Tag Archives: certify

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Does Germany Have a Gray Market Problem?

By Marguerite Arnold
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Tilray just did something very interesting. In addition to announcing that it was shipping product to German distributor Cannamedical via its Portuguese facility, it also announced that it had begun outdoor cultivation.

Groovy.tilray-logo

Even more intriguing: the company is claiming that somehow, via its proprietary technology (apparently), this kind of crop will be legit for distribution within the EU medical system.

There is only one problem with this. Outdoor growing does not sound remotely GMP-certified.

Here is the next bit of exciting news. Tilray, apparently, is not the only large Canadian cannabis company now operating in Europe that appears to be trying to get around GMP certifications for medical market penetration. Or appear oblivious to the distinctions in the international (and certainly European market).

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Photo: Ian McWilliams, Flickr

And things are a bit smelly on that front, not only in Denmark post CannTrust, but in truth even in Germany, the supposed “Fort Knox” of regulatory consumer and pharmaceutical standards.

In fact, at least according to insiders, there is apparently quite a bit of gray market product sloshing around in the Teutonic medical market. Even though so far, at least not publicly punished for the same, nobody has been caught. Or at least publically reprimanded.

And who is on the hot seat at least according to most of the licensed if not just pre-licensed indie producers and distributors who were contacted for this story? Sure, there are dark horse “start-up” indie violators, but they are not the only problem. Many who talked to CIJ named big public Canadian companies too. And potentially Bedrocan beyond that.

Who Is Who And What Is What?

Part of the problem, beyond any kind of deliberate flouting of regulations on the part of many companies who are at least trying to understand them, is that global standards are different. “GMP certifications” of every country, even within a region like Europe, are in fact, not uniform. That is why, for example, the new EU-US MRA agreement had to be signed first regionally and then on a state-by-state level across the EU.

Beyond Germany of course, there are other problems that are coming to the fore.In the medical cannabis space, in particular, right now, that is causing problems simply because many with pharma experience are not hip to the many risks in the cannabis industry itself. On the Canadian, Australian and American side, there is also a lot of bad advice, in particular, coming from consultants who should know better.

To be properly EU and German GMP-certified, one of the required steps is to have German inspectors walk your production floor. It is also not good enough to have “pesticide-free” or national organic certification at the crop cultivation site, and add GMP cert at time of “processing.” That piece of misadvise has been showing up not only in Canada, but Australia too. And creates a nasty reality if not expensive retooling upon entering the legitimate market in Europe, for starters.

These Issues Affect Everyone In The Industry

German Parliament Building

In an environment where ex-im is the name of the game, and even the big guys are short of product, compliance is getting granular as smaller players step up to the plate – and many if not most hopeful Canadian producers (in particular) now looking to Europe for sales are not (yet) up to speed.

A big piece of the blame also lies in the lack of proper administration at the federal and state level too – even auf Deutschland. To get a distribution license, a company must actually get three licenses, although there are plenty in the market right now who begin to describe themselves as “distributors” with less than the required certs.

The lack of coordination and communication, including which certs to accept as equivalent and from where is creating a market where those who know how to game the system are.

For example, several people who contacted CIJ, claimed that uncertified product was making its way into Germany via Central and Latin America, through Canada, picking up “GMP cert” along the way. In other words, not actually GMP-certified but labelled fraudulently to make it appear that way.

The same claims were also made by those with on-the-ground industry knowledge in South Africa (Lesotho).

Beyond Germany of course, there are other problems that are coming to the fore. As CIJ recently learned, a firm authorized by the Dutch government to provide cannabis packaging, including for exports, was not GMP certified until July 2019 – meaning that all product they shipped internationally even within Europe before that date potentially has labelling issues. Cue domestic importers. If not regulators.

Grey Market Product Is Making Its Way In Through Official Channels

For those who are taking the time to actually get through the legal registration and licensing process, it is infuriating to see others who are apparently fairly flagrantly buying market position but are in no position to fulfil such obligations. It is even more infuriating for those who intend to meet the requirements of the regulations to realize that the vast amounts spent in consulting fees was actually money paid for inaccurate information.

And the only way ultimately the industry can combat that, is by standing up, as an industry, to face and address the problem.German distributors are so aware of the problem that they are starting to offer gap analysis and specific consulting services to help their import partners actually get compliant.

Government agencies also might be aware of the problems, but they have been reluctant to talk about the same. CIJ contacted both BfArM and the local Länderauthorities to ask about the outdoor grow in Portugal and the lack of GMP cert for a Dutch packager. After multiple run-arounds, including sending this reporter on a wild rabbit chase of federal and state agencies (who all directed us back to BfArm) and an implication by the press officer at BfArM that the foreign press was not used to talking to multiple sources, CIJ was redirected back to state authorities with a few more instructions on which bureau to contact. The state bureau (in Berlin) did not return comments to questions asked by email.

Here is the bottom line that CannTrust has helped expose this summer: the entire global cannabis industry is trying hard to legitimize. Not every company is shady, and there are many who are entering it now who are playing by the rules. But those who are hoping to exploit loopholes (including “name” if not “public” companies) are also clearly in the room.

And the only way ultimately the industry can combat that, is by standing up, as an industry, to face and address the problem.

CannTrust Meltdown Indicative Of Summer Of Scandal To Come

By Marguerite Arnold
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While you may not have heard of CannTrust Holdings so far, that is now about to change. A summer spectacle of double dealing and corporate greed has put this Canadian cannabis company on the global map.

Unfortunately, the current meltdown underway is indicative of more to come.

A Summary Of The Story So Far

CannTrust, a company which serves 72,000 Canadian patients and got into the game early, decided to do what it saw other companies doing all around them. That covers a lot of ground (good and bad at this point). Regardless, the most relevant recent twist to the saga came when the company hired a new CEO, Peter Aceto last October.

Aceto however, along with the now also fired co-founder and chair of the board Eric Paul, decided to continue growing and harvesting unlicensed product. Worse, this occurred while boasting in public of their productivity gains on the way to securing a hefty investment of capital this spring. $170 million. The grow rooms finally got their certification in April.

