Tag Archives: cultivation

Soapbox

How Cannabis Can Positively Impact California’s Drought

By Lukian Kobzeff
2 Comments

As the drought in California persists and quickly becomes the new hydrological norm, many within the state have embraced efforts to find ways and means to live within the drought forced water “budget.” Because of the importance of water conservation, the cannabis industry should embrace its socio-ecological responsibility and seize the opportunity to help shift the perception of cannabis cultivation into that of a sustainable, high-value agricultural crop that can be grown in an environmentally safe manner, while using water efficiently.

The intersection of Prop 64, MCRSA and the drought provides the cannabis industry with a unique opportunity to positively impact water conservation. Because legal cannabis cultivators are just now designing blueprints for grow sites, these cultivators are in a position to build infrastructure and systems specifically designed to achieve permanent, sustainable water conservation.

By embracing and championing water conservation, the cannabis industry will achieve two goals: being a collaborative player in the larger community working towards sustainable water use and enhancing the overall perception of the cannabis industry in the conscious of the general public. For an industry seeking legitimacy, there is no better way to put cannabis in the mainstream conscious than by embracing environmentally responsible philosophies. Here are a few measures the cannabis industry should embrace:

Measure

The current drought has generated a state-wide conversation about tracking and recording water usage. Some commentators believe California is suffering from a water data problem. Recently passed AB 1755 is a step by California to address that shortcoming by creating a technology platform to aggregate and share water data. Cannabis cultivators should get onboard with measuring water usage. One method is to install sensitive flow meters in each drip station to precisely measure water used during each grow cycle. First, this provides the cultivator with a precise data set. Precise data sets are extremely important, especially when trying to achieve the two-part-goal of conserving water and maximizing crop yield. Second, having precise data sets allows the cultivator to determine, from harvest-to-harvest, increasingly precise ratios of input (water) to output (flower). Most likely, this input:yield ratio is subject to diminishing returns at the margin; that is, adding additional water will not proportionately increase crop yield. For instance, 50 units of water could produce 50 units of crop, but 75 units of water might only produce 55 units of crop. By measuring the input (water), the cultivator is able to identify the precise threshold where diminishing returns set in and can therefore reduce the “diminishing returns” water usage, saving money and conserving water.

Collaborate

Building on water-usage data collection, cultivators can then collaborate with each other and with water agencies. By sharing data sets, cultivators can quickly develop ideal input:yield ratios, can better understand how water usage fluctuates within each discreet grow cycle and can develop methods such as deficit irrigation and real-time soil moisture measurements. This collective industry knowledge will help each individual cultivator to reduce water-usage. In collaborating with local water boards, the boards will better understand how much water is being used and conserved by the industry. Additionally, if the boards have a more precise understanding of the expected usage per season or per specific period in a grow cycle required by cultivators in their jurisdictions, those boards can better plan for the peaks and troughs in water demand. Besides data sharing, agencies and cultivators can collaborate in developing “fill stations” (offering free, non-potable recycled water for irrigation), or help fund development of direct potable water technologies and other recycled water technologies. Collaboration amongst growers and with water boards will lead to greater water conservation.

Energy Saving

An ancillary benefit to water conservation behaviors is the reduction of energy consumption. It takes an immense amount of energy to pump and transport water to end-users, such as cultivators. Reducing water usage in turn reduces energy consumption, because less water used means less water transported and disposed of. This is one method for indoor cultivators to offset energy consumption. In addition to reducing energy usage by conserving water, cultivators can follow Irvine Ranch Water District’s example of implementing an energy storage system to reduce costs and ease energy demand during peak hours. Indoor cultivators should adopt the same basic structure and mechanics: install Tesla battery packs to store energy for use during peak hours (when electricity is more expensive) and recharge the batteries at night when demand is low (and electricity is cheaper).

Opportunities Abound

This is an exciting time in California’s history, with the pending election of Prop 64, the passage of MCRSA, and the opportunities present in the water-energy nexus. The $6 billion cannabis industry has an incredible opportunity to have a far-reaching impact on water-conservation. By being an active collaborator conserving water, the cannabis industry can position itself as a trendsetter and private sector leader in sustainable and eco-conscious methods, technologies, and processes.

Lezli Engelking

Q&A with Lezli Engelking: Why Are Standards Important?

