Hemp-Derived Products with a Contract Manufacturer

By Aaron G. Biros

Based in Santa Monica, California, Sagely Naturals was founded in the summer of 2015, with the goal to produce a sustainably sourced, topical CBD cream with no psychoactive effects to treat daily aches and pains. The co-founders, Kerrigan Hanna and Kaley Nichol, have extensive backgrounds in the food service industry, and as a result they pride themselves in quality controls and proper safety procedures. Since the launch of Sagely Naturals, they have been selling their Relief & Recovery Cream online and in a wide variety of retail outlets beyond just cannabis dispensaries. Their ability to distribute outside of dispensaries is due to the fact that the product’s active ingredient, Cannabidiol (CBD), is derived from hemp, instead of cannabis with higher levels of Tetrahydrocannabinol (THC).

kerrigan/kaley — Co-founders Kaley Nichol (left) and Kerrigan Hanna (right)

Their attention to detail in consistency and quality makes them stand out as cannabis processors, using a contract manufacturer with good manufacturing practices (GMPs) along with the proper standard operating procedures (SOPs) in place. “All of our contract manufacturer’s corrective and preventative actions (CAPAs) are outlined in the company’s SOPs, which are in place for everything including specific manufacturing processes, receiving and shipping materials and testing batches,” says Hanna. “The contract manufacturer also provides certificates of analysis (COAs) for every product they make.” According to Hanna, they exclusively use current GMP-certified facilities. One such SOP lays out the responsibilities for the quality control department in order to release and approve ingredients of their products.

There are some SOPs that could pertain specifically to the processing of hemp or cannabis products, according to Hanna. “Receiving and handling raw materials like hemp, batch coding, the actual formulation and manufacturing process, quality controls and cleaning and sanitation [could be tailored to pertain to cannabis],” says Hanna. Proper SOPs laid out in the manufacturing process include the cleaning and sanitation of machines, as well as adjusting settings, formula ratios and initialing and dating product labels on every batch, among more specific operating procedures.

The cream is made with natural ingredients like safflower seedily and peppermint. — The cream is made with natural ingredients like safflower seed oil and peppermint.

According to the co-founders, they spent a large amount of time vetting their hemp supplier, making sure they are using cutting-edge technology, growing it sustainably, and adhering to strict SOPs. “The team includes a Ph.D. chemist, who also is a founding member of our supplier and extractor,” says Hanna. “We work with CO2 extraction because we wanted the most control over the compounds that end up in our product. We are able to purposefully choose which cannabinoids end up in our product.” Through supercritical carbon dioxide extraction and post-extraction processing, the team is able to eliminate any trace of THC, guaranteeing the consumers will receive no psychoactive effects.

In looking toward long-term growth, the co-founders emphasize the importance of environmental sustainability. “Having honest ingredients is one of our company missions along with having honest practices,” says Hanna. “None of our ingredients are tested on animals so we are an animal cruelty-free organization.” Their hemp is grown using organic and environmentally friendly practices. “We prioritize using plant-based ingredients, so the formulation of our Relief & Recovery Cream relies on using organic and raw materials—such as essential peppermint and safflower oil.” Companies like Sagely Naturals using contract manufacturers to process hemp could represent the future of the cannabis industry. When safety, sustainability and quality issues come into the spotlight more, so will the need for outlined SOPs, proper documentation and extensive lab testing.

June 29, 2016

Q&A with Dan Anglin: Cannabis Safety is an American Duty

By Aaron G. Biros

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Dan Anglin, a Marine Corps veteran and chairman of the Colorado Cannabis Chamber of Commerce, is the founder and chief executive officer of Americanna, an infused products business in Colorado with a heavy focus on regulatory compliance, consistent dosing and product safety. The company was the very first to implement the THC stamp, a requirement for all infused products in Colorado this coming October 1^st.

As a veteran of Operation Desert Storm, Anglin began his career as a legislative analyst in Arizona, and then moved to Colorado where he worked for the Colorado Legislative Council. Soon after, he became a lobbyist for the Colorado Association of Commerce and Industry. With a focus on health policy, he became the primary lobbyist for anything related to healthcare at the state level.

After running his own lobbying firm, he was hired by EdiPure, which was at the time the largest infused product manufacturer, to lobby against an amendment in the state legislature that would have all but shut down the infused products industry. Within six months, he was made a partner and co-owner of EdiPure for almost three years where he focused on regulatory compliance and legislative matters. In April of 2015, Anglin left EdiPure to buy Boulder Pharma with Frank Falconer, rebranding the company as Americanna making primarily edible products.

According to him, over the past few years, public opinion has grown in favor of differentiating cannabis products from other food products beyond just the packaging. Anglin said he saw this coming and embraced it as a core concept of his business model. Americanna produces gummies in the shape of a cannabis leaf with the THC stamp on each individual gummy. “This is a matter of public safety that you can clearly tell it is a cannabis product by its shape and symbol,” says Anglin. “We should be proud of cannabis products as an expression of American liberty, it is our duty not to hide it in an unrecognizable food product, but celebrate it with a clear shape and stamp, providing for consumer safety.” In this Q&A, we sit down with Dan Anglin to learn about his quality and safety controls, manufacturing processes and why his business embodies American freedom.

CannabisIndustryJournal: How do you see what you are doing as exercising your American liberties?

Dan Anglin: I served my country and protected the rights of Americans overseas. Because the people of Colorado have chosen this [adult use cannabis legalization] to be a right expressed in the state constitution, I feel that every day our 38 employees come to work and make cannabis products, we are exercising our rights as citizens of Colorado and of the United States.