What is even more embarrassing however, is that this was a round led by the much-vaunted investors the industry has been courting assiduously for the past several years. Specifically, in this case? Institutional banks like Bank of America, Merrill Lynch, Citigroup, Credit Suisse Securities and RBC Capital Markets.

But that is “just” the North American hemisphere. The rather unfortunately named CannTrust (certainly at this point) also had a European footprint – notably Denmark. Unlicensed cannabis ended up there too, of course. Stenocare A/S, the company at the receiving end of the same, reported receipt of product from the unlicensed rooms on July 4.

As far as such things go, however, you have to give it to CannTrust company executives. In terms of setting standards if not benchmarks and “records”, they certainly seemed to have set a few, although probably not the ones they aspired to. If not, with certainty, their investors.

A Surprise Or Inevitability?

That said, for many who have been sounding warnings for at least a year, the 2019 Summer of Canadian Cannascandal is certainly starting to confirm what many have been saying for quite some time. This is not the first time a securities exchange, for one, has sounded the alarm. Deutsche Börse delisted the entire North American public cannabis industry last summer briefly. Then they revised their policy, reluctantly, after Luxembourg changed its stance on medical use. That said, they are still watching with a standing policy of bouncing any company that runs afoul of their rules.

The problems, issues and more bubbling at the center of this cannameltdown, in other words, are not limited to just one company or country.

And everyone knows it.

Accounting For Past Mistakes

For those who are counting, the value of all of that illegally grown CannTrust product is not insignificant. Estimates are floating in the CA$50-70 million range. The problem is, of course, nobody is sure what numbers to rely on. CannTrust employees knowingly provided inaccurate information to the new CEO if not regulatory body until a whistle-blower provided a few more details.

That said, for all of the hullabaloo, one thing this story also does is point a bright spotlight on the lax enforcement of even this pretty easy-to-understand regulation.

The question, however is, if CannTrust thought it could get away with this kind of blatent flouting of the rules, if not lax oversight, are there any other companies who might have also done similiar things?

After all, even the pesticide scandal of 2016 did not occur at just one company either.

Where Are The Proceedings?

This is a rolling story, which began to break at the beginning of last month when Health Canada issued a non-compliance order to CannTrust and impounded 5,200 kg of dried cannabis that was apparently grown in unlicensed grow rooms on July 3.

There have already been some jaw dropping revelations so far (beyond the executive decision to even go down this road in the first place) no matter how attractive pimping numbers was. Starting with things like fake walls being erected to hide the grow. And then of course pictures that have been all over social media of late, of the now departed CEO Aceto being photographed directly in front of said unlicensed rooms too.

As a result, the drama has continued to unfold in a highly predictable way.

By August 1, CannTrust Holdings, a Canadian cannabis company listed on both the New York and Toronto stock exchanges, was facing a “quasi-criminal investigation” by the Canadian Joint Serious Offenses Team. This is a coalition of law enforcement agencies including the Ontario Securities Commission, the Royal Canadian Mounted Police Financial Crimes Unit, and the Ontario Provincial Police Anti-Rackets Branch.

But CannTrust’s issues don’t end there. This is an international story that is just beginning. Government regulators in Europe if not elsewhere are paying attention.So are shareholders, and their lawyers.

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How Germany Gets Its Cannabis

By Marguerite Arnold
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The German cannabis cultivation bid may be mostly done and dusted (although the last four lots are now up for legal challenge) but the drama is only intensifying on the ground in Germany. Namely, where is the cannabis being consumed on the ground now actually coming from?

For the past several years (in fact since 2016 when a Frankfurt-based start-up called Medcann imported the first Canadian medical cannabis into the German market in partnership with Canopy Growth), the conventional wisdom has been that Holland and Canada were the only two countries allowed to import medical cannabis into the country.

Canopy_Growth_Corporation_logoAs is usually the case in the cannabis industry, when it comes to such things, there were also multiple and highly creative explanations about this strange state of affairs that sounded oddly exotic enough to be plausible. This is after all, the international cannabis business.

These explanations also usually referenced conventional industry “lore” including such tall tales as these two countries were not signatories to an international drug treaty (not true), to being European (nope) or even a member of the EU (also completely false).

Yet there was always something strange with such urban legends – perpetuated by insiders across the German industry. Starting with a deliberate vagueness about details. Especially as in the summer of 2017 when Tilray announced grow facilities in Portugal, and by the end of it, Canopy was moving into Spain, and later by early 2018 Denmark and more. Italybegan to appear on the radar of multiple big Canadian companies. Clearly all these big companies seemed to know something that those outside did not. See Greece. Not to mention the teeth-gnashing of the Israelis– repeatedly shut out of the German market by not being allowed to export by their own government until Christmas Day, 2018.

The mystery deepened in March in fact, as a furore rocked the German-based cannabis industry over the last weeks. Farmako, a new, Frankfurt-based distributor, not only announced that it was importing 50 tonnes of cannabis into the country– and from Poland (where production of such bulk has not even been seeded) – but then gave additional details on a Bloomberg appearance that appeared to indicate that in fact the medical cannabis they were already selling (sourced from other places) had come from Macedonia. 

Certification, and most certainly paperwork are the name of the gameIn fact, no such transfer of cannabis had occurred from the Macedonian side (yet), although the firm in question at the other end of the deal was subjected to considerable harassment in the German canna-specialty press in the meantime.

The news, that occurred right at a time when Tilray is clearly training pharmacists for the German market, the first bid is concluding, Greece issues even more cultivation licenses, Canadian companies are clearing still stepping up their production game, and South Africa is also getting into the formal licensing act, with all sorts of interesting things afoot in Uruguay, also set off what appears to be an official investigation of the firms involved at the governmental level.

Insiders are tight lipped and nobody is willing to talk on record. However, the distribution firm, Farmako, has subsequently reported that in the month of March, they became the top selling cannabis specialty distributor in Germany. And since they are not out of business, it is also clear that while their PR may have been a little premature if not easily misunderstood, the broader message is very obvious.

