Tag Archives: cbd

December 1, 2020

Cannabis Compliance Testing: Safety vs. Quality

By Vanessa Clarke, Melody Lin

Dr. Markus Roggen is a chemist, professor, cannabis researcher and founder & CEO of Complex Biotech Discovery Ventures (CBDV). Founder & CEO of Ascension Sciences (ASI), Tomas Skrinskas has been at the leading edge of transformative healthcare technologies, including computer assisted surgery, surgical robotics and genetic nanomedicines, for over 15 years.

Leading researchers from the cannabis industry – Dr. Markus Roggen (Complex Biotech Discovery Ventures) and Tomas Skrinskas (Ascension Sciences) – highlight the challenges facing the industry’s current compliance testing standards and the opportunities emerging from the latest developments in nanotechnology and advanced analytical testing. Here are the key insights from the discussion.

What are the current compliance testing requirements for cannabis products? Are they sufficient in ensuring safety and quality?

In the current landscape, Canada’s compliance testing requirements are clearly laid out in the form of guidance documents. Specifically, for pesticide testing, cannabinoid concentration content in products, heavy metals, etc. Compliance testing can be roughly divided into two categories: 1) establishing the concentrations of wanted compounds, and 2) ensuring that unwanted compounds do not exceed safety limits.

In the first category, cannabinoids and terpenes are quantified. Their presence or absence is not generally forbidden but must stay within limits. For example, for material to be classified as hemp, the THC concentration cannot exceed 0.3 %wt., or a serving of cannabis edible should contain below 5 mg of THC. The second category of compliance testing focuses on pesticides, mold and heavy metals. The regulators have provided a list of substances to test for and set limits on those.

Are those rules sufficient to ensure safety and quality? Safety can only be ensured if all dangerous compounds are known and tested for. Take for example Vitamin E acetate, the substance linked to lung damage in some THC vape consumers and the EVALI outbreak. Prior to the caseload in the Fall of 2019, there were no requirements to test for it. It’s not only additives that are of concern. THC distillates often show THC concentrations of 90% plus 5% other cannabinoids. What are the last 5% of this mixture? Currently, those substances have not been identified. Are they safe? There is no concrete way to determine that.

The aforementioned guidelines have the best intentions, but do not adequately address two key obstacles the industry is currently facing: 1) what happens in practice, and 2) what can easily be audited? Making sure people follow the requirements is the challenge, and it comes down to variability of the tests. Testing has to happen on the final form of the product as well as every “batch,” but there is little guidance on how that is defined. With so much growth happening in the industry, how are these records even tracked and scrutinized?

And finally, there’s the question of quality. How do you define quality? Before establishing quantifiable quality attributes, it can’t be tested.

If compliance testing is insufficient, then why aren’t more cannabis companies testing beyond Health Canada’s requirements?

Compliance testing has always been focused on the end product, THC and CBD levels, and consumer safety. As long as cannabis companies are testing to determine this, doing further testing means added costs to the producer. There is a rush to get cannabis products to the new market because many consumers are eager to buy adult use products such as extracts or edibles, and quality is not the biggest selling point at this very moment.

However, there are unrealized advantages to advanced analytical testing that go beyond Health Canada’s requirements and that offer greater benefits to cannabis producers and product developers. Producers often see testing as an added cost to their production that is forced upon them by the regulators and will only test once the product is near completion. For cannabinoid therapeutics and nutraceuticals, advanced analytical testing is critical for determining the chemical makeup and overall quality of the formulation. This is where contract researchers, such as Ascension Sciences, come in to offer tests for nanoparticle characterization, cannabinoid concentration, dissolution profiles and encapsulation efficiency.

HPLC (high pressure liquid chromatography) instrument.

A lack of budget and awareness have prevented cannabis companies from advanced analytical testing. However, testing that goes beyond lawful requirements is an opportunity to save money and resources in the long term. This is where companies, like Complex Biotech Discovery Ventures (CBDV), offer in-process testing that provides a deep characterization and analysis of cannabis samples during every stage of product development. If tests are conducted during production, inefficiencies in the process are revealed and mistakes are spotted early on. For example, testing the spent cannabis plant material after extraction can verify if the extraction actually went through to completion. In another case, testing vape oil before it goes into the vape cartridges and packaging allows producers to detect an unacceptable THC concentration before they incur additional production costs.

Which methods are the most successful for cannabis testing?

The most effective method is the one that best determines the specific data needed to meet the desired product goal. For example, NMR Spectroscopy is paramount in assessing the quality of a cannabis sample and identifying its precise chemical composition.

HPLC (liquid/gas chromatography) is the most precise method for quantifying THC, CBD and other known cannabinoids. However, if a cannabis extractor wants to quickly verify that their oil has fully decarboxylated, then an HPLC test will likely take too long and be too expensive. In this case, IR (Infrared Spectroscopy) offers a faster and more cost-effective means of obtaining the needed data. Therefore, it ultimately depends on the needs of the producer and how well the testing instruments are maintained and operated.

What’s next in analytical testing technology? What are you working on or excited about?

