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Why the Central Chiller Isn’t So Central to Grow Room HVAC

By Geoff Brown
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There’s a better way to design HVAC for cannabis grow rooms, and it may seem a little odd at first.

Central chillers are a tried-and-true solution for projects requiring large refrigeration capacity. They’re found in college campuses, hospitals, office buildings and other big facilities.

While central chillers are a good default for most large-scale applications, they fall short in this industry. Grow rooms, with their need for tight, variable conditions and scalable, redundant infrastructure, have HVAC requirements that the central chiller model simply can’t deliver on.

Let’s unpack the shortcomings with the central chiller in this niche and explore some possible solutions.

What’s Wrong With Chillers?

Building a scalable HVAC system is essential for the cannabis industry as it continues to ramp up production in the U.S. and Canada.

Many growers are building their large facilities in phases. In Canada, this is common because growers must have two harvests before they can receive a production permit, so they build just one phase to satisfy this requirement and then build out the facility after the government’s approval.

This strategy of building out is less feasible with a central chiller.

solsticegrowop_feb
Indoor cultivator facilities use high powered lights that give off heat, requiring an efficient air cooling system.

A chiller and its supporting infrastructure are impractical to expand, which means it and the rest of the facility needs to be built to full size for day one, even though the facility will be in partial occupancy for a long time. This results in high upfront capital costs.

If the facility needs to expand later down the road, to meet market demand for example, that will be difficult because, as mentioned, it’s expensive to add capacity to a central chiller.

Additionally, the chiller creates a central point of failure for the facility. When it goes down, crops in every room are at risk of potentially devastating loss. Grow rooms are unusual because of their requirement for strict conditions and even a slight change could have big impact on the crop. Losing control due to mechanical failure could spell disaster.

One Southern Ontario cannabis grower met with some of these issues after constructing their facility, which uses a central chiller for cooling and dehumidification. The chiller was built for full size, but the results were disappointing as early as phase one of cultivation. While sensible demands in the space are being easily met, humidity levels are out of control – flowering rooms are up to 75% RH.

Humidity is one of the most important control aspects to growers. Without a handle on it, growers risk losing their entire crop either because there’s not enough and the plants dry out, or there’s too much and the plants get mold disease. This facility has fortunately not yet reported serious crop issues but is mindful of the potential impact on harvest quality.

By going unitary, capital costs scale on a linear basis.If tight control over humidity is what you need, then a chilled water system needs very careful consideration. That’s because typical chiller system designs get the coils cold enough to lower the air temperature, but not cold enough to condense water out of the air as effectively as a properly designed dehumidifier coil.

A chilled water system capable of achieving the coil temperatures needed for adequate dehumidification in a typical flower room will also require full-time reheat to ensure that air delivered to the plants isn’t shockingly cold — either stunting their growth or killing them altogether. This reheat source adds complexity, cost and inefficiency which does not serve growers well, many of whom are under pressure from both utilities and their management to minimize their energy usage.

How Do Unitary Systems Solve These Problems?

Compared to central chillers, a unitary setup is more agile.

A facility can commence with the minimum capacity it needs for start-up and then add more units in the future as required. They’re usually cheaper to install than a central system and offer several reliability and efficiency benefits as well.

The real business advantage to this approach is to open up the grower’s cash flow by spreading out their costs over time, rather than a large, immediate cost to construct the entire facility and chiller for day one. By going unitary, capital costs scale on a linear basis.

Talltrees
One of the flowering rooms in an indoor set up (Image: Tall Trees LED Company)

Growers can have more control over their crop by installing multiple units to provide varying conditions, room-by-room, instead of a single system that can only provide one condition.

For example, flowering rooms that each have different strains of crop may require different conditions – so they can be served by their own unit to provide variability. Or, rooms that need uniform conditions could just be served by one common unit. The flexibility that growers can enjoy with this approach is nearly unlimited.

Some growers have opted for multiple units installed for the same room, which maximizes redundancy in case one unit fails.

A cannabis facility in the Montreal area went this direction when building their HVAC system. Rather than build everything in one shot, this facility selected a unitary design that had flowering rooms served independently by a series of units, while vegetation rooms shared one. The units were sized to provide more capacity than currently required in each room, which allows the grower to add more plants and lighting in the future if they choose.

This facility expects to build more grow rooms in a future phase, so it was important to have an intelligent system that could accommodate that by being easy to add capacity to. This is accomplished by simply adding more units.Multiple, small systems also have a better return-on-investment.

The grower, after making a significant investment in this facility, was also averse to the risk of losing crop due to mechanical failure, which is why they were happy to go with a system of independent grow room control.

