Tag Archives: California

A Conversation with the Founders of Veda Scientific: Part One

By Aaron G. Biros
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Leo Welder, CEO of Veda Scientific, founded the business with Aldwin M. Anterola, PhD in July of 2019. A serial entrepreneur with experience in a variety of markets, he came to the industry with an intrigue for cannabis testing and analysis. After teaming up with Dr. Anterola, co-founder and chief science officer at Veda Scientific, they came together with the purpose of unlocking possibilities in cannabis. From the beginning, they set out with a heavy scientific interest in furthering the industry from a perspective of innovation and research.

Through discussing their clients’ needs and understanding their complex problems, the two realized they wanted to start a lab that goes well beyond the normal regulatory compliance testing. Innovation in cannabis looks like a lot of things: new formulations for infused products, better designs for vaping technology or new blends of genetics creating unique strains, to name a few. For the folks at Veda Scientific, innovation is about rigorous and concentrated research and development testing.

With the help of some very sophisticated analytical chemistry instruments, their team is working on better understanding how volatile compounds play a part in the chemometrics of cannabis. From varietals and appellations to skunky smells, their research in the chemistry of cannabis is astounding – and they’ve only begun to scratch the surface.

In this two-part series, we discuss their approach to cannabis testing, their role in the greater industry as a whole and we go down a few cannabis chemistry rabbit holes and find out that what we don’t know is a lot more than what we do know. In part one, we get into their backgrounds, how they came into the cannabis industry and how they are carving out their niche. Stay tuned for part two next week where we delve deep into the world of volatile compounds, winemaking, the tastes and smells of cannabis and chicken adobo.

Aaron G. Biros: Tell me about how you and your team came to launch Veda, how you entered the cannabis space and what Veda’s approach is to the role of testing labs in the broader cannabis industry. 

Leo Welder, CEO of Veda Scientific

Leo Welder: I’m an entrepreneur. This is my third significant venture in the last fifteen years or so. So, I was intrigued by cannabis legalization broadly, because it is such a unique time in our history. I was always interested in participating in the industry in some way, but I didn’t see where would be a good fit for me. I used to meet monthly with a group of friends and fellow entrepreneurs for dinner and discussions and one member started working on the software side of the industry. He mentioned the testing element of cannabis in one of our meetings. I latched on to that and was intrigued by the concept of testing cannabis. I began to research it and found the role that testing plays in the cannabis industry is really significant. I found out that regulators rely pretty heavily on labs to make sure that products are safe, labels are accurate and that consumers have some protections. So, I thought that this is a space that I thought I could really find a calling in.

So, from that point I knew I needed to find a subject matter expert, because I am not one. I have business skills and experience in some technical fields but I am not a cannabis testing expert by any means. So, with that I started to look at a few different markets that I thought may have opportunity for a new lab, and I came across Aldwin’s business; he had a cannabis testing lab in Illinois at that time. I reached out to him, talked to him about my vision for the space and his thoughts and his vision and we really started to come together. From there, we researched various markets and ultimately chose to approach Santa Barbara County as our first foray together into the cannabis testing market.

Aldwin M. Anterola: As Leo mentioned, he was looking for a subject matter expert and I am very much interested in plant biochemistry. Which means I like to study how plants make these compounds that are very useful to us. For my PhD [in plant physiology], I was studying how cell cultures of loblolly pine produce lignin. Our lab was interested in how pine trees produce lignin, which is what makes up wood. Wood comes from phenolic compounds. You’ve probably heard of antioxidants and flavonoids – those are phenolic compounds. After my PhD, I wanted to do something different so I decided to work with terpenes.

I picked a very important terpene in our field, an anti-cancer compound called Taxol, produced from the bark of the yew tree. You have to cut trees to harvest it. We have ways of synthesizing it now. But at that time, we were trying to figure out how the tree produces that terpene. Of course, I’m interested in any compound that plants make. My interest in terpenes led me to cannabinoids which turn out to be terpenophenolics, thus combining the two interests in my professional field.

Aldwin M. Anterola, PhD, Co-Founder and Chief Science Officer at Veda Scientific,

So that’s the scientific and intellectual side of why I became interested in cannabis, but practically speaking I got into cannabis because of a consulting offer. A company was applying for a cultivation license, wanted to have a laboratory component of their business in their application, and hired me to write that part of their application. I was very familiar with HPLC, and had a GC/MS in the lab. I also have a background in microbiology and molecular biology so I can cover every test required at that time, and I knew I could research the other analytical techniques if necessary.

So, they did not get the license, but I figured I’d take what I wrote, once I received permission, and set up an independent laboratory together. But it’s hard to run a lab and be a professor at the same time. Also, the busines side of running a lab is something that I am not an expert in. Fortunately, Leo found me. Before that, I really got excited about this new industry. The concept of cannabis being now accessible to more people is so interesting to me because of how new everything is. I wanted to be involved in an industry like this and help in making it safe while satisfying my curiosity in this new field of research. As a scientist, those are the things that excite us: the things we didn’t have access to, we can now do. It opens up a whole new room that we want to unlock. It was my intellectual curiosity that really drove me. This opened up new research avenues for me as well as other ventures if you will. How can I be more involved? I thought to myself.

SIU boasts an impressive cannabis program, thanks largely to Dr. Anterola’s work there.

Back in 2014, I introduced cannabis research to our university [Southern Illinois University] and set up an industrial hemp program, which was DEA-licensed I gathered faculty that would be interested in studying hemp and cannabis and we now have a whole cannabis science center at the university. I teach a course in cannabis biology and because I also teach medical botany to undergraduate students, I was able to introduce [premed] students to the endocannabinoid system. Anyway, I can go on and on.

Outside of that I became involved with the AOAC and ASTM, and became a qualified assessor for ISO 17025:2017. I have been a member of the American Chemical Society since 2000 but there were no cannabis related activities there yet until relatively recently. But when they had the new cannabis chemistry subdivision, I am happy to participate in there as well . There are many avenues that I took to begin dabbling with cannabis, be it research, nonprofits, teaching, testing and more. Cannabis has basically infiltrated all areas of what I do as an academic.

Leo: I read his resume and I was like this is the guy! So back to your question, what’s Veda’s role as a testing lab in this space? What are we trying to build? We spent a lot of time trying to figure out what we wanted to be in this space. We came to understand that labs are not the tip of the spear for the market; that would be the growers, the retailers and the processors. We are a support, a service. We see ourselves as a humble, but competent guide. We provide the data for the tip of the spear, the people pushing the industry forward with support, data and the services to make sure they have the tools they need to build these great companies and great products with good cultivation practices and more, leading everyone to the next level of the cannabis industry. Our job is to support innovation, to provide quality compliance testing, to of course ensure safety, while also providing great R&D to these innovative companies.

