “I was a DSEF guest speaker at the University of Greensboro in South Carolina recently. It was a terrific experience and the college kids asked great questions about our opportunities, our products and how they can participate.”

Burton also believes that businesses and organizations can have significant impacts on the image of the segment by sharing the opportunities of direct selling to younger generations of women. In the meantime, she will continue to work toward seeing the bipartisan legislation pushed through Congress.

“Being a voice of the industry means that I support ethical legislation and that I am going to go to Capitol Hill,” Burton says. “I’m going to send my people to Capitol Hill, and I am going to financially contribute to what needs to happen so that we can make sure as we build our political muscularity it gives us the teeth to correct and enforce.”

The post Advocating for the Direct Selling Community first appeared on Direct Selling News.