What is also very clear at this point, in other words, is that the German door for cannabis and the international industry appears to be opening to product sourced from many places. Further by extension, the German government is in the process of recognizing foreign GMP certification processes from multiple countries all over the world as being equal to its own – at least on the cannabis front.

In fact, this has been going on relatively quietly for the past six months or so.

What Are The Standards, Certifications, and Qualifications?

A press release from January of this year, issued from an Australian firm called MCA, announced they had accepted the first letter of intent to ship to a German firm (in 2020). The company is currently accepting pre-orders as it finishes construction and achieves EU GMP certification. The same (female founded) firm was also present at the ICBC in Berlin this year in March, reporting that German demand from a universe of local distributors was already greater than they could fill. The news that their first sale went to German firm Lexamed, the controversial German wheelchair distributor who helped bring down the first German bid, was also largely unremarked upon at the time by most of the industry press and in fact, ever since.

GMPIn truth, it appears that the countries and companies that have the right to import to Germany must first have their own national GMP certification recognized as being equal to German standards – or a so-called Mutual Recognition Agreement (or MRA) must exist between the importer and exporter nations. It still means that to be really EU-GMP compliant, inspectors have to walk your cultivation floors. But first your country has to have the MRA. And that is a matter for lawyers and regulators to decide.

In the Australian case, the GMP equivalence for cannabis production apparently became reality within the last six months although no one is giving exact dates. In the case of Macedonia, this is pending, with German inspectors now apparently scheduled to begin inspecting domestic cultivation facilities within the next month to six weeks.

The biggest news, of course, which makes even more sense on the heels of Canopy’s latest “record breaking” U.S. acquisition, is that the EU and the U.S. will enter into an MRA in July that was finally agreed to in February of this year. This will also mean that cannabis “medicines” potentially even beyond CBD, produced via U.S. GMP processes, will be allowed to enter Europe if not Germany in the near future – and from the U.S. for the first time. Ahead of federal legalization in the U.S.

It also means that Israeli and American firms will be allowed to enter the European and thus German market for the first time (on the ground with product) by at latest, the third quarter of this year.

Caused By The Bid….and Likely Shorter Term Outcomes

What the events of the last several weeks make clear is that the bid is not only insufficient for demand, but the authorities are officially, if quietly recognizing the same. There are already rumours about the next cultivation tenders in Germany, and there is a high likelihood that other countries (see Poland in particular) may also follow suit shortly.

Further, the difficulties in making sure that not only countries but the companies based in the same remain compliant with EU and further German sanctified EU- GMP processes (for one) is likely to be an issue that continues to bubble. Why? It is a problem already in the broader pharmaceutical market here.

The Plusses and Minuses of The News

The first thing that is also obvious is that even Wayland cannot source the entire German market with the product it has begun to grow here no matter who ends up with the last four cultivation licenses this time around. Further, that the other winning bid firms (Aphria and Aurora as known at this point) without cultivation on the ground, are sourcing from somewhere that is also probably at this point, not even Canada. No matter how much expansion is going on in Canada, in other words, what is now entering the German market may bear a Canadian brand but could just have easily been sourced from almost anywhere in the world.

That also means that enterprising firms (see Australian MCA) can skip the Canadian introduction to the German market and sell directly to local producers before they even have crops on the ground, as well as the burgeoning German cannabis distributors across the country.

For such firms now wanting to enter the market, however, it is not all clear sailing. The events of the last few weeks clearly show that the government is watching, including reading English language industry press, and willing to pursue any firms it deems are breaking the rules on both sides of national borders.

Certification, and most certainly paperwork are the name of the game, as well as greater accuracy in company intentions (even if in the near term).


Disclaimer: Nysk, the Macedonian firm referred to in this story, is a sponsor of the MedPayRx pilot to market program

How To Choose The Right Cannabis Consultant For Your Company

By Martha Ostergar
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The cannabis industry is growing fast as more states implement legislation to legalize cannabis in different ways. If you’re trying to break in or keep your place in this new market, it can be difficult to understand and comply with ever-changing government regulations as you try and scale your business.

Cannabis businesses need to comply with a range of new local, state and federal regulations related to cannabis specifically, in addition to regulations already in place for the pharmaceutical and food industries to ensure their products are safe for public consumption. On top of that, there are the complexities of managing a supply chain, including growing, warehousing, transportation, food safety requirements, product labeling, business plans, marketing, selling and any other necessities that come with running a businesses.

This is a lot of new information when you’re vying for your place in the cannabis industry. That’s why some businesses are turning to consultants to help. Consultancy is a great and time-tested way to grow your businesses and keep a competitive edge. But just like every other industry, when you choose a consultant, there are specific things to look for and avoid.each party will have work to do in order to communicate clearly, define responsibilities and execute on a plan.

Understand the Role of Consultants

The expertise of  cannabis consultants can vary widely. Usually there’s no “one stop shop” for everything you need to run your business, meaning consultants often specialize in a specific area. Consultant expertise includes specialties such as cultivation, manufacturing, food safety, dispensary, transportation, legal, accountants, human resources and more, all within different regulatory compliance wrappers.

It’s important to remember that consultants are usually not responsible for setting goals for you, but the right consultant can help you refine, meet and even exceed your goals. However, each party will have work to do in order to communicate clearly, define responsibilities and execute on a plan.

Focus on Your Specific Needs

Identifying your specific needs and understanding what success looks like for you is a critical step to take before contacting any consultant. This prep work helps you identify what kind of consulting you actually need and what you’re willing to spend to get it. Some consultants can help you tackle more than one area, but most will specialize. In fact, choosing several specialized consultants (if you have many needs), may feel like it costs more up front, but it will likely save you frustration, headaches and money in the long run. Additionally, if a consultant claims they can do everything in several areas of expertise, they may be overpromising on what they can actually deliver to you as a customer.