The adult use side of the cannabis industry is a true expression of liberty in choice. This is what freedom is all about! In the past five years, the United States has given more and more groups of people more freedoms and liberties; this is another group of people that believe they deserve rights, in this case the liberty to consume cannabis freely.

This is an issue of states’ rights too. The people of Colorado voted to make the adult use of cannabis a right in their state constitution. We are abiding by the Cole Memo by doing everything we can to protect public safety. There is still a long way to go, but the fact that my employees and I are paying taxes and selling this in a regulated environment is absolutely an expression of our American liberty.

CIJ: Walk us through some of your quality controls in manufacturing infused products.

Dan: We have a contract manufacturer with a white label agreement, so our food products are of the same quality as any food product you would find in major retailers. Quality controls begin as soon as we unpack the food product, making sure it has been stored at the right temperature with all of the right conditions. We toss any products that do not meet our quality standards. Post-infusion, we go into packaging and separate them into flavors. As packagers are putting them into the child resistant packaging as required by law, they are doing QC checks on every single gummy.

The most important part of our quality control system is the testing for potency, homogeneity and microbial contamination. Post-harvest, the cannabis is tested and after it is extracted, the product is tested again but this time also for residual solvents. Once we infuse the product, we test it again. This is so important because making any type of food product requires doing everything you can to prevent bacterial contamination.

CIJ: How do you view cannabis safety as your responsibility?

Dan: Frank and I developed the business based on compliance and consistency. We already comply with rules expected to be enforced six months from now. We want consumers to be able to count on the consistency of the dosing in our products. Our semi-automated process of infusion can precisely dose every single product to ten milligrams. It is an infusion that soaks through the product, not a spray, and is one of the most homogenous products available.

Because we are creating food products, we have the same responsibility as any other food producer. When you make something that people ingest, it is your responsibility to follow health codes that provide guidelines for food handling. Every one of my employees is ServSafe certified. We are treating cannabis as an ingredient in a food product. Food safety is paramount and should be at the top of every infused product manufacturer’s mind.

June 29, 2016

Going Beyond the Strain Names with PotBot

By Aaron G. Biros

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David Goldstein, co-founder and chief executive officer of PotBotics, launched a medical cannabis recommendation engine called PotBot with the goal to better inform patients to target their conditions with more accurate recommendations based on scientific research. “This is a tool to help move the market away from the thousands of strain names that are mainly just marketing or branding indicators,” says Goldstein. The medical application is designed to inform patients on peer-reviewed data, research on the treatment of their ailments with cannabis and the specific cannabinoids that are necessary for treating their condition. They began development on PotBot in October of 2014, launching the beta version to 400 users in November of 2015. On April 20^th, 2016, Goldstein launched officially in the Apple Store, and the program will be available on Android in July.

goldstein potbot — David Goldstein (left) alongside co-founder, Baruch Goldstein (right)

Rather than focusing on strain names, PotBot focuses on the cannabinoid values to help patients gain an understanding of the correlation between which compounds might best target their condition. “This is a great tool for patients trying to familiarize themselves with what strains might work best,” says Goldstein. “For example, insomnia patients generally need cannabis with higher CBN levels, so we first educate the patient on cannabinoid ranges to shoot for and what strains might help. PotBot would recommend the strain Purple Urple because it is an indica found to have higher CBN values,” adds Goldstein. The program goes into great detail with the patient’s preferences including everything down to consumption methods so they know why it might recommend certain strains.

A screenshot showing a recommended cannabinoid ratio for a patient

The recommendation tool is accessible via kiosks at dispensaries, on a desktop version for the computer as well as on the Apple Store for iPads and iPhones. “I do not see it as a way of replacing budtenders, rather supplementing them with knowledge,” says Goldstein. PotBot is designed as a tool to supplement the budtender’s understanding of cannabis, so the budtender does not need to know everything off the top of their head or recommend strains based on anecdotal information, according to Goldstein.

Goldstein’s team at PotBotics performed extensive research prior to launching PotBot, spending two years doing strain testing to develop the program. “There is currently no regulatory body [for strain classification] so we took it upon ourselves to work with the best testing laboratories for truly robust analyses and properly vetted growers to get the most valid data,” says Goldstein. “The current strain classification system and nomenclature is rather unscientific so we focus on cannabinoid values and soon we will be able to incorporate terpene profiles in the recommendation.” Moving away from the common focus on taste, smell and other qualitative values, they focus on medical attributes of cannabinoid profiles because they have the most peer-reviewed research available today.

As an OEM, the company designed the tool to work with each dispensary’s inventory, to provide recommendations for strains that a patient can access on site, however anyone can access the recommendation tool for free at PotBot.com. Goldstein’s company and their mission represent an important development in the cannabis industry; this could begin a key transition from thousands of understudied strain names to a more scientific and calculated method to treating patients’ conditions with cannabis.

June 28, 2016

The Emerald Test Yields Positive Results for Cannabis Labs

By Aaron G. Biros

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Emerald Scientific recently announced results for their latest round of the semi-annual Inter-Laboratory Comparison and Proficiency Test (ILC/PT), and the outcomes may bode well for one of the most vital quality and safety aspects of the cannabis industry. According to Cynthia Ludwig, director of technical services at the American Oil Chemists’ Society (AOCS), there are no official methods for cannabis testing from an internationally recognized non-profit organization known to provide ‘official methods’ to various industries, so method validation needs to be done in-house, which is very costly and time-consuming. Cannabis testing labs are charged with the difficult task of providing honest, consistent and accurate results for potency, pesticide residue, residual solvents and contaminants. AOCS partnered with Emerald Scientific in this round of ILC/PT and preformed the statistical analysis and reports. For the first time in The Emerald Test’s history, participants were able to review all of the raw data and were given a consensus mean, z-scores and kernel density plots in order to compare themselves to other participants.