Multiple, small systems also have a better return-on-investment. Not only are they easier to maintain (parts are easier to switch out and downtime for maintenance is minimal) but they can actually be more efficient than a large, central system.

Some units include heat recovery, which recycles the heat created by the dehumidification process to efficiently reheat the unit’s cold discharge air and keep the space temperature consistent, without needing expensive supplementary heaters. There’s also economizer cooling, which can be used to reduce or even eliminate compressor usage during winter by running the unit on dry outside air only.

Demand for cannabis continues to increase and many growers are looking to expand their businesses by adding new facilities or augmenting existing ones. Faced with the limitations of the traditional chiller system, like the lack of flexibility, scalability and redundancy, they’re looking for an intelligent alternative and the unitary approach is earning their trust. It’s expected this option will soon become the leading one across North America.

South American Firms Begin Exporting Cannabis To Germany

By Marguerite Arnold
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In a sign of how widely the German government is now casting its net for medical cannabis, even South America is not off the table. At the end of last month, two firms– one from Uruguay and another from Columbia- announced that they would begin importing medical cannabis of the THC and CBD kind.

Fotmer Life Sciences (from Uruguay) and Clever Leaves (Columbia) are entering a market where domestic cultivation has been on the drawing board for two years so far, but so far, brought down by lawsuits.

At present, Aphria, Aurora and Wayland are the big Canadians in front position on the German bid- but so far that is only importing. There are legal challenges against what appears to be the domestic cultivation licenses that appear so far to be unresolved. And against that backdrop, the big Canadians are also facing competition from indie German distributors now casting a wide net for product, globally.

Due to the timing of the announcement from South America and the firm involved in the import, CanSativa GmbH is clearly connected to the large gap in demand that is now developing in the German market and supply requirements. Further CanSativa is also a German firm engaged in what insiders on the ground admit is basically the only way to enter the market here right now, namely via an agreement with one of the new (and Frankfurt-based) distributors who are interested in this space.

Cannabis Central Is Not Berlin

To the great surprise of outsiders, who have long believed that Berlin is the center of all things cannabis in Germany, CanSativa is now one of quite a few firms who have not only called Frankfurt home, but have begun to put the city on the global cannabis map. That started of course with MedCann GmbH (later acquired by Canopy Growth), now with a huge new office in the center of the banking district.

However that also includes the now controversial Farmako, and several other new distributors who are setting up shop with a “Mainhatten” address.

Why Frankfurt? It has one of the best and busiest airports in the world just 20 minutes from the center of the city, and of course, it is home to the Deutsche Börse, the center of not only German, but European finance.

What Does This Announcement Mean?

For those interested now in setting sail for Europe, there is clearly a strategic path to get there, even if it means picking up stakes and setting down cultivation roots in places where there is an ex-im market. While the announcement about Latin American exports is not unexpected, it is also surprising that the very competitive young distributors now popping up in Germany, in particular, cannot find closer sources to bring cannabis into the country from.

However, it is early days yet. The Israelis are coming as of this summer. German inspectors are also on the ground in Macedonia through June, certifying the early movers in the market there to begin importing presumably just before Israel enters the global ex-im business, finally.

There will also be an uptick in firms exporting at least medical grade (GMP-certified) CBD and hemp in the direction of Europe from the United States, although at present that traffic is a trickle as firms begin to find out about the possibility.

Regardless of the source, however, the news is yet another sign that the medical market is taking root, no matter how ambiguous the numbers still are, and no matter how hard it is on the ground to obtain.

Cannabis is now, indeed, entering Europe via Germany from all over the world, and it’s only going to get hotter this year.

german flag

Germany Enters The Fray On Novel Food

By Marguerite Arnold
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german flag

The novel foods discussion in Europe is a thorny one- and further one very misunderstood by natives, let alone those who would take Europe by canna storm. Within Europe, this discussion has festered and percolated for the better part of two years. Last year, despite a huge bump in sales in certain regions (see Switzerland), police were directly involved on the ground in Spain and rumblings of the same possibility took place in Austria at the end of the year. Early this year, further indecision at the EU level has continued to confuse the entire discussion.

This year, while there have been recent blow-ups in the UK, and fights at the EU level, the main action has been in the DACH region of the EU. The DACH trading alliance includes Germany, Switzerland and Austria.

In fact, the debate in this region of the world may drive not only European but UN policy. For that reason, the road currently is a thorny one, with lots of drama shaking out along the way in policy fights that still, at least in many European countries, involve the fuzz and what has been ostensibly packaged and labelled as “health food.”

