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Meet Looming Federal Cannabis Regulatory Compliance Management with Automation & Confidence

By Steven Burton
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Federal regulation of the cannabis and hemp sectors is coming sooner rather than later — and this is mostly good news for cannabis businesses and consumers. But cannabis producers already struggling to meet complex and ever-changing local regulations (where they exist) will be facing a new set of challenges with another level of regulatory oversight and compliance.

Navigating multi-jurisdictional regulatory compliance management requirements is near-impossible with legacy manual systems. That’s why it’s time to leverage the right enterprise resource planning (ERP) system, so that you and your team can meet these compliance management complexities with confidence and ease. Whether you manufacture flower, edibles, beverages, supplements or other dispensary products, here’s what you need to know to stay agile and profitable as more changes loom.

Federal Legalization is Coming

To date, there are 18 states with adult use cannabis markets, 37 with medical cannabis programs, and an additional 13 that have some level of decriminalization. At the federal level, there have already been several attempts at cannabis law reform, with even more on the table in the coming year.

One of the most promising is the Republican-led States Reform Act, filed in November 2021. The central tenant of this proposed legislation is to remove cannabis and cannabinoids from listing as a Schedule 1 Drug under the Controlled Substances Act.

Importantly, if this law passes, it would allow individual states to pursue their own cannabis policies and remove the current risks companies face when going against current federal anti-cannabis scheduling.

The States Reform Act also proposes a three percent federal tax on all cannabis sales and that all cannabis sales fall under the ​​Alcohol and Tobacco Tax and Trade Bureau’s (TTB’s) control. The States Reform Act would — finally — guide the regulation of hemp-derived products through the Food and Drug Administration (FDA).

US Senate Majority Leader Chuck Schumer has also been working on another reform bill, specifically the Cannabis Administration and Opportunity Act (CAOA), which he plans to introduce in April 2022 to further emphasize the criminal justice aspects of legal reform in the context of the War on Drugs.

While the government’s track record on cannabis regulatory reform hasn’t been as progressive as many would like, at this point there is widespread public support and proposed bills from both sides of the aisle. As a result, the US may finally see some movement on cannabis law reform in the very near future.

How to Prepare for Federal Regulatory Compliance Management

With federal regulation looming, it’s time for licensed producers to elevate their internal systems. Whether you work with tetrahydrocannabinol (THC) or cannabidiol (CBD), the regulatory protocols in an already complex marketplace are going to change.

This is especially paramount for those producing cannabis or hemp beverages, edibles and supplements. You will need comprehensive and efficient systems to facilitate this transition. An ERP should reduce compliance headaches and ensure your business is ready to scale when a national marketplace launches.

Automate Data Gathering

It is no longer cost effective to manage seed-to-sale traceability with manual data capture. With the thousands, if not tens of thousands, of data points required at most commercial facilities on a routine basis, data logging is by far the best way to start compliance automation.

Automated ERP systems, which capture essential information across your entire operation, ensure access to real-time data for forecasting, accounting, regulatory compliance reporting and traceability. That means using software that captures and logs intel from across your organization about quality control, inventory and traceability, all without arduous manual input.

The best and most successful ERP systems should be used by all employees to collect data, from sorters/pickers to fork lift drivers to supervisors to senior management. For this to happen easily, the solution must be accessible and user friendly for all employees. ERP systems that can be easily integrated with tablets and smartphones (as well as IoT devices) reduce the need for expensive terminals on the production floor and make data collection a straightforward part of daily operations.

Build Systems to Facilitate Growth from the Start

A rigid ERP system that can’t grow with you is not a smart long-term investment. An adaptable multi-platform system evolves with your company and constantly changing regulatory compliance requirements. A solution that provides access to the entire facility, instead of being limited to individual users, ensures that growing teams can easily contribute to data quality from the plant floor all the way up to the executive office for actionable insights.

Markets are opening up across the country and quite soon, many companies will be looking to expand their operations nationally. As a result, you’ll need systems that can scale, cover additional facilities, keep up with increased production, and even work across different jurisdictions.

Having instant access to detailed operational information delivers greater business oversight at the micro and macro levels – insight that is crucial for expansion, profitability, and cost-cutting measures. Companies with the right systems in place will effectively manage the resulting federal complexities to deliver on regulatory expectations and capture a competitive market share.

Leverage Regulatory Frameworks and Technology from the Food Industry

The Canadian example demonstrates clearly that the regulatory frameworks from the food and beverage industry are the most applicable to the cannabis sector – more so than for pharmaceuticals, nutraceuticals or alcohol. This is most obvious in lucrative value-added markets like edibles and extracts, which are actually also food products.

Issues like dosage standardization, controlling common hazards, managing traceability chains and inventory, and introducing quality standards (including third party certifications like organic and SQF) are all crossovers from the food industry.

Just as the compliance automation wave has hit the food industry in recent years, manufacturers of infused products and extracts can then use the same technology to reduce safety and quality control costs as well as documentation and administrative costs. The lesson? Cannabis industry leaders don’t need to totally reinvent the wheel.

Cannabis Producers Need an ERP System Tailored to Their Needs

In Canada, cannabis manufacturers have learned all too well what a few little mistakes can do to reputation and profitability. MJBiz Daily reported in 2021 that the Canadian government had issued more than CDN $1.3 million (USD $1 million) in fines since legalization. That’s a lot of regulatory compliance issues. Considering there are nearly 500 compliance fields to fill out for monthly reporting, mistakes are difficult to avoid, especially if you rely on a manual system.