In terms of compliance, regulations to standardize the testing is the hot topic at the moment. For nanotechnology and nanoparticles, the big question now is what is known as the “matrix” of the sample. In other words, what are the cannabinoids, and what else is in the sample that’s changing your results? The R&D team at Ascension Sciences is in the process of developing a standardized method for this to combat the issues mentioned earlier in the interview.

Ascension Sciences is also excited about characterizing nanoparticles over time to determine how cannabinoids are released and how that data can be transferred or made equivalent to consumer experiences. For example, if a formulation with quicker release, faster onset and better bioavailability is found in the lab, product development would be more efficient and effective when compared to other, more anecdotal methods.

At CBDV, the team is working on in-process analytical tools, such as decarboxylation monitoring via IR Spectroscopy and NMR Spectroscopy. CBDV is also looking at quantifying cannabis product quality. The first project currently in motion is to identify and quantify cannabinoids, terpenes, and other compounds present when vaping or smoking a joint using a smoke analyzer.

A lack of budget and awareness have prevented cannabis companies from testing beyond what’s required by Health Canada. Compliance testing is designed to ensure safety, and for good reason, but it is currently insufficient at determining the quality, consistency and process improvements. As the above factors are necessary for the advancement of cannabis products, this is where further methods, such as advanced analytical testing, should be considered.

December 1, 2020

How Small Dispensaries Can Stay Competitive in Today’s Market

By Claudia Post

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Small cannabis dispensaries face different challenges than those seen with large, multi-state operators. To this end, massive companies like MedMen and Grassroots Cannabis need to accommodate multi-state operations’ compliance challenges. Conversely, small dispensaries must learn to compete with the big box retailers of the cannabis industry.

Small cannabis dispensaries must figure out how to make their size an advantage against larger business entities to stay competitive. To this end, they must critically assess the corporate structure of large cannabis companies like Green Thumb Industries to look for operations and marketing opportunities still “left on the table” for smaller operators.

Luckily, owning and operating a small cannabis dispensary affords creativity and innovation in the workplace. Namely, because small businesses can quickly implement change and pivot to the demands of the ever-changing cannabis landscape. Conversely, due to corporate structures’ difficult navigation, their larger counterparts must go through far more effort to implement operational changes. To better understand how small dispensaries can stay competitive in today’s market, we put together some criteria to examine.

Cross-Training Employee Teams

The fact that small cannabis dispensaries do not have many employees significantly reduces operating costs. However, to capitalize on the savings of a small employee team, you must cross-train your staff. Because if a small team can handle all the required tasks of a shift, you will never waste money on over-staffing your dispensary operation.

budtenderpic — A bud tender helping customers at a dispensary

Looking at the specific jobs of a small cannabis dispensary, business owners should ensure that budtenders are trained to handle nearly every business task. To illustrate, you should train budtenders to open and close the store, conduct inventory work, recommend products and operate seed-to-sale software. Not only does this cross-training keep you from overstaffing your dispensary when it is slow, but it also insulates your business during busy market fluctuations.

Please note, once you train budtenders to handle a variety of tasks, you should also pay them more than the industry average. In doing so, you insulate yourself from the high turnover rate that plagues the cannabis space.

Lean Operating Principles

Lean operating is a practice that has exploded in popularity across the business world. To help teach lean operating principles, specialty training companies offer Six Sigma certifications. These certifications help business owners and executives save money on operational efficiencies. Methods taken from Six Sigma can be incredibly impactful for small cannabis dispensary businesses.

According to the ASQ professional training website, “Lean Six Sigma … drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time, while promoting the use of standardization and flow, thereby creating a competitive advantage.”

Lean Six Sigma principles can be beneficial with inventory control in small cannabis dispensaries. To this end, these businesses should apply analytics to track consumer behavior within their stores. After that, they can use data to create precise sales forecasts and conduct highly accurate product procurement. The end goal being to increase liquidity by reducing money tied up in a bloated inventory of unsold cannabis products.

Personalized Experience

Due to their small size, single dispensaries have the luxury of customizing the retail shopping experience. As such, without the added pressures of corporate oversight, small operators have the creative freedom to make for highly memorable shopping experiences within their stores. In going the extra mile on things like interior design, small dispensaries can help ensure customer retention and benefit from word-of-mouth marketing.

For example, Barbary Coast Dispensary in San Francisco, CA, has the look and feel of a high-end speakeasy, making it the perfect match for the Bay Area’s aesthetic sensibilities. The dispensary interior is decorated with a 19th-century touch and features a dab bar, where clients can enjoy the surreal atmosphere while consuming some of California’s best cannabis. A visit to a small dispensary like this will likely leave a lasting impression.

Memorable retail shopping experiences often translate directly to customer loyalty. In turn, this dynamic directly impacts your bottom-line concerning marketing expenses. Notably, a steady base of loyal customers will sustain your business, significantly reducing your marketing costs. In the end, marketing can be directed at retaining clients through loyalty programs and customer engagement – both can be mainly handled “in house” and relatively inexpensively.