Emerald Scientific’s ILC/PT program measures how accurately a cannabis lab performs along with comparing it to other labs for an indicator of variability and ways to improve, according to a press release. 46 cannabis laboratories participated in The Emerald Test’s latest round of proficiency testing for potency and residual solvents. Cynthia Ludwig sits on the advisory panel to give direction and industry insights, addressing specific needs for cannabis laboratories. Kirsten Blake, director of sales at Emerald Scientific, believes that proficiency testing is the first step in bringing consistency to cannabis analytics. “The goal is to create some level of industry standards for testing,” says Blake. Participants in the program are given data sets, judged by a consensus mean, so labs can see their score compared to the rest of the cannabis testing industry.

Proficiency tests like The Emerald Test give labs the ability to view how consistent their results are compared to the industry’s results overall. According to Ludwig, the results were pleasantly surprising. “The results were better than expected across the board; the vast majority of labs were within the acceptable range,” says Ludwig. The test is anonymous so individual labs can participate freely. “The overall performance of the participating labs in the Potency and Solvent Residue Emerald Test were very encouraging,” says Ludwig. “All but a couple of labs had the majority of their results fall within two standard deviations of the consensus mean, which is generally accepted as being within the acceptable limits to most evaluators.” Although requirements for labs testing cannabis differ in each state, Ludwig says the results show the ability of these labs to competently perform the tests and generate reliable results. “Given the lack of harmonized regulations, this is a testament to the self-imposed quality standards the industry is trying to achieve.”

Reggie Gaudino, Ph.D., vice president of scientific operations and director of genetics at Steep Hill Laboratories. (photo credit: Preston Gannaway)

Among the laboratories that participated, Steep Hill Laboratories joined the test at two of their locations. Reggie Gaudino, Ph.D., vice president of scientific operations and director of genetics at Steep Hill Laboratories, believes that tests like the Emerald Test ensure that the cannabis labs are performing their function to the best of their ability, which is extraordinarily important. “We, and not just Steep Hill, but all testing labs, are the custodians of quality and safety for the cannabis industry,” says Gaudino. “If we are not doing our best to ensure the quality of our science is beyond reproach, then we are failing the consumer; if even one person gets sick or dies because a lab cut corners and tried to make extra money, that is one person too many.” Accurate testing comes from internal and external proficiency testing.

According to Gaudino, how cannabis labs perform in The Emerald Test can affect every aspect of cannabis consumption: “Correct dosing from potency analysis reports, identification of as many, if not all, active compounds known to enable the consumer to make a determination as to which strain, edible or concentrate would be most beneficial and assurance that there are no harmful chemicals or biological contaminants on cannabis or cannabis derivatives; all of it stems from being able to accurately test.” Gaudino is a major proponent of The Emerald Test because it provides some measure of consistency and accuracy in the cannabis industry. Until more consistent regulations for cannabis testing are formed on a national scale, self-imposed quality standards such as The Emerald Test helps labs, growers and consumers know they are getting reliable data.

June 15, 2016

Documentation & Compliance: A Q&A with Michael Shea, ConformanceWare

By Aaron G. Biros

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Cannabis safety throughout the supply chain requires active documentation tools for business owners to keep up with standards and regulations on the local and state level. Michael Shea, founder and president of AccessQMS and chief executive officer of Upshot’s ConformanceWare, provides consulting support across multiple industries with independent referral services to compliance professionals. With quality, safety and efficiency at top of mind, ConformanceWare’s design team developed the Medical Cannabis Series (MC Series™) to help cannabis business owners make the task of compliance easier. The documentation tools in the program are individually tailored to address needs in cultivation, processing, analyzing and dispensing.

The MC Series-Analyze Edition is currently in use at Canalysis Laboratories and NV Cann Labs, both operating in Nevada. According to Tara Lynn, chief executive officer at NV Cann Labs, the product helps them meet all of their documentation needs. “I appreciate all of the development using the MC Series- Analyze Edition and look forward to developing even more of a relationship through the years to come,” says Lynn. We sit down with Michael Shea to learn more about his product and how cannabis business owners can stay on top of regulatory compliance.

CannabisIndustryJournal: How will the MC Series help cannabis laboratories, cultivators, processors and dispensaries navigate regulatory compliance?

Michael Shea: To open a sustainable business involving cannabis goes beyond submitting applications, paying fees and focusing on profit alone. As laws adjust and tighter controls are put in place, more and more business owners are realizing what preserves and sustains their business is, in fact, compliance.

True sustainability is driven by forward thinking that values documenting and following best practices to ensure quality, safety and efficiency. Ambiguity concerning where to turn or how to correctly produce this documentation not only poses a difficult dilemma, it can put one’s investment at risk as well.

Finding a remedy for the situation begins with an expansion of perspective. Businesses will benefit most by actively working toward compliance from the onset. This approach eliminates having to face non-compliance and the enforcement that goes along with it.

MC Series™ is designed for this purpose and will greatly help businesses precisely document how their method of operation demonstrates full compliance with applicable laws and standards. Each MC Series™ edition is developed using Microsoft Word and Excel, which is then customized to mirror each organization’s processes, procedures and instructions.

