Dr. Hope Jones, chief scientific officer of C4 Laboratories, believes there are a number of opportunities for cannabis growers to scale their cultivation up with micropropagation. In her presentation at the CannaGrow conference recently, Dr. Jones discussed the applications and advantages of tissue culture techniques in cannabis growing.
Dr. Hope Jones, chief scientific officer at C4 Labs
Dr. Jones’ work in large-scale plant production led her to the University of Arizona Controlled Environment Agriculture Center (CEAC) where she worked to propagate a particularly difficult plant to grow- a native orchid species- using tissue culture techniques. With that experience in tissue culture, hydroponics and controlled environments, she took a position at the Kennedy Space Center working for NASA where she developed technologies and protocols to grow crops for space missions. “I started with strawberry TC [tissue culture], because of the shelf life & weight compared with potted plants, plus you can’t really ‘water’ plants in space- at least not in the traditional way,” says Dr. Jones. “Strawberries pack a lot of antioxidants. Foods high in antioxidants, I argued, could boost internal protection of astronauts from high levels of cosmic radiation that they are exposed to in space.” That research led to a focus on cancer biology and a Ph.D. in molecular & cellular biology and plant sciences, culminating in her introduction to the cannabis industry and now with C4 Labs in Arizona.
Working with tissue culture since 2003, Dr. Jones is familiar with this technology that is fairly new to cannabis, but has been around for decades now and is widely used in the horticulture industry today. For example, Phytelligence is an agricultural biotechnology company using genetic analysis and tissue culture to help food crop growers increase speed to harvest, screen for diseases, store genetic material and secure intellectual property. “Big horticulture does this very well,” says Dr. Jones. “There are many companies generating millions of clones per year.” The Department of Plant Sciences Pomology Program at the Davis campus of the University of California uses tissue culture with the Foundation Plant Services (FPS) to eliminate viruses and pathogens, while breeding unique cultivars of strawberries.
A large tissue culture facility run in the Sacramento area that produces millions of nut and fruit trees clones a year.
First, let’s define some terms. Tissue culture is a propagation tool where the cultivator would grow tissue or cells outside of the plant itself, commonly referred to as micropropagation. “Micropropagation produces new plants via the cloning of plant tissue samples on a very small scale, and I mean very small,” says Dr. Jones. “While the tissue used in micropropagation is small, the scale of production can be huge.” Micropropagation allows a cultivator to grow a clone from just a leaf, bud, root segment or even just a few cells collected from a mother plant, according to Dr. Jones.
The science behind growing plants from just a few cells relies on a characteristic of plant cells called totipotency. “Totipotency refers to a cell’s ability to divide and differentiate, eventually regenerating a whole new organism,” says Dr. Jones. “Plant cells are unique in that fully differentiated, specialized cells can be induced to dedifferentiate, reverting back to a ‘stem cell’-like state, capable of developing into any cell type.”
Cannabis growers already utilize the properties of totipotency in cloning, according to Dr. Jones. “When cloning from a mother plant, stem cuttings are taken from the mother, dipped into rooting hormone and two to five days later healthy roots show up,” says Dr. Jones. “That stem tissue dedifferentiates and specializes into new root cells. In this case, we humans helped the process of totipotency and dedifferentiation along using a rooting hormone to ‘steer’ the type of growth needed.” Dr. Jones is helping cannabis growers use tissue culture as a new way to generate clones, instead of or in addition to using mother plants.
With cannabis micropropagation, the same principles still apply, just on a much smaller scale and with greater precision. “In this case, very small tissue samples (called explants) are sterilized and placed into specialized media vessels containing food, nutrients, and hormones,” says Dr. Jones. “Just like with cuttings, the hormones in the TC media induce specific types of growth over time, helping to steer explant growth to form all the organs necessary to regenerate a whole new plant.”
Having existed for decades, but still so new to cannabis, tissue culture is an effective propagation tool for advanced breeders or growers looking to scale up. In the next part of this series, we will discuss some of issues with mother plants and advantages of tissue culture to consider. In Part 2 we will delve into topics like sterility, genetic reboot, viral infection and pathogen protection.