FDAlogoThe story is similar in the United States. State regulatory compliance management requirements are complex and arduous for individual companies and employees. When federal regulation does come, US-based producers will very likely face even more strenuous reporting requirements to multiple jurisdictions.

Cannabis companies will need a data-driven system in place to align with the FDA’s Cannabis-Derived Products Data Acceleration Plan. Finding food safety and traceability software that makes reporting easier, automatic, and less prone to human error is paramount to success. As you prepare for the looming federal legislation, look for an ERP system that covers all the bases, including one that:

  • Improves Market Agility: Expedites opening new facilities in new markets as they come online
  • Evolves with Regulatory Changes: Facilitates the transition from unregulated markets into federally regulated ones
  • Automates Reporting: Protects you from regulatory compliance management bumbles stemming from manual input and human error
  • Reduces Workload: Optimizes workflow and reduces labor costs associated with manual input
  • Is Comprehensive: Covers all bases, including food safety, quality control, traceability, production management, and even occupational health and safety

If you aren’t automating the capture of essential information across the entire operation, you won’t be prepared for the regulatory burdens likely to come with federal cannabis legislation. To stay compliant and on top of what will likely be an incredibly competitive marketplace, you are going to need real-time data — data that will provide precise seed-to-sale traceability, product recall capability, and reporting.

Digitizing safety, traceability and complex production management through one state-of-the-art ERP system allows cannabis companies to reap the rewards of data-driven, automation technology almost immediately without the significant capital expenditure on large-scale equipment or robotics. From there, navigating regulatory complexity becomes not only streamlined and operationalized, but an actual market advantage for future growth.

The Importance of Smart Cannabis Packaging

By John Shearman
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Regardless of their size, all consumer package brands spend a significant amount of money and resources on packaging to attract consumers’ attention. We are all very visually oriented and gravitate to items that pique our interests. Cannabis brands are no exception when it comes to branding their products. Packaging plays a big part in carrying their brand forward and standing out on the dispensary shelves. When I was in Las Vegas at a CBD tradeshow in early 2020, I visited a dispensary, and it was beautiful. I remember commenting to a colleague that was with me how spectacular the product packaging was in the glass cases. One had unique artwork on each different product they offered, and it was indeed art. Yes, I did purchase this one that pulled me in.

The cannabis industry in the United States presents a challenge to brands because there is no overall federal guidance for packaging. Each state is controlling the cannabis legislation and, with it, the packaging guidelines. So multi-state operators (MSOs) have to manage each state as a separate entity and abide by the packaging regulations, which is not very efficient and adds a cost burden. As the industry matures and becomes federally legal across the country, packaging regulations will be easier to implement.

Louis Vuitton bags are one of the many goods that are commonly counterfeited
Image: UK Home Office, Flickr

Let’s take a look at counterfeit products across all product categories. There is a significant global problem with counterfeits, as articulated by the below statistics.

The total global trade in fakes is estimated at around $4.5 trillion. 

Fake luxury merchandise accounts for 60% to 70% of that amount, ahead of pharmaceuticals, entertainment products and representing perhaps a quarter of the estimated $1.2 trillion total trade in luxury goods.

Digital plays a big role in this and perhaps 40% of the sales in luxury fakes take place online.

Customs and Border Patrol confiscated $1.3 billion worth of counterfeit goods in the U.S. for Fiscal Year 2020. (The value of 2020’s seizures are actually down compared to the $1.5 billion worth of counterfeit goods seized by CBP in 2019).

Unfortunately, the figures above are concerning, and the cannabis industry will face the same counterfeit issues that will add to these stats in the future. What can be done to help fight the problem and alleviate the pain for cannabis brands? Smart technology.

The trend towards “smart technology” varies by sector, but the underlying concept involves building levels of technology systems designed to impede or limit the highly sophisticated counterfeiter from replicating or replacing products. These levels typically include a forensic level control on the product, digital systems to track the material and customer facing systems to articulate the underlying value to the consumer.

Building these levels of smart technology into cannabis-products and packaging allows consumers to authenticate real versus fake, and in the case often in cannabis, legal versus illegal. Molecular technology is one forensic level of control option that can be used as a unique identifier for product authentication. Each brand would get its unique identifier to apply to the raw materials that make up its product, such as oil or an isolate. Then a sample can be tested at the origin point and subsequent nodes in the supply chain using a remote testing device. All the digital data is captured in a secure cloud database for traceability and transparency to the end consumer, to show them the authenticity of the product they are consuming. The same molecular technology can be applied to the ink or varnish for packaging and labels. A great application to help combat counterfeits and product diversion across the globe.

Counterfeiters can create near duplicate versions of the original

Another engaging platform is called StrainSecure by TruTrace Technologies. Their SAAS platform allows cannabis manufacturers to track all their product batches and SKUs tied to a blockchain. It also facilitates the interaction between the manufacturer and third-party testing facilities to conduct product testing and reporting. The data is captured within the platform, and with easy access dashboard views, it provides the insights to authenticate products at any time.

A company out of Australia called Laava is producing a product called Smart Fingerprints. It’s the next evolution of QR codes. The Smart Fingerprints can be applied to each package, providing a unique identifier that consumers can read with a mobile phone application. The consumer is provided with information concerning the product’s authenticity and any additional information the brand wants to share with the user. Smart Fingerprints are a great example of customer engagement at the point of activity that is secure.