Being user friendly, we have built in numerous hyperlinks for navigating and managing files and documents so that the documentation behaves like a website. This enables each user to access, edit, save and retrieve information instantly.

CIJ: How does your product utilize CMC’s, FDA, ISO, FOCUS, AHPA and EPA standards to help business owners?

Michael: Businesses handling cannabis are subject to strict regulations and are expected to show full compliance with regulatory protocols. Setting up your business correctly means playing by the rules and operating with the proper documentation and structural foundation.

By applying established best practices from the start, business owners will be able to minimize risk for investors, tighten efficiencies and quickly adapt to regulatory changes with minor adjustments. This serves two primary functions: Business owners will now have the protection they need and the means to promote their brand as a world-class operation.

Because laws surrounding cannabis are in such a state of flux and revision, what is most valuable to know is what technical documents lawmakers select for the purpose of writing regulations. Putting this knowledge to work, the MC series uses a variety of guidance documents designated by regulatory and standards bodies for best establishing compliance.

Developed with regulations in mind, each series edition accurately defines the scope of applicability required for your business model. Whether you’re a grower, processor, cannabis testing service or dispensary the MC series has a solution. It significantly helps business owners to achieve compliance by providing the required documentation with an operations framework.

MC series merges regulatory best practices with internationally accepted standards to deliver a complete solution with a very quick turnaround time. Designed to ensure public safety and protect human health, the MC series provides a much-needed tool that bridges the gap between compliance and profitability.

CIJ: How might you be ahead of the curve in looking toward a rescheduling or a schedule 2 cannabis framework?

Michael: Being ahead of the curve simply translates to knowing the regulatory landscape and what’s involved moving forward. When the goal is to legalize cannabis for its great many uses and benefits, public health and safety must come first. Now is the time for business owners to get serious and effectively address the process of legitimizing it.

As with anything available for consumption, standardization is the method and regulators have a long established process for putting controls in place to ensure the health and safety of consumers. We have a lot of experience in this area, and our MC Series™ is an exceptionally useful tool for people who don’t. It is our way of contributing to assisting and accelerating the process.

Essentially, we are saying to business owners, operate your business as if cannabis is already legal. Managing your operations in compliance to existing regulatory best practices will speak volumes to lawmakers. You will be effectively demonstrating to Federal and State governments that you understand the importance of regulations to ensure public health and safety and are making compliance top priority.

This will make your business fluid in relation to regulatory changes and prepare you for Schedule II and beyond.

CIJ: Why should business owners be proactive in navigating regulatory compliance with a documentation management system?

Michael: With so many regulations targeting the cannabis industry, it is hard to keep track of and adjust accordingly. Many business owners are getting excited about being involved and making a difference. Amidst all this enthusiasm, the importance of best practices is often times overlooked and prioritized for when business is good and finances improve.

At this point, business owners can no longer afford to position best practices for future use.

For businesses handling cannabis, taking a future stance will always increase risk.. This leaves you legally exposed to unforeseen costs and complications. More importantly, it will exponentially increase the potential for watching your investment, hard work and business be out paced by the competition, or even worse, closed down permanently.

Alternatively, being proactive will yield different results. Great benefits will come by adopting and following best practices to operate your business. In doing so, you now have an effective method to ensure quality, health and safety, environmental stewardship and sustainability. As a rapidly growing industry, these areas of discipline are absolutely critical for cannabis to reach its full potential and be fully accepted.

In many industries, legitimate and successful companies see best practices as simply part of doing business. Many see it as a tool that provides a useful roadmap for continually improving their operations and strengthening their position in the market.

When the legal obligations have been taken care of, success becomes a matter of setting realistic goals, planning well and delivering with impeccable timing. Operational performance can now be measured and improved for unhindered growth. Everyone involved or tied to your business is now on the same page and in areas of supervision, micromanagement is replaced with a documented system. Documentation should clearly define everyone’s roles and responsibilities, so that when errors occur, there are corrective action procedures available to fix them.

Editor’s note: For more information you may reach out directly to Michael Shea at 313-303-6763 or info@conformanceware.com

June 1, 2016

Pesticide & Potency Analysis of Street-Grade versus Medicinal Cannabis

By Danielle Mackowsky

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In states where cannabis is legalized, some analytical laboratories are tasked with identifying and quantifying pesticide content in plant material. This is a relatively new concept in the study of cannabis as most forensic laboratories that work with seized plant material are only concerned with positively identifying the sample as cannabis. Laboratories of this nature, often associated with police departments, the office of the chief medical examiner or the local department of public health are not required to identify the amount of THC and other cannabinoids in the plant. While data is abundant that compares the average THC content in today’s recreational cannabis to that commonly consumed in the 1960s and 1970s, limited scientific studies can be found that discuss the pesticide content in street-grade cannabis.

cannabis-siezed — Street-grade cannabis that is ground into a fine powder

Using the QuEChERS approach, which is the industry gold-standard in food analysis for pesticides, a comparison study was carried out to analyze the pesticide and cannabinoid content in street-grade cannabis versus medicinal cannabis. For all samples, one gram of plant material was ground into a fine powder prior to hydration with methanol. The sample was then ready to be placed into an extraction tube, along with 10 mL of acetonitrile and one pouch of QuEChERS salts. After a quick vortex, all samples were then shaken for 1 minute using a SPEX Geno/Grinder prior to centrifugation.