Oxygen plays an integral role in plant photosynthesis, respiration and transpiration. Photosynthesis requires water from the roots making its way up the plant via capillary action, which is where oxygen’s job comes in. For both water and nutrient uptake, oxygen levels at the root tips and hairs is a controlling input. A plant converts sugar from photosynthesis to ATP in the respiration process, where oxygen is delivered from the root system to the leaf and plays a direct role in the process.
Charlie Hayes has a degree in biochemistry and spent the past 17 years researching and designing water treatment processes to improve plant health. Hayes is a biochemist and owner of Advanced Treatment Technologies, a water treatment solutions provider. In a presentation at the CannaGrow conference, Hayes discussed the various benefits of dissolved oxygen throughout the cultivation process. We sat down with Hayes to learn about the science behind improving cannabis plant production via dissolved oxygen.
In transpiration, water evaporates from a plant’s leaves via the stomata and creates a ‘transpirational pull,’ drawing water, oxygen and nutrients from the soil or other growing medium. That process helps cool the plant down, changes osmotic pressure in cells and enables a flow of water and nutrients up from the root system, according to Hayes.
Charlie Hayes, biochemist and owner of Advanced Treatment Technologies
Roots in an oxygen-rich environment can absorb nutrients more effectively. “The metabolic energy required for nutrient uptake come from root respiration using oxygen,” says Hayes. “Using high levels of oxygen can ensure more root mass, more fine root hairs and healthy root tips.” A majority of water in the plant is taken up by the fine root hairs and requires a lot of energy, and thus oxygen, to produce new cells.
So what happens if you don’t have enough oxygen in your root system? Hayes says that can reduce water and nutrient uptake, reduce root and overall plant growth, induce wilting (even outside of heat stress) in heat stress and reduce the overall photosynthesis and glucose transfer capabilities of the plant. Lower levels of dissolved oxygen also significantly reduce transpiration in the plant. Another effect that oxygen-deprived root systems can have is the production of ethylene, which can cause cells to collapse and make them more susceptible to disease. He says if you are having issues with unhealthy root systems, increasing the oxygen levels around the root system can improve root health. “Oxygen starved root tips can lead to a calcium shortage in the shoot,” says Hayes. “That calcium shortage is a common issue with a lack of oxygen, but in an oxygen-deprived environment, anaerobic organisms can attack the root system, which could present bigger problems.”
So how much dissolved oxygen do you need in the root system and how do you achieve that desired level? Hayes says the first step is getting a dissolved oxygen meter and probe to measure your baseline. The typical dissolved oxygen probe can detect from 20 up to 50 ppm and up to 500% saturation. That is a critical first step and tool in understanding dissolved oxygen in the root system. Another important tool to have is an oxidation-reduction potential meter (ORP meter), which indicates the level of residual oxidizer left in the water.
Their treatment system includes check valves that are OSHA and fire code-compliant.
Citing research and experience from his previous work, he says that health and production improvements in cannabis plateau at the 40-45 parts-per-million (ppm) of dissolved oxygen in the root zone. But to achieve those levels, growers need to start with an even higher level of dissolved oxygen in a treatment system to deliver that 40-45 ppm to the roots. “Let’s say for example with 3 ppm of oxygen in the root tissue and 6ppm of oxygen in the surrounding soil or growing medium, higher concentrations outside of the tissue would help drive absorption for the root system membrane,” says Hayes.
Reaching that 40-45 ppm range can be difficult however and there are a couple methods of delivering dissolved oxygen. The most typical method is aeration of water using bubbling or injecting air into the water. This method has some unexpected ramifications though. Oxygen is only one of many gasses in air and those other gasses can be much more soluble in water. Paying attention to Henry’s Law is important here. Henry’s Law essentially means that the solubility of gasses is controlled by temperature, pressure and concentration. For example, Hayes says carbon dioxide is up to twenty times more soluble than oxygen. That means the longer you aerate water, the higher concentration of carbon dioxide and lower concentration of oxygen over time.
Another popular method of oxidizing water is chemically. Some growers might use hydrogen peroxide to add dissolved oxygen to a water-based solution, but that can create a certain level of phytotoxicity that could be bad for root health.