Aldwin: I’d like to add a bit to that thought. Okay so that’s who we are, but what are we not? Because as Leo said I had a testing lab before we met [Advanced Herbal Analytics]. From there, I approach it as safety testing, making sure that before it gets to the end consumer, we are sort of like gate keepers keeping consumers safe. That’s one side to it, but we are not the people who are trying to make sure that none of the products get to the market. For some, that’s how we’re treated as.

People often look at testing labs like the police. We are not the people trying to limit products to market. Our approach is not to find faults. There is another way of being a testing lab that is less about finding faults in products and more about finding uniqueness. What makes your product different? With this new approach, we are much more focused on helping the best products make it to the shelves.

Aaron: Given that all state licensed labs have to provide the same tests as the other labs in that state, how does Veda differentiate itself?

Leo: Location was the first thing. We picked Santa Barbara County intentionally. We knew that some of the biggest operators, some of the most forward-thinking innovators were setting up shop here. Looking down the road, not just this year or next year but very long term, we wanted to start building a great, sustainable company. We wanted to build a brand that those kinds of companies would be receptive to. Building better and greater products. There’s one other lab in the county and that’s it. Whereas there are clusters of labs in other parts of the state. Part of the draw to Santa Barbara for us was that it is such a small, tight-knit community. We have worked very hard to build relationships in our community and to understand their challenges, helping them however we can.

Location and relationships. Getting to know the challenges that different size customers face, be it our greenhouse customers versus outdoor customers, or large-scale operations versus smaller manufacturing operations, the challenges are all different. Some people care about turnaround times, some more about R&D. If we understand our client’s problems, then we can provide better service. We see ourselves as problem solvers. We lean heavily on our technical team members like Aldwin, who not only have tremendous amounts of experience and education, but also great networks to utilize when a customer needs help, even when it falls outside of our local expertise.

The GCxGC/MS instrument, used for Veda’s advanced R&D testing

Last but certainly not least is the advanced R&D testing that we do. When we first started, we started talking to farmers and manufacturers trying to understand their challenges. What data were they not getting? How would a testing lab better serve them? So, we started investing strategically in certain instruments that would allow us to better serve them. We’ll get into this later as well, but we invested in a GCxGC/MS, which allows us to get more visibility into things beyond the typical panels, like more terpenes and other volatile compounds including thiols and esters. We did that because we knew there is value in that. The data our customers were getting prior just wasn’t enough to put together really great breeding programs or to manufacture really consistent products, you know, to move toward that next level of innovation in the industry.

Aldwin: Leo mentioned advanced R&D and it’s basically the same approach that I mentioned before. It’s not just telling you what you can and cannot do. It’s about asking them what do you want to do and what do you want from a lab? If we have a problem, let’s see if we can solve it. That’s how the GCxGC/MS came into play because we knew there was a need to test for many terpenes and other volatile compounds. The common complaint we received was why two terpene profiles differ so much from each other, even from the same genetics.

This is something that would actually give the customer, the cultivator or the manufacturer: data about their product that they can actually use. For consistency, for better marketing and other reasons. We are trying to help them answer the questions of ‘how can I make my product better?’

You know, for example, clients would tell us they want something that has a specific taste or smells a certain way. Nobody is telling them what makes the flavor or smell. There is a need there that we can fill. We are trying to provide data that they, the customers, need so that they can improve their breeding programs or their formulations. Data they can use, not just data they need in order to comply with regulations. They would ask us what we can do. We listen to our customers and we try and help as best we can. We don’t know every answer. We are discovering there is a lot more to terpenes than what you can find on a traditional one dimensional gas chromatogram. Some of the terpene data that our clients had previously is not really actionable data, which is where the GCxGC/MS is helping us.

In part two, we delve deep into the world of volatile compounds, winemaking, the tastes and smells of cannabis and chicken adobo. Click here to read part two. 

2022 Cannabis Industry Outlook: Your Business’ Future Depends on its Risk Management

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Cannabis risks have always outpaced the availability of insurance, in large part because of its status as a federally illegal substance and the dangers in extraction and production. But it now shares many of the same risks as other industries — catastrophic crop damage, cyber risk and a shortage of skilled workers.

With legalization becoming more common, the industry is positioned for enormous growth despite these challenges. However, enterprises that will benefit the most are those best positioned to manage risk.

Here are four obstacles to growth in the industry in 2022 and how enterprises can combat them:

Cybercrime will be the top manufacturing risk

Both cybercrime and cannabis have experienced major booms since the start of the COVID-19 pandemic. Cannabis companies watched as healthcare and pharmaceutical organizations were hit hard by cybercriminals in 2020, and now the threat could be headed their way.

For retailers, the vulnerability often lies in their POS tech

For cannabis retailers, the vulnerability lies in their dependence on point-of-sale tech, while the threat for cultivators exists within their strong use of intelligent automation to manage the grow environment. Across the industry, the lack of sophisticated IT security systems is like a beacon for bad actors.

Nearly 60% of cannabis businesses say they haven’t taken the necessary steps to prevent cyberattack, but the winds are changing. Due to these concerns and the growing attention on cybercrime in the industry, cyber coverage is expected to rise 30% or more in 2022, which puts the onus on risk management practices that will help prevent cyberattacks and ensure coverage from insurers concerned about risk.

Barriers to business growth may result in more M&A

As of summer 2021, 18 U.S. states have legalized adult use and 37 states have legalized medical cannabis.

While this is opening opportunities for many cannabis businesses, the U.S. remains a complicated market. Federal regulations continue to hinder even more cannabis industry growth by restricting lending to the industry from traditional banking and financial institutions. While it’s not illegal to do service with the cannabis industry, many institutions stay away due to its high risk.

Smaller cannabis companies are impacted most heavily by this barrier and await passage of the Secure and Fair Enforcement (SAFE) Banking and Clarifying Law Around Insurance of Marijuana (CLAIM) Acts to allow easier access to capital. Together, these two acts of legislation will provide guidelines on how to work lawfully with legal cannabis businesses and prohibit penalizing or discouraging institutions from working with them.

In the meantime, M&A activity is expected to increase in 2022 as large cannabis businesses have the means to access capital and acquire these small companies. This includes Canadian cannabis companies, unburdened by federal restrictions, who are expected to increase their cross-border mergers and acquisitions.