By Aaron G. Biros, Lezli Engelking
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Lezli Engelking
Lezli Engelking
Lezli Engelking, founder of FOCUS

FOCUSlogoLezli Engelking founded the Foundation of Cannabis Unified Standards (FOCUS) in 2014 to protect public health, consumer safety, and safeguard the environment by promoting integrity in the cannabis industry through the use of standards. Standards are an agreed upon way of doing things and specify guidelines or requirements for producing goods or providing services, according to FOCUS.

Peter Maguire, committee chair of the FOCUS Cultivation Standard
Peter Maguire, committee chair of the FOCUS Cultivation Standard

Standards can take the form of a “reference document, which may include specifications, guidelines, conditions or requirements for products, operations, services, methods, personnel and systems on how to design, operate, manufacture or manage something.” Peter Maguire, VP of System Applications for Lighthouse Worldwide Solutions and committee chair of the FOCUS Cultivation standard, joined the organization wanting to make a positive impact on the industry that is in line with protecting people and medical patients. He sees so much variability in the industry and the need to homogenize standard operating procedures (SOPs). “I have worked with multiple cultivation facilities and a few of them have operating procedures in place but having them in place is only half the solution- it’s critical to have the right ones in place,” says Maguire. He has twenty years of experience in contamination control in manufacturing, before entering the cannabis industry.

The FOCUS cultivation standard was created by experts who have years of experience in both cannabis cultivation, good agricultural practices and in the tightly regulated pharmaceutical industry. “FOCUS created these guidelines as a sort of roadmap for success in business; You need to keep your employees healthy and your products safe to survive in the long term,” says Maguire. We sit down with Lezli Engelking to find out how the standards are created, what makes them significant and what businesses can gain by working with them.

CannabisIndustryJournal: Why are standards important?

Lezli: Standards are the international language for trade – they exist in every industry. “The U.S. Department of Commerce estimates that standards and conformity assessment impact more than 80% of global commodity trade.” FOCUS is not reinventing the wheel with what we are doing. We are simply adapting a business model the federal government already uses. In the 80s, when the heroin epidemic swept across the US, methadone clinics popped up in every state in the country within two years. The clinics were all operating under different state, city and county regulations – much like the cannabis industry is today. The federal government took a look at the situation and decided they needed a way to regulate these clinics in order to protect public health and safety. They released a Request For Proposal (RFP) looking for an organization to create voluntary-consensus standards and a third-party certification system for the methadone clinics. Commission on Accreditation of Rehabilitation Facilities (CARF) is the organization that answered and won that RFP. CARF continues to work with Health and Human Services to maintain the standards and provide third-party certification to the clinics today. FOCUS develops international, voluntary consensus standards and a third party certification program for the global cannabis industry based on the CARF model. This is extremely important, because of the National Technology Transfer and Advancement Act, (Public Law 104-115), signed into law March 7, 1996 by President Clinton. The act requires that all federal agencies use standards developed by voluntary-consensus standards bodies, instead of government-unique standards wherever possible. Perhaps even more importantly, the Act includes provisions that encourage federal agencies to partner with the private sector in the development of standards that not only help improve the efficiency and effectiveness of government, but also strengthen the U.S. position in the global marketplace.

CIJ: What exactly goes into developing a voluntary-consensus standard?

Lezli: Voluntary-Consensus refers to the type of standard and how it is developed. Everyone who participates in the development of voluntary-consensus standards does so on a voluntary basis. Committee members must come to a consensus on every point within the standard- down to every comma or semicolon. Once the development process is complete, the standards must undergo a 30-day public review period. The process for developing voluntary-consensus standards is designated by International Organization for Standardization (ISO). ISO has member agencies in 163 countries that participate in the development of standards. The American National Standards Institute (ANSI) is the American body for ISO. FOCUS follows all ISO/ANSI guidelines in the standards development process. This is extremely important because it means FOCUS standards are suitable for accreditation and adoption into regulations according to the National Technology Transfer and Advancement Act. All voluntary-consensus standards are developed under the principles of:

  • Openness| Participation in the standard development process is open to individuals with a stake in the standard who bring useful expertise along with the spirit and willingness to participate.
  • Balance| Focus stakeholder groups involve all stakeholder groups: industry, regulatory, quality assurance, medical, law enforcement, business, research, consumers, patients and the general public.
  • Voluntary-Consensus| Individual subcommittees of volunteers develop each area of the standard, offering their unique expertise to form a consensus. They are not paid for their participation.
  • Lack of Dominance| No party has dominant representation, or influence to the exclusion of fair and equitable consideration of other viewpoints.