Quenchers-analysis — Formation of layers following QuEChERS extraction

For pesticide analysis, a one mL aliquot of the top organic layer was then subjected to additional dispersive solid phase extraction (dSPE) clean-up. The blend of dSPE salts was selected to optimize the removal of chlorophyll and other interfering compounds from the plant material without compromising the recovery of any planar pesticides. Shaken and centrifuged under the same conditions as described above, an aliquot of the organic layer was then transferred to an auto-sampler vial and diluted with deionized water. Cannabinoid analysis required serial dilutions between 200 to 2000 times, depending on the individual sample. Both pesticide and cannabinoid separation was carried out on a UCT Selectra® Aqueous C18 HPLC column and guard column coupled to a Thermo Scientific Dionex UltiMate 3000 LC System/ TSQ Vantage^TM tandem MS.

Pesticide Results

Due to inconsistent regulations among states that have legalized medicinal or recreational cannabis, a wide panel of commonly encountered pesticides was selected for this application. DEET, recognized by the EPA as not evoking health concerns to the general public when applied topically, was found on all medical cannabis samples tested. An average of 28 ng/g of DEET was found on medicinal samples analyzed. Limited research as to possible side effects, if any, of having this pesticide present within volatilized medical-grade product is available. Street-grade cannabis was found to have a variety of pesticides at concentrations higher than what was observed in the medical-grade product.

Potency Results

Tetrahydrocannabinolic acid A (THCA-A) is the non-psychoactive precursor to THC. Within fresh plant material, up to 90% of available THC is found in this form. Under intense heating such as when cannabis is smoked, THCA-A is progressively decarboxylated to the psychoactive THC form. Due to possible therapeutic qualities of this compound, medical cannabis samples specifically were tested for this analyte in addition to other cannabinoids. On average, 17% of the total weight in each medical cannabis sample came from the presence of THCA-A. In both medical and recreational samples, the percentage of THC contribution ranged from 0.9-1.7.

Summary

A fast and effective method was developed for the determination of pesticide residues and cannabis potency in recreational and medical cannabis samples. Pesticide residues and cannabinoids were extracted using the UCT QuEChERS approach, followed by either additional cleanup using a blend of dSPE sorbents for pesticide analysis, or serial dilutions for cannabinoid potency testing.

May 24, 2016

Terra Tech Expands, Maintains Quality: A Q&A with CEO Derek Peterson

By Aaron G. Biros

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Terra Tech, with the recent acquisition of Blum, a dispensary in Oakland, and the line of concentrates, IVXX, is sweeping the cannabis industry by setting standards for safety and quality. Terra Tech, publicly traded in the Over-The-Counter market, is well known as an agricultural company, with the subsidiary brand, Edible Garden, selling produce to Whole Foods, Wal-Mart and Kroger’s. In December of last year, we covered Terra Tech’s entrance into the cannabis marketplace and their experience with large-scale, sustainable agriculture. We sit down with Derek Peterson, chief executive officer of Terra Tech, to get an update on their progress and quality controls.

CannabisIndustryJournal: In January, Terra Tech announced revenue guidance of $20-22 million for 2016. Can you share some of your strategy going forward to meet your goals?

rsz_img_2343 — Terra Tech is taking organic and GFSI-certified agricultural practices to growing cannabis

Derek Peterson: We have always played both a long game as well as a short game, meaning while we are building our longer term business, like in Nevada, we are also focusing on short term accretive acquisitions, like we did with Blum in Oakland. We want to make sure we capture short-term revenue growth while we plan our future revenue production. We feel confident about achieving those results.

CIJ: How big of a role does the acquisition of Blum and IVXX brand expansion play in meeting those goals?

Blumoakland — The Oakland location of Blum dispensary

Derek: Blum is a significant factor even though we are only capturing three quarters of revenue considering we closed the deal on March 31^st of this year. So for the full year of 2017 we will have growth from this level considering we will be able to report a full year of Blum revenue. IVXX presents us with the best opportunity for growth in the coming years. As the market in California and Nevada grows we can continue to expand our IVXX footprint throughout the state. Being able to wholesale to thousands of other retail facilities affords us a significant opportunity to grow our sales.

CIJ: How do you think the brand of Edible Garden positions you well for expansion in the cannabis industry?

Poinsettias ready for distribution at Edible Garden facility in Belvidere, New Jersey — Produce ready for distribution at Edible Garden facility in Belvidere, New Jersey

Derek: One of the reasons we were so successful in the Nevada market was because regulators and legislators felt a high degree of confidence in our abilities considering we are USDA organic, Kosher and GFSI-certified. Our traditional agricultural experience has been very synergistic with our cannabis division from both an optics and operational perspective.

CIJ: Could you give us an update on progress in Medifarm LLC in Nevada? And on your distribution plan for IVXX in California?

Derek: We are continuing to expand our IVXX line throughout the state and increasing our sales force. In addition we will continue to develop new products to distribute into our existing supply chain, like we just did with our new pre filled cartridge line.

We are opening our Decatur location in Las Vegas in early July and Reno and Desert Inn towards the end of August. Our cultivation and extraction facilities should be complete no later than January 2017. We will have our entire infrastructure in place if the recreational bill passes in Nevada this November.

Blum Las Vegas location will open in July

CIJ: Tell us about the role of laboratory testing in your business.

Derek: Laboratories play a significant role, as they are becoming a mandated step in most new legislation around the company. Independent lab testing is extremely important to maintain safe access for consumers and patients. We work primarily with Steep Hill Labs and CW analytics.