It is for that reason that the most recent move by the German Federal Office of Consumer Protection and Food Safety (or BVL), which said that CBD should not be sold in food at all, has gotten all the attention lately. Especially and more worrying for the nascent CBD industry across the continent, the agency also opined that it does not see a case where CBD-containing cannabis would be marketable in foods or health supplements.

european union statesLast month, on April 11, the European Industrial Hemp Association (IEHA) issued a sharp rebuttal to the same. As they have just been asked to serve in an advisory role in setting EU regulations on novel foods and hemp extracts, this is likely to move the conversation forward regionally. Including in the DACH region where this issue is all over the place.

What Exactly Does Novel Foods Regulation Cover?

Novel Foods regulation in Europe covers two things, and this is true far from cannabis. It is consumer rights legislation and guidelines that cover all plant-based food and supplements across the continent. It also covers beauty products (since the skin is the body’s largest external organ) although so far, this tiny part of a niche industry has largely escaped attention. Do not expect that to last.

Where this crosses with cannabis is an interesting discussion. Hemp and cannabis of course have been consumed in Europe for thousands of years. As such, food and extracts of the plant, from species that occur naturally here, normally would not raise a fuss. However, this discussion has also become complicated for a few reasons. Starting with the fact that the seeds and strains now being developed in the U.S. and Canada are not “native” to the European region.

In fact, the early exports across the Atlantic (and there have now been a few) are all on the hemp side of the equation. Currently hemp is the only plant containing CBD that is recognized as viable under novel foods. Cannabis sativa strains that are low in THC are where this whole discussion gets dodgy. The strain, Girl Scout Cookies, and its contents including CBD for example, would under this regime, never be allowed. Nor would cannabis strains bred for their low THC in the United States.

The second issue is how such plants are processed and the cannabinoids extracted. That is another issue that directly relates to how concentrates, tinctures and extracts are made in the first place. This is also in the room.

But that is also where the entire debate also spins off into other semantic hair-splitting that the industry so far has found not only tedious but largely impenetrable.

Why Is The German Announcement So Cynical?

Germany is following its DACH neighbour Austria to directly put the brakes on the CBD and THC discussion across the border with Switzerland. In contrast to its Teutonic trading partners, the Swiss have been experimenting with all kinds of CBD products, from all sorts of sources, and are now talking THC recreational trials (even if sold out of pharmacies).

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

In contrast, over the last six months, both Germany and Austria have come out with statements and official pronouncements not about hemp, per se, but rather CBD- a cannabinoid found in all instances of both hemp and cannabis sativa. While politically this might send a statement that both countries are not ready to engage the cannabis debate on the next level (beyond medical in other words), scientifically of course, this is a silly argument to make. A cannabinoid is a chemical compound that acts the same whether it comes from cannabis, hemp or synthetic sources (see the synthetic dronabinol).

In the meantime, CBD itself has not been declared a “novel food.” In other words, for all the legal regulatory “brakes” and excuses, the dust is starting to clear on the debate as both regional and international bodies finally take on the entire cannabis discussion, albeit in a plodding, multi-year way. That, however, is undeniably under way at this juncture.

In the meantime, look for political grandstanding about every cannabinoid under the sun and further such drama will not abate even with “recreational” reform. Even when Europe accepts full boat regulated, recreational, novel food regulation will still be in the room. Even if politicians no longer play games with individual cannabinoids.

That said, at this point, that is also unlikely. In other words, expect the battle on the novel food front to continue for the entire industry, and shift, when recreational comes, to merely another cannabinoid, unless policy makers address the bottom-line issues now.

Disposable Gloves: The Unregulated Cannabis Threat

By Lynda Ronaldson
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Today in the states where medical and recreational cannabis is legal, cannabis products purchased from licensed facilities are required to have undergone testing by accredited labs. The compliance testing verifies advertised potency levels and checks for microbial contamination, herbicides, pesticides, fungicides and the presence of mold and mildew, among other potential contaminants.

Until recently, little attention has been given to disposable gloves and their possible involvement in the contamination of the products they handle.  What factors should you consider when purchasing gloves?

Disposable Gloves Facts

Disposable gloves, like cannabis products, are not made of equal quality. There are several different types of disposable gloves on the market, and huge variations in glove quality and chemical compositions exist between and within each glove type.

Recent scientific studies have revealed how gloves produced in factories with poor manufacturing standards and raw material ingredients can contaminate the products they handle. High-level toxins in disposable gloves were found to affect lab results, toxins in gloves contaminated the food they touched, and pathogen contamination of unused disposable gloves has been proven. Should the cannabis industry take more interest in the disposable gloves they are using? With so much at stake if compliance test results are compromised, we think so!

Glove Procurement: Factors to Consider

What factors should you consider when purchasing gloves?