CIJ: More specifically, how are the FOCUS standards developed?

Lezli: To create a baseline standard, FOCUS utilized World Health Organization (WHO) guidelines for Good Manufacturing Practices (GMP), Good Agricultural Practices (GAP), Good Laboratory Practices (GLP), Code of Federal Regulations (CFR) for pharmaceutical GMPs, nutraceutical GMPs, food safety standards, OSHA and HACCP. From there, applicable cannabis regulations from around the world were added. All of this information was compiled into auditor-style checklists. Each committee member was provided time to go edit, remove or add to items in the checklist on their own. Over the next two years, each of the eight committees had monthly meetings, going through and coming to a consensus on each line item of the standard. Once the committees completed development, the standards were open for a 30-day Public Review to collect comments and feedback. The first eight FOCUS standards, completed and ready for use, cover Cultivation, Retail, Extraction, Infused Products, Laboratory, Security, Sustainability and Packaging & Labeling.

FOCUS is currently recruiting committee members to begin development of five new cannabis standards later this year: Advertising/Marketing, Insurance, Banking/Finance, Patient Care and Research. Committees will receive a list of proposed suggestions for what should be considered in developing the standards. Each committee member will develop a list to select criteria they think should be included into the standard. FOCUS will compile the lists, then committees will go through the monthly standards development/vetting process for each line item in the standard.

CIJ: So what does a business have to gain by adopting a FOCUS standard?

Lezli: Compliance becomes easily manageable with the FOCUS software platform, integrating standards, training and SOPs into the everyday operations of the business. FOCUS certified clients could expect to reduce costs, reduce risk and reduce liability by assuring they are producing safe, quality and consistent products. FOCUS certification allows a business to differentiate themselves from their competitors, and prove to their patients and customers they can trust their products. Certification also allows businesses to access reasonable insurance rates and drives interest from investors.

FOCUS is here to partner with cannabis businesses. We are there to hold their hand, by providing guidance and assistance along every step of the way. Unlike state mandated audits that delineate what a business is doing right or wrong, FOCUS is an on-going compliance management system. We are here to make sure a business runs as efficiently as possible and take the guesswork out of compliance. Under FOCUS certification, a business receives ongoing consulting, customized SOPs, employee training and a documentation management software system to track and prove compliance.

CIJ: Can you give us an update on FOCUS’ progress in 2016?

Lezli: A large milestone for FOCUS this year, aside from completing version one of the standards, is choosing an appropriate software platform, (Power DMS) to house the standards and provide an ongoing compliance management system for our clients. Power DMS also houses regulatory standards for law enforcement; health care, federal aviation and fire departments, so most agencies in public health are already familiar with it. The familiarity and access to this platform is a huge benefit on the regulatory side. It allows first responders to access the schematics of a FOCUS certified client in the event of an emergency. This is crucial in the event of an explosion from extraction equipment, or a fire in a cultivation facility, as without first identifying where the hazards are, they will not access the facility. The FOCUS software platform allows first responders access to all pertinent information through computers in police cars, ambulances, or fire trucks.

For the industry, the FOCUS software platform is equally as impressive. Not only does the platform house the standards and all SOPs, it is also complete compliance management system. FOCUS certified clients have a simple management tool that houses all training and documentation, assuring all required compliance documentation can be easily accessed at any time. The platform also allows FOCUS certified clients to provide access to governing bodies in advance of state audits –streamlining the process and minimizing time and interruption caused by state audits. The FOCUS platform tracks all changes to required documents, provides real time updates on employee training, creates appropriate traceability logs, and provides updates on regulatory changes, including which SOPs need to be changed to maintain compliance. The platform allows FOCUS to be way more than an auditing company. FOCUS is a partnership in compliance for cannabis companies wanting to maintain good business practices and stay compliant with regulations.

We have about 140 new committee members that will assist existing committees with standards updates and participate in the development of the next set of FOCUS standards for advertising/marketing, banking/finance, research, patient care and insurance. All committees will convene before 2017.