CIJ: Can you expand on your integrated pest management and your growing practices?

stickerscannabis — Platinum Cookies ready for packaging and labelling

Derek: Well we cannot say organic, however we do cultivate all naturally. We also cultivate traditional produce that we sell to major retailers. We are USDA organic-certified and we implement similar processes in our cannabis cultivation. Pest control is extremely challenging for any farmer but we rely primarily on bio control, meaning the good bugs eat the bad bugs. This has been very effective for us in the cultivation of all our products.

CIJ: How is your business different from the slew of other dispensaries and growers in California?

Consistency in quality standards requires meticulous SOPs

Derek: Service and consistency; we have over 42,000 registered patients and our operations team has over 19 years of experience in California. One of the reasons we have become one of the largest dispensaries in the state is because of that experience. In addition, consistency is extremely important. Consumers expect the same product in every other business and ours is no different. If they come in for our Platinum Cookies one month and the next month it has different characteristics you are going to lose patient confidence. So in the front of the house, we are focused on pairing patients’ needs with the correct product and in the back of the house we are focused on providing a meticulously cultivated product, produced at the highest standards.

CIJ: Can you delve into some of the processing for concentrates? How do you meet such rigorous quality standards?

IVXX processing — Extraction equipment in one of the processing facilities for IVXX

Derek: Through research and development, we have engineered a proprietary process in which our solvent profiles used under our proprietary conditions ensures solvent residual levels which are not detected by instrumentation at 3^rd party testing agencies such as Steep Hill Labs. In addition, any good scientific method requires repetition and corroboration of results. In order to accomplish this we also rely on random routine testing in which we send out extracts out to other 3rd party testing labs. Proprietary conditions include, but are not limited to, heat, vacuum, agitation, etc. By utilizing the correct amalgamation of solvent profiles, extraction conditions, purging conditions, as well as rigorous quality control standards, we are able to ensure a product that is void of any residual solvents, without sacrificing potency or identity of the cannabinoids and terpenes. Cannabinoids and terpenes are of chief interest when extracting cannabis for patients so that they have access to these essential oils without any of the actual leaf and bud.

All solvents used are the highest grade available to us, which ensures a truly medical product for the patient. In addition, all of our extraction equipment is routinely cleaned and sterilized using medical grade cleaning agents.

May 23, 2016

Building or Converting to a Greenhouse? Four Considerations for Commercial Growers

By Taylor Engert

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Successful cannabis cultivation practices leverage commercial agricultural industry practices for the most efficient and cost-effective production of the crop. Since the 1990s, the cannabis industry has cultivated primarily in indoor warehouses and outdoor farms, however the industry is experiencing a significant shift toward greenhouses.

Shelly Peterson, vice president of light product solutions at urban-gro, joined a recent panel of industry experts including Shivawn Brady, chief executive officer and founder of Seva Crop Consulting, and Karl Keich, executive director at Canna Consulting Group, at the Marijuana Business Conference in Orlando, Florida, to discuss how to transition from an indoor or outdoor grow to a greenhouse facility.

What are the considerations when deciding between a warehouse and greenhouse? The panel shares four factors around the costs and operational challenges, and the benefits of a greenhouse.

Maximize Efficiency in Every Process

Why are cannabis cultivators looking toward greenhouses? Peterson says it is all about efficiency. “In a warehouse, electricity costs can run up to 50 percent of the total cost of goods sold, which is a tremendous amount that can be decreased by switching to a greenhouse,” says Peterson. “In a greenhouse, you can add supplemental lighting to augment what the plant is receiving from the sun.”

For cultivators, Peterson noted that it is critical to ensure growers have experienced vendors and advisors on the team to help maximize the efficiency of the greenhouse. “As the cost of this product comes down, the efficient growers will be the ones in it for the long haul,” added Peterson.

Construction vs. Operating Costs

A greenhouse facility that urban-gro helped bring to operation.

The panel identified upfront cost as one of the biggest challenges faced when building out a greenhouse. “The cost of retrofitting a warehouse and building a greenhouse are similar, but where you will save is in the operational costs,” says Peterson. “Lighting can be up to one third of your total cost in indoor facilities, when you switch to a greenhouse that cost can be reduced by 50 to 70 percent.”

Brady acknowledged that some traditional greenhouses have challenges in controlling the environment, but automated greenhouses offer retractable roofs and siding. “If you have the resources to invest in your greenhouse system upfront, that is generally a better way to save money in the long run,” says Brady. “Managing pests in greenhouses can also become very challenging if you don’t have the proper climate regulations.”

Lighting for Your Greenhouse

One of the greatest benefits of growing in a greenhouse is the ability to source natural light. But what about the required light levels? Peterson pointed out that light levels change throughout the year and the plants have different light needs in different stage. Supplement with a lighting system that can read the natural light levels received over any given period of time and be adjusted accordingly. “Greenhouse facilities also need to be outfitted to meet the needs of the cannabis plant, which differ in some ways from other agricultural crops,” says Peterson.

Peterson explained that every light is designed with a different purpose in mind. “There are different lights for indoor warehouse facilities where the lighting system provides 100 percent of the available light for cannabis growth versus supplemental lighting for greenhouses,” Peterson adds. “The key is to measure how much light is actually delivered by the sun on a daily basis, which changes throughout the year; at urban-gro, we supplement the facility with light fixtures that will not create shadowing during hours of sunlight and adjust to reach the optimal collective light levels.”

With LED lighting a hot button topic, Peterson explained that the most important consideration for any light fixture, whether LED or HPS, is it’s efficiency capacity. “It all depends on the budget and payback period and a lot of numbers need to be crunched,” says Peterson. “Yield is directly correlated to light; planning properly, sealing your environment, making sure you have the right target DLI, and buying good light meters, are all key.”