  1. Industrial grade gloves- There is no such thing as an industrial grade glove certification, although it does give an incorrect impression that gloves are strong and resilient. Industrial grade means they have not been subjected to inspection nor have passed any specific testing requirements.
  2. Food contact gloves are certified under FDA Title 21 CFR Part 177, which states the components of the glove comply with the FDA regulations and the gloves consist of “substances generally recognized as safe for use in food or food packaging.” Few controls exist for glove manufacturing relating to the reliability of raw materials and manufacturing processes, and costs can be reduced with the use of cheap, toxic materials.
  3. Medical grade gloves have to pass a series of technical tests in order to meet the safety requirements specified by the FDA. Gloves are tested for puncture and abrasion resistance, must meet tension and elongation tests and are also tested for chemical substance resistance. Manufacturers of these gloves must receive 510k certification. As this study shows, even medical gloves can contain high levels of toxic ingredients, affecting laboratory test results.
  4. The Acceptable Quality Level (AQL) refers to a quality standard for measuring pinhole defects- the lower the AQL, the less defects the gloves have. There are no AQL requirements for food grade or industrial grade gloves, meaning there are no guidelines for the number of failures per box. Medical grade gloves must have an AQL of 2.5 or less, meaning 2.5 failed gloves per 100 gloves is an acceptable level.
  5. For Californian cannabis companies, are your disposable gloves Prop. 65 compliant? Accelerator chemicals, such as 2-Mercaptobenzothiazole (MBT) found in some nitrile gloves, have recently been added to the Prop. 65 chemicals known to cause cancer.

How Gloves Can Contaminate Products

Physical, chemical and microbiological hazards have been identified in disposable glove supply chains. Gloves of any grade are not tested for cleanliness (microbial and bioburden levels), raw material toxicity and chemical composition, or pathogen contamination.

100% of glove factories supplying the United States are based in Southeast Asia. These factories are generally self­-regulated, with FDA compliance required for a rough outline of the ingredients of the gloves rather than the final product. Few controls are required for glove manufacturing relating to the reliability of raw materials, manufacturing processes and factory compliance or conditions. A clear opportunity exists for accidental or intentional contamination within the glove-making process, especially to reduce costs.

In order to safeguard their customers from product contamination, a selection of tests and certifications, some of which are unique within the glove industry, are being implemented by glove supplier Eagle Protect. These tests make sure Eagle’s gloves coming into the United States are made in clean, well run factories, free of any type of contamination and are consistent in material makeup to original food safe specifications. This glove Fingerprint testing program, consists of a number of proprietary risk reduction steps and targeted third-party testing methods, includes gas chromatography combined with mass spectroscopy (GC/MS); surface free energy determination; in vitro cytotoxicity analysis; and microbial viability-linked metagenomic analysis.

With a great deal of faith placed on a glove supplier’s ability to deliver disposable gloves sight unseen, we believe these tests are essential to further reduce risks or pathogen contamination associated with them, keeping your cannabis products safe.

Jennifer Whetzel

Branding for Cannabis Companies 101: Part 1

By Jennifer Whetzel
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Jennifer Whetzel

Busy entrepreneurs often skip steps in their business development process, particularly in the cannabis space. Since this is a new industry, there isn’t a long history of marketing/advertising efforts to look back on; the standards are still being developed. But more often, businesses simply may not have a budget large enough to pay an agency, and they may not feel confident executing these efforts on their own.

Fortunately, you can do a lot independently to get your name out there. This three-part series will give you a quick primer on branding – what it is, why it’s important and how to do it. But first, we need to discuss the differences between branding, marketing and advertising so that you know what kind of tools you have at your disposal.

What is Branding?

Branding should be considered a prerequisite to marketing and advertising.

Branding: Who
Marketing: What & Why
Advertising: Where & When

Branding is simply thinking about your company from the inside-out. It’s asking yourself questions about the kind of person your brand would be, down to its beliefs, personality and sense of style. Ultimately, we do this to build a deep emotional connection with potential customers. When you know who you are and put yourself out in the world, you’re signaling to them that you are a good match for each other.

When you have a brand that consistently forms emotional relationships with customers, that bond converts to both income and long-term company value, making your spending on marketing and advertising go further. It gives you a competitive advantage over companies with weak or non-existent branding (and in the U.S. cannabis industry, there are plenty of those). Moreover, it’s a key factor that venture capitalists and friendly Fortune 500s look for in potential investments.

So, what should you be asking yourself when it comes to branding? Start with exploring the fundamentals. Decide on the philosophical, emotional and visual characteristics of your brand.

As far as the philosophical questions go, it’s important to codify your mission, brand values, customer promise, core competency and future vision to build a strategic brand. Think about what you’re offering, how it will change lives, and what unique qualities will help you make it all happen.