Using ozone, Hayes says, is by far the most effective method of getting dissolved oxygen in water, (because it is 12 ½ times more soluble than oxygen). But just using an ozone generator will not effectively deliver dissolved oxygen at the target levels to the root system. In order to use ozone properly, you need a treatment system that can handle a high enough concentration of ozone, mix it properly and hold it in the solution, says Hayes. “Ozone is an inherently unstable molecule, with a half-life of 15 minutes and even down to 3-5 minutes, which is when it converts to dissolved oxygen,” says Hayes. Using a patented control vessel, Hayes can use a counter-current, counter-rotational liquid vortex to mix the solution under pressure after leaving a vacuum. Their system can produce two necessary tools for growers: highly ozonized water, which can be sent through the irrigation system to effectively destroy microorganisms and resident biofilms, and water with high levels of dissolved oxygen for use in the root system.
When a grower harvests their cannabis plants, they process it by drying, curing and trimming the plant material. Dried cannabis ready for the consumer can often sit on retail shelves for months before it is purchased. According to the Cannabis Safety Institute, trimming is the processing stage with the highest level of human handling, and thus presents the most significant opportunities for microbiological contamination.
The Cannabis Safety Institute recommends workers handling dry cannabis wash their hands periodically, generally conform to food safety rules and wear gloves at all times. In addition to these tips, looking at relative humidity is a good tool to mitigate contamination concerns like the growth of yeast and mold spores. Mold spores can grow quickly when there is enough moisture, but if the cannabis is dry enough, mold spores cannot develop.
Growers controlling the relative humidity of their finished product in the past often placed an orange peel or a wet cotton ball in a jar with dried cannabis to retain the weight from water and keep it from over-drying. Those tactics have since been improved upon using modern technology.
Water activity is a measure of the relative humidity immediately adjacent to the product, according to Bob Esse, vice president of research at Boveda. “Cannabis’ relative humidity will reach equilibrium with the surrounding environment over time, which is why it is so critical to manage this adjacent atmosphere,” says Esse. “Moisture content is the total water present in the product and is a variable that changes in its relationship to water activity from one strain or type of product to the next.”
Back in 1997, Boveda first patented two-way humidity control. For the last 20 years, that company has made humidity control products for packaging in a variety of industries, like wooden musical instruments, pharmaceuticals, medical devices, electronics, tobacco, photos and documents and perhaps most notably for keeping cigars at the right humidity level in a humidor. According to Charles Rutherford, business development director at Boveda, he saw people buying their products meant for cigars, but using them with cannabis. About six years ago, they started developing a product specifically for the cannabis market.
The science behind it is relatively simple, says Rutherford. “Certain salts saturated in water can naturally regulate humidity- we just developed a cannabis-specific humidity level and patented the packaging around it that purifies the water and can come in direct contact with cannabis,” says Rutherford. “Using water activity meters and a moisture isotherm test, we determined the most appropriate range of humidity levels that cannabis will remain stable.” That range turned out to be between 59% and 63% humidity level for the properties in dried cannabis to stay the same.
According to Rutherford, it is a little more complex than just a range to stay in. “There are different humidity levels that certain strains prefer, but there are personal preferences, regions and other factors to consider when determining the levels of humidity ideal for cannabis,” says Rutherford. “We wanted to understand what people consider to be perfect.” In their research they found that depending on the region of the country, that humidity level varies considerably. “Using a water activity meter we could tell exactly what people prefer,” says Rutherford. Colorado, for example, prefers significantly drier cannabis than the Pacific Northwest, according to their findings.
Right now, Boveda has two-way humidity controllers set at 62%, 58% and soon they will have an under 50% option (appealing to the Colorado market). Using a device to accurately control the humidity level in cannabis can help growers and retailers prevent contamination from the biggest source of concern: water. “There is a ton of talk about pesticide contamination, but the reality is even if the flower is grown organically, you can still encounter safety problems when the moisture level is off,” says Rutherford. From a medical perspective, keeping dried cannabis at an ideal humidity level helps stabilize the properties of it, maintaining the medical efficacy. “If this is something people use for a medicine, it should be at an ideal condition,” says Rutherford. “Quantifying and understanding what humidity level is right is what we are helping accomplish.” For patients with compromised immune systems that need safe, consumable cannabis, a humidity control device can help prevent contamination and ensure a certain degree of safety in their medicine.