Product Differentiation

Small dispensaries can utilize product differentiation to stay competitive in today’s market. To this end, small operators are blessed with the ability to pivot quickly with new product offerings. Conversely, large dispensary chains with corporate structures must go through rigorous steps before launching new products at their stores.

Offering rare or unique cannabis strains is a great way to differentiate

Small cannabis dispensaries can immediately “get out ahead” on new product trends as they arise. For example, you can offer rare cannabis strains or boutique extracts that none of the larger dispensaries carry.

By the time the larger dispensaries in your area catch up on the current trends, you can move on to the next one. We recommend making alliances with some of the top craft growers in your area to make this possible.

Every year, the cannabis industry grows more competitive. As this business evolves from an underground affair to a multi-billion-dollar enterprise, the scope and sophistication of cannabis dispensary operations grows exponentially. Within this ever-changing dynamic, many small dispensaries fear the wayside will leave them.

Yet, if you approach the market with creativity and zeal, you can make the additional market pressure work to your benefit. By focusing on critical facets like cross-training employees, lean operating principles and product differentiation, you can build a profitable and sustainable cannabis dispensary by making small size a competitive advantage.

November 30, 2020

How Far Away Is Adult Use Cannabis Reform On The Global Calendar?

By Marguerite Arnold

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There is an ineffable logic to the pace of reform these days. Nowhere is that clearer in both the success of voter reform measures in the United States (along with timelines for implementation baked into the language of the same) and developments internationally. No matter that New Zealand decided to take a recent punt on the issue, there are other forces moving elsewhere that have the potential to be far more consequential – and in the short term.

Israel Announced Its Intent To Create A Recreational Market in 2021

There is little news anywhere as consequential as that of the oldest medical market finally succumbing to the inevitable. Namely, Israel has announced that it will allow an adult use market to begin operations probably by the third quarter of 2021. That said, don’t hold anyone to a deadline in the days of COVID-19, which will just as surely have not passed by then.

However, this development means that the entire conversation has moved up a notch – because the Israelis have so much research on the plant at this point.

For this reason, the tiny country is likely to have an outsized impact on the entire discussion – along with conveniently timed medical exports to the world.

Luxembourg Will Initiate Its Recreational Market Shortly Thereafter

It is likely not insignificant that the Israelis announced their intent to begin an adult use market just ahead of the long-announced Luxembourg flip – now on the agenda of the Green Party domestically for several years.

The strategic location of Luxembourg in both the European market as well as the much larger financial one now interested in the vertical cannot be understated. Indeed, the country has already played an outsized role in the development of the medical market here due to the contretemps over the clearing of stock trades in the German market as of 2018.

The double whammy of good news from both markets will also create a buzz internationally that is sure to drive other conversations forward – even if it is to study how both countries approach the issue. And, more to a point, how they differ from Canada, including regulation of their equity markets.

Combined with a more regulated market in Holland and presumably continued “experimentation” in Denmark, and by the end of next year, adult use reform will have hit the continent and in no small way.

Does This Mean The Sudden Potential of Adult Use Everywhere?

As 2020 has shown, in spades, just about anything can and frequently does happen. However, do not expect many more countries to move into the recreational column for the next several years.

Whatever the UN does or does not do about cannabis at the next meeting of the WHO, cannabis the plant remains a Schedule I drug internationally. This means that, for example, import and export of the same across borders, even in Europe, is likely to be problematic and for some time to come – let alone its international travel across say, the Atlantic.

Further from the law enforcement and financial security (namely money laundering) perspective, there are big issues that have to be dealt with finally, internationally, that so far have not – and under the guise of “medical reform.”

For that reason, in other words, do not expect Germany, much less France or even the UK to suddenly switch gears. And remember that both Luxembourg and Israel are small countries.

Bottom line? Adult use reform is here to stay, and will increasingly show up on the map. But the more “blanket” reform, still driving the entire discussion, is broadly, and globally, medical.

November 20, 2020

Leaders in Infused Products Manufacturing: Part 4

By Aaron Green

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Cannabis infused products manufacturing is quickly becoming a massive new market. With companies producing everything from gummies to lotions, there is a lot of room for growth as consumer data is showing a larger shift away from smokable products to ingestible or infused products.

This is the fourth article in a series where we interview leaders in the national infused products market. In this third piece, we talk with Stephanie Gorecki, vice president of product development at Cresco Labs. Stephanie started with Cresco in 2019 after transitioning from an award-winning career in traditional foods CPG. She now heads up product development where she manages R&D for Cresco, a multi-state operation with tremendous SKU variety.

Next week, we’ll sit down with Lisa McClung and Glenn Armstrong from Coda Signature. Stay tuned for more!

Aaron Green: Stephanie, how did you get involved at Cresco Labs?

Stephanie Gorecki: A few years ago, CBD became the most talked about ingredient in the food industry. CBD-infused food headlines appeared in most of the trade magazines. I have always been curious about working in the cannabis space, and not just with CBD, but THC and other cannabinoids. I researched technical seminars and came across the cannabis infused edibles short course put on by the Institute of Food Technologists.