The Four Ps: Product, Price, Place and Promotion.The philosophical characteristics help you decide who you are. Your emotional characteristics are the ones that connect you with the world. These would include your creation story, your brand personality and tone of voice. How does your brand see and respond to the world? Why? People love consistency. Having a consistent presentation makes your brand feel more authentic; in turn, people are more receptive to you.

The visual qualities are how the world should see you. These assets should include your color palette, fonts, imagery and logo. Making decisions about your brand’s appearance may feel subjective and overwhelming to people, but it doesn’t have to be. Basically, evaluate these ideas and assets in terms of how your audience is likely to respond to these elements. For example, how does your happy-go-lucky audience feel about a logo that is lime green versus corporate blue? Which color best reflects your brand sensibility? You know who you are; the visual characteristics are how you plan to show it.

Marketing

As a discipline, marketing traditionally involves making strategic decisions about the four Ps: Product, Price, Place and Promotion. These decisions become significantly easier once you have defined your brand.

Essentially, marketing addresses the way your brand lives in the world. It tells potential customers what you sell, and why they should choose your brand. It involves making thoughtful decisions and having a strategy for decisions such as product names and your corporate culture.

You also need to think about your pricing strategy and how that manifests in front of customers. For example, are you a high-end product with a premium price or the Walmart of weed? What’s your customer service strategy? Are your budtenders in flannel or lab coats?By now, you know who your brand is and how you want to present it to the world. Now you need to get consumers to see it that way. That’s where advertising comes into play.

Marketing also involves decisions about collateral—namely, your product packaging, brochures, signs and trade show booths. It also impacts your brand’s in-person presence. That could include experiences like events your company attends, trade shows where you have a booth or table, sensory experiences or even AR/VR experiences with your product.

By now, you know who your brand is and how you want to present it to the world. Now you need to get consumers to see it that way. That’s where advertising comes into play.

Advertising

Generally, advertising relates to paid campaigns that are carefully written and designed to tell potential customers where, when, why and how to connect with your brand and buy your products and services.

Fortunately, you have the tools to thrive by putting in the work to get to know your brand.These campaigns are often launched within the space of owned media, such as television commercials, radio and print ads and billboards. There are tons of digital and social media options. Your job is to find the ones that your customers interact with and decide what you want to say about yourself. For example, what kind of sites would you want to place ads on? What state of mind are customers in when they go to those sites? And what message do you want them to get from you in that moment?

Normally, answering these questions would be daunting. But since you’ve already decided who your brand is, you may already know what colors you want to use for this ad. You’ve already considered what your mission is. You know how your brand should appear to the world. And since you’ve unlocked these truths, you’ll be able to develop campaigns that feel genuine, unique, and memorable.

Connecting with consumers and making them remember you isn’t optional. It’s what will ultimately decide whether your business survives or not. Fortunately, you have the tools to thrive by putting in the work to get to know your brand. It’s tough, and it may not come easily at first. But we don’t start a business because it’s easy. We accept the risks and frustrations because we love what we do. Tell everyone why they should too.

Illinois Senate Passes Bill To Legalize Adult Use Cannabis

By Aaron G. Biros
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Illinois lawmakers came one step closer to legalizing adult use cannabis this week. The Illinois Senate voted 38-17 to pass HB 1438, which is now headed to the House for a vote. Sponsors of the bill, Senator Heather Steans (Chicago-D) and Representative Kelly Cassidy (Chicago-D), along with Governor J.B. Pritzker, have been viewed as the architects of this piece of legislation.

Illinois Governor J.B. Pritzker

This is not the first time that Democrats in the Illinois legislature have attempted to legalize adult use cannabis. Back in 2017, state Representative Kelly Cassidy and state Senator Heather Steans, the two lawmakers sponsoring this bill, sponsored a legalization bill that failed to garner support.

Governor Pritzker, who campaigned on cannabis legalization, has been vocal about his support to push this bill through the legislature. Back in January, the sponsors of the bill announced their plans with the bill, backed with full support from the Governor’s office. Then in early May, the coalition announced the formal introduction of the bill.

It is clear that Illinois is excited about cannabis, including the less-than-0.3%-THC variety, or legal hemp under the Farm Bill. Within two days of announcing the opening of license applications for growing hemp, the Illinois Department of Agriculture received roughly 350 applications.

Regarding the bill that just cleared the Senate, one particularly contentious issue raised was the allowance for “home grow.” The Senate approved the bill after a provision was added allowing just medical cannabis patients to grow their own, not everyone.

If this bill manages to pass through the House, Governor Pritzker is expected to sign the bill immediately. The bill would legalize and regulate sales of cannabis and cannabis products on January 1, 2020.