On a retail level, the packaging insert can extend the shelf life of products and maintain the quality. “The world has known for decades that 70% humidity level for cigars is ideal,” says Rutherford. “The cannabis world hasn’t had a moisture standard or understanding of what is proper until very recently.” That 62% humidity level determined after commissioned testing is a good standard to reference when determining your own ideal humidity level.
Growers also recognize the value in keeping their cannabis at the right humidity level beyond the obvious safety concerns. “As cannabis dries out and loses its humidity, the overall weight is reduced,” says Rutherford. “Precision humidity control gives a uniform humidity throughout the flower, leaving out the mystery for growers and maintaining weight, meeting the nexus between quality and weight.” According to Rutherford, growers have an incentive to package their cannabis a little on the wet side. “Because it weighs the most when wet, it is sold by weight and it will lose moisture over time, the incentive to deliver product that will dry out over time- that can create a lot of problems by having high moisture content.” For the first time ever, people can dramatically extend the shelf life of dried cannabis, instead of letting products naturally deteriorate and go bad over time. “For the first time ever, it allows you to extend the shelf life of dried cannabis for aging cannabis like wine and cigars,” says Rutherford.
The data from that Cannabis Safety Institute report, collected by AquaLab and CannaSafe Analytics using a vapor sorption analyzer, shows a cutoff of 65% relative humidity. These findings give the industry a lot of guidance in working to reduce the amount of yeast and mold contamination, says Bob Esse. “If your dried cannabis is above 65% relative humidity and you are a retailer, you should send that product back to the grower because it wasn’t dried properly, is vulnerable to mold and yeast spores and thus not safe for the consumer,” says Esse.
Pointing to the report, Esse says foods with high moisture content are able to support robust microbial population growth, which can lead to bacterial and fungal infections. “Water activity is what impacts whether microorganisms can grow or not.” By using two-way humidity control technology, growers and retailers can mitigate risks of contamination, improve quality and extend the shelf life of their products.
If you are in the business of growing cannabis, you should be aware of the common reasons for production losses, how to address root causes and how to prevent future occurrences in a sustainable way. Human error is the number one root cause identified in investigations for defects in the cultivation business. Sadly, little is known about the nature of these errors, mainly because our quest for the truth ends where it should begin, once we know it was a human error or is “someone’s fault.”
Yes, human error usually explains the reason for the occurrence, but the reason for that error remains unexplained and consequently the corrective and preventive actions fail to address the underlying conditions for that failure. This, in turn, translates into ineffective action plans that result in creating non-value added activities, wasting resources and money as well as product.
Human error can occur when workers are in direct contact with the plant
So after investigating thousands of human error events and establishing systems to improve human reliability in manufacturing facilities, it became even clearer to me, the need to have good, human-engineered standard operating procedures (SOPs).
In the cannabis growing process, there are different types of mistakes that, when analyzed, all can be addressed in the same manner. For example, some common errors that we see are either overwatering or nutrient burn, which can occur when the plant is overfed. The same is true in the opposite scenario; underfeeding or under watering lead to problems as well. If your process is not automated, the reason for these failures was most likely human error. Now, why did the person make that mistake? Was there a procedure in place? Was the employee trained? Is there a specific process with steps, sub-steps, quantities and measures? Were tools available to be able to do the task correctly? There is so much that can be done about these questions if we had clear, well-written and simple, but specific instructions. The benefits greatly outweigh the effort required.
Also, besides providing step-by-step instructions to avoid commission errors (to perform incorrectly as opposed to omit some step), there are other types of errors that can be avoided with SOPs.
Decision making like detecting nutrient deficiencies can lead to human error.