The above three solutions show the availability of advanced technologies the cannabis industry can implement on its packaging and products to ensure authentic and safe products are sold to consumers. It provides consumers with vital information and insights about products so they can make informed buying decisions. There is no one silver bullet solution that provides all the answers. As with every high value product, counterfeiters will work to create near duplicate versions of the original until it becomes unsustainable to do so. It will take a technology ecosystem to seamlessly connect and provide actuate and timely information between supply chain partners and ultimately the end consumer. As the US works to separate the legal from illegal production for both the adult use and medical supply of cannabis, the looming challenge will be on protecting and communicating authenticity, packaging will be the first step in this.

GMPs & Cannabis Manufacturing

By Kathleen May
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Editor’s Note: While CIJ typically omits the word “marijuana” where possible due to antiquated nomenclature and prejudicial connotations, we understand the legal distinction between cannabis containing THC and hemp requires the use of the word when referencing federal government policies and legislative language.

Despite the rapid evolution of the cannabis industry, the assurance of safe manufacturing practices remains unclear.Both the Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA) have imposed significant hurdles for cannabis operators to remain on the “right side of the law.” Therefore, manufacturers of both hemp and marijuana products have been left to figure things out on their own, or choose to ignore existing guidance because the lack of federal oversight allows them to do so. Inconsistent regulation on manufacturing, packaging, labeling and testing of cannabis products offers the potential for unsubstantiated, non-scientific and often times blatantly false claims on product safety and efficacy.

Science vs. Law

Hemp and marijuana are both species of the Cannabis family, Cannabaceae. Genetically they are identical but are arbitrarily defined by the presence of delta-9 tetrahydrocannabinol (THC). While science does not differentiate between hemp and marijuana, the law does.

The hemp industry declared a small victory with the passing of the Agricultural Act of 2014 (2014 Farm Bill). Under this bill universities and state agriculture departments were allowed to grow hemp under state law. Additionally, “industrial hemp” was officially defined by establishing the legal limit of THC at 0.3% on a dry weight basis. The Agricultural Improvement Act of 2018 (2018 Farm Bill), under the guidance of the United States Department of Agriculture (USDA), took things a few steps further by authorizing the cultivation of hemp and removed hemp and hemp seeds from the CSA. The bill however provides no language that mandates the safe manufacture of hemp-derived consumer goods. The 2018 version also preserved the FDA’s authority to regulate products containing cannabis and cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act). To the surprise of most, listing cannabidiol (CBD), even hemp-derived, as an ingredient on consumer product labels remains illegal under the bill. Furthermore, CBD product manufacturers are not protected under the current regulations. Since 2015 the FDA has issued warning letters to firms marketing CBD products as dietary supplements and/or foods, and in December 2018, FDA declared it illegal to introduce food containing CBD (or THC) into interstate commerce, regardless if it is derived from hemp. To date, the only FDA approved CBD product is GW Pharmaceutical’s Epidiolex.

Marijuana remains classified as a Schedule I controlled substance under the CSA. Thirty-six (36) states have approved comprehensive, publicly available medical marijuana programs, and now 14 states have approved adult use programs, with New Jersey passing legislation on February 22, 2021. However, the industry has seen minimal movement toward mandating GMP requirements in the marijuana market. Only a handful of medical programs require manufacturers to follow GMP. Furthermore, the requirements are inconsistent between states and the language in the regulations on how to approach GMP implementation is vague and disjointed. This fragmented guidance supports the complexity and difficulty of enforcing a coherent, standardized and reliable approach to safe manufacturing practices.

What is GMP and Why Should You Care?

Good Manufacturing Practices (GMPs) are a system for ensuring that products are consistently manufactured and controlled according to quality standards and regulatory guidelines. The implementation of a GMP compliant program ensures consumer health and safety, allows manufacturers to understand the intended use of their products, allows manufacturers to defend product specifications as being appropriate, considers the risks to vulnerable populations and minimizes overall business risk. In a nutshell, GMP equals product safety and quality, and defines the responsibilities of the manufacturer to ensure consumers are protected from the distribution of unsafe and ineffective products. Currently, the GMP “landscape” in the cannabis space is complicated. The various “flavors” (food, dietary supplements, cosmetics and drugs/devices) of GMP leave many confused and frustrated when making the decision to implement GMP. Confusion is a result of unclear regulatory requirements as well as operators not fully understanding how to classify or designate the end use of their product(s). Implementing an effective GMP program requires proper planning (both short and long term), financial commitment and qualified resources.

Where Should You Start?

As the regulatory landscape continues to evolve and mature in the cannabis space, your business model must consider GMP implementation if you wish to remain successful and sustainable.

Intended Use

Before you can implement GMP you must first understand what GMP regulations apply to the intended use of your product(s). Are you manufacturing food, beverages or dietary supplements? Get acquainted with the FDA Code of Federal Regulations (CFRs) on GMP. 

Conduct a Gap Assessment

A gap assessment allows you to determine your deficiencies in relation to GMP compliance. The assessment should include, but is not limited to facility design, equipment design, supply chain, risk management and employee training.