Make a Positive Impact and Quality Product

Brady noted that industry leaders are conscious of positive impact towards human health and environmental stewardship when moving to a greenhouse. Cultivators may find the process challenging initially, however the facilities are quite easy to operate and manage, and allow stress-free cultivation of commercial-scale crops.

Keich added that the cannabis industry is becoming more like commercial agriculture. By utilizing the correct technologies and regulators, greenhouse cultivation makes the crop smell, taste and look that much better. “Let’s use natural sunlight to minimize costs and be environmentally friendly to produce a superior product,” says Keich.

Peterson wrapped up by stressing that cultivators should evaluate the greenhouse environment and lighting to improve their bottom line. “Look at the most efficient way to lower your cost of goods sold. Lighting is a very big component to that,” she continued. “Make sure you evaluate the efficiency of the fixture and ask the questions: Why are we targeting this light level? Is the color spectrum correct? Are you measuring in micromoles per watt? These are all different questions, however figure out how much light is coming out of the fixture and verify it for yourself, and you will be successful,” says Peterson.

May 18, 2016

Solutions for Cannabis Cultivation: Integrated Pest Management

By Aaron G. Biros

3 Comments

Pest problems in cultivating cannabis such as spider mites and powdery mildew are major concerns facing growers on a daily basis. Colorado’s ongoing recalls for cannabis products containing pesticides serve as a reminder that pest problems continue to plague growers. Utilizing integrated pest management (IPM) can help reduce the need to use any pesticides, as well as mitigate the risk of unwanted pests wreaking havoc on a cannabis harvest. urban-gro, a solutions provider for commercial cannabis cultivation, builds IPM plans for large-scale cannabis growers tailored to meet specific needs in regulatory compliance for different states.

Biological controls are essential to any proper IPM solution for growers. Beneficial living organisms such as insects, mites, nematodes or entomopathogenic fungi can all be applied as a method for controlling pests. Biological controls like those can reduce the need to use pesticides on cannabis. John Chandler, vice president of cultivation technologies at urban-gro, believes IPM requires a broad, systematic approach to eliminate the need for pesticides. “IPM is a combination of cultural, chemical and biological control,” says Chandler. “We start by evaluating the air flow of the facility, how plants are transported, any exclusion barriers and air filtration.” A robust IPM plan begins in the design phase of a new facility. “We can make key adjustments in floor plans, layouts and mechanical systems to optimize that first line of defense that is critical to mitigating the risk of pest issues.” Incorporating good agricultural practices can also help mitigate those risks.

durangopot — A close-up of a plant entering flowering at the Durango facility

“We help develop standard operating procedures with good agricultural practices in mind, including preventing cross contamination, which is the biggest pest issue facing cannabis growers,” says Chandler. “I encourage clients to set up harvest and vegetative rooms so that the plants are moving in one specific direction between rooms rather than back and forth.” Using positive air pressure with proper ventilation can further prevent cross contamination. Chandler also recommends scrubbing air coming into the building with gaseous hydrogen peroxide to keep filtering air in ventilation.

According to Mark Doherty, director of sales at urban-gro, their IPM plans are customized to meet different states’ rules and regulations, including each list of approved pesticides. “We work to design a system that meets each individual grower’s needs, while helping them navigate regulations in any given state,” says Doherty. “It is important to make cannabis safe for patients and IPM is critical in building a healthy ecosystem for plants to be grown in a safe, yet cost-effective manner.” Proper use of IPM can reduce the need to use pesticides, which could impact a cultivator’s bottom line, but ultimately protect patients’ wellbeing by providing safe and pesticide-free cannabis.

prosodic — Procidic works on contact and with residual action.

When all else fails and pests still find their way onto cannabis, there is a solution to address major losses. urban-gro distributes a product called Procidic2®, a broad-spectrum bactericide and fungicide compound, manufactured by Greenspire Global. The advanced commercial formula is designed to eliminate pathogenic bacteria and fungi. Procidic2® can be applied as a preventive and a curative. WSDA Organic Program has approved Procidic2® for use in organic agriculture production and handling. According to Steve Knauss, president of Greenspire Global, “Procidic2® works in sync with the plant through two modes of action: First it controls powdery mildew and gray mold on contact, and secondly it is absorbed systemically into the plant to control disease infection such as root rot,” says Knauss.

Implementing a comprehensive IPM system requires making key changes in cultural, biological and chemical controls. In doing so, growers can successfully mitigate the risk of pest problems, thus reducing the need for potentially harmful pesticides.

May 17, 2016

The Great LED Debate

By Aaron G. Biros

5 Comments

The preferred choice for indoor cannabis growing has long been high-pressure sodium (HPS) 1000-watt light bulbs during flowering. Light-emitting diodes (LED) are quickly changing the indoor farming landscape with innovative technologies and promising energy savings. Many think the technology still needs time to develop. There are certainly many pros and cons to switching an indoor cultivation facility from HPS to LED lighting systems.

Steve Kruss, president of Light-Waves Electronics, Inc., gave a comprehensive analysis of the advantages and disadvantages of various light sources at the CannaGrow Conference and Expo. “The first adopters [of LED light technology] more than two years ago did not get the results they wanted, so many growers gave them a bad rap very early on,” says Kruss. His discussion delved into the pros and cons of both LED and HPS lights in growing cannabis.

lightwavesinc — Light-Waves Electronics Inc. LED fixtures being installed in a cultivation facility.