Decision-making is another reason why we sometimes get different results than the ones expected. If during your process there are critical, knowledge-based decisions, workers need to be able to get all the information to detect as well as correct situations. Some decisions are, for example, when (detection) and how (steps) should I remove bud rot? Is there a critical step in the process (caution) to avoid other plants from becoming affected? Any information on the what, how, when, where and why reduces the likelihood of a decision error, later described as obvious.
When we face manufacturing challenges like nutrient deficiency in a particular stage, mold, fungus, gnats or even pollination of females, we want to do whatever we can to prevent it from happening again. So consider that from avoiding to detecting errors, procedures are a critical factor when improving human performance.
Here are some guidelines when writing procedures to prevent human error.
Use them. Enforce the use of procedures at all times. As humans, we overestimate our abilities and tend to see procedures as an affront to our skills.
Make sure it is a helpful procedure and users are involved in the process. People that participate in writing rules are more likely to follow them.
Make sure they are available for their use.
All critical activities should have a procedure.
The procedure needs to be clear, have a good format, clear graphics, appropriate level of detail and specific presentation of limits.
Make sure that facts, sequence and other requirements are correct and all possible conditions are considered e.g. “what if analysis”.
Human error won’t be eradicated unless we are able to really identify what is causing humans to err. If eliminating or “fixing” the actual individual eliminates or potentially reduces the probabilities of making that mistake again, then addressing the employee would be effective. But if there is a chance that the next in line will be able to make the same mistakes, consider evaluating human factors and not the human. Take a closer look and your process, system and ultimately your procedures.
Formed in 2015, Outco is a vertically integrated, licensed producer of medical cannabis in Southern California. Outco manages Outliers Collective, the first licensed dispensary continually operating in San Diego County. They operate the first licensed cultivation on Native American land in Southern California, the first cultivation building permit in Southern California and the first licensed extraction facility in San Diego County. Outco is on track to be the largest licensed producer of medical cannabis in Southern California.
Lincoln Fish, co-founder and chief executive officer of Outco
The company prides themselves on attention to detail; the well versed team implements real science in their cultivation and extraction processes. Lincoln Fish, co-founder and chief executive officer of Outco, has more than 30 years of experience as an entrepreneur. Before entering the cannabis industry, Linc started and sold companies in the healthcare technology and nutraceutical spaces.
With construction underway at new facilities, Outco is anticipating an expanding market and higher demand.
Fish’s experience with FDA regulations in nutraceuticals prepared him for running a business in such a tumultuous, highly regulated environment like cannabis. “One thing I took from the nutraceutical industry is how to present products to consumers and letting them know it is safe, effective and consistent,” says Fish. He says he noticed a serious lack of consistency in products. They tested 25 different vape cartridges, with their own oil, to find a consistent product they can use and know that consumers will safely and consistently get the same results. “There is a lot of room for more professionals and a lot of room for more science,” says Fish. “We try to position ourselves in a way that is consistent with where we think policy will go so we are very careful with recommendations from a scientific standpoint, patient information and product safety.”
Starting at a seed or cutting, plants are grown with the protection of biological control agents
According to Fish, they currently distribute cannabis products to about 75 licensed dispensaries in Orange County, San Diego and Los Angeles. With construction underway at their cultivation facility on Native American land, Fish says they plan to generate roughly 2600 pounds of cannabis each month. Gearing up for that in addition to the expanding recreational market requires some planning in advance, says Fish. Part of that plan is making sure quality controls are in place to keep consistency in the product quality and dosage. They are also actively seeking to open their distribution channels further.
One of the cultivation facilities at Outco
“We are building out a full lab of our own in addition to third party testing to perform internal quality controls,” says Fish. Equipped with their own laboratory instrumentation like HPLC and GC, they hope to establish proper in-house quality controls as well as provide that resource to younger startup companies. As one of the founding partners of Canopy San Diego, an ancillary startup accelerator, Fish sees great potential in working with younger companies to get them off the ground. Fish met Outco’s vice president of extraction, Dr. Markus Roggen, at a Canopy San Diego event. It was there that they had the idea to build a startup accelerator for companies that actually touch the plant- extractors, cultivators and infused-product manufacturers, as opposed to a startup accelerator that would only help ancillary businesses.