Develop an Action Plan

Once the gap assessment is complete a comprehensive action plan will be developed to map out the steps required to achieve GMP compliance. The action plan should follow the SMART Goal principles:

  • Specific (simple, well-defined)
  • Measurable (meaningful)
  • Attainable (achievable, agreed upon)
  • Relevant (resource-based, reasonable and realistic)
  • Timely (time-based, defined due dates)

The plan will include prioritized deliverables, due dates and allocated resources in order to strategically plan and execute and complete the required tasks.

Schedule a Mock GMP Inspection

A mock inspection verifies that the action plan was adequately executed. Hire an experienced resource familiar with related GMPs and QMS to conduct the inspection. A successful mock inspection is a perfect litmus test if the end goal is to achieve GMP certification.

Cannabis manufacturers that ignore the obvious progression toward an FDA-like industry will not survive the long game. Those that embrace the momentum and properly plan to mitigate product and business risk – those who demonstrate integrity and are truly in this space to ensure safe, effective and quality products to consumers will come out on top, gain credibility and secure brand recognition.

References:

  • 21 CFR Part 111, Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements.
  • 21 CFR Part 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food and the Food Safety Modernization Act (FSMA).
  • 21 CFR Part 210, Current Good Manufacturing Practice in Manufacturing, Processing, Packing, or Holding of Drugs; General.
  • 21 CFR Part 211, Current Good Manufacturing Practice for Finished Pharmaceuticals.
  • 21 CFR Part 700, Subchapter G-Cosmetics.
  • 21 CFR Part 820, Subchapter H-Medical Devices; Quality System Regulation
  • Congressional Research Service, FDA Regulation of Cannabidiol (CBD) Products, June 12, 2019.
  • United States Food and Drug Administration-Warning Letters, Current Content as of 02/19/2021.

Links:

Heat-Not-Burn: A Q&A with Mike Simpson, CEO and Co-Founder of Omura

By Aaron Green
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Heat-not-burn is a non-combustion technology consisting of a heating source and either an oven that the user packs cannabis into or a stick pre-filled with cannabis. The cannabis is heated to a lower temperature than a combusted joint or bowl to create an aerosol that the user inhales. Heat-not-burn in this way is distinct from traditional vaping where a liquid or oil is heated to become a vapor and inhaled.

Omura is a design company that has developed a platform product for the heat-not-burn market.

We spoke with Mike Simpson, CEO and co-founder of Omura. Mike co-founded Omura in 2018 after an international design career where he spent much of his time in Japan working with consumer products.

Aaron Green: Mike, what trends are you following in the market?

Mike Simpson: I’m always tracking trends in the heat-not-burn space. Because of my background, I know that the tobacco industry inspires a lot of the technology in the cannabis space. If you look at all the vape pens, that technology was initially developed for big tobacco, which then later was adopted by cannabis. I’m always looking to stay educated on what’s happening in the tobacco industry, as I know it’s directly tied to my work in cannabis.

I’m also looking at what’s happening all over the world with legislation. I’ve been studying it for years, but this past year has been phenomenal. Seeing five new states go to some level of legalization, the federal law and new states legalizing cannabis in the 2020 Election. I believe the Biden/Harris victory will have a major impact on the industry, however we still have to see what happens with the Senate. These next couple of years are going to be very interesting to see how things shape out for cannabis.

Aaron: What are you personally interested in learning more about?

Mike Simpson, CEO and co-founder of Omura

Mike: I am interested in learning how the world is going to behave next year with this new life that’s been thrusted upon us. How effective is the new vaccine going to be? How are people going to retrospectively look at this year, and the lifestyle that they used to have before going into COVID? How much of it’s going to become permanent? How much of this Zoom life will we continue to enjoy? In the future, will office spaces become obsolete? How much will we still be using home deliveries? Do we actually want to go to restaurants again? That’s what I’m very interested in learning about is how human behavior and the world will change because of what’s happening right now.

Aaron Green: How did you get started at Omura?

Mike Simpson: Great question. I moved to Japan as a designer working for Lego and set up their design office for Lego toys. After Lego, I started working instead with Nike and Adidas designing performance sneakers and apparel for a couple of years until I found Big Tobacco — which is where my Omura story begins. I rapidly found myself in a position where I was creating new technologies, for the consumption of nicotine and tobacco. While working on an early project, I was asked if I knew any science fiction writers. Thanks to Lego, I just so happened to know Syd Mead, the designer for popular sci-fi films including BladeRunner, Tron and Aliens. So, I called him and we worked on a project which was aimed at setting the future of the smoking industry. Obviously, this was a brilliant project for someone like myself to get involved in. We came up with several scenarios that depicted the future of what tobacco consumption would look like, and each of them essentially included vaporization. This was before the vaporization days which made it kind of a difficult sell. I spent many years working on where we could use existing technologies in order to execute some of these scenarios. Ten years later, I moved to California, and I started studying the cannabis space for Big Tobacco which ultimately led me to Omura.

Aaron: Can you give me a reference point on the date when you were back in California?

Mike: I came here eight years ago, and I was in Japan pretty much 10 years prior to that.

Essentially what I realized when I got to California was that cannabis was perfect for heat-not-burn because of all the cannabinoids and the terpenes. You heat it up, and you get all of the good properties out of it without the need for combustion. There were already hundreds of products in the market, which validated that people love doing it.