Arizona To Implement Mandatory Lab Testing

By Aaron G. Biros
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Good news came to patients using medical cannabis in Arizona earlier this week: Lawmakers in Arizona unanimously passed SB1494 through the state’s House and Senate, the bill requiring mandatory lab testing for medical cannabis products. Arizona Governor Doug Ducey is expected to sign the bill and has ten days to do so.

Arizona Governor Doug Ducey

When Governor Ducey signs the bill into law it will mark the first time since the state legalized medical cannabis in 2011 that a measure to protect patient safety via lab testing will be implemented. According to the bill, beginning November 1, 2020, all cannabis products shall be tested prior to sales “to determine unsafe levels of microbial contamination, heavy metals, pesticides, herbicides, fungicides, growth regulators and residual solvents and confirm the potency of the marijuana to be dispensed,” (Page 6, Section 36-2803).

The bill requires dispensaries to provide test results to patients immediately upon request. Dispensaries need to display a sign notifying patients of their right to see “certified independent third-party laboratory test results for marijuana and marijuana products for medical use,” according to the text of the bill (Page 7, Section 36-2803.01).“There will have to be some serious planning, but other states have achieved this and we can too.”

Under the new bill, the Arizona Department of Health Services will adopt rules to certify and regulate labs, establishing requirements like health and safety protocols, mandatory quality assurance program and standards, chain of custody and sampling policies, adequate records, accreditation, proficiency testing, among other requirements (Page 6-7, Section 36-2803).

Ryan Treacy, co-founder of the Arizona Cannabis Laboratory Association (ACLA) and CEO/Founder of C4 Laboratories, says this is a major turning point for Arizona’s cannabis industry. “We have been devoid of regulations with regard to testing the entirety of the program since it was legalized; This will be a significant change,” says Treacy. “Now patients can make sure they are getting a safe and clean product and getting exactly what they paid for.”

For those in the know when it comes to cannabis testing in the United States, the new requirements will look very similar to other states with testing requirements. One particularly unique aspect of the new program, however, is the establishment of a “Medical Marijuana Testing Advisory Council,” made up of stakeholders representing different interests in Arizona’s cannabis industry. Members of the council will include representatives from dispensaries, labs, cultivators, concentrate producers, edibles producers, as well as registered patients, caregivers, a representative from the Arizona Department of Public Safety, a licensed health care provider and “any other members deemed necessary by the director,” reads the text of the bill (page 16, Section 36-2821).

Ryan Tracy, co-founder of the ACLA and founder/CEO at C4 Labs.

“Other states like California have complained about detection limits, while Arizona is taking a unique approach with an advisory council with stakeholders in the cannabis industry,” says Treacy. “So that when the Department of Health Services promulgates rules, they are taking into account the challenges in the cannabis industry specifically. We have a chance to do this right and avoid pitfalls we’ve seen in other states.”

One problem worth mentioning for Arizona’s cannabis industry: Dispensaries have not been required to test products for patients since medical cannabis was legalized back in 2011. That means many producers could be very used to operating procedures that don’t account for lab testing. With mandatory lab testing, some producers may be behind the curve when it comes to mitigating contamination.

According to Treacy, this could disrupt the supply chain a little bit. “When testing becomes mandatory in November 2020, dispensaries will need a full panel of tests performed on their samples,” says Treacy. “With the entire market now required to complete a full panel in depth analysis on each product, product testing will become a more time-consuming stop in the supply chain. So companies will need to work that into their plan to meet regulation requirements to prevent a bottleneck and maintain patients’ access to their cannabis medicine.”

Arizona has a chance to prevent that type of bottleneck seen in states that implemented testing requirements, like California for example. “When you have a habitual history of not testing products, it can be very hard to change, which adds to Arizona’s challenges,” says Treacy. “We need to make sure this does not affect access for patients and the ability of the industry to continue to flourish and grow.”

While Treacy thinks the transition will be difficult for some, it’s absolutely necessary for Arizona’s patients to access clean and safe medicine. “There will have to be some serious planning, but other states have achieved this and we can too.”

Clinical Trials Commence for CBD Pet Products

By Aaron G. Biros
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Products using hemp-derived cannabidiol (CBD) designed for pets is not a new concept; Companies have been marketing CBD pet products for quite some time now, making their way into pet stores across the United States. Some pet owners have embraced the trend, using CBD oil to calm pets down, help alleviate joint pain as well as inflammation, while others are understandingly skeptical when it comes to using novel remedies for their furry friends.

Researchers at the University of Pennsylvania’s School of Veterinary Medicine hope to find some answers to those questions, particularly regarding the efficacy of using CBD remedies for dogs. According to a press release, a team of researchers at University of Pennsylvania’s Veterinary Clinical Investigations Center will perform the first major double-blind clinical trial to study the effectiveness of CBD in treating joint immobility in dogs. The trial will be led by principal investigator Dr. Kimberly Agnello.