Adam Jacques and Team Launch Sproutly, Dispensary in Eugene, Oregon

By Aaron G. Biros
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sproutly signAdam Jacques and his team officially launched the newest arm of their business last week, Sproutly, a dispensary located in Eugene, Oregon. “This is an extension of what the Grower’s Guild Gardens does and what the Microgrower’s Guild was,” says Jacques. The Grower’s Guild Gardens, Jacques’ award-winning cultivation business, is known for their high-CBD genetics and patient-focused work, most notably with Leni Young, which helped lead to the passing of legislation in Alabama called Leni’s Law, decriminalizing the possession of cannabis oil for patients in the state.

The shelves of Sproutly boast over 75 strains of cannabis from Jacques' farm.
Sproutly’s shelves boast over 75 strains of cannabis from Jacques’ farm.

Sproutly is a medical and recreational dispensary that boasts a wide variety of high-CBD strains, a reflection of the team’s focus in the past. “We are extremely medically focused with a variety of unique CBD strains in stock,” says Jacques. “First and foremost are the patients, but entering the recreational market means we will be carrying a wider variety.” The opening of the dispensary is well timed as the team received their Tier II cultivation license, allowing them to grow cannabis up to 20,000 square feet in an outdoor space and 5,000 square feet indoor. So in addition to the handful of brands they carry, including Lunchbox Alchemy edibles, Northwest Kind and Marley Naturals, they also carry over 75 strains from their own Grower’s Guild Gardens.

Adam Jacques in front of a display shelf at Sproutly.
Adam Jacques in front of a display shelf at Sproutly.

Adam and Debra Jacques pride themselves in rigid standards for quality in sourcing, so it should be no surprise that they plan on supplying their dispensary with over 150 strains coming from more than 1,200 plants on their farm. “We really only take products from people we know and trust,” says Jacques. “That is why most of the flower in the dispensary is coming from our farm, so we know exactly what is going into it.” Jacques points to third-party certifications such as Clean Green, for other vendors to find reputable growers. “I need to know where it is coming from and that requires a personal relationship to trust the quality of their products.” The value of trust and personal relationships is also why they go through extensive training of their staff, using their own expertise for in-house training.

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The team includes Chris West, Elton Prince and John De Kluyver, all of whom have a decade or more of experience cultivating cannabis and working with patients. “We take our bud tenders through training classes, they get tested on their knowledge of products and the science of cannabinoids and terpenes and how the combinations affect people differently,” says Jacques. By leveraging that high level of in-house expertise, the team prides themselves on customer service, helping patients and customers find the right strain or product that suits them best.

In the front of the dispensary, a receptionist greets patients or customers, checking identification and showing you to a bud tender. As you walk into the retail space, you immediately notice the professionalism of the staff, taking time to personalize each customer’s experience without making him or her feel rushed. The clean aesthetics, product selection and knowledgeable staff provide for a friendly retail culture without the common ‘stoner culture’ that usually follows.

Jacques and his team will not be trading in their overalls and work boots just yet as they are inching toward harvesting their 1,200 outdoor cannabis plants soon. Grinning ear-to-ear, Jacques showed off his Tier II cultivation license on the farm, and with it came a glimpse into their exciting growth.

Soapbox

Learning from the Horticultural Industry at Cultivate’16

By Nic Easley
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This past week, over 10,000 individuals traveled to Columbus, Ohio to attend Cultivate’16, a conference hosted by AmericanHort, an organization dedicated to leading and unifying the horticultural industry. Cultivate’16 had hundreds of vendors displaying the latest technology and equipment for greenhouse production, design and controls along with the latest innovations in software, manufacturing, automation and more.

For all of the energy surrounding the nascent cannabis industry, there was very little representation from it at Cultivate’16. Our associates encountered an estimated thirty cannabis industry professionals, compared to an estimated total of 10,000 attendees. This further compounds the reality that the cannabis industry is still a very young industry when compared with the more mature and well established industries such as conventional agriculture, finance, information technology and others.

At Cultivate’16, there was enormous potential for businesses in the cannabis industry to learn from the traditional horticultural industry. The horticultural industry has had to become extremely efficient with its capital, resources and time in a manner which the cannabis industry has not had to accommodate yet. There were automated container filling machines, cost effective nutrient solutions and greenhouses that are controlled wirelessly. Those were just a fraction of the products and systems that could save cannabis cultivators hundreds of thousands of dollars.