However, there was a ritual: you needed to buy the flower, grind it, pack the device, select the temperature and then use the same mouthpiece repeatedly. And it doesn’t stop there. When the session is finished, you dig out the used flower with a metal spatula or brush. After every 10 or 15 times you have to clean it with rubbing alcohol to get rid of any existing residue from those sessions. This is just a big messy job with a massive amount of inconsistency and variability. For me, it was mind blowing that people would even go through this procedure. With Omura, I knew we needed to simplify that process. Our product comes with a pre-filled flower stick with an exact dose, that you place in the device very simply. You then use the stick as the mouthpiece and when you’re finished, throw the flower stick in the trash. It’s compostable and biodegradable. So we eliminated all of those pain points.

Aaron: Great! Where are you guys based out of?

Mike: Venice, California.

Aaron: So, what makes the Omura vaporizer different from other heat-not-burn products? You mentioned you have the disposable cartridge. Is there a design philosophy around it that you can talk more about?

Mike: Omura comes with 12 flower sticks in child-proof packaging. What makes us different is that we have our proprietary flower stick and device that work together. With our heat-not-burn technology, you get all the terpenes, but when you set fire to it, as you would with other products, you mask that with smoke. Our product is different from anything else in the market, because it has simplified the user experience through efficiency, user interaction and also through design as well.

The other founders come from deep design and technology backgrounds, designing technologies for Apple and Philips Electronics, so it was an important focus for us with Omura. Our newest device, the Series X was designed by Michael Young, a world-renowned industrial designer who has built an impressive portfolio of innovative products.

The Omura Series X

With Omura, we’re bringing sophistication of the design world into the cannabis world. It’s not just about simplifying the experience and making a great kind of efficient method of consumption, it’s also about creating something for everyday use that is beautifully designed and easy to use.  

Aaron: The Series X is Omura’s latest device. Can you tell me what changes you’ve implemented to make it better than the first version?

There are a few differences between the Series 1 and Series X: First, the new design fits in the palm of your hands so it’s discreet. It comes with a USB-C charging base that automatically connects with magnets. We’ve also improved the efficiency of the oven. The first device boiled 94% of the cannabinoids, this one now boils 99%. We’ve increased user-efficiency, by removing the button from the Series 1 making it so all you have to do is put the flower stick in and the device starts automatically. Additionally, we wanted to give users an option between a hotter or cooler experience so we added an extra heat curve, as we recognize that some of our CBD users prefer more of a terpene experience.  

Aaron: Can the user modify that with an app?

Mike: It is a very simple switch on the bottom of the device that allows you to toggle between the higher and lower temperature curves

Aaron: Okay, cool. Can we talk about your supply chain a little bit here? Do you manufacture everything in Los Angeles? Or do you have partners? 

Mike: Everything is designed in the US and manufactured in China. Which is fairly common throughout the industry. Shenzhen is well known for making products for the vaping industry. We create empty tubes filled in a batch production process. All the flower is grown here in the US. To clarify, we aren’t a plant-touching company. We don’t have a cannabis license. When it comes to THC, we have partnership deals. We work with select cannabis brands which is how we are able to sell in dispensaries. On the other hand, our CBD model is split. We have two brands of our own. Libertine, which is more of a male-focused Gen Z brand. Then we have Oriel, which is more of a wellness brand, catered to women.

Aaron: So how would an aspiring brand get on your platform?

Mike: Good question. Any brand or company who is interested in partnering with Omura can contact us through our website, www.omura.com, on Instagram @Omura or via email: hello@omura.com. We would then assess them to see if they’re a good fit. Currently we’re looking to span quite a large kind of demographic as far as appeal. So, if these prospective partners are in a territory, whether it be California or another state, have good market share and high-quality flower, then we would be very open to having a conversation.

Aaron: That’s the end of the interview — thanks Mike!

The Future of Vape Litigation: Temperature Control

By Michael Preciado
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The e-cigarette or vaping use-associated lung injury (EVALI) outbreak of 2019 caught the attention of many, and has brought with it the scrutiny of both regulators and plaintiffs’ attorneys eager to act as “civil prosecutors.” As Tolkien would say, the Eye of Sauron has now turned its gaze towards the cannabis vapor industry.

With the misinformation and negative publicity that the EVALI outbreak brought to the industry, vaporizer device manufacturers should expect more lawsuits to be filed against them through 2020 and beyond. The cannabis vapor industry should also expect the theories of defect alleged against their products to become more sophisticated as more plaintiffs’ attorneys enter the arena.

One theory of defect you should expect plaintiff’s attorneys to pursue in 2020 is what I generally refer to as “temperature control litigation.”

These pre-filled cartridges are compatible with just about any battery because of the universal 5/10 thread connectors.

Here is the problem:

Typical additives in cannabis oil, while once thought to be safe, can degrade at higher temperatures into toxic chemicals. For example, the Vape Crisis of 2019 was largely attributed to a cannabis oil additive known as vitamin E acetate. While typically regarded as safe for use in nutritional supplements or hand creams, when used in cannabis oil, investigators believe vitamin E acetate can degrade into a toxic chemical when vaped—and is responsible for causing mass pulmonary illness for thousands of consumers.