Severe weather isn’t easing up

Extreme natural catastrophes are no longer rare, and they have only added greater uncertainty to the industry which has always had difficulties securing crop insurance.

NASA’s Aqua satellite took this picture of the smoke over California in 2017
Photo: NASA

For example, policies that transfer wind and hurricane damage risk in Florida or wildfire and smoke taint in California are virtually non-existent for cannabis — and for outdoor growers, a single weather event can wipe out an entire crop with no recourse.

One possible solution for cannabis companies that cannot secure traditional crop insurance is parametric insurance, which pays out in full when a weather element reaches a threshold, regardless of the actual damage.

Growers with indoor operations, or those considering moving that way, must cope with energy conservation initiatives. Measures like the one in California that would require indoor growers to use LED lighting by 2023 could cost the industry millions and present a direct threat to small operations’ viability. This makes it important for cannabis producers to institute conservation measures and undertake risk mitigation measures like improved safety measures at indoor growth facilities ahead of 2022 renewals.

As a continually emerging market, cannabis risks are great. Adding to these pressures is the growing impacts of climate change and cybercrime raising the bar even further. Growth for the cannabis industry in 2022 will depend upon strong risk management solutions and the ability for cannabis companies to implement them.

Social Consumption: The Time is Now

By Dede Perkins
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Social consumption lounges are becoming increasingly popular in legal cannabis markets. Just what are social consumption lounges? They’re a safe, enclosed space where cannabis consumers of legal age can come together and enjoy cannabis products, much like a bar environment for consuming alcoholic beverages.

Social consumption lounges are particularly attractive for their potential to bring in cannabis tourists. Although adult use cannabis can help promote tourism, tourists typically can’t smoke in most places indoors (including their hotel accommodations) nor consume on the street or in public, due to strict public consumption rules set by state regulations. This leaves the perfect set-up for consumption lounges, which provide the appropriate and legal environment for tourists to consume cannabis.

What do social consumption lounges look like in practice? What are the rules and regulations that social consumption lounges must adhere to? How and where are social consumption lounges currently legal in the United States? Here’s what you need to know.

What are social consumption lounges?

Social consumption lounges—also known as consumption lounges, cannabis lounges, cannabis consumption area and cannabis consumption lounges—are retail lounges that permit on-site cannabis consumption, such as smoking and vaping cannabis flower as well as ingesting cannabis infused products like edibles and tinctures. Similar to a bar that serves alcoholic beverages, all consumers in a cannabis lounge must be at least 21 years of age. While smoking typically isn’t permitted in retail businesses, smoking is permitted in lounges.

Mellow Yellow in Amsterdam

While state-specific regulatory bodies are responsible for developing, implementing and enforcing the rules surrounding U.S. social consumption lounges, Dutch “coffee shops” may have served as the inspiration and model for U.S. industry. Contrary to the name “coffee shops”, patrons don’t go to Dutch coffee shops for coffee. Rather, they go because the sale and consumption (including smoking) of cannabis is permitted and socially accepted. According to travel resource Amsterdam.info, Dutch coffee shop culture emerged in the 1970s when the federal government made a clear legal distinction between “hard” and “soft” drugs. Soon after in 1972, the first coffee shop named Mellow Yellow opened. Although cannabis wasn’t clearly legal or illegal, Dutch law enforcement tolerated the growing number of cannabis coffee shops, focusing instead on prosecuting heroin and lethal illicit substances. Today, the Amsterdam City Council permits coffee shops to operate after they obtain a non-transferable license, which must be displayed in shop windows, thanks to an agreement with the coffee shop union Bond van Cannabis Detaillisten (BCD).

Unlike Dutch coffee shops, U.S. social consumption lounges must adhere to numerous rules and regulations specific to their state and municipality. One major difference is who is permitted to own and operate a lounge. In some U.S. states, consumption lounges are operated by existing cannabis businesses, such as adult use and medical dispensaries. In these cases, the lounge may be required to be on the cannabis business’s existing premises. In New Jersey, this must be an “indoor structurally enclosed area of the cannabis retailer or medical cannabis dispensary that is separate from the retail sales or medical dispensary area” or “an exterior structure on the same premises as the cannabis retailer or medical dispensary, either separate from or connected to the cannabis retailer or medical dispensary,” according to the National Law Review. In many places within the U.S., “stand alone” lounges that aren’t attached to an existing cannabis business aren’t permitted.

In the Netherlands, coffee shops operate in a legal grey area with their products being supplied by an entirely underground cultivation market. Cannabis being consumed in coffee shops isn’t regulated or checked. Per regulations in the U.S. states that allow them, however, only legal cannabis may be consumed in these lounges. While consumers might be able to bring their own cannabis or cannabis products, consuming any cannabis or cannabis products obtained through the underground market is strictly prohibited.

Where are social consumption lounges legal?

The Barbary Coast lounge in San Francisco

Not all U.S. states with legal recreational, adult-, or personal-use cannabis programs permit social consumption lounges. Although it’s been a decade since Colorado and Washington voted in favor of legalization, consumption lounges are a fairly recent trend, likely because states without legal consumption spaces found out the hard way that they couldn’t accommodate tourists or anyone who wished to consume cannabis outside of their home. Here’s where social consumption lounges are legal in the U.S.:

  • Nevada: After the Governor signed a bill in June 2021, a new cannabis law permitting social consumption lounges went into effect in October 2021 and lounges are anticipated to open in early 2022, according to Nevada public radio station KNPR. Additionally, efforts are being made to prioritize minority-owned business owners of consumption lounges, reports local news station Fox5 KVVU-TV.
  • New Jersey: Although consumption lounges weren’t initially permitted in the recent regulatory framework, individual municipalities now decide whether or not to permit lounges within their communities. Atlantic City and Jersey City have approved social consumption lounges, reports Hudson County View.
  • New York: The state’s recently passed adult use cannabis law allows social consumption lounges, but the recreational market isn’t  expected to take off until mid-2023, according to Business Insider. Lawmakers still need to adopt a regulatory framework to how lounges (along with other cannabis businesses) will operate.
  • Illinois: Currently, two social consumption lounges have opened, and two others are planned to open across the state,” says the Chicago Tribune.
  • Colorado: Similar to New Jersey, individual municipalities decide whether to permit lounges in their communities. Denver and Aurora have approved consumption lounges.
  • California: Given the state’s rich history of an underground market, informal social consumption lounges aren’t particularly new. However, a recently approved law officially allows social consumption lounges, reports Marijuana Moment.