According to the press release, this is the largest trial for cannabinoid therapy in pets so far. The trial will include use of the CBD-infused pet product, Therabis’ “Mobility.” Therabis is a subsidiary of Dixie Brands, Inc., a large cannabis infused products company in markets across the United States. Here are some of the details on the clinical trial, shared through the press release:

Dogs known to be suffering from inflammation secondary to osteoarthritis will be studied to determine whether those who receive the Therabis supplement achieve better outcomes than untreated dogs. One group of dogs will receive the formula for a proprietary veterinarian-specific formula Therabis product; a second group will receive Cannabidiol alone which previous studies have shown may have benefit in osteoarthritic dogs; a control group will receive a placebo. Study designers are targeting inclusion of up to 20 dogs in each group. The design of this study will provide valuable data defining the synergistic potential of the additional ingredients in the Therabis formula.

According to Dr. Stephen M. Katz, co-founder of Therabis, they think the data from the trials will show a positive outcome for dogs using their products. “We are honored to have a Therabis product selected by the world-renowned experts at Penn Vet for their first major study of the effects of natural hemp oil to reduce joint pain in dogs,” Says Katz. “Our experience in my clinic has shown that cannabidiol (CBD) is an effective treatment in reducing inflammatory response. We have a passion for improving dogs’ quality of life, and we look forward to learning all we can about therapeutic methods to achieve this.”

The results from this clinical trial, to be published in an academic journal upon conclusion of the study, should be of great interest to the hemp industry. Brightfield Group estimates that the CBD-infused pet products market is a $199 million industry, expected to grow up to $1.16 billion by 2020.

Soapbox

Warning Signs For CBD Food & Drink Manufacturers

By Jonathan C. Sandler
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CBD-infused coffee? CBD-infused chewing gum? Many think cannabis and its derivatives are the next big wellness craze that will make the demand for flax, fish oil and turmeric combined seem meager. The food and drink industries are cautiously exploring the cannabis market, trying to determine the optimal timing to introduce their own product lines.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

The cannabis plant produces chemicals known as cannabinoids, one of which is cannabidiol, or CBD.When the Agriculture Improvement Act of 2018 (also known as the Farm Bill) passed, the food and drink industries jumped into the hemp-derived CBD world with both feet because the Farm Bill lifted the federal ban on hemp production, which previously classified hemp as a controlled substance akin to heroin. Lifting the ban led to an explosion in the number of CBD products hitting the market around the country. However, repeated and recent actions by the U.S. Food and Drug Administration (FDA) provide clear warning signs that the legal pitfalls surrounding CBD in food and drinks are not yet resolved.

CBD is marketed as a featured ingredient for a wide variety of products ranging from pain relievers, to protein bars beverages and supplements. Both CVS and Walgreens have announced plans to carry CBD products in their stores. However, despite the money pouring into CBD products, federal agencies are not relinquishing their controls.

FDAlogoIn the Farm Bill, the FDA retained authority to regulate products containing cannabis or derivative products. The FDA has regulatory authority over foods (including dietary supplements and food additives), drugs (prescription and non-prescription), cosmetics, veterinary products and tobacco products, among other categories. Therefore, vendors of virtually all products containing CBD are regulated by the FDA.

It is important to note that the FDA does not view CBD derived from hemp differently than any other CBD despite the fact that it is non-psychoactive. CBD is an active ingredient in at least one FDA-approved prescription drug—Epidiolex. Therefore, under the logic of the Federal Food, Drug & Cosmetic Act (FDCA), CBD is a drug. If a substance has been “approved” by the FDA as an active ingredient in a drug product, it is per se excluded from being defined as a “dietary supplement” under sections 201(ff)(3)(B)(i) and (ii) of the FDCA and it cannot be included as an ingredient in food.

It is highly unusual that CBD has been able to proliferate in the marketplace given the FDA’s technical legal position on it. FDA regulations on drugs are much more stringent than for food or dietary supplements. Generally, the FDA’s position on CBD in food and beverages is that it is unlawful to engage in interstate commerce with products containing CBD. The given reason is that the Federal Food, Drug, and Cosmetic Act prohibits the introduction of a food product into interstate commerce that contains an active ingredient in an approved drug. While arguments against this position exist, they have not carried the day, yet.

An example of a warning letter the FDA sent to a CBD products company making health claims

In March 2019, FDA Commissioner Scott Gottlieb announced he would be resigning on April 5, 2019, but he sent clear warning signals to the CBD industry prior to his departure. In early April, the FDA cracked down on websites making “unfounded, egregious” claims about their CBD infused products. The FDA sent warning letters to three companies who made claims about their CBD products including that their CBD products stop cancer cell growth, slow Alzheimer’s progression, and treat heroin withdrawal symptoms. Commissioner Gottlieb issued a statement that he believed that these were egregious, over-the-line claims and deceptive marketing that the FDA would not tolerate.