I attended the short course in April of 2019. I realized that to be hands-on with cannabis in the near future, I would need to join an organization that was already in the space. The space was highly regulated which meant that research in the mainstream food and beverage space was limited.

Immediately following that seminar, I began to look for opportunities near where I lived. That’s when I came across the Cresco Labs career opportunity. The Director of Food Science position appeared to be a good match. I applied for the position and went through the interview process. Approximately two months after attending that seminar, I joined Cresco Labs.

Aaron: Awesome! It’s a cool story. In your role, how do you think about developing products that differentiate in the market?

Stephanie: There are many opportunities for brand differentiation in cannabis right now. There is a focus on high bioavailability and water solubility and how that translates to onset times once consumed. Many of these technologies utilize ingredient technologies and systems that I have experience with from my past work in the flavor industry.

Gummies and jellies are a great infusion matrix to start with because of their shelf-life stability. There are a variety of formulation techniques that can be used to deliver on product differentiations. There is an abundance of flavor varieties, colors, processing steps and cannabinoid ratios that can be baked into a formula to make that product line unique.

Here in the cannabis space, SKU variety is essential. It’s exciting to be a part of a company where we develop products that appeal to a variety of customer wants and needs.

Aaron: In that vein, what’s your process then for creating a new product?

Stephanie: I’ll start with how we develop an edible. Most of my background is in this type of product development, but the same process is applied to how we develop and extract vape, topical, flower SKU, or ready-to-smoke type products. We follow a similar stage/gate process utilized by most CPG companies.

Marketing typically presents our product development team with a brief on a new concept based on how they’ve read the needs of the market. There are opportunities for us to come to marketing with ideas for innovation, too. The product development team regularly works in our processing facility, so we as a team are aware of the different capabilities of each state and production line. During the briefing phase, we determine what is needed to be achieved and the parameters that the team would like the new product to deliver on.

For edibles, we begin our development work at The Hatchery. The Hatchery is our non-infused product development space that we utilize outside of our processing facility. In this space, we have several pieces of pilot equipment that allow us to scale and create prototypes that are highly representative of what our finished product will look like. For vapes, flower SKUs and RTS (ready-to-smoke) products, development and processing trials happen within our cultivation center.

All infusions are conducted in our licensed processing center. We also conduct stability testing and analytical testing in-house on our products. Our analytical lab is amazing – we have talented chemists and the ability to run GCMS, HPLC, microbiological testing, and many other analytical tests that are important for ensuring consistency and product uniformity.

Aaron: Can you expand on a point about testing? How do you think about testing at the different points in your manufacturing or production process?

Stephanie: Testing comes in several forms. We focus heavily on analytical testing since that does not involve product consumption. Potency uniformity and consistency is critical for edibles. For infused products, we have one shot at hitting our potency – infusion science is extremely important for us. Our gummies and chocolates cannot be re-worked, so hitting our potency range on the first attempt is important. If we miss the target, the product has to be destroyed.

We have methods developed to conduct in-process potency testing where we can. With the processes and infusion methods that we have implemented, we are rarely outside of our targeted potency ranges.

Aaron: Okay, awesome, then, can you walk me through your experience with one of your most recent product launches?

Stephanie: We recently launched Mindy’s Dark Chocolate Peppermint Bark, a limited time offering for our Mindy’s chocolate line. There’s a series of commercialization trials that we will conduct prior to launch. We use these trials as an opportunity to train our production teams on the new manufacturing instructions and processes.

When it comes to launching products, our technical teams are very hands on with new product introductions. Since we cannot manufacture product in one state and ship it to another state, we have to build processing centers and secure the proper licenses in every state that we’d like to operate in. When we have a new product ready to launch in a new state, our team works with Operations on the tech transfer piece. We’re there on-site during launches to oversee and train on the entire process until our teams are comfortable with manufacturing and packaging the new SKUs.

We monitor launches carefully to ensure product looks as it should before and after leaving our facility for sale in licensed dispensaries across the state. When there are opportunities to optimize a process post-launch, we will do what we can to make the process work as well as possible for the teams producing our products.

Aaron: Okay, so next question is, how do you go about sourcing ingredients for your infused products?

Stephanie: We manufacture our oils and extracts in house, and then source other ingredients externally. We have a supplier quality assurance process for new supplier approval, and we have documentation needs that we need each supplier to be able to deliver on.

Several of our suppliers have invested in research and development of products that will help us to meet our deliverables in the cannabis industry. Our suppliers, at times, have provided applications support in order to help with our speed to market and early phase prototyping. These types of partnerships are essential to us being able to make quick modifications and decisions on ingredients such as flavors and colors.

Aaron: Can you give me an example of a challenge that you run into frequently? This could be a business challenge or a cannabis-related challenge.

“I’m a scientist at heart. I look forward to more spending on cannabis research to show how THC and other cannabinoids can be used to treat a variety of conditions.”Stephanie: A big challenge for us and other multi-state cannabis operators are the variations in compliance regulations state-to-state. We have compliance managers in every state who work to ensure we are meeting all of the state regulations. Our packaging reviews are in-depth because of all the language that needs to be included on our packaging.