The number of states considering and/or permitting social consumption lounges is growing. Which states will likely legalize them next? As noted below, it looks like Michigan, Massachusetts and Maine will be next.

  • Michigan: The state doesn’t allow for them now, but they could come in the future, reports WZZM13.
  • Massachusetts: The state is considering them, reports Boston.com.
  • Maine: The state delayed them until 2023, according to MJ Biz Daily.

Why are social consumption lounges becoming increasingly popular?

Consumption lounges are becoming increasingly popular for many reasons. First and foremost, they’re a win for the cannabis industry because they provide consumers with a physical place to consume safely and legally.

The Original Cannabis Cafe by Lowell Farms in West Hollywood

Second, the tourism sector benefits from social consumption lounges. “The problem is people can buy marijuana products in states that have legalized adult-use cannabis, but they have limited options when they want to consume the cannabis that they purchase legally,” explains Cannabiz Media. For instance, Las Vegas has promoted itself as a cannabis travel destination since 2017, despite lack of adequate space for visitors to consume. Meanwhile, those who don’t consume cannabis have criticized the city for its growing public consumption, complaining especially about the odor of smoked cannabis. Social consumption lounges can potentially help fix these growing pains in the state’s cannabis market.

Additionally, lounges are a win for harm reduction. Lounges provide beginner cannabis consumers the opportunity to consume alongside experts, to be shown the ropes with professionals present. Being in a community with experienced consumers provides opportunities for novices to understand how to smoke, dose and overall consume properly and safely.

Lastly, MG Magazine emphasizes other benefits including de-stigmatization, social connection, industry partnerships and product innovation.

Regulation and compliance differences between states

Without federal cannabis legalization, states are tasked with regulating their own cannabis markets. Likewise, state regulatory agencies are responsible for drafting regulations for social consumption lounges.

California and Colorado have fewer limitations, likely because both states have more experience and overall comfort with the plant. In states with more lenient regulations, 420-friendly cafes, hotels, bus tours, paint nights and other businesses are tolerated.

New Jersey has notably strict regulations for social consumption lounges. For example, the current state law doesn’t permit any stand-alone consumption spaces independent of existing permitted cannabis businesses. Therefore, a cannabis cafe or bud and breakfast isn’t permitted.

There is, however, one legal loophole in New Jersey for stand-alone consumption space. The microbusiness license model allows for temporary licenses, permitting a temporary social consumption lounge, such as for an event at a private venue. New Jersey permits them in Newark, Hoboken, Highland Park, Jersey City,Elizabeth, Long Branch Atlantic City and Trenton.

In closing, it is likely that social consumption lounges will become increasingly common especially in major U.S. cities with legal adult-use cannabis programs. While Dutch coffee shops may have inspired the emerging U.S. social consumption lounge model, their U.S. counterparts must comply with much stricter rules and regulations. Since regulations vary from state to state, it’s important to be on top of your state’s policies in order to stay compliant.

2021 Cannabis Labs Virtual Conference: December Program

By Cannabis Industry Journal Staff
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2021 Cannabis Labs Virtual Conference: December Program

Sponsored by ANAB, Hardy Diagnostics and MilliporeSigma.

Click here to watch the recording

Agenda

Cannabis Laboratory Accreditation Panel

  • Tracy Szerszen, President & Operations Manager, PJLA
  • Mohan Sabaratnam, Vice President, IAS
  • Kathy Nucifora, COO, COLA
  • Chris Gunning, General Manager for Accreditation Services, A2LA
  • Aaron Biros, Editor, CannabisIndustryJournal.com

In this session, the panel answers attendee questions related to ISO 17025:2017 accreditation for cannabis testing labs. Learn some of the common challenges labs face when seeking accreditation and learn about sampling protocols, security issues, statements of conformance, calibration and much more.

TechTalk: ANAB

  • Melanie Ross, Technical Products Developer, ANSI National Accreditation Board

R & D Lab Testing: Ensuring Success with Results

  • Mark Carter, president of MC Squared Enterprises

Learn how R&D lab testing can help you, prepare for compliance batches, successfully launch new products and amp up your quality control.

TechTalk: MilliporeSigma

 

USDA’s Hemp Testing Rules Have Changed: Accelerate Your Lab’s Preparedness

  • Arun Apte, CEO, CloudLIMS

This presentation takes a deep dive into understanding the requirements for USDA hemp testing, the operational changes hemp testing laboratories need to make to comply with the new hemp testing rules and the regulatory compliance framework and quality standards the testing labs need to meet.

TechTalk: Hardy Diagnostics

  • Jessa Youngblood, Food & Beverage Market Coordinator, Hardy Diagnostics

Bringing a National Hemp Testing Panel to Market

  • Josh Wurzer, Co-Founder & President, SC Laboratories

Without clear direction from the FDA, states are filling the void by developing their own quality standards and testing requirements for hemp derived CBD products. Unlike their THC based counterparts, hemp derived CBD products are being sold across state lines raising the demand for a single testing panel that will be compliant in every state. Attendees will learn:

  • The current state of regulations nationally
  • The issues that hemp product manufacturers need to be educated on to ensure compliance,
  • The challenges labs face in offering customers a truly comprehensive panel.

Click here to watch the recording

steep-hill-labs-logo

Steep Hill Expands to Illinois with New Lab

By Cannabis Industry Journal Staff
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steep-hill-labs-logo

Last week, Steep Hill announced their expansion into Illinois with a new cannabis testing lab partner licensed in Ottawa, IL. Illinois became the eleventh state to legalize adult use cannabis back in 2019. It’s also the eleventh market that Steep Hill has opened a laboratory in.

Co-founders Nick Etten, John Tinsley and Matt Grabowski will lead the new Steep Hill venture. Etten will lead the team as SVP of external affairs, who comes from Acreage holdings and the Veterans Cannabis Project. Tinsley comes from a consulting background at EY-Parthenon and Grabowski comes from a background in finance.

According to the press release, the new Steep Hill location in Ottawa is “within a 90-minute drive of the largest MSOs in Illinois.” The lab will provide full regulatory compliance testing panels in addition to R&D testing, according to Tinsley. “We are currently building out the lab,” says Tinsley. “We will also provide research and development testing services for cultivators and processors; supporting our partners in the development of new products and supporting their growth.”

Steep Hill is often touted as the first cannabis testing lab in the United States, with its headquarters in Berkeley, California. The company has been testing cannabis for thirteen years now.