The FDA also announced in early April that it will hold a public hearing on May 31, 2019, to obtain scientific data and information related to safety concerns, marketing and labeling cannabis and cannabis-derived compounds including CBD. The FDA expressed interest in hearing whether drug companies would still be motivated to develop drugs with CBD and other compounds if their use in food and beverages became more widespread. The FDA also announced plans for an internal working group to review potential pathways for legal marketing of CBD foods and dietary supplements. Of particular concern to the FDA is online retail products available nationwide such as oil drops, capsules, teas, topical lotions and creams.

Still, some states are trying to take matters into their own hands. For example, the California State Assembly recently passed bill A.B. 228 that permits the inclusion of CBD in food and beverages. Colorado has already passed a similar bill. Other states such as Ohio and cities such as New York City have gone the other way, prohibiting CBD from being added to food or beverages.

The May 31 FDA hearing is an opportunity for interested parties to give feedback and help focus where the FDA should be creating clear industry standards and guidance. In the meantime, the industry should continue to expect warning letters from the FDA as well as possible state-level scrutiny. Companies would be wise to proactively review their labels and promotional practices in order to mitigate the risk of forthcoming actions and engage in the FDA’s provided avenues for industry input. Companies must also look to the laws of the states and even to the counties where they are selling their products.

Arizona Still Doesn’t Require Lab Testing, But That Could Change Soon

By Aaron G. Biros
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As of today, Arizona is the only state in the country that has legalized medical cannabis but does not require producers to test their medical cannabis. States throughout the country that legalize medical cannabis routinely implement regulations that require third-party, independent lab testing to protect patient and consumer safety. Arizona legalized medical cannabis for a number of qualifying conditions back in 2011, but still has no measure like other states to protect patient safety.

Lawmakers in Arizona now have the opportunity to change that with SB1494, which passed unanimously through the state’s Senate back in March of 2019. According to the Arizona Cannabis Laboratory Association (ACLA), the bill awaits action in the House of Representatives. The ACLA says in a press release that “supporters of the bill are calling on lawmakers to move on a bill that unanimously passed in the Senate earlier this year.” The bill would require producers to use independent, third-party labs to test cannabis for things like harmful toxins and molds.

Ryan Tracy, co-founder of the ACLA and founder/CEO at C4 Labs.

According to Ryan Treacy, co-founder of the ACLA and CEO/Founder of C4 Laboratories, the ACLA was formed for a few important reasons: “We feel it is very important that we encourage and cultivate a professional and collaborative rapport among the reputable Arizona cannabis labs,” says Treacy. “So that we can call upon the collective groups’ years of experience to help provide insight and suggestions on how we as a group can insure the most accurate and consistent results for our clients throughout the state and ultimately their patients.” Treacy went on to add that it is particularly important their collective voice be heard at the State Capitol as lawmakers work towards passing SB 1494.

“There isn’t any reason to wait for someone to get sick before the legislature passes this bipartisan bill. Let’s get it done!”George Griffeth, President of the ACLA, says there is a sense of urgency in passing this bill before the voters decide on legalizing recreational adult-use cannabis next year. “Everyone agrees that now is the time to be proactive to protect patients from unsafe contaminants,” says Griffeth. “Currently 61 tons of medical marijuana is consumed by patients and many believe that the number of people using the medicine will continue to grow. With a ballot initiative related to the recreational use of marijuana facing voters next year, Arizona must act now to make sure standards are in place.”

They say the bill has bipartisan support and many stakeholders in Arizona’s cannabis industry express support for it as well. For Ryan Treacy, he is worried about patients consuming harmful chemicals and toxins. “My colleagues and I are deeply concerned that more than two-hundred thousand people who use medical marijuana could be inadvertently exposing themselves to toxic chemicals, E. Coli, Salmonella or mold,” says Treacy. “There isn’t any reason to wait for someone to get sick before the legislature passes this bipartisan bill. Let’s get it done!”

Treacy says this bill is particularly difficult to pass because the original measure to legalize medical cannabis was a ballot initiative. That means the bill needs 75% support in both the House and the Senate in order to amend the original measure. “The passing of this bill would be a huge win for the patients and will help to ensure honesty and transparency for those that operate in the current medical cannabis program here in AZ,” says Treacy. “This testing bill is also written with legislative intent to cover any and all future adult use or recreational use legislative laws or ballot initiatives. We hope to have a final verdict on this bill by end of this week or early next.”