Each state needs its own packaging with proper compliance labeling. Some states require a cannabis warning symbol of a certain type. If we sell Mindy’s Gummies in 8 flavors and THC mg SKUs in four states, that is 32 different pieces of artwork that need to be managed and cross-checked for accuracy. We have 32 separate pieces of packaging for this one line of products. We have many lines of products with multiples strains (flower and vapes) and flavors (edibles).

Aaron: You mentioned packaging, do you do all of your packaging in house?

Stephanie: We design our packaging artwork in-house. We have a creative team who works on our product artwork, and then a team of cross-functional members tasked with packaging editing and review. Packaging reviews go through multiple rounds before being released for printing. We source a variety of packaging depending on the needs of the product going into the packaging. For edibles, our packaging has to be opaque. Product cannot be seen through the packaging in most states. This is great for our products that are made with natural colors that may be light sensitive.

All of our packaging needs to be child resistant. This limits the amount of packaging variety that we have, but this is a big opportunity for packaging developers. We want and need more sustainable forms of packaging that are differentiated from other packaging forms currently on the market.

Aaron: What trends are you following in the industry personally?

Stephanie: Cannabis trends that are of interest to me personally are fast-onset and water solubility technology. There have also been many discussions surrounding minor cannabinoids and how those can be blended together to drive customer experience.

There are traditional food trends that also impact how we formulate. Our Mindy’s Edibles line is flavor forward. The flavors are sophisticated. In the Mindy’s line, you won’t find a generic orange or grape flavor. Instead, you’ll find a Lush Black Cherry or Cool Key Lime Kiwi Flavor. This flavor development work starts with Mindy Segal, who is the face and talented James Beard award-winning chef behind our Mindy’s Edibles line of products.

Aaron: Okay, so the last question I have for you is, what are you interested in learning more about?

Stephanie: I’m a scientist at heart. I look forward to more spending on cannabis research to show how THC and other cannabinoids can be used to treat a variety of conditions. People use cannabis for many reasons: to relax, to ease aches or pains, etc. It’s exciting to lead part of our technical team during a period of time where cannabis is rapidly growing and is of great interest and increasing acceptance across our country and in the world.

Aaron: Okay. So that’s it. That’s the end of the interview!

November 18, 2020

NCIA Publishes Environmental Sustainability Recommendations

By Cannabis Industry Journal Staff

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Earlier this week, the National Cannabis Industry Association (NCIA) published its recommendations for improving environmental sustainability in the cannabis industry. The report, titled Environmental Sustainability in the Cannabis Industry: Impacts, Best Management Practices, and Policy Considerations, was developed by their Policy Council along with experts in the field of environmental sustainability.

The 58-page report is quite comprehensive and covers things like land use, soil health, water, energy, air quality, waste and the negative effects of an unregulated market. While the report goes into great detail on specific environmental policy considerations, like recycling, water usage, energy efficiency and more, it makes a handful of overarching policy recommendations that impact environmental sustainability on a much more macro level.

The report mentions developing a platform for sharing information in the national cannabis industry. The idea here is that information sharing on a national scale for things like energy use can be used as a communication tool for regulators as well as a tool for companies to collaborate and share ideas.

The second more overarching policy recommendation the NCIA makes in this report is “to incorporate environmental best practices and regulatory requirements into existing marijuana licensing and testing processes.” This would help streamline and unify regulations already in place and keeps sustainability in the discussion from the very start.

The last major policy recommendation they make is for incentive programs. They say that governments should incentivize cannabis businesses to operate more sustainably and “prioritize funds provided to businesses where barriers exist to entering the market, such as small- or minority-owned businesses.” The report adds that this could essentially kill two birds with one stone by promoting environmental sustainability and diversity at the same time.

Kaitlin Urso is the lead author of the report and executive project and engagement manager for the Colorado Department of Public Health and Environment. She says that these policy recommendations were designed to benefit everyone. “A successful, socially responsible cannabis industry will require best practices for environmental sustainability. This paper is a vital first step in that effort,” says Urso. “This is important, ongoing work that will benefit everyone. The NCIA’s paper on environmental sustainability is going to inform how we approach important questions related to the future of the cannabis industry.”

To read the report in its entirety, click here.

November 12, 2020

Soapbox

Being an American Cannabis Entrepreneur in Europe

By Michael Sassano

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I have heard everything from “No one in their right mind would spend the energy in Europe when the U.S. has the most developed infrastructure in the world and $13 billion in sales” to “Is it even legal there?”. And yes, when you come from the West Coast cannabis world, it’s hard to imagine anywhere else but the West Coast of the U.S.A.

Europe has taken an infrastructural leap forward by starting off the pharmaceutical, medical and GMP supplements path. As an American-European from the West Coast cannabis world, remembering how the U.S. started/progressed, remaining patient and stretching the grey matter crossing the thresholds of pharmaceutical manufacturing, is serious.