How Section 280E is Still Hindering the Cannabis Industry

By Jay Jerose
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The cannabis industry is an unprecedented industry and one under constant review and control. Following the November 2020 elections, fifteen states and Washington DC have legalized adult use cannabis, a number that will continue to grow as legalization slowly becomes more widely adopted in other states. Beyond that, a continuously growing number of states allow residents to purchase legal medicinal cannabis, and many have also decriminalized adult use. However, it still remains a Schedule I substance under the Controlled Substances Act and is therefore illegal on all accounts at the U.S. federal level, which creates a number of issues for businesses in the cannabis industry duly operating in states where it has been legalized.

Not only is it difficult for cannabis companies to avail themselves of alternative banking solutions, but there are also obstacles in place preventing these companies from taking advantage of notable tax deductions. The primary obstacle being Internal Revenue Code (IRC) Section 280E.

What is Section 280E?

Section 280E is a relatively short code section, only 77 words to be exact, but it carries significant weight and can have a debilitating effect on the taxable income of marijuana [sic] related businesses (MRB). Section 280E of the IRC prohibits taxpayers who are engaged in the business of trafficking certain controlled substances, including cannabis, from deducting typical business expenses associated those activities. Section 280E, which was enacted in 1982 during the “War on Drugs” era, has become increasingly relevant for cannabis businesses. The cannabis industry has grown substantially in recent years with annual market values expected to reach $30 billion by 2025.

However, while Section 280E greatly restricts the tax deductions of state-legal cannabis businesses, there is some reprieve. Current IRC provisions permit state-legal cannabis businesses, including growers, producers, wholesalers or retailers, to deduct the Cost of Goods Sold (COGS) in computing their US federal income tax liability, despite the application of Section 280E.

Impact of Section 280E on Businesses

 What does Section 280E mean for cannabis businesses today? It is intended to prevent dealers from claiming tax deductions for their business expenses, interpreted to include state-legal cannabis businesses, reduced deductions that result in increased taxable income and MRBs will face higher federal tax rates. 

The IRC disallows any deductions or credits paid or incurred during a tax year if those deductions or credits relate to trafficking controlled substances. The courts have taken the position that the term “trafficking” in this case means “engaging in a commercial activity – that is, to buy and sell regularly.” Simply, the law denies cannabis businesses any U.S. federal income tax deduction for ordinary and necessary business expenses, despite being duly licensed as a legal business in their state of operation.

Typically, the ability to deduct ordinary business expenses means that a business is subject to federal tax on its net income (i.e., gross receipts minus expenses). However, the definition of Section 280E and the classification of cannabis as a Schedule I substance severely hinders legal cannabis companies from taking advantage of tax deductions for actual economic expenses incurred in the ordinary course of business, which results in a significantly higher effective tax rate as compared to other businesses.

Legal Actions and Challenges to Section 280E

There have been court challenges and concessions made to Section 280E. Specifically, the 2007 court case Californians Helping to Alleviate Medical Problems, Inc., v. Commissioner. This court case reinforced the precedence that Section 280E does not apply to cost of goods sold. The Internal Revenue Service (IRS) defines cost of goods sold to be “expenditures necessary to acquire, construct or extract a physical product which is to be sold.” Generally, for a retail MRB, this means that the direct cost of acquiring cannabis products for resale. Deductions for rent, utilities, wages, insurance and other operating costs common to ordinary businesses are generally disallowed. New York State has specifically indicated that it intends to follow Section 280E for its own income tax calculations, disallowing these same deductions against New York taxable income

Tax Court and Section 280E

The Tax Court has also been aggressive in tamping down efforts by MRBs to separate cannabis related and non-cannabis related activities. The courts argue that these separate activities constitute a single trade or business when they share a close and inseparable organizational and economic relationship. In addition, the risk of cannabis related activities tainting a taxpayer’s other business concerns exists if services or employees are shared between an MRB and a non-MRB. Allocation of expenditures to cost of goods sold, as well as any allocations of costs between MRB and non-MRB entities, need to be well thought out and supported by defensible tax and accounting positions.

The Future of MRBs and Section 280E

All indications point to an increased frequency of IRS audits of MRBs compared to audits of non-cannabis related businesses. Therefore, documenting the methodology behind the calculation of costs of goods sold is even more important for MRBs. It is vital to consult with a tax advisor to ensure you are maximizing your cost of goods sold deductions and preparing the best documentation possible to support your 280E tax positions.

Disclaimer: The information presented in this article should not be considered legal advice or counsel and does not create an attorney-client relationship between the author and the reader. If the reader of this has legal or accounting questions, it is recommended they consult with their attorney or accountant.

Artisanal Cannabis Extraction – An Interview with Precision Founder Nick Tennant

By Aaron Green
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Cannabis and hemp derived concentrates are a rapidly growing product category. Formed by extracting cannabis using a variety of methods including ethanol, butane hash oil and CO2, concentrates find their way into consumer packaged goods as ingredients for infused products or as stand-alone products such as resins, rosins, distillates and hash.

Precision Extraction Solutions (Precision) was founded in 2014 to provide equipment and services to cannabis and hemp processors. In October 2021, Agrify (NASDAQ: AGFY) purchased Precision in a $50M cash and stock deal. The move positions Agrify to offer end-to-end infrastructure solutions for cannabis cultivators and processors.

We interviewed Nick Tennant, SVP of Innovation at Precision, now a division of Agrify. Nick founded Precision after seeing a need for quality equipment in concentrate processing. Prior to Precision, Nick was involved in a vertically integrated cannabis business in Michigan where he gained experience in cultivation, extraction and retail.

Aaron Green: How did you get involved in the cannabis industry?

 Nick Tennant: I’ve been in cannabis about 17 years now. I had family in Colorado and California who I started to interface with around 2006. Around 2008, Michigan passed their cannabis law, and we were one of the first businesses to get licensed. The subsequent five years from that law getting passed, up to 2013, I did pretty much everything in terms of commercial cannabis – cultivation, retail, edible manufacturing, you name it. Concentrates didn’t really exist in a meaningful way; the products definitely were there, but the technology wasn’t. I looked at technology at the time and it was very primitive, so we made a shift to focusing on concentrates. We launched Precision in 2014 and we basically shot out of a cannon, doing a million dollars in sales in our first 90 days. Since then, we grew the company up to 60 employees and substantial amounts of revenue. We sold Precision to Agrify in October of this year.

Green: Tell me about that transition from a cannabis products company to an equipment manufacturer.