Researchers do not fully understand how this process occurs, but chemists from the Royal College of Surgeons in Ireland found in a recent study that the key is understanding how temperatures affect chemicals when vaping. Through a process known as pyrolysis, the study found that vitamin E acetate can possibly degrade into ketene when vaped at higher temperatures—depending on the type of coil resistance, voltage and temperature configuration used in a vaporizer device. (Ketene has a high pulmonary toxicity, and can be lethal at high concentrations, while low concentrations can cause central nervous system impairment.) Similar studies have also shown that additives like Propylene Glycol (PG), Vegetable Glycerin (VG), and Polyethylene Glycol (PEG) can degrade into toxic chemicals at high temperatures—which has led Colorado to ban the use of PEG for inhalable cannabis products altogether.

More shocking, is that such temperature control issues are not limited to additives. It is very common for experienced users to experiment with low to high temperatures when vaping cannabis; it is believed that vaping cannabis at low temperatures (325-350°F) results in a mild high, while vaping cannabis at higher temperatures (400-430°F) results in a more euphoric feeling and intense high. But when cannabis is vaped at even higher temperatures (450°F +), industry experts do not really know if or how cannabinoids and terpenes degrade, which combinations of cannabinoids and terpenes affect degradation and what the health risks could be. It’s anyone’s guess.

Cheap batteries with the universal 5/10 thread can heat the product at inconsistent temperatures, raising safety and quality concerns

These temperature control issues are further complicated due to the universal 5/10 thread. Most consumers purchase cannabis oil through pre-filled “carts” (cartridges)—that are compatible with 90% of vaporizer batteries on the market because of universal 5/10 thread connectors. But vaporizer batteries can operate anywhere from sub-300 degrees to 800 degrees and above. Coupled with varying battery voltages, ceramic coil quality and oil quality, vaporizer batteries can produce a wide range of operating temperatures. Consequently, it is possible users could connect a cart to a vaporizer battery (set at too high a temperature configuration) and risk pyrolysis, change the chemicals inside their cannabis cart, and cause unknown harm to themselves.

Unquestionably, all of the above will result in lawsuits. Companies that manufacture cannabis oil will be sued for failing to conduct emissions testing to properly evaluate safe temperature settings for use of their carts. Vaporizer device manufacturers will be sued for failing to publish warnings, instructions and adequate owner’s manuals regarding the same. And the rallying cry against the cannabis vapor industry will be damaging. Plaintiff’s attorneys will accuse the industry of choosing profits over safety: “The cannabis vapor industry knew cannabis oils could turn into toxic chemicals when heated at high temperatures, but instead of conducting long-term emissions testing to evaluate those concerns, the industry chose profits over safety. As long as the industry made money, no one cared what dangers arose from elevated temperatures—and consumers paid the price.”

With the above as background, it is critical for the cannabis vapor industry to get serious about product testing. The industry needs to know if and why certain cannabinoids, terpenes and additives can turn into toxic chemicals when they are vaporized at high temperatures—and how the industry can guard against such dangers. And to cover their bases, the industry needs to publish proper warnings and owner’s manuals for all products. The time to act is now.

EU Regulations Address Heavy Metals In Consumer Products

By Christopher Dacus
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RoHS 3 (EU Directive 2015/863) adds a catch-all “Category 11” of regulated products that includes electronic nicotine delivery systems (ENDS), e-cigarettes, cannabis vaporizers and vape pens. This category becomes effective July 22, 2019. The most significant restricted substance applicable to this category is lead, and RoHS requires regulated products to contain less than 1000 parts per million (ppm). This follows on the heels of California’s new 2019 regulations requiring the testing of contents of cannabis vape cartridges using even stricter limits for lead (which makes sense because it applies to the product being consumed, not the separate electronic components). These regulations may seem unrelated, but anecdotally there have been widespread reports of higher than expected lead content in China-sourced electronic components, including both cartridges and related electronics. Whether metal used in e-cigarette type products is the source of any lead in the actual nicotine, cannabis or other concentrated product is an entirely different topic, but new laws, and in particular the new RoHS catch-all category, make 2019 an important year for any company responsible for certifying or testing lead levels in e-cigarette or vape products.

Background on EU RoHS

RoHS (Restriction of Hazardous Substances) originated in the EU in 2003 as a restriction on hazardous substances in specified categories of electronics and electronic products. Other countries have passed laws styled after RoHS, but only the EU RoHS is addressed here. Unlike some environmental laws, RoHS is not only focused on the safety of products during their life cycle of consumer use, but is designed to keep restricted substances out of landfills and recycling centers.

The original RoHS restricted the use of lead, cadmium, mercury, hexavalent chromium, PBB and PBDE. RoHS now restricts the use of a total of ten substances after the EU added four types of phthalates to its restricted substance list. Compliance with RoHS became a requirement for the use of the CE mark in 2011, and replaced a RoHS compliant mark on restricted products.

RoHS specified categories for regulation include large household appliances, small household appliances, computer equipment, lighting, power tools, toys, certain medical devices, control equipment (smoke alarms, thermostats and their industrial equivalents), and ATM machines. Newly added Category 11, the “catch all” category, includes all other electronic and electrical equipment not covered in the previous categories, including electronic nicotine delivery systems, cannabis vaporizers and vape pens.