Dr. Markus Roggen, vice president of extraction
Dr. Roggen, who is an organic chemist by training, heads up Outco’s supercritical CO2 extraction operation. “I came to the ‘art’ of cannabis extraction with an open, yet scientifically focused mind,” says Dr. Roggen. “My approach was to look past the myths and stories about extraction methods and focus on finding data, as there really wasn’t much available. I therefore, from the beginning, started to study the capabilities of our extraction equipment by chemometric methods.” Chemometrics is the science of relating measurements made on a chemical system or process to the state of the system via applications of mathematical methods. “Already the first sets of experiments showed that long-held beliefs in the cannabis community were inaccurate,” says Dr. Roggen. “For example the particle size of extracted material matters. Or that it is possible to preserve and even isolate terpenes by CO2 extraction methods.” With plans to have a full plant and analytical chemistry laboratory on site, they hope to perform more research that focuses on optimizing extraction processes.
Plant irrigation and fertigation procedures are determined via experimentation
Dr. Allison Justice leads their cultivation team with a background in greenhouse management and commercial horticulture. Dr. Justice says plants are grown, starting at a young age (seed or vegetative cutting), with the protection of biological control agents. “Biological control is a management strategy that entails the release of beneficial insects or fungi, such as parasitoids and predators, in order to suppress or regulate insect populations in greenhouses and grow rooms,” says Dr. Justice.
Dr. Allison Justice, vice president of cultivation
When implemented properly, this eliminates the need to use synthetic pesticides. “Biological control agents are not put in place to eradicate pest populations yet are applied as preventives to minimize plant damage and maintain their own populations.” They are constantly evaluating light types, spectrum and intensity to determine optimal ranges, according to Dr. Justice. They don’t use any pre-mixed “cannabis” nutrient supplements for their plants, instead they design an experiment to determine the desired levels and ratios of essential plant nutrients. “We have found it crucial to determine what ratios of nutrients the plant actually needs and by knowing this, we know how to manipulate the recipe determined by the plant’s given nutritional symptoms,” says Dr. Justice. Every type of adjustment in cultivation and extraction is based on results from experimentation rooted in legitimate science. Instead of guessing when it might be time to harvest, they use a water activity meter, logging and recording all the data to determine the appropriate time to trim and cure plants. Performing analytical testing at every step is key, says Fish.
Looking toward the recreational market, Fish sees an obvious opportunity to expand their wholesale operations substantially, with several larger new cultivation projects planned. “The key though is to produce flower and concentrate offerings with the same standards we employ for medical cannabis,” says Fish.
The Hoban Law Group announced today the formation of a committee to address banking access issues for the Pennsylvania cannabis market. Steve Schain, Esq., nationally recognized consumer finance litigation, banking law and cannabis law expert practicing with national cannabis law firm Hoban Law Group, is the committee’s spokesman and chair.
Steve Schain, Esq. chair and spokesperson of the committee.
Limited access to banking is an ongoing issue plaguing cannabis businesses due to its federally illegal status. According to Steve Schain, cannabis businesses across the country are forced to pay their vendors, utility bills, payroll, taxes and insurance in cash. “At any time, a dispensary or cultivation operation could have up to $200,000 in cash on site- not having a place to bank opens opportunities for criminal activity,” says Schain. It also presents operational issues for business owners like record keeping or even personal bank accounts getting shut down.
“All of those issues could mean less jobs, less economic activity and less tax revenue for the state,” says Schain. “Fully compliant operations should not have to deal with this.”
Schain formed the committee for a number of reasons, including “Setting the table and starting a dialogue. We want this to be scalable. In the past, the great flaws in banking efforts for cannabis were a lack of cohesion and operating credibility- we hope to approach it from a multi-disciplinary angle and change that,” says Schain.
State Senator Daylin Leach
The committee’s members include three PA politicians: Daylin Leach, State Senator of the 17th District, who introduced the bill that legalized medical cannabis in Pennsylvania, Derek Green, Philadelphia City Councilman and Mary Jo Daley, Representative of the 148th District. Tom Fleming, former assistant director of the Office of Compliance at the Treasury Department’s Financial Crimes Enforcement Network, is also a member of the committee.