Horticulturalists have been forced through shrinking margins to increase their output and savings. The horticultural market is expanding at an average rate of 5% per year as opposed to the cannabis market which is currently growing at a rate of 68% year over year. Cannabis operators can still get anywhere from $1,200 to $1,400 a pound in most legal markets on the lower end. This is in comparison to basil at $4 a pound. This difference is stark. It means that cannabis cultivators are not under the same pressure to be efficient as other traditional crop cultivators. It is clear though that with increasing legalization of cannabis in both the medical and adult use markets that the price of cannabis will fall. Therefore, it would be wise for the cannabis professionals to attend events such as Cultivate’16 in greater numbers to prepare for the eventual decrease in price.

3C Consulting was present at Cultivate’16 because we understand the importance of looking to other successful industries for guidance. We were able to converse with a diverse array of vendors and business owners to further our own knowledge on the best practices to bring to the cannabis industry. To be able to learn from those that have come before you is a strength, not a weakness. Far too often the cannabis industry seeks to reinvent the wheel. It does not have to be this way.

By learning from other industries, utilizing the latest horticultural technology and becoming more cost-effective the cannabis cultivators will be able survive and thrive. It is those that prepare for turbulence that are best able to capitalize on change. In the Chinese language, the word for crisis is the same as the word for opportunity. It is wise to prepare for a crisis so that when it does occur you are able to transform it into an opportunity.

Marijuana Matters

Patent Options Available for Breeding Cannabis

By David C. Kotler, Esq.
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Patent No.: 909554. Date of patent: August 4, 2015. Years from now, historians and academics may look back on this patent number and date as a watershed mark in the evolution of legal cannabis. Feel free to read the 147 pages of the patent documents but, in short, it “leads to many innovations, provides compositions and methods for breeding, production, processing and use of specialty cannabis.” It was the first time that the U.S. Patent Office (USPTO) had issued a patent for a plant containing significant amounts of THC. One USPTO spokesman recently discussed with a journalist that “there are no special statutory requirements or restrictions applied to marijuana plants.” The following is a broad, and I mean really broad, overview of the options available to protect intellectual property within the cannabis species and strain realm.

Generally speaking, to be patent eligible, an invention must be useful, it must be new, it cannot be obvious and it must be described in a manner so that people of skill in the relevant specialty can understand what the invention is, make it and use it without engaging in undue experimentation. In terms of cannabis, essentially the breeder must have created a new and non-obvious strain over what already exists that is useful such as being highly resistant to molds or having a specific concentration of CBD.

Breeders potentially have a number of options available to them, despite the common belief otherwise. In the U.S. there are five types of intellectual property protection that breeders can obtain for new plant varieties or their use of clones:

One may seek protection for seeds and tubers, known as Plant Variety Protection. A tuber is essentially a swelled root that forms a storage organ. The Plant Variety Protection Office provides this protection. To apply for Plant Variety Protection, the applicant submits information to show that the variety is new, distinct, uniform and stable.

For asexually propagated plants except for tubers, a Plant Patent may be sought. These are sought through the USPTO. This is relatively inexpensive compared with a Utility Patent covering the genetics.

Trade secrets are often used to protect inventions that will not be commercially available or cannot be reverse engineered. For example, if a new strain is invented but is only commercially available in its final form, trade secret protection may be the best form. The most important thing to remember is that a company must follow a strict set of requirements to keep the trade secret confidential.

The last patent type protection could be through a Utility Patent. A Utility Patent can be issued for any type of plant showing its utility. These are issued by the USPTO. Seeking and obtaining a Utility Patent is expensive and complex.

In addition to Patent Protection, breeders may seek Contractual Agreements restricting the use of the clones (i.e. a material use agreement). The parameters that a breeder wishes to craft can essentially be crafted into the language of any type of agreement that is drafted to memorialize the relationship and terms between the parties.

A few broad-stroke items to keep in mind with regard to patents particularly relative to the patenting of cannabis strains and the like: First, is the passage of the America Invents Act which among other changes allowed for the U.S. to transition from a First-to-Invent patent system to a system where priority is given to the first inventor to file a patent application. Second, there are the potential bars based on different types of prior use.

Any discussion about the foregoing topic should necessarily include the question: Is it really good for the cannabis industry and its evolution? The dialogue moves out of one steeped in tradition, lure of trips through mountain passages, and potentially patient benefit or in search of higher quality and into connotations of business law and big businesses sweeping in to take over. It is an expensive process. It may be inevitable. In the meantime, protect yourself as best you can and as you see fit.

pleabnicrop
Soapbox

Cannabis, Soil Science and Sustainability

By Drew Plebani
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pleabnicrop

The average commercial cannabis cultivator seems to be following the modern agricultural paradigm. That model is based on questionable and, one might say, ineffective soil systems management.