RoHS Lead Exemptions Complicate Compliance

RoHS provides numerous exceptions to its strict 1000ppm lead standard that are slated to expire in phases from 2021 through 2024. Most Category 11 exceptions will not expire until 2024. For example, RoHS permits different levels of lead for lead in glass and ceramics, lead in high temperature solders, and lead in copper and aluminum alloys. So, an e-cigarette may contain some parts that are held to the highest level of lead restriction, it may but contain isolated components that (at least through 2024) are held to more permissive standards. While this leeway may reduce manufacturing costs for certain components, it creates greater complexity in testing. Anecdotal reports suggest that especially for products that compete heavily on price, sourcing from lesser-known Chinese foundries has resulted in unpredictable lead levels.

Take Away Points

As vape and e-cigarette companies compete with new features and design elements each year, and companies rely on new manufacturers, keeping up with regulations has proven to be difficult for both U.S. and for EU regulated products. For example, a company has to comply with numerous regulations regarding the oil or concentrate that will ultimately be inhaled by a consumer, and with regulations like RoHS that regulate parts a consumer may never touch or see. Each year, some company comes out with a new set of electronic features that may interact with newly formulated oils or concentrates, other companies compete for features or price points, making these products a moving target when it comes to testing.

Adding lead to many metals makes them easier to work with and therefore cheaper. Anecdotal reports suggest that especially for products that compete heavily on price, sourcing from lesser-known Chinese foundries has resulted in unpredictable lead levels. This can be the result of any number of causes: changes in sub-contractors, uses of industrial equipment for other products that permit higher lead content, or simply unscrupulous management that is willing to risk a contract to save money manufacturing a batch of components. There is speculation that some lead may leach into oil or concentrates in e-cigarette and vape products from the contact between the oil or concentrate and internal heating elements in certain type of products. RoHS compliance with regard to lead levels may reduce the chance of inadvertent lead contamination by such means, and compliance may therefore yield benefits on several regulatory fronts.

Compliance with RoHS for each part of an e-cigarette or vape therefore requires knowing your supplier for each component, but given increased regulation of these products (both the hardware and consumable elements) this can only help compliance with regulations in every relevant jurisdiction.

urban-gro Launches Cannabis Industry’s First Line Of IoT Solutions

By Aaron G. Biros
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Last week at the MJBizCon, a major cannabis industry event held annually in Las Vegas, urban-gro launched the first technology line for cannabis growers utilizing Internet-of-Things (IoT). urban-gro, a cultivation technology company for commercial-scale growers, announced the launch of announced Soleil® Technologies, an integrated portfolio of hardware, software, and services that uses IoT.

“The solution suite includes per-plant sensing, environmental monitoring, machine diagnostics, fertigation management, lighting controls, inventory management, and seed-to-sale tracking,” reads the press release. IoT is essentially a network of devices embedded with sensors and software that allow the devices to connect and exchange data. IoT devices are used extensively in the food industry, including for integrated pest management, restaurant food safety and management and tracking product conditions such as temperature and humidity throughout the supply chain, among other uses.

Soleil consists of three primary lines:

  • Soleil 360 is the cloud-based software-as-a-service (SASS) platform that integrates all Soleil solutions.
  • Soleil Sense is the brand for all of urban-gro’s low-power wireless sensors that deliver data with the scale, precision and resolution needed for analytics and machine learning.
  • Soleil Controls is urban-gro’s product set for climate and irrigation controls, lighting systems, and other focused controls.

The core, low-power sensor that makes this unique was licensed from Edyza, a wireless innovator that specializes in low-power wireless grids that scale. urban-gro then developed on top of that sensor, including its cloud-based management, analytics, what the sensors detect and cover, etc., to make it ideal for cannabis growers.

According to Brad Nattrass, urban-gro’s chief executive officer, finding an IoT solution that can easily scale was a key goal for their business. “When evaluating the most advanced market-ready sensor technology available, it was crucial that we deliver a solution that can easily scale to thousands of sensors in order to satisfy the needs of large-scale commercial cultivators,” says Nattrass. “The introduction of Soleil demonstrates urban-gro’s commitment to going beyond simply supplying equipment, to truly serving our clients as an ongoing technological innovator and advisor, enabling cultivators to leverage today’s more advanced technologies to rise above the competition.”

“Cultivators will be able to monitor substrate moisture and EC (electrical conductivity) levels on a per plant basis, as well as track key environmental metrics like temperature, humidity, air movement, and probability of infestation,” reads the press release. “With multiple device options, cultivators can choose between several deployment options.” With the data hosted on the cloud, users can access it through web browsers, Android and iOS devices.

According to Jay Nichols, a representative of urban-gro, they have hired (and is hiring) code developers, product developers, etc. in order to expand this unit. Plant sensors are just one piece of the system, with the goal to automate the entire cultivation process, including controlling lights, pest management, irrigation and fertigation. They say it will be available in late Q1/early Q2.

Quality Assurance In The Field: Instruments For Growers & Processors

By Aaron G. Biros
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As the cannabis marketplace evolves, so does the technology. Cultivators are scaling up their production and commercial-scale operations are focusing more on quality. That greater attention to detail is leading growers, extractors and infused product manufacturers to use analytical chemistry as a quality control tool.

Previously, using analytical instrumentation, like mass spectrometry (MS) or gas chromatography (GC), required experience in the laboratory or with chromatography, a degree in chemistry or a deep understanding of analytical chemistry. This leaves the testing component to those that are competent enough and scientifically capable to use these complex instruments, like laboratory personnel, and that is still the case. As recent as less than two years ago, we began seeing instrument manufacturers making marketing claims that their instrument requires no experience in chromatography.