A number of committee members are actively involved in the legal cannabis industry and cannabis banking initiatives. Sundie Seefried, a member of the committee, is the chief executive officer of Partner Colorado Credit Union, which is
Lindy Snider, advisor at Greenhouse Ventures and KIND Financial
currently handling over half of Colorado’s estimated billion-dollar cannabis banking market, according to Schain. Lindy Snider, founder and chief executive officer of LindiSkin, advisory board member of KIND Financial and Greenhouse Ventures, is also listed as a member of the committee.
“According to the treasury department, only 301 financial institutions have reported banking cannabis cash,” says Schain. “Few federally chartered banks or credit unions will work with cannabis businesses, but two states-Washington and Maine- have banking regulators sensitive to cannabis banking and we have found 36 banks and credit unions providing financial services to cannabis enterprises.”
The goal with forming this committee is to change that and create an environment where banking for cannabis businesses is much easier. “We plan on drafting a white paper with best practices on compliant and profitable banking on behalf of cannabis-related businesses and financial institutions,” says Schain.
Working from a banker’s perspective is the key here, says Schain. They want to create a working, compliant and profitable system for banks to do business with cannabis cash. One of the problems in the meantime is the high-risk nature of dealing with cannabis companies, leading to an inability to get insurance on those accounts. In the eyes of the federal government currently, conducting cannabis-related transactions may be deemed money laundering and highly illegal. “The real issue is with the federal government and I strongly suspect this is not an issue at the top of the Trump White House agenda.”
From the perspective of sustainable cannabis cultivation models, it seems clear that outside of the particular cultivation methodology adopted, that operational efficiency and the implementation of lean manufacturing principles will be necessary for successful and truly “sustainable” businesses, in the current, ever growing, cannabis space.
Implementing lean manufacturing principles as an integral part of the cannabis cultivation facility just makes sense- it is a manufacturing operation after all. From a lean perspective, doing away with the non-value-added costs in the supply chain and production model are quite important.
Let’s look at this case study as evidence for the necessity of operational efficiency:
A 300-light flowering, indoor cultivation facility in Colorado.
The system was purchased with ongoing pest/disease issues, recent updates to Colorado’s approved pesticide list, had prompted the implementation of an updated integrated pest management (IPM) program, which had been moderately successful in developing an albeit short-term solution to keeping ongoing root aphids, powdery mildew, and botrytis, to name a few, at bay.
This existing facility was producing roughly 60 pounds of trimmed cannabis per week, equivalent to almost $6M annual gross, however they were losing a percentage of their yields to product that did not pass Colorado’s contaminant testing requirements.
It is important to note that any deviation from the existing manufacturing schedule and system would create a change to the potential productivity of the system, for better or worse.
At the most basic level, one would hope that a new operator taking over an existing facility would analyze the system and implement incremental or perhaps major changes to create more efficient and profitable outcomes. That being said, currently the average grower likely doesn’t have much understanding of the lean manufacturing process. That will undoubtedly change.
When we look at basic manufacturing facility operations, on an annual gross potential basis, each daily task not completed on the existing manufacturing timeline is, at least, a 0.3% (1/365) loss in potential productivity. In monetary terms, for this particular facility, each 0.3% equates to a potential $18,000 in lost productivity.
The information that follows is taken from observations during the first week of this facility ownership transition and below is a generalized outline representing just one aspect of the operational inefficiencies (created or existing) that were observed :
Plant group A put into flowering 4 days behind schedule (4 days x 0.3%) =1.2%
Plant group B transplanted 3 days behind =0.9%
Plant group C transplanted 7 days behind =2.1%
Plant group D (clones) taken 7 days behind =2.1%
IPM applications not completed for 7+ days
That equals a 6.3% loss in potential annual productivity, which translates into a rough estimate of up to $378,000 in lost revenue.
Changes to the nutrient program in the midst of the plant’s life cycle had created nutrient deficient plants in all stages of vegetative and flowering growth, coupled with changes to the existing IPM program, all add to the potential losses incurred. Deviations in the plant nutrition program and IPM scheduling are hard to quantify mid-cycle, but will certainly be quantifiable when the hard numbers come home to roost.