Ask the Right Questions

When vetting a consultant, it’s your job to ask probing questions. Don’t hold back and don’t be put off by vague answers. If a consultancy avoids questions or can’t give clear answers, they may be overpromising or being less than honest about their skillset. Here are some general areas of discussion to help you get started when interviewing consultants:

Consultants can help you get through unfamiliar territory or help you to manage your team’s workload.
  • The consultant’s relevant experience.
  • Past or current client references.
  • Detailed discussion of your specific needs as a business.
  • How much time can the consultant dedicate to you as a client.
  • Detailed outline of the consultation plan, including a clear timeline.
  • Responsibilities of each party, deliverables and what success looks like for customer sign off.
  • Certifications and credentials if relevant to your consultation needs (e.g. legal, accounting, regulatory).
  • What is and is not included with their quoted fee, and what you may be charged for as an “add on” to your contract.
  • Any possible conflicts of interest, including how consultants separate work for clients who are competitors.

Avoid Red Flags

As with any burgeoning market, there will be consultants who get into the cannabis space that are more interested in making money than helping you as an individual client as businesses work to legitimize the industry as a whole. Doing your research and asking for referrals helps, but there are also red flags to look for. Some of these red flags may pop up due to inexperience and some may be a sign of bad actors in the consultant market.

  • Asking for equity as payment.
  • Refusing to provide references.
  • Avoiding questions or giving unclear answers.
  • Unwilling to track time and itemize costs on bills.
  • Overpromising AKA “this sounds too good to be true.”
  • Dominating the process instead of treating you like a partner.

Build a Strong Relationship

To get the most out of a consultancy experience, it’s important for both parties to work at building a strong business relationship. You know you’re hitting the sweet spot in business relationships when you have well-oiled communication and feedback loops, including honesty around expectations and frustrations from both parties. A great consultant wants feedback so they can improve their process, therefore they will actively listen to and address your concerns. Additionally, it’s important for you as a client to also be open to feedback and ready to make changes to your process to get the best return on your investment.

Wayland Group’s GMP Certification Begins To Clarify German Cultivation Scenarios

By Marguerite Arnold
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Wayland Group just announced that they received GMP (good manufacturing practices) and GDP (good distribution practices) certification for their Ebersbach facility near Dresden, Germany. The plant already produced 2,400 kg of CBD isolate last year.

The certifications give Wayland the right to sell directly into German and other EU markets, and more significantly, the ability to store bulk product domestically.They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

Wayland is also widely believed to have applied for the much-stalled German cultivation bid. With per-gram production prices at Ebersbach cited at 1.34 euros, this certainly also sends an interesting message about who might win what in the bid, and where the price of cannabis might be headed.

Currently, cannabis is being sold to pharmacies in Germany at prices almost twice the retail price per gram in Canada. In turn, this means that the “retail” price of floss (flower) is running much higher than it is in more established markets (read Canada and of course the U.S.). Point of sale prices in Germany, for example, run between $2-3,000 per month per user. That is an era that is clearly also now coming to an end.

The Cultivation Bid

With the news of Wayland’s certifications, comes an almost certainty that they will become finalists in the pending cultivation bid in Germany. Why? They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

If Bedrocan was the incumbent favorite to win the majority of the licenses handed out to any one firm (especially given the recent increase in cannabis allowed to be sold into Germany across the Dutch border), this places Wayland in a strong second. If Bedrocan is not involved in the bid, this news might indicate that Wayland might be the largest winner in German cultivation licenses this time around.

The plot indeed thickens.

Prices: In General, Across Europe

The firm will be providing product, no matter what the outcome of the bid, at a production price, which is in line with the widely estimated requirements of the bid itself. Winning firms must also be able to provide pricing that is competitive to each other. It is unclear where the government will set that floor, but all medical cannabis sold in Germany after that, will then be competing with that price.

Could it be that the reference price of cannabis, in other words, has just been indirectly announced with the Wayland certifications?

Then there is this wrinkle. Given that production in Germany is more expensive than other countries in Europe (see Portugal, Spain and Greece in particular), the difference in labor costs may still outweigh the costs of shipping across the continent. Or, as the market gets going, it may not. Regardless, in a country like Germany where drug prices are routinely pre-negotiated in bulk by the government, cannabis prices will start to be regulated in a way they have not in other places, notably Canada. This means that heady visions of “mark-ups” to meet a so far unmet demand are also probably not in the cards, although government supported cannabis exports might be.

Insurance “Brands” And Bulk Buys Ahead?

Then there is this intriguing wrinkle. German “public” insurance patients (in other words 90% of the population) are not always free to choose the products they use. Why not? Beyond bulk purchases by the government, insurance companies are also allowed to enter into bulk contracts with some providers, namely medical equipment manufacturers. This is sort of the same situation as visiting an “in network” provider in the United States. In other words, the equipment is free (or vastly cheaper) to the patient if the selected brand is chosen.

Could cannabis go the same route?

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Photo: Ian McWilliams, Flickr

At this juncture, that is unclear. Dronabinol, the only widely available source of cannabinoids in the country until 2016, is considered more of a generic than “name brand.” So far, neither it nor Sativex were pre-negotiated drugs. This was also for a very simple reason. There were only 800 registered patients in Germany until that year. That is far under the “orphan drug” category, which in Germany is 10,000 people. At this point, there are already much higher patient numbers (some cite as many as 79,000), with the majority of treatment going to patients with chronic pain.

By definition, this means that cannabis prices here will continue to be negotiated with little room for high mark-ups as the market consolidates. The more patients there are, the more attention will be paid to ensuring that the drug becomes affordable- not just to patients, but also insurers.

There is zero chance that the government will allow German public healthcare to be bankrupted over this still stigmatized plant, no matter how medically efficacious it is.

Germany and Israel at this point, have the longest established insurance mandate for cannabis- and in the German situation, this is now just two years old. The British NHS just announced that cannabis would be covered, with Luxembourg and Poland now also in the mix. However, the place of the insurance community in this debate is also a factor to be considered into the entire conversation as it unfolds here, beyond efficacy.

Dutch insurers in fact, stopped covering the drug almost as soon as Germany announced its own experiment.

It is unlikely that Wayland is unaware of such realities. The company has former executives from AOK on its German board. AOK is one of the largest statutory health insurers in Germany and one on the front line of cannabis reimbursements for the last two years.