Nick Tennant, SVP of Innovation at Precision Extraction Solutions

Tennant: It was a gradual transition. As I started to see the extraction niche expand, I really started to put more time and resources into it. When we launched Precision and were met with such success in just the first 90 days, I knew that I had to abandon everything else I was doing to focus on this. My former partners took over the businesses, like the grows. We worked out individual circumstances regarding how I was going to leave those businesses and focus full time at Precision.

Green: So, big news recently with the acquisition, congratulations on that! Tell me about Agrify and why a deal with Agrify made sense to you.

Tennant: The strategic rationale is that we are providing an end-to-end infrastructure solution. They have the horticultural aspect, an excellent public vehicle, and plenty of cash on the balance sheet to continue to scale the business and acquire additional constituents within the cannabis infrastructure. Getting to the point where you can exit the businesses, it’s a long road, and our business is very niche. We were seeking to partner with t a bigger player in the industry with more resources that would help us to scale what we were trying to do, and Agrify was the perfect fit.

Green: You’ve got several areas of focus at Precision ranging from ethanol extraction, distillation, and butane hash oil (BHO) extraction. Where are you focusing the business going forward?

Tennant: Going forward we want to provide that end-to-end one-stop shop infrastructural solution for any cannabis products company. We want Agrify to become the dominant and fastest growing player in the cannabis industry for infrastructural solutions, whether that’s horticulture or extraction. We’re continuing to expand our product portfolio into other niches so that if you’re building a cannabis facility, you only need to come to one company and the process is as simple as possible.

Green: What kinds of products are you seeing the consumer gravitate towards?

Tennant: I think that cannabis will remain to be very artisanal because of the uniqueness of the plant. If you look at similar industries, I could compare it to craft beer or winemaking. I think that hydrocarbon and water hashes will continue to play a substantial role. I also think that ethanol and distillate-based products will hold market share just like the Budweiser and Kendall Jacksons of the world.

People love the native sort of essence of the plant, that this is a plant sort of bestowed upon us by the universe with all these unique healing and restorative properties. I think that trying to capture those properties and that native essence of what’s going on within the genome of the plant and translate that into a product is going to be the theme that continues to dominate, and I think that for several reasons. For the same reason somebody will go to Whole Foods, and they’ll buy the local organic grown fruit or vegetables, people are going to gravitate towards artisanal cannabis products. People that consume cannabis, generally speaking, are more naturalistic or homeopathic than most.

Green: Precision has technology for a range of extraction methods where the focus has been on cannabis. Are you seeing any new markets outside of cannabis?

Tennant: Yes. We’ve dealt with varieties of different botanical extraction companies over the years, but they’re a very small segment of our business. We’re a cannabis business. Non-cannabis extraction may make up less than 1% of our business so it’s very small.

Green: What trends are you following in the cannabis industry?

Tennant: Consolidation, I would say, is a big one. MSOs are consolidating and buying up the small players. The second major trend is regulation, and what’s going on in DC. Beyond that, you obviously have new states coming online, shifting consumer trends, things like that. I would say these last two are less impactful from a macro standpoint, but nonetheless, still things that we follow.

Green: Following up on consolidation, do you see a demand for larger systems now?

Tennant: I’d say 95% of what we do is under 2000 pounds a day, which we consider artisanal. You’re not going to see large scale production consolidation because you have fragmentation by state. It would be most efficient for a cannabis manufacturer to manufacture everything in one location but it’s just not possible with the state laws. It’s very fragmented. Somebody like a Trulieve might have 20 different manufacturing operations, all running similar processes. Perhaps we will see more upon national legalization and the opening of state borders.

Green: What in your personal life or in the cannabis industry are you most interested in learning about?

Tennant: I am constantly learning. That’s just how my brain is, and the type of person that I am.  I’m interested in a variety of topics, but I think I’m most interested in how capital markets are going to materialize and substantiate around the federal legalization because we’re in this weird space of cannabis. It’s weird, because you have a boom industry that’s generating massive amounts of revenue and massive amounts of tax dollars, but you must remind yourself that there is no real liquidity in this market, meaning you can’t finance things. A typical cannabis company that wants to go out and get capital is getting rates between 16 to 18%. There’s just a capital restriction since cannabis is a Schedule I substance, and these large lenders don’t want to play into that.

The question in my head and the big catalyst for the entire industry is: what happens when we get a descheduling, decriminalization and/or legalization on a federal level? How does that affect the large funds sentiment to deploy this zero-interest rate capital that we’re seeing in the rest of the world? We’re seeing it in mortgages. We’re seeing it in every aspect of the world. There’s free money printing, but it’s not flowing into cannabis because those federal laws are prohibiting it as such. Ultimately, as more infrastructure comes online, these companies are not going to have to scrape by to build a $3 million lab. They can finance it at a reasonable interest rate, and the infrastructure can come online.

That’s going to be better for the consumer. There will be more infrastructure, more products, more research and development, more retail locations. Everything gets better, more convenient, and more robust. I would think that finance interest rates are the largest lever within the industry right now, and because of that, you’ll likely see cannabis capital markets go pretty crazy when legalization comes around.

Green: Okay, great. That concludes the interview.

Tennant: Thanks, Aaron.

Cannabis Business Summit & Expo Announces Keynote Speaker

By Cannabis Industry Journal Staff
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The National Cannabis Industry Association (NCIA) presents the 7th Annual Cannabis Business Summit & Expo, December 15 – 17, 2021 at the Moscone Center in San Francisco, California. As one of the industry’s most influential national trade shows, it is the only event to combine a lineup of business-building education, exhibitors representing the entire cannabis ecosystem and exclusive experiences, all under one roof.

NCIA’s Cannabis Business Summit & Expo is known throughout the industry for its unmatched education opportunities and high-profile speakers. The upcoming event in San Francisco is no exception. Highlighting next month’s conference agenda is groundbreaking keynote speaker Troy Datcher, CEO of The Parent Company.

Read on for the details. Click here to view the full conference agenda and click here for tickets to the 7th Annual Cannabis Business Summit & Expo. Licensed retailers, distributors, infused product manufacturers and cultivators with a valid state license may attend the Cannabis Business Summit and Expo free. Use code CBSCIJ15 for 15% off your registration.