These inefficiencies, once compounded, could potentially equal more than a 20% loss in potential productivity during the subsequent 3.5 month plant cycle. The current 60 pounds-per-week would likely be reduced for the next 2 months, down to roughly 50 pounds, or even much less, per-week. This could become a loss upwards of $500,000 in annual potential revenue in the first quarter of operation alone.
These seemingly small and incremental delays in the plant production cycle are all greatly compounded. The end result is that each subsequent cycle of plants is slightly smaller due to delays in transplanting and less days at maximized vegetative growth, etc. Undoubtedly, the cumulative effect of these operational inefficiencies creates a significant drop in the existing level of productivity, with the end result being a significant, undesired loss of revenue.
The sum of the lessons learned from this cultivation facility, is this: a sustainable operation, in the most pragmatic sense, is an efficient one both in terms of productivity and in terms of the carbon footprint and waste generated. The more streamlined and successful the operations are, the greater likelihood of success. Perhaps all of this is to say don’t forget about all the little parts that make up the whole, and strive to create a work environment/corporate culture that empowers your employees, your managers and all involved to participate and contribute to the process of improving the operations for mutual benefit.
Lessons learned from the aerospace manufacturing industry: Even the smallest zip tie on a spaceship matters! Some food for thought: If it’s truly beneficial it should stick around… If it is beneficial and it’s not sticking around, then there are limiting factors in the system that need to be addressed.
Three health alerts were issued Thursday, November 4th for contaminated cannabis sold to consumers at North Bend, Salem and Eugene dispensaries. Green-Way Medicinal in Salem and Stonies in North Bend sold two strains of cannabis flower found to have high levels of piperonyl butoxide, an ingredient commonly found in pesticides that acts as a synergist to amplify the effects of certain compounds.
The two batches in question, including the strains Pleeze (batch number G6J0039-02) and Dryzl (batch number G6J0039-01), were found to contain the potentially dangerous chemical at levels of 15.39 ppm and 16.24 ppm, respectively. The Oregon Health Authority (OHA) action level for piperonyl butoxide is 2.0 ppm. To see the full health alert, click here.
The dispensary in Eugene, Flowr of Lyfe, sold one strain of cannabis that had levels of the insecticide spinosad over the 0.2-ppm action level. The very popular indica hybrid, Dutch Treat (batch number G6J0018-01), was found to contain 0.9-ppm of spinosad. Though it still tested above the 0.2-ppm action level for that insecticide, it pales in comparison to October’s health alert, where a batch of cannabis had over 200 times the acceptable level of that insecticide. Both spinosad and piperonyl butoxide are considered toxic to humans.
According to the health alert, “All tests were performed by an OHA-accredited and Oregon Liquor Control Commission-licensed laboratory.” It is unclear exactly how or why the cannabis was able to get transported and transferred from the grower to the dispensary and then sold to consumers after failing the pesticide test. According to Jonathan Modie, spokesman for the OHA, they are currently investigating the matter and following up with the dispensaries and growers to find out what happened. “We need to find out how this got transferred in the first place and then sold,” says Modie. “They had access to the test results and should have been able to determine for themselves that these products should not have been sold or transferred.”
“We don’t know, we are still gathering information, there is a risk of civil penalty as well as losing your registration for a dispensary or grower that illegally transferred products that have tested for analytes above the action levels,” says Modie, when asked if punitive measures would be taken. While there are no particular regulations for this scenario in performing a mandatory recall, the OHA is obligated under law to issue health alerts when there is a situation that might affect public health, according to Modie.
“We deal with this with infectious disease outbreaks or during a food borne illness outbreak; if they [the public] can avoid it by hearing from us then we want to get the word out and this is a very similar situation.” For medical patients that purchase potentially contaminated cannabis such as this, it is easy to contact them to have the patient dispose or return the cannabis. Dispensaries are not required to collect information from recreational customers, and most dispensaries do not, which is a major problem when this situation happens, as it has twice in the past two weeks.
“We can never do too much communication,” says Modie. “We will let the public know in any way possible that they should return this product or dispose of it responsibly.”
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 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
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.
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