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Discussing Lab Accreditation: The New ISO 17025:2017 Standard

By Aaron G. Biros
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At this year’s Food Safety Consortium a couple weeks ago, the newly launched Cannabis Quality Track featured a number of panels and presentations that highlighted the many intersections between food safety and cannabis. One particular topic of interest was measuring the quality and safety of cannabis products through laboratory testing. At the event this year, representatives from the leading laboratory accreditation bodies in the country sat together on a panel titled Accreditation, Regulation & Certification: Cannabis Labs and Production.

Representatives from ANSI-ASQ National Accreditation Board (ANAB), the American Association for Laboratory Accreditation (A2LA) and Perry Johnson Laboratory Accreditation (PJLA) discussed the new ISO standard, common issues that labs encounter when getting accredited, the future of the cannabis lab industry and certifications for food safety and quality.FSC logo

The panelists included:

  • Tracy Szerszen, president/operations manager, PJLA
  • Natalia Larrimer, engagement and program development manager, ANAB
  • Lauren Maloney, food safety program accreditation manager, Perry Johnson Registrars Food Safety, Inc. (PJRFSI)
  • Chris Gunning, life sciences accreditation manager with A2LA
Tracy Szerszen
Tracy Szerszen, president/operations manager, PJLA

The new ISO 17025:2017 standard was a topic addressed pretty early in the panel. Tracy Szerszen introduced the topic with a recap of the 2005 standard. “With 17025, for those that are familiar with the older version, 2005, there are really two sections of the standard for that one,” says Szerszen. “The newer standard is a little bit different, but there is a quality management system review that we do and we look at the laboratory to ensure that they are testing appropriately based on what they applied for. So, for cannabis labs, they typically have the same scope in types of methods with respect to microbiology and chemistry, and we are making sure they are following the standard from a technical standpoint, meaning they have the right equipment, the appropriate personnel and also have a quality management system.”

Chris Gunning followed that up with a closer look at the changes coming to the new 2017 standard. “If you are familiar with the 2005 version, you know that a lot of the clauses started out with a ‘you shall have a policy and procedure for doing X,’” says Gunning. “One of the major changes to the 2017 version is it gives laboratories more latitude on whether they need to have a policy/procedure to do certain things.” Gunning says the 2017 version is much more of an outcome-based standard. “As far as assessing to it, it becomes a little harder from our side because we can’t say you have to have this quality manual or you have to have this procedure that were going to assess you to. We are more open to looking at the outcomes.”

Christopher Gunning, life sciences accreditation manager with A2LA
Christopher Gunning, life sciences accreditation manager with A2LA

The most interesting change to the ISO standard comes with addressing the idea of risk. “One of the newest concepts in this standard is risk and how you assess your risk to your organization how you assess risk of impartiality, how you assess your measurement uncertainty when you are creating decision rules,” says Gunning. “Those are the big concepts that have changed in the 2017 standard in that it is more outcome-based and introducing the concept of risk more.”

After discussing some of the broader changes coming to the 2017 version, the panelists began delving into some common pitfalls and issues labs face when trying to get accredited. “From our experience, in Michigan, the new standard was written into the regulations, but a lot of labs were already accredited to 2005,” says Szerszen. “So, we actually contacted the state and explained to them that they have three years to transition. And some states will say ‘too bad, we want the 2017 ISO,’ so some of the cannabis labs are asking us to quickly come back so they can get appropriate licensing in the state and do a transition audit quickly.” She says most states seem to be comfortable with the current transition period everyone has, but it certainly requires some discussion and explanation to get on the same page with state regulators. “November 29, 2020 is the deadline for moving to the new 2017 standard.”

In addition to state requirements like traceability and security on top of an ISO 17025 accreditation, labs can run into issues not typically encountered in other testing markets, as Gunning mentioned during the panel. “One of the hardest parts of getting accredited is the need for properly validated methods, for all the different matrices in samples,” says Gunning. “Some of the biggest hurdles for new labs getting assessed are validation and the availability of reference materials and proficiency testing samples that meet their state requirements.” Those are just a handful of hurdles that labs aren’t usually anticipating when getting accredited.

Natalia Larrimer, engagement and program development manager, ANAB

Another big topic that generated a lot of dialogue during the panel was the need for a national accreditation standard for cannabis testing labs, one that Natalia Larrimer is advocating for. “Many laboratories are operating facilities in more than one state and what they are facing is a different set of criteria for laboratory recognition in each state, says Larrimer. “One initiative that we would love to see more support for, is a set of uniform requirements nationally. ACIL is currently working on developing these type of requirements which would be in addition to the ISO/IEC 17025 standard and specific for cannabis industry…” Larrimer says she’d like to see these requirements recognized nationally to get labs on the same page across multiple states. “This includes requirements for things like security, traceability, proficiency testing, sampling and personnel competence. The industry would greatly benefit from a uniform cannabis testing program across the US, so that testing facilities in Oregon are operating to the same criteria as facilities in California or Colorado, etc.”

The panelists went into greater detail on issues facing the cannabis lab testing industry, but also delved into certifications for food safety and quality, an important new development as the infused products market grows tremendously. Stay tuned for more highlights from this panel and other talks from the Food Safety Consortium. We will be following up this article with another that’ll shed some light on food safety certifications. Stay tuned for more!

FSC logo

Lab Accreditation Bodies To Meet At Food Safety Consortium

By Aaron G. Biros
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FSC logo

The Food Safety Consortium, taking place November 13-15 in Schaumburg, Illinois, will host a series of talks geared towards the cannabis industry this year. The newly launched Cannabis Quality Track features a number of panels and presentations designed to highlight the many intersections between food safety and cannabis.

FSC logoThe track will have presentations discussing food safety planning in cannabis manufacturing, HACCP, GMPs, regulatory compliance and supply chain issues among other areas. One particular topic of interest in the quality and safety of cannabis products is laboratory testing. At the event this year, leading laboratory accreditation bodies in the country will sit together on a panel titled Accreditation, Regulation & Certification: Cannabis Labs and Production.

Roger Muse, vice president at ANAB

Representatives from ANSI-ASQ National Accreditation Board (ANAB), the American Association for Laboratory Accreditation (A2LA) and Perry Johnson Laboratory Accreditation (PJLA) will host the panel on the morning of Wednesday, November 14.