Troy Datcher, CEO of The Parent Company

Keynote Address

10:15 a.m. | Thursday, December 16, 2021

A Conversation with Troy Datcher | CEO, The Parent Company
Moderated by Adrian Farquharson | Founder, MARY Magazine

NCIA will welcome 2021 Cannabis Business Summit Keynote Speaker for Thursday, December 16, Troy Datcher, CEO of The Parent Company. Leading a new generation of c-suite innovators, Chief Executive Officer Troy Datcher, together with Chief Visionary Officer Shawn “JAY-Z” Carter, helms a cannabis business for the post-prohibition era at The Parent Company. Combining best-in-class operations with leading voices in popular culture and social impact, The Parent Company focuses on building brands that will pave a new path forward for a legacy rooted in equity, access, and justice.

Datcher joined The Parent Company from The Clorox Company, where he deployed global sales plans for over $6.7 billion in cross-portfolio annual revenue throughout a 20-year tenure as Senior Vice President and Chief Customer Officer. In an intimate “fireside chat” setting, moderated by Adrian Farquharson, journalist and founder of MARY Magazine, Datcher will share personal stories and detail the impact he is working to make in the cannabis space.

Don’t miss this opportunity to learn from the best at NCIA’s 7th Annual Cannabis Business Summit & Expo, December 15-17, 2021 at the Moscone Center in San Francisco. Click here to view the full conference agenda and click here for tickets. Licensed retailers, distributors, infused product manufacturers and cultivators with a valid state license may attend the Cannabis Business Summit and Expo free. Use code CBSCIJ15 for 15% off your registration.

Controlled Environment Agriculture: An Interview with Sam Andras

By Aaron Green
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Food-focused controlled environment agriculture (CEA) is a multidisciplinary production technique whereby plants and products are grown inside greenhouses, vertical farms and growth chambers where every aspect of the environment can be monitored and controlled. Using CEA, cultivators can produce high-value and traditional food crops with the goal of maximizing plant productivity in an efficient and environmentally friendly way.

As the industry’s first integrated building and cultivation systems design firm, urban-gro is ushering in a new era in the design of efficient indoor agriculture facilities, providing productivity and efficiency benefits to CEA operators when designing and operating facilities.

We interviewed Sam Andras, executive vice president of Professional Services at urban-gro, and principal of MJ12 Design Studio. Sam joined urban-gro after his company MJ12 Design Studio was acquired in July 2020. Prior to that, he was principal in charge of 2WR+ Partners, a 20-year Georgia-based architecture and interior design firm.

Aaron Green: Sam, tell me, how did you get started in the cannabis industry?

A facility that Andras designed in Massachusetts

Sam Andras: I started my architecture firm in 2001 in Georgia and later moved to Colorado in 2012. In 2013, I had the opportunity to do three cannabis facilities and really saw it as an emerging market that I thought would be really cool to dig into and pursue. Due to the marijuana stigma at the time, our company, 2WR, decided to create a cannabis-specific entity and developed MJ12 Design Studio. We built a website and it took off. Since 2013, I’ve personally designed about 130 cultivation facilities and vertically integrated facilities, from Hawaii all the way to New Zealand.

Green: When you say vertically integrated, what does that include?

Andras: The full building design of cultivation, product manufacturing, extraction, infusion and dispensaries.

Green: Is that something urban-gro currently does as well?

Andras: Now? Yes, with MJ12 under the facility design umbrella. After urban-gro acquired us in July, they were able to start offering full turnkey services. Everything from architecture, mechanical and plumbing engineering, electrical engineering, integrated cultivation, design of fertigation, benching, lighting, water treatment, environmental controls and other plant focused services– all of that is under our umbrella.

Green: Can you explain what controlled environment agriculture (CEA) is?

Andras: Absolutely. To me, CEA is crop agnostic, it can be anything from leafy greens to cannabis. Though we’re mainly focused on the cannabis industry and controlling that environment, we do also serve some leafy green companies. Environmental control includes things like temperature and humidity levels in the various stages of growth which is key to the economic success of organizations.

A California dispensary he designed

I’m a firm believer in legalization on the federal level down the road, which means that everything’s going to be under FDA for human consumption. If you look at the European models, when you look at the medicinal product development, it’s focused on consistency of the crop, from one crop to the next. And the way you achieve consistency is with CEA.

Green: From a resource perspective, can you describe how CEA differs from indoor to outdoor and greenhouse?

Andras: When you look at the market and the sale value of cannabis flower grown indoors versus outdoors or even greenhouse, greenhouse growing has huge variations by region. I believe greenhouses function better in more of a dry, arid climate. Indoor grows give you the ability to design and control your entire environment including temperatures, humidity levels, plant sizes, watering rates and other considerations. Growing indoors, in a controlled environment, gives you more flexibility to explore different alternatives in your cultivation.

A California cultivation facility he designed

Green: Final question: what in cannabis or in your personal life are you most interested in learning about?

Andras: That’s a great question. I’m a hands-on kind of guy. I would love to spend a couple of weeks working in extraction, as that’s the piece of the puzzle, as an architect, I know the least about. We’ve designed pretty much every type of cultivation from drip irrigation aeroponics to aquaponics, ebb & flow. You name it, we’ve done it, but the whole extraction process and the different equipment, and why companies choose ethanol, butane, hydrocarbon, CO2 and how to design for those extraction processes is something that as an architect, I’d love to learn more about.

Green: Okay, Great. That concludes the interview. Thanks Sam!

Andras: Thanks, Aaron.

Cannabis Safety & Quality: An Interview with the Founder of CSQ

By Aaron Green
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The supply chain for consumer cannabis products is complex, involving cultivation, extraction, manufacturing and packaging. While global best practices exist for Good Agricultural Practices (GAPs) and Good Manufacturing Practices (GMPs), the certifications are not tailored to the cannabis industry.

CSQ has developed tailored standards for the cannabis industry to assist cannabis companies in improving their quality. As a division of ASI, a woman-owned business that’s provided safety solutions to the food industry since the 1940s, the CSQ standards were built in 2020 to meet ISO requirements, GFSI requirements and regulatory cannabis requirements from seed-to-sale. CSQ is the first cannabis certification program to meet the GFSI Benchmarking Requirements with plans to be benchmarked in 2022.

We interviewed Tyler Williams, CTO and founder of CSQ. Tyler founded CSQ after working at ASI – a family-owned food safety company in St. Louis.

Aaron Green: Nice to meet you, Tyler. How did you get involved in the cannabis industry?

Tyler Williams: It’s kind of a long story, but it’s a good story. My mom worked for ASI for 15+ years. That company has been around since the 1940s and is one of the oldest food safety companies in the world. The owners were ready to sell about five or six years ago, and my mom ended up using a small business loan to purchase the company. That’s how I got started in a food safety and dietary supplement space.