Instrument manufacturers are now competing in a new market: the instrument designed for quality assurance in the field. These instruments are more compact, lighter and easier to use than their counterparts in the lab. While they are no replacement for an accredited laboratory, manufacturers promise these instruments can give growers an accurate estimate for cannabinoid percentages. Let’s take a look at a few of these instruments designed and marketed for quality assurance in the field, specifically for cannabis producers.

Ellutia GC 200 Series

Shamanics, a cannabis extractor in Amsterdam, uses Ellutia’s 200 series for QA testing

Ellutia is an instrument manufacturer from the UK. They design and produce a range of gas chromatographs, GC accessories, software and consumables, most of which are designed for use in a laboratory. Andrew James, marketing director at Ellutia, says their instrument targeting this segment was originally designed for educational purposes. “The GC is compact in size and lightweight in stature with a full range of detectors,” says James. “This means not only is it portable and easy to access but also easy to use, which is why it was initially intended for the education market.”

Andrew James, marketing director at Ellutia

That original design for use in teaching, James says, is why cannabis producers might find it so user-friendly. “It offers equivalent performance to other GC’s meaning we can easily replace other GC’s performing the same analysis, but our customers can benefit from the lower space requirement, reduced energy bills, service costs and initial capital outlay,” says James. “This ensures the lowest possible cost of ownership, decreasing the cost per analysis and increasing profits on every sample analyzed.”

Shamanics, a cannabis oil extraction company based in Amsterdam, uses Ellutia’s 200 series for quality assurance in their products. According to Bart Roelfsema, co-founder of Shamanics, they have experienced a range of improvements in monitoring quality since they started using the 200 series. “It is very liberating to actually see what you are doing,” says Roelfsema. “If you are a grower, a manufacturer or a seller, it is always reassuring to see what you have and prove or improve on your quality.” Although testing isn’t commonplace in the Netherlands quite yet, the consumer demand is rising for tested products. “We also conduct terpene analysis and cannabinoid acid analysis,” says Roelfsema. “This is a very important aspect of the GC as now it is possible to methylate the sample and test for acids; and the 200 Series is very accurate, which is a huge benefit.” Roelfsema says being able to judge quality product and then relay that information to retail is helping them grow their business and stay ahead of the curve.

908 Devices G908 GC-HPMS

908 Devices, headquartered in Boston, is making a big splash in this new market with their modular G908 GC-HPMS. The company says they are “democratizing chemical analysis by way of mass spectrometry,” with their G908 device. That is a bold claim, but rather appropriate, given that MS used to be reserved strictly for the lab environment. According to Graham Shelver, Ph.D., commercial leader for Applied Markets at 908 Devices Inc., their company is making GC-HPMS readily available to users wanting to test cannabis products, who do not need to be trained analytical chemists.

The G908 device.

Shelver says they have made the hardware modular, letting the user service the device themselves. This, accompanied by simplified software, means you don’t need a Ph.D. to use it. “The “analyzer in a box” design philosophy behind the G908 GC-HPMS and the accompanying JetStream software has been to make using the entire system as straightforward as possible so that routine tasks such as mass axis calibration are reduced to simple single actions and sample injection to results reporting becomes a single button software operation,” says Shelver.

He also says while it is designed for use in the field, laboratories also use it to meet higher-than-usual demand. Both RM3 Labs in Colorado, and ProVerde in Massachusetts, use G908. “RM3’s main goal with the G908 is increased throughput and ProVerde has found it useful in adding an orthogonal and very rapid technique (GC-HPMS) to their suite of cannabis testing instruments,” says Shelver.

Orange Photonics LightLab Cannabis Analyzer

Orange Photonics’ LightLab Cannabis Analyzer

Dylan Wilks, a third generation spectroscopist, launched Orange Photonics with his team to produce analytical tools that are easy to use and can make data accessible where it has been historically absent, such as onsite testing within the cannabis space. According to Stephanie McArdle, president of Orange Photonics, the LightLab Cannabis Analyzer is based on the same principles as HPLC technology, combining liquid chromatography with spectroscopy. Unlike an HPLC however, LightLab is rugged, portable and they claim you do not need to be a chemist to use it.

“LightLab was developed to deliver accurate repeatable results for six primary cannabinoids, D9THC, THC-A, CBD, CBD-A, CBG-A and CBN,” says McArdle. “The sample prep is straightforward: Prepare a homogenous, representative sample, place a measured portion in the provided vial, introduce extraction solvent, input the sample into LightLab and eight minutes later you will have your potency information.” She says their goal is to ensure producers can get lab-grade results.

The hard plastic case is a unique feature of this instrument

McArdle also says the device is designed to test a wide range of samples, allowing growers, processors and infused product manufacturers to use it for quality assurance. “Extracts manufacturers use LightLab to limit loss- they accurately value trim purchases on the spot, they test throughout their extraction process including tests on spent material (raffinate) and of course the final product,” says McArdle. “Edibles manufacturers test the potency of their raw ingredients and check batch dosing. Cultivators use LightLab for strain selection, maturation monitoring, harvesting at peak and tinkering.”

Orange Photonics’ instrument also connects to devices via Wi-Fi and Bluetooth. McArdle says cannabis companies throughout the supply chain use it. “We aren’t trying to replace lab testing, but anyone making a cannabis product is shooting in the dark if they don’t have access to real time data about potency,” says McArdle.