Panelists will include:

  • Roger Muse, vice president of business development of ANAB
  • Christopher Gunning, life sciences accreditation manager with A2LA
  • Tracy Szerszen, president/operations manager, PJLA
  • Lauren Maloney, food safety program accreditation manager, Perry Johnson Registrars Food Safety, Inc. (PJRFSI)
Tracy Szerszen
Tracy Szerszen, president/operations manager, PJLA

Laboratories that are new to the industry and looking to get accredited should be aware of the new ISO/IEC 17025:2017 standard, which was released last year. According to Tracy Szerszen, labs that have already been accredited to the 2005 version will be required to transition to the 2017 version by November 29, 2020. “This can be done in conjunction with routine assessments scheduled in 2019 and 2020,” says Szerszen. “However, laboratories are cautioned to transition within a reasonable timeframe to avoid their 17025: 2005 certificate from lapsing prior to the transition deadline. Some of the changes to the standard include but are not limited to: the re-alignment of clauses similar to ISO 9001:2015 and other ISO industry standards, modifications to reporting and decision rules, the addition of risked based thinking and a new approach to managing complaints.” Szerszen, along with the other panelists, will go much more in-depth on changes to the new ISO 17025 and other topics during the panel at the Food Safety Consortium.

Some of the other topics the panel will discuss include:

  • ISO/IEC 17025 –what’s expected, benefits of accreditation, common deficiencies, updates to the new 17025 standard
  • Standards available for production facilities-GMPs & GFSI standards
  • How standards can be used to safeguard the quality of production and safety requirements
  • An open discussion with panelists from leading accreditation bodies on the state of cannabis lab testing
Christopher Gunning, life sciences accreditation manager with A2LA
Christopher Gunning, life sciences accreditation manager with A2LA

According to Chris Gunning, many states are requiring accreditation to ISO/IEC 17025, the standard used throughout the world in many other high-profile industries such as the testing of food and pharmaceuticals, environmental testing, and biosafety testing. “In an industry where there are few standard methods, where one hears that you can ‘pay to play,’ and where there are ‘novice’ laboratories popping up with little experience in operating a testing laboratory, it is extremely important to have an experienced, independent, 3rd party accrediting body evaluating the laboratory,” says Gunning. “This process confirms their adherence to appropriate quality management system standards, standard methods or their own internally developed methods, and can verify that those methods produce valid results. Ultimately, the process of accreditation gives the public confidence that a testing laboratory is meeting their state’s requirements and therefore consumers have access to a quality product.” He says most states with legal cannabis recognize the need for product testing by a credentialed laboratory.

Lauren Maloney, food safety program accreditation manager, Perry Johnson Registrars Food Safety, Inc. (PJRFSI)

Another important topic that the panel will address is the role of food safety standards in the cannabis industry. Lauren Maloney says cannabis product manufacturers should consider GMP and HACCP certifications for their businesses. “Food safety is important to the cannabis industry because although individual states have mandated several food safety requirements there still considerable risks involved in the production of cannabis products,” says Lauren Maloney. “Consumers want the assurance that the cannabis products are safe and therefore should be treated like a food product. Because FDA does not have oversight of these production facilities, third party certification is essential to ensure these facilities implement a robust food safety system.”

The panelists will examine these issues along with other topics in greater detail during their talk at this year’s Food Safety Consortium.

Dr. Ed Askew
From The Lab

Quality Plans for Lab Services: Managing Risks as a Grower, Processor or Dispensary

By Dr. Edward F. Askew
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Dr. Ed Askew

Editor’s Note: The views expressed in this article are the author’s opinions based on his experience working in the laboratory industry. This is an opinion piece in a series of articles designed to highlight the potential problems that clients may run into with labs. 


This article is the first in a series that will look into the risks any user of laboratory services (growers, processors or dispensary owners) will face from the quality systems in place in the laboratory. I will discuss specific risk areas in clear and understandable language so as to not obscure the substance of the article series with abbreviations and nomenclature that is not familiar with the reader. Subjects of the articles that follow will focus on the specific laboratory certification or accreditation requirements and how the user may find out if their risks are addressed. As these articles are meant to be interactive with the reader, users are encouraged to send questions or suggested topics to the author.

This article will be an introduction to the typical laboratory process that generates the “paperwork wall” and how it might impact the user.My experience with laboratory certification or accreditation (difference between the two discussed later in this article) comes from over 30+ years in the environmental chemistry field. My experiences include working under the Clean Water Act, Safe Drinking Water Act, FIFRA (pesticides) and ISO 17025 laboratory analyses and laboratory management. I have also received training to perform ISO 17025 and EPA Drinking Water audits. During this time I have been audited as a laboratory analyst/laboratory manager and have performed audits.

As such, I can open up the laboratory structure beyond the sterile “paperwork wall” that has been constructed to allow the user to see the quality of data that is used in final reports that can wreak havoc. This article will be an introduction to the typical laboratory process that generates the “paperwork wall” and how it might impact the user.

One of the common misconceptions that a user has with a “certified or accredited” laboratory is that procession of a certificate indicates that ALL laboratory analyses produced are accurate and precise. I liken this to the “paperwork wall” that laboratories produce when the user questions any results reported to them. The laboratory management assumes that they have answered the user complaint (i.e. a certified/accredited laboratory cannot make a mistake) and the user will not pursue further questions once the certificate is produced.Accreditation does not guarantee that the laboratory personnel can perform the analyses the user is paying for; just that the laboratory’s paperwork has been audited.

First off, let’s look at what the difference between the terms certified laboratory vs. accredited laboratory. These simple words mean specifically different types of laboratories. According to the NIST National Voluntary Laboratory Accreditation Program (NVLAP):

  • Certification is used for verifying that personnel have adequate credentials to practice certain disciplines, as well as for verifying that products meet certain requirements.
  • Accreditation is used to verify that laboratories have an appropriate quality management system and can properly perform certain test methods (e.g., ANSI, ASTM, and ISO test methods) and calibration parameters according to their scopes of accreditation.

So, how does that impact the user?