Costs to Do Business

Which country you choose to begin operations in decides if cannabis is more or less expensive cap-x and opp-x to the U.S. And don’t forget the Euro conversion. Clearly, working near main cities like Berlin and Geneva will be expensive both for land and competition for talented staff. I chose Portugal, which greatly reminds me in terms of geography to a mini-California on the coast of Europe. Portugal also boasts the most progressive cannabis rules and is home to large cannabis producers like Tilray and Clever Leaves paving the way in the EU market. Greece is also one of our top locations, due to being cannabis friendly and another coastal country with great talent and reasonable costs to live and operate.

Excitement

All of Europe is buzzing with cannabis. Somai Pharmaceuticals tracks over 387 star-ups in cannabis around Europe, South America, Australia and Asia. The excitement when Colorado first announced cannabis legalization in 2014 is the same feeling in Europe now. Most groups are collaborative yet guarded at the same time with the uncertainty of how EU cannabis plays out. Patient demand exists, and similar government wills are at play, but all in the direct backyard of big pharma.

Right now you see huge companies that will always exist and small companies that will always be a part of competition. It’s likely that Europe will shake out to be 30% large to medium company mix and 70% medium to small companies. So, the feeling of room for everyone exists there. This is not surprising considering the legal market in the world is $17B in sales while the illegal market is estimated at ten times that market. And new demographics from around the world are opening up to cannabis for pain relief, sleep and other ailments for new age groups.

Brand New Infrastructure

Conforming to standard guidelines like pharmaceutical manufacturing, GMP supplement manufacturing and GACP farming is just plain normal. U.S. state-by-state expansions really missed the boat on this, and state rules without federal guidelines aren’t good for businesses left guessing or consumers. Eventually, with federal legalization, some infrastructure rebuilding will be needed to conform to standard procedures. I am unsure if the systems are even capable of handling tens of thousands of operating facilities with or without regulation, but starting off at the highest level of pharmaceutical grade is a good way to build consumer and regulator confidence. Learning pharmaceutical and supplement GMP manufacturing is a precise and studied endeavor coming from the U.S. cannabis market. The US hemp industry is embracing this on a supplement level. I now curl up to online courses and formulation books.

In time, all of Europe’s 741 million population will have access to cannabis related products. With standardized processes, new infrastructures and good-old fashioned entrepreneur energy Europe will be a massive market. Sure, the early adopters will need to struggle through regulations and rule creation, but the lifestyle in Southern Europe is the envy of West Coast USA, where laid-back lifestyle and organic food is the minimum standard.

November 11, 2020

Trichome Analytical Accredited, DEA-Registered

By Cannabis Industry Journal Staff

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In a press release sent out this week, Trichome Analytical, based in Mount Laurel, New Jersey, announced two new developments for their business: They have achieved ISO 17025:2017 accreditation and they are officially registered with the DEA for hemp compliance testing.

The press release also mentions their collaboration with Shimadzu, who supplies 80% of the lab’s equipment and supports the Trichome’s operations with technical guidance.

For the hemp industry, pre-harvest testing for THC levels is a requirement and labs are required to get registered with the DEA in order to perform that testing.

These announcements are somewhat timely, given the results of the election. Voters in New Jersey approved adult use cannabis legalization just last week.

November 5, 2020

Shades Of Cannabis Reform & Confusion Across Europe Seem To Mirror US Progress

By Marguerite Arnold

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Cannabis reform is proceeding globally right now in some interesting places, and in an oddly syncopated schedule yet again.

Namely, in the last few weeks, change has been moving forward not only in the U.S., but Europe too. That this effort in the EU came literally weeks before the American presidential election where as of now, no matter who will occupy the White House, even more states move into the adult use camp is also surely no accident. Particularly given the results.

In South Dakota’s case, voters agreed to legalize both a medical and recreational market in a single election. In New Jersey, the referendum that passed authorized a market that is moving quickly to get implemented. This is equally intriguing. Namely that to the average person right now, no matter where they are, the continued delays and gridlock to get going, no matter the problems along the way, are increasingly unpopular politically. That too, is showing up at the ballot box.

Indeed, cannabis reform is now absolutely one of the most pressing and yet unaddressed issues in several countries at present. See New Zealand (where the voter mandate for adult use reform failed during their Presidential election last week).

Europe Seems To Be Following New Zealand’s Caution As Germany Delays Further Reform But…

Last week, a proposal on adult use cannabis reform failed in the German Bundestag (Parliament). With the exception of the far right Alternativ für Deutschland (AfD), every other political party agrees that there needs to be forward motion on the topic, but nobody seems to want to fully address it. This is no surprise. Indeed, the recent appointment of a former German minister last month to a Swiss cannabis company seems, certainly in retrospect, to presage the same. As well as the many protest votes on the topic emanating from Berlin, one way or the other.

However, in the aftermath of what is expected to be a widely influential medical case here (namely the regional approvers may not interfere with a doctor’s right to prescribe to qualified patients), it may be that the government wants more time to grow its medical program while Denmark, Holland and Luxembourg (if not Spain) figure out the logistics on the ground.

