Tag Archives: efficiency

Integrating a Culture of Quality Into the Cannabis Industry

By David Vaillencourt
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The culture of the cannabis industry is filled with passion that many envy, and for valid reasons. The roots of the cannabis plant go back thousands of years. As of this writing, there are no documented human deaths that were caused by a phytocannabinoid overdose. However, it is not all rainbows and unicorns.

Before breaking ground, fundraising, proper facility design, competitive application and permitting requirements are just the start. Once operating, businesses struggle to stay current with regulations that continue to evolve. Cannabis cultivators struggle to scale while mitigating pest infestations, which is a part of life in the conventional agricultural industry. A lack of consistent products frustrates consumers, while regulators and policy makers continue to struggle on the best way to regulate a commodity that has seemingly endless demand. The reality is dizzying!

However, amidst all of the challenges and opportunities, a continually overlooked tool stands out: a Quality Management System (QMS). Merriam-Webster defines a system as “an organized set of doctrines, ideas, or principles usually intended to explain the arrangement or working of a systematic whole.”

A QMS documents processes, procedures and responsibilities that ultimately direct an organization’s activities to meet customer and regulatory requirements as well as continually improve its effectiveness and efficiency. In other words – it steers innovation through the collection of data while ensuring products are safe for the consumer. For further reading, the American Society for Quality (ASQ), now over 70 years old, is an excellent resource and provider of resources and formal training programs that are recognized and revered around the world.

Step 1: Define your stakeholder requirements

This all starts with knowing your stakeholder (e.g., customer, regulatory body) requirements. For simplicity’s sake, let’s start with your customer; at a fundamental level, they expect safe, consistent and reliable products that impart a certain experience.

How does that translate into specifications? Let’s look at them one at a time.

What does “safe” mean? For an edible, safe means the product is free of physical, chemical and microbial hazards. Knowing what potential impurities could be in your product requires understanding your raw materials (inputs) and the manufacturing process. To take a deeper dive, some of the aspects of safety and quality, product specifications and testing considerations are discussed in this recent Cannabis Industry Journal article by Dr. Roggen and Mr. Skrinskas here.

An example of a compliant label in Oregon

What does “consistent” mean? This builds off and complements the safety profile. It could mean a consistent fill level, an acceptable range of cannabinoid concentration, and so on. For example, in the US Pharmacopeia’s peer-reviewed article about quality attributes of cannabis inflorescence (commonly known as flower or bud), they recommend 20% as the acceptable variance in cannabinoid content. For a product labeled as having 25% THC, the product will actually test to between 20% and 30%. This may be surprising, and discomforting for some, but the reality is that products on the market consistently fail to meet label claims.

What does “reliable” mean? That could mean that you always have inventory of certain products on the shelves at your dispensary. Defining “always” as a SMART goal – perhaps it means that you will have your top 3 products in stock at least 90% of the time. Customers need to feel like they can rely on your business to provide them with the products they want. Take the time to capture the data