  • If your state or 3rd party certificate only accredits a laboratory, then the accreditation agency only inspects the laboratory’s quality program as it applies to written documents and static equipment. (e.g. The quality manual is written and the standard operating procedures (SOPs) are in place).
  • Accreditation does not guarantee that the laboratory personnel can perform the analyses the user is paying for; just that the laboratory’s paperwork has been audited.
  • Certification on the other hand says that the laboratory personnel are qualified to perform the laboratory analyses and that the final laboratory results meet specific (certain) requirements. In other words, the laboratory’s quality plan and SOPs are met.

There are three different paths that are utilized by state cannabis control agencies to accredit or certify a cannabis laboratory.

  • ISO 17025: The ISO laboratory quality standard for laboratory accreditation is the most broadly used. ISO 17025 is an international standard and its implementation in the United States is regulated by ILAC. There are three 3rd party companies that audit for and award ISO 17025 accreditation certificates. They are Perry Johnson Laboratory Accreditation Inc., ANAB and A2LA.
  • TNI: The NELAC Institute standards are utilized by one state to handle their cannabis laboratory accreditation.
  • States: Some states have tried to blend an ISO 17025 requirement with their own state’s certification requirements to produce a mixed accreditation-certification program. But, this type of program may rely on two or more agencies (e.g. ISO 17025 3rd party auditors communicating with state auditors) to cover all specific laboratory areas.

PJLAIn two of the paths above, the final result is that the laboratory receives accreditation. That means that only the quality management system and the scope (e.g. SOPS, laboratory instruments, etc.) have been audited, not the laboratory personnel or their capabilities. The third pathway may produce a certified laboratory or may not.

To provide an example of where an accredited laboratory followed their paperwork but produced inadequate results:

  • I received a laboratory report for organic chemical analyses of a client’s process.
    • The laboratory results placed the user in noncompliance with the state and federal regulatory limits.
    • But, the laboratory result contained data flags (e.g. additional information that explains why the laboratory result failed the laboratory’s quality requirements).
    • The laboratory still received payment from the user as the laboratory performed the analyses.
  • I had to explain to the regulatory agency that some of the data flags when investigated showed:
    • The laboratory failed to use the approved analytical method.
    • The detection level for the regulatory chemical was so low that the laboratory had no instrument capable to see those chemicals at the concentrations reported by the laboratory.
  • The state regulators accepted the explanation I provided and the user was no longer under a regulatory administrative order.
  • But, when I presented this information to the accreditation agency that accredited this laboratory I was informed:
    • The laboratory flagged the data so it can be reported to the user.
    • If the user wanted more from the laboratory, then the user will have to outline their specific requirement in a quality contract with the laboratory. (i.e. If the laboratory identifies the problems then they can report the data no matter what happens to the user).

So now, what is being done behind the “paperwork wall”? Areas such as those listed below can impact the results received by the user.

  • Laboratory quality culture: What does the laboratory staff think about quality in their normal daily work?
  • Laboratory staff competence: What is the level of training and real world competence of the staff that actually works on the analyses?
  • Laboratory capabilities: Does the laboratory actually have the laboratory instruments and equipment that can perform the analyses the user needs?
  • Laboratory quality control parameters: What is in the quality manual and does it make sense?
  • Laboratory analytical method validation: Are the analytical methods used by the laboratory validated by approved statistical procedures?

What should the user have in place to limit their risks from laboratory analyses?

  • Failsafe sampling preparation plans: Make sure the user samples for the laboratory are collected correctly.
  • Failsafe’s on laboratory sample reports: Protect the user from bad laboratory reports.
  • User auditing of the laboratory: Go to the laboratory and see if the laboratory can pass muster.

What’s Next: The next article will go behind the laboratory “paperwork wall” to detail the culture that impacts the user results negatively and how that can be recognized. Follow-up articles will help users developing quality plans that identify risks and how to limit them.

Supplier Quality Audits: A Critical Factor in Ensuring GMP Compliance

By Amy Scanlin
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Editor’s Note: This is an article submission from the EAS Consulting Group, LLC team.


To Audit, or not to audit? Not even a question! Audits play a crucial role in verifying and validating business practices, ensuring suppliers are meeting their requirements for Good Manufacturing Practices (GMPs), and most importantly, protecting your interests by ensuring that you consistently receive a compliant and quality product. Audits can help ensure sound business procedures and quality systems, including well-established SOPs, verification and documentation of batch records, appropriate sanitation practices and safe storage and use of ingredients. Audits can also identify deficiencies, putting into motion a corrective action plan to mitigate any further challenges. While a detailed audit scheme is commonplace for established industries such as food, pharmaceuticals and dietary supplements, it is equally important for the cannabis industry to ensure the same quality and safety measures are applied to this budding industry.

If the question then is not whether to audit, perhaps the question is how and when to audit, particularly in the case of a company’s suppliers.This is an opportunity to strengthen the working relationship with each side demonstrating a commitment to the end product.

Supplier audits ensure first and foremost that the company with which you have chosen to work is operating in a manner that meets or exceeds your quality expectations – and you should have expectations because ultimately your product is your responsibility. Any issues that arise, even if they are technically the fault of a supplier, become your issue, meaning any enforcement action taken by your state regulators will directly impact your business. Yes, your supplier may provide you with a batch Certificate of Analysis but you should certify their results as well.

Audits are a snapshot of a moment in time and therefore should be conducted on a regular basis, perhaps biennially or even annually, if they are a critical supplier. In some cases, companies choose to bring in third-party auditors to provide an objective assessment of suppliers. This is especially helpful when the manufacturer or customer does not have the manufacturing, compliance and analytical background to accurately interpret data gathered as part of the audit. With the responsibility for ensuring ingredient identity and product integrity falling on the manufacturer, gaining an unbiased and accurate assessment is imperative to reducing the risk to your business.

Conducting a supplier audit should be well planned in advance to ensure both sides are ready. The audit team must be prepared and able to perform their duties via a combination of education, training and experience. A lead auditor will oversee the team and ultimately will also oversee the results, verifying all nonconformities have been properly identified. They will also work with the supplier to conduct a root cause analysis for those nonconformities and develop a corrective action plan to eliminate them from occurring in the future. The audit lead will also verify follow-up results.