It is important to highlight the weaknesses in many common HPS systems and the possible solutions that LED technology could offer. According to Kruss, HPS lights do not match the light spectrum’s photosynthesis curve that plants need to absorb energy. HPS lights give off a tremendous amount of heat that requires more energy to cool a facility down with an HVAC system, increasing energy costs for growers. Since LED’s use 50% less wattage, they produce approximately 50% less heat, significantly reducing cooling costs. HPS light bulbs need to be replaced multiple times per year. Quality LED fixtures can last more than 50,000 hours, or roughly eleven years. “The reality is HPS is putting a lot of light out but that energy is wasted because so much of it is in a light spectrum that plants do not absorb,” says Kruss. Perhaps most important is the lack of ability to vary the light spectrum; any light that HPS bulbs produce that the plant does not absorb is essentially wasted energy.

LED light bulbs provide a solution to the wasted light in HPS by targeting the particular spectrum that plants need for photosynthesis. By targeting the photosynthetically active radiation (PAR), roughly 400-700nm, LEDs can effectively mimic the sun’s ability to produce the wavelength of light specifically needed in a certain stage of cultivation. The absorption spectra and action spectra are wavelengths of light preferable for harvest as well as plant growth and metabolism, respectively. LED manufacturers and growers commonly try to harness the Emerson Effect, which uses red (670nm) and far red (700nm) to increase the rate of photosynthesis.

A plant in flowering under a Light-Waves Electronics LED fixture

The benefits of LED lights in growing cannabis are numerous. The primary benefit is that it provides light at the specific wavelengths chosen to match the specific needs of plants. When finely tuned, LEDs can influence the growth process by slowing down vegetative plant growth and inducing flowering when appropriate. LEDs are more energy efficient than their counterparts partially because they give off substantially less heat in the beam itself, reducing cooling costs. Some growers use LEDs together with HPS lights, some use LEDs with natural sunlight in a greenhouse setting and some use strictly LEDs for the entire growth cycle. Each cultivation operation has its own budgetary restraints and structural limitations, but energy efficiency is one area that all growers should look to improve. According to Adam Koh, chief cultivation officer of Comprehensive Cannabis Consulting (3C), indoor growers can get away with T5 fluorescent lamps (which do not consume much energy) throughout the vegetative process.

For some, the debate is over and growers recognize the added benefits that LEDs bring to growing cannabis. According to Kruss, LED technology is almost there. “In terms of yields, LED lights are providing around 75% of the weight that HPS produces, but on the vegetative side, the growth is considerably faster which could make up for that weight loss with faster grow cycles and an extra harvest,” says Kruss.

Talltrees — An LED cultivation operation set up by Tall Trees LED Company

Adam Jacques, award-winning grower and founder of Growers’ Guild Gardens, has used LEDs in tandem with sunlight. Him and his team have bred and grown cannabis in indoor, greenhouse and outdoor operations. “I love the huge steps that some LED manufacturers have made in the past year,” says Jacques. “When I utilize them within a greenhouse setting I really like the product it grows.” Jacques’ findings in the field echo Kruss’ statements that LED lights have made considerable progress very recently. “It does take a little dialing in due to the plants’ increased feeding regiment, but it is a small price to pay for all of the benefits we see,” adds Jacques. His success with the new technology is representative of a larger trend; more and more growers are beginning to implement LEDs in some form.

Some claim the yield is less from LED lights during flowering.

Maxx Wiley and Robert Manes, co-founders of Tall Trees LED Company based in Arizona, believe their technology is on par with the yields other growers are getting with different light sources. “We conducted heads-up tests with our 500-watt LEDs versus other 1000-watt HPS bulbs and have seen very impressive results,” says Wiley. “The plants under our lights were consistently getting more weight and more flowers; the flowers appeared smaller but were actually denser and heavier in reality.” Wiley’s company makes commercial LED luminaires that are IP 65 waterproof rated and he claims they never had any issues with failures. The technology uses no moving parts to cool the lights, just metal clad circuit boards, heat sinks and conductive thermal-bonding materials. “We have had customers run potency analyses and have found tremendous variation in plants grown with HPS,” says Wiley. “We see more compound production and more consistency crop-to-crop with our LED technology.” There are currently a handful of manufacturers bringing innovative designs to market.

A cultivation operation in Maine using GS Thermal Solution liquid-cooled LED fixtures

GS Thermal Solutions, based in Connecticut, manufactures 1000-watt LED fixtures that are liquid-cooled. The company makes lights that are fully adjustable, so growers can dial in each spectrum of light intensity independently and tailor to specific strains as well as stages of growth. According to Rick Rhyins, vice president of sales at GS Thermal Solutions, the liquid cooling technology allows for a much longer lifetime of the LED and a much more efficient energy consumption. “Our technology addresses the shortcomings and previous problems with early generation LED models,” says Rhyins. Coupled with facility automation, GS Thermal Solutions uses a central control system to monitor cooling, light intensity and spectra, nutrient monitoring and feed control.

Yet some are still skeptical of the LED lighting in today’s market and feel the technology is not there yet. Nic Easley, chief executive officer of Comprehensive Cannabis Consulting (3C), has brought over sixty cultivation operations to market and is hesitant to endorse the technology at this point. “I will never be an early adopter when it comes to new lighting technology and I feel we are at least a year out from seeing consistently efficient LED lighting,” says Easley. “There are still a lot of false claims out there and I want to wait until I see repeatable results on a small scale before I feel comfortable endorsing LED lights for cannabis cultivation.” While companies will continue to innovate lighting solutions for indoor cultivation, in many cases (but not all) it seems using the sun to grow cannabis would be more energy efficient.