French flags blowing in the wind in Le Havre — French medical trials expected to begin Q2 of 2021

Given that France has finally committed to a national medical trial to begin no later than the second quarter of next year, and further one where it punts the majority of the cost onto the industry itself, this would create a solid “medical cannabis” bloc in Europe’s most affluent states. Not to mention the first real, nationally authorized patient trial in Europe that is not commercial.

But even this is not the whole story. While dickering about the certifications and scheduling of the plant go on now at the highest international levels, let alone federal ones domestically, hemp products are clearly entering the consumer market here – from upscale CBD stores in city centers to hemp seed oil and hemp-infused mayonnaise appearing on the shelves of German mainstream grocery stores. Not to mention hemp infused alcohol of at least the vodka, gin and rum varieties.

And then of course there is Italy.

The Italian Market May Be The Dark Horse In Europe Everyone Has Been Waiting For

Within literally the month of October, all in public view, the Italian government circled on the topic of legalizing the CBD/hemp market. As of last week, the Ministry of Health finally decided that cannabidiol sourced from hemp is not a narcotic.

CBD in Italy went from widely available to banned and back to available again.

Given the fact that home grow now is not illegal, and medical cannabis is technically available, it would seem that Italy is positioning its hemp market to survive if not thrive at least domestically and further thread the needle of industry continuity against fluid and further rapidly changing European and international regulation right now.

In the meantime, like Germany, however, the country is clearly angling to create an industry infrastructure – and further beyond the pharmaceutical vertical – via “other” channels before taking the final plunge. Cannabis Lite fits that bill perfectly.

What Does This Mean For 2021 And Beyond?

No matter the official denials, it is very clear that recreational cannabis reform at the American and Canadian ballot box is moving the conversation forward globally, even if at a different pace.

With the WHO now poised to weigh in on the issue, more American states signing up, an expanding medical market across the world and adult use upstarts everywhere, 2021 is absolutely sure to be a meaningful year just about everywhere on the cannabis front.

November 4, 2020

Cannabis Sweeps: AZ, MS, MT, NJ & SD Approve Legalization

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Five states had cannabis reform on the ballot yesterday for the 2020 election: Arizona, Mississippi, Montana, New Jersey and South Dakota. All five ballot initiatives won by a clear margin, with some races ending in landslides. Stay tuned for coverage on congressional and presidential elections and the impact on the future of the cannabis industry.

For now, here are which states legalized cannabis last night, as well as some details on the five (well, technically eight) state ballot initiatives:

Arizona – Prop. 207 (Adult Use)

Results: 59.8% Yes, 40.2% No

Details:

Legalizes cannabis for adults over 21
Puts a 16% tax on retail sales of cannabis and cannabis products
Develops a process for expunging records of cannabis-related drug offenses
Arizona already has an established medical cannabis program

Mississippi – Initiative Measure 65 & Alternative Measure 65A (Medical)

Results: 67.9% Yes for either, 32.1% No against both

Details:

Both initiatives theoretically legalize medical cannabis in the state.
There is a legislature-proposed alternative on the ballot, which makes things a bit confusing and gives voters the option of voting for both, neither or one of the two.
Initiative 65 would give the state’s department of health a mandate and authority to establish regulations for a medical cannabis program by August 2021. This initiative lists 22 qualifying conditions.
Initiative 65A gives the legislature the power to come up with their own program as they see fit and does not include any sort of deadline.

Montana – Initiative 190 (Adult Use) & Initiative 118

Results: 56.6% Yes, 43.4% No

Details:

Legalizes, taxes and regulates cannabis for adults over 21
Requires the state’s department of revenue to license and regulate cannabis businesses
Puts a 20% tax on retail sales of cannabis and cannabis products
Develops a process for expunging records of cannabis-related drug offenses
Montana already has an established medical cannabis program

Initiative 118:

This just allows the language of the initiative to call an adult over 21, instead of 18 as it is stated in the Montana constitution.

New Jersey – Question 1 (Adult Use)

Results: 66.9% Yes, 33.1% No

Details:

Legalizes, taxes and regulates cannabis for adults over 21
New Jersey already has an established medical cannabis program – this ballot measure gives authority to the regulatory body currently overseeing the medical program, the five-member Cannabis Regulatory Commission.
Only applies the 6.625% state sales tax and prohibits additional sales taxes.
This made it to the ballot by way of legislature after New Jersey lawmakers failed to pass it in 2019, instead passing the question on to voters. New Jersey does not have a ballot initiative process.

South Dakota – Constitutional Amendment A & Initiated Measure 26 (Adult Use & Medical)

Details:

Constitutional Amendment A Results: 53.4% Yes, 46.6% No

Legalizes, taxes and regulates cannabis for adults over 21
This also requires the state legislature to set up a medical program as well as a hemp program by April 2022.
Puts a 15% tax on retail sales of cannabis and cannabis products
Gives local governments authority to allow or ban cannabis businesses

Initiated Measure 26 Results: 69.2% Yes, 30.8% No

Establishes a medical cannabis program in South Dakota
It does list a few qualifying conditions like severe nausea, chronic pain, seizures and more, but it gives the state’s department of health the power to add more conditions to that list.
SD Department of health would have 120 days to set up regulatory framework.