Auditors should discuss with the supplier in advance what areas will be observed, what documentation will need to be ready for review and they should conduct their assessments with professionalism. After all, this is an opportunity to strengthen the working relationship with each side demonstrating a commitment to the end product.This is your chance to ensure your suppliers are performing and will meet your business, quality and product expectations.

Auditors must document that ingredient identity and finished product specifications are verified by test methods appropriate for the intended purpose (such as a whole compound versus a powder). State regulations vary so be certain to understand the number and types of required tests. Once the audit is complete and results are analyzed, you, the manufacturer, have an opportunity to determine if the results are acceptable. Remember, it is your product, so ultimately it is your responsibility to review the available data and release the product to market, you cannot put that responsibility on your supplier.

Quality Agreements as Part of a Business Agreement

There are opportunities to strengthen a partnership at every turn, and one way to set a relationship on the right path is to include a quality agreement as part of a business agreement. A quality agreement lays out your expectations for your suppliers, what you are responsible for and is a living document that, once signed, demonstrates their commitment to upholding the standards you expect. Just as with a business agreement, have any quality agreements reviewed by an outside expert to ensure the wording is sound and that your interests are protected. This is just another step in the development of a well-executed business plan and one that solidifies expectations and provides consequences when those expectations are not met.

Supplier audits must be taken seriously as they are opportunities to protect your brand, your business and your consumers. Enter into an audit as you would with any business endeavor – prepared. This is your chance to ensure your suppliers are performing and will meet your business, quality and product expectations.

Ask The Expert: Exploring Cannabis Laboratory Accreditation Part 1

By Aaron G. Biros
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Laboratories throughout the world and in a variety of industries get accredited to demonstrate their competency. In the cannabis industry, some states are beginning to require it and many labs get accredited even if their state doesn’t require it. So what does accreditation mean and why is it so important?

The International Organization for Standardization (ISO) is a standard-setting organization that works to promote industrial and commercial standards. The standards set by ISO are designed to help prove a product’s safety and quality to a certain minimum level.

The ISO/IEC 17025:2005 standard sets specific requirements to demonstrate the competence of a lab for carrying out tests. It essentially shows customers or regulators that a lab has the skills and scientific know-how to perform testing, certifying the lab is capable. Accreditation means certifying a lab to that standard and is synonymous with both quality and competence of an organization.

Michelle Bradac, senior accreditation officer at A2LA

The American Association for Laboratory Accreditation (A2LA), founded in 1978, is a non-profit, internationally recognized accreditation body in the United States that offers laboratory and laboratory-related accreditation services and training. They have worked in the cannabis industry to accredit a number of cannabis laboratories to the ISO/IEC 17025:2005 standard. In this series of articles, we sit down with experts from A2LA to learn more about cannabis lab accreditation, why it’s so important and some of the challenges labs face when seeking accreditation.

In the first part of this series, we sit down with Michelle Bradac, senior accreditation officer at A2LA, to learn the basics. Michelle earned a bachelor’s degree in Biology at Towson State University and then attended Hood College, earning a master’s certificate in Regulatory Compliance in Biomedical Science. She has worked at A2LA for eight years, assisting in the accreditation of food testing, environmental testing and cannabis testing laboratories to ISO/IEC 17025, as well as performing quality system assessments. She also facilitates a number of accreditation programs including Field Sampling Measurement Organizations, STAC (Air Emissions) and Cannabis Testing. Bradac is also a member of the ASTM Cannabis Working Group and the ACIL Cannabis Working Group.

In the next part of this series, we will hear about specific requirements in states, some of the benefits of using ISO/IEC 17025 and the influx of start-up or novice testing laboratories.

CannabisIndustryJournal: What is Laboratory Accreditation? 

Michelle Bradac: Laboratory accreditation is a formal means of determining and recognizing the technical competence of laboratories to perform specific types of testing, via the use of an independent third party accreditation body. It provides laboratory users a mechanism to identify and select reliable testing organizations. Use of ISO/IEC 17025 as a basis for laboratory accreditation is internationally recognized as THE conformity assessment standard to which laboratories are accredited; it is used in the USA by both Public (State, local, federal (FDA, USDA, CDC, DoD and EPA) and private laboratories for testing of foods & feeds, drugs, cosmetics, tobacco, natural products and cannabis (among other materials and products).

CIJ: How does laboratory accreditation benefit the cannabis testing laboratory? 

Michelle: It provides a framework for continuous improvement and self-correction where the cannabis testing laboratory data management system is independently reviewed and blinded sample Proficiency Testing is encouraged.

CIJ: How does laboratory accreditation benefit the medical cannabis recommending physician?

Michelle: The physician gains a greater degree of assurance that the material provided by the dispensary is what the label says it is. This is especially important in working with patients that are immunocompromised where heavy metals, residual solvents and harmful pesticides could have negative health consequences.

CIJ: How does the testing of medical cannabis by an accredited laboratory benefit the patient?

Michelle: The patient gains increased confidence that the label accurately reflects the potency and chemical properties of the product.

CIJ: What specific challenges does A2LA face in accrediting cannabis testing laboratories?

Michelle: Much of the typical infrastructure is lacking or only now being developed. This ranges from proficiency testing programs, Reference Material Producers, method development and sampling procedures. There is also difficulty in ensuring that laboratories are appropriately validating methods in states where cannabis product is not yet available.

CIJ: Why is A2LA the optimal choice for ensuring the quality and reliability of the results produced by medical marijuana testing laboratories?

Michelle: A2LA has by far the most experience as an accreditor of laboratories that perform testing of natural plant products. We have been performing assessments of and granting accreditation to these types of laboratories for over twenty years. This results in our staff and our assessor corps who are then able to provide valuable insight and technical sophistication that other accreditation bodies do not have. Specific to the cannabis industry, A2LA is also represented in all the major standards development organizations, tradeshows and industry groups; which strengthens our understanding of the industry and ability to assist our customers towards meeting their goal of obtaining accreditation.