About three to four years ago, we started getting inquiries from cannabis companies asking about GMP audits and certification and different things. We started doing certifications to our GMP food processing standard or dietary supplements depending on what they wanted but realized that there were a lot of things that weren’t applicable to cannabis companies or there were extra things needed for cannabis companies. That’s how I started working with cannabis companies to start developing the CSQ certification program and it has just kind of grown over the years.

Tyler Williams, CTO and founder of CSQ

We currently have four standards at the CSQ level. CSQ plans on being benchmarked to GFSI which stands for Global Food Safety Initiative. We plan on going through that process to get the benchmark next year. There are four standards underneath CSQ: one for growing and cultivation; one for extraction; one for food and beverage edibles; and then cannabis dietary supplements. We’re looking to add standards for cosmetics, cannabis contact packaging materials, retail and consumption lounges.

Last year, when we were doing our pilot audits, we realized that the CSQ standard was great for medium to big sizedMSOs because they’re already doing these best practices. It’s easier for them to, you know, implement a few things, and then get certified, whereas for the smaller guys who might be coming from the illicit market, it’s a lot harder – it’s a lot bigger jump from them to go from zero to 100. Last month, we released our unaccredited cGMP, cGMP+, cGAP and cGAP+ standards. The difference between the regular and the plus is that the plus has HACCP (Hazard Analysis Critical Control Point) and then it also includes a recall module where the site must do a mock recall while the auditor is on-site.

CSQ doesn’t perform the audits. We license the use of our standard to accredited certification bodies and then they must get accredited to be able to certify companies under the CSQ name.

Green: Can you tell me a bit about the genesis of CSQ and the structure of the organization?

Williams: We’re a for-profit company. We thought about going the non-profit route but it’s a lot more intricate and a lot more people involved when you go that route. Our parent company is ASI, and we are under the ASI global standards division which is responsible for developing standards. So, CSQ is one of those standards under that brand and that’s kind of the foundation of it. We have two licensed certification bodies right now. ASI has a certification body, and they are one of our licensed CBs and then WQS, who’s based out of North Carolina and has a big presence in South America which is great because we’re starting to get inquiries from companies in South America as well.

Green: How do you go about building industry awareness and acceptance of the standard?

Williams: Building awareness really started with going out to the medium- to large-sized companies and saying, “Will you open your doors and let us come and basically do all these audits for free at your facility just so we can kind of get a baseline across the industry?” So, that started the conversation with industry. The MSOs in the medium- to large-sized companies, are more ready to go through the certification process because they know that federal legalization is around the corner. They know these things are going to have to be in place already so they’re just doing it as preparation. There isn’t much demand for retailers right now like there is in the food and or dietary supplement space. So that’s where the demand is really coming from – wanting to self-regulate in preparation for federal legalization.

Most of our outreach is education-based. We speak at a lot of conferences. We host a lot of webinars and free events and things like that, just to get the word out about CSQ. A lot of people know what GMPs are, or know that they should be following GMPs, but they don’t necessarily know how to get from point A to point B. Our job is to educate them that it’s not as hard as they think it is and it’s not as expensive as they think it is. The cost of an audit is relatively inexpensive. What I always tell people is the sooner you start preparing, the cheaper the whole process is. What happens a lot of times is a facility will not build out their facility to GMP specifications, and then they want to get GMP certified so they must move the hand washing station from the back of their facility to the front where the employee entrance is or things like that. The sooner these companies start thinking about it, the better and that’s basically what we’re trying to do is just educate the industry about that kind of preparation.

Green: cGMP and cGAP are perhaps more broadly accepted outside of the cannabis industry. Do cGMP and cGAP fall under the CSQ certification?

Williams: There are four ingredients that make up the CSQ standard. There are industry best practices, which are specific to just the cannabis industry. There are good manufacturing practices, or good agricultural practices, that are just accepted globally. Then we look at the Codex Alimentarius, which is the global food code. Every country mustwrite their federal rules on food based off this standard. We use the Codex when we’re talking about edibles and things like that. And then the last aspect of CSQ is the GFSI benchmarking requirements. So that’s kind of the basis of our program, making sure that the auditors have certain amount of audit hours, and we have training and processes in place for that. That’s where the GFSI benchmarks are coming out. So, all those four things kind of really create the CSQ standard.

Green: There are clear internal benefits to a company for holding to a quality standard. What are the downstream benefits to the companies that have CSQ? How do the end-users know about it?

Williams: I come from the food industry and if you go to the grocery store, you just assume that everything’s safe.Consumers don’t even think about the certifications that those companies must get to even be able to sell their product in retail stores. They don’t necessarily put those certifications on the packaging material, because as a consumer “SQF” means nothing to most consumers, right? It would only mean something if you’re in the industry.We’re trying to be different with CSQ and get more consumers aware of it. One of the things that we have is a database of certified facilities. Consumers will be able to say, “Okay, maybe I’m interested in this new brand. Are they certified to this program or not?” and be able to see that. We’re also trying to get companies to put the CSQ logo once they’re certified on their marketing materials.

Now, one thing that we cannot do yet is put the logo on the finished product packaging, because we don’t have a testing addendum, but we’re working on that. There’s not a lot of demand for it right now and it’s more expensive audit costs, where you’re talking about lab tests, and things like that. So, it’s something that we’re working on, but we haven’t fully developed yet.

Green: Next question is around d-8 THC and federal regulations. What’s your position on d-8 and how are you thinking about d-8 trends in the future?

Williams: d-8 THC itself as a product, I think it’s fine. I think if it’s made safely, we know all the components I think it’s fine from that aspect. The problem that we have right now is it’s not regulated. That’s where I think we need to have these states that have legalized THC or hemp to then implement rules and regulations and bring d-8 THC into those rules and regulations. And so maybe then it’s only those licensed facilities that are inspected by the state that are producing those products and not just some guy out of his garage. I think a lot of people right now are just wanting to ban it completely and I don’t think that’s the best approach. There’s nothing wrong with the product itself, it’s just how it’s being produced right now in the gray area where no one’s regulated.

Green: What in your personal life or in cannabis are you most interested in learning about?

Williams: I love what I do. I’m always looking at and reading regulations and then trying to learn something new. I’ve been going through organic certification training right now. At some point, CSQ will probably go down the route of having some sort of organic certification. So that’s been kind of what I’ve been working on and learning right now. But I’m a sponge and I like to absorb new information about the industry.

Green: Thanks Tyler, that concludes the interview!

Williams: Thanks, Aaron!