November 2, 2020

2021 Trends: Nine Developments in California’s Cannabis Market

By Amy Steinfeld, Jack Ucciferri

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While we’re pleased to report that 2020 is almost over, 2021 will be a mixed bag. New jurisdictions will open their doors to cannabis and consumption will continue to rise, but competition from new operators and illicit supplies will increase. As California’s cannabis industry matures and turns the page on a bizarre year, market uncertainty will linger as the pandemic drags on and overtaxation and regulation strangle profits. But let’s remember, cannabis has been cultivated for over 6,000 years and has withstood far worse—this market isn’t going anywhere and will continue to grow and become more impactful.

Access to Traditional Finance Services

The U.S. Senate will likely pass legislation providing cannabis businesses access to traditional banking and financing services. This will be a game changer for the industry. Valuations will go up. Increased liquidity will smooth transactions. Companies will look to affordable debt to expand their footprints and capacity to compete on a new scale. Full federal legalization could be a game changer if 280E tax restrictions are lifted and interstate and international cannabis trade open up, but the timing of this is hard to predict.

Continued Quarantine-Induced Consumption

Cannabis consumption will continue to increase as Californians seek to ease pandemic-related stress, temper quarantine conditions, and sample an eye-popping array of new products. Sophisticated consumers will be open to spending more on unique and niche products. But hemp-derived cannabinoids may present a new source of competition, especially if CBD remains unregulated. By the end of 2021, cannabis beverages will begin to compete with mainstream alcohol categories. Pharmaceuticals will increasingly take notice of this industry and the increasing share of consumers turning to plant-based remedies.

Ever More Cultivation Opportunities

In pursuit of revenue, agricultural counties will liberalize their policies on cannabis cultivation by permitting more acreage and streamlining permit processes. Neighborhood groups will push back, but policymaker concerns will be assuaged when they see cannabis farms operating innocuously (and sustainably) around the state. Advances in seed breeding, pest-and-disease control, outdoor growing techniques and odor abatement technology will help too.

New Retail

Cities and counties will revisit opening their borders to cannabis retail storefront and delivery as they attempt to fill budget gaps. Many cities will allow cannabis retail for the first time and/or expand the number of licenses available. These new dispensaries will provide a much-needed outlet for the influx of licensed flower and will continue to spur innovation and consumer education. But a “second wave” of retail speculators seems poised to let optimism override judgement, setting themselves up for failure or acquisition by incumbents.

Getting Social Equity Right

2021 will be a pivotal year for social equity, which will establish a foundation for a just cannabis economy. The industry will have to grapple with how to ensure that those most impacted by the criminalization of cannabis and most often excluded from traditional financing exposure are provided with equitable access to meaningful opportunities. As California’s regulated cannabis market grows, getting social equity right will be important if the industry is to firmly establish itself as an inclusive industry that addresses impacts on marginalized communities and responds to customer demands.

Formalizing Appellations

California’s new CalCannabis Appellations Program will provide cultivators and brands a way to credibly market the value of their unique growing regions and cultivation methods. These distinctions only apply to cannabis planted in the ground, excluding greenhouse and warehouse grows. The expectation is that high-end consumers, trained to recognize place-based designations and quality certifications in other products, will reward products that boast these designations. How many consumers will be willing to pay the premium and how long full implementation of the program will take, remains to be seen.

Prices May Begin to Drop

2020 was a great year for the few fully licensed cultivators in California permitted to sell to the regulated market. 2021 may be different. Numerous licensed cultivation projects will complete the permitting processes and come online next year. While growing demand may outpace supply at first, by Q3 supplies could swamp the market. Premium flower is perhaps an exception. Adding to the pricing pain, as always, is California’s illicit market, which will continue to undercut prices, as legal growers toil to comply with a labyrinth of state and local regulations. Nonetheless, cannabis will remain the most profitable crop on a per acre basis for some time.

Business Turmoil

The drop in prices coupled with continued high taxes and regulatory burdens will result in turnover of assets and businesses. Less efficient and inexperienced cultivators will struggle, many unable to ultimately withstand pricing pressure. Others will be hit by enforcement actions for failing to comply with California’s myriad regulations. Retailers, already burdened by punitive tax structures, real estate finance commitments and onerous local regulations, will need to be disciplined and have a clear strategy to address new competition.

Consolidation

Driven by business failures and renewed investor interest, California’s regulated cannabis industry may consolidate rapidly in the second half of 2021. Institutional finance will enter the space with a much more disciplined approach than prior capital sources. Traditional agricultural interests will invest in cannabis cultivation projects. Well-run retail chains will begin to outcompete, and then acquire, mom-and-pop competitors. Big brands will continue to expand their shelf space, relegating smaller competitors to niche and novelty status.

In short, the cannabis industry will continue to be highly dynamic, exciting, enticing and risky.