In the high-yield cannabis world, amidst decades of prohibition, following the lead of the modern agricultural model has resulted in the adoption of cultural practices that go something like this: Use and destroy the soil, then dispose of it once it is rendered lifeless and useless due to repeated heavy applications of chemical fertilizers, pesticides, and other poisons.

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(Left) unimproved site soil next to (right) improved site soil. Notice the root mass developing on the right

Certainly conventional agricultural food production and the soil management systems underpinning them are faltering, evidenced by soil systems deteriorating many times faster than they are being improved. This qualifies as a failure in my book.

What will be the fate of profit margins, sustainability and medicine in the cannabis industry if we continue to follow blindly in the footsteps of chemical agriculture? Perhaps it is time to turn over a new leaf.

A little context for the discussion: scientists say the Earth has lost a third of arable land in the past 40 years, and some say soil erosion is the number one challenge facing the world today. Why? How?

Well…world agricultural production accounts for about three-quarters of the soil erosion worldwide. This steep decline in arable soil is occurring during a time when the world’s demand for food is rapidly increasing. It is estimated that the world will need to grow 50% more food by 2050, and it is important to note that, the total volume of food necessary, remains relative to the nutrient density of the food.

Time for a radical solution, and cannabis can lead the way.

Currently, cannabis is the most profitable crop per land area and very likely the most resource-consumptive crop grown (due to the current legal and regulatory climate and thus limited supply vs. demand).

As the cannabis industry continues to grow, now more than ever we have the opportunity, and I believe the responsibility, to cultivate in ecologically mindful ways, improve the end product and it’s positive impacts, increase both short-term and long-term profits, decrease or eliminate waste and lower the carbon footprint of cannabis cultivation operations.

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A cover crop under trellis’ with cannabis plants

Most importantly, we have the opportunity to fund, implement and lead the way in research and development of sustainable, medical, phytonutrient-dense crop production methodologies.

Only by implementing more rigorous scientific methods to cannabis cultivation can we hope to provide truly meaningful improvements in and contributions to the fields of agriculture, science, medicine and human health.

While dumpsters of potting soil continue to roll off to the landfill, complex health and human science and the cultivators truly engaged in science will continue to provide meaningful data regarding plant compounds and what factors influence the best outcome for the desired end product.

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The same crop pictured above, now two weeks into flowering, using cover crops

I am willing to bet that what is best will not be coming from the business models employing antiquated, wasteful and destructive cultivation strategies, and that in due time these models will fade into distant memories.

This is the first in a series of articles, in which we will explore topics related to the pursuit of high yield, phytonutrient-dense “high brix” cannabis production.

The next article will provide a historical and geologic context to the cannabis plant, as viewed from the scope of soil biology and the progression of ecosystems and soil types, and how maximized genetic expression, through maximized soil and plant health influence the production of high quality cannabis.

derekpeterson

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

By Aaron G. Biros
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derekpeterson
derekpeterson
Derek Peterson, chief executive officer of Terra Tech

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

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

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

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

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

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The Oakland location of Blum dispensary

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

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

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

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

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

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IVXX concentrates

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

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

Blum Las Vegas location will open in July
Blum Las Vegas location will open in July

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

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

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

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Platinum Cookies ready for packaging and labelling

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

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

Consistency in quality standards requires meticulous SOPs
Consistency in quality standards requires meticulous SOPs

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

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

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Extraction equipment in one of the processing facilities for IVXX

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

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

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

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

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

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

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The panel at the Marijuana Business Conference.

Maximize Efficiency in Every Process

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

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

Construction vs. Operating Costs

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

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

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

Lighting for Your Greenhouse

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

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

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

Make a Positive Impact and Quality Product

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

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

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

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Solutions for Cannabis Cultivation: Integrated Pest Management

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

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urban-gro helped design this facility in Durango, Colorado.

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

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

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

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IPM plans require thinking in terms of systems to find the right balance of biological controls.

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

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Procidic works on contact and with residual action.

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

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

The Great LED Debate

By Aaron G. Biros
5 Comments

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

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

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

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

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

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

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

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

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An LED cultivation operation set up by Tall Trees LED Company

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

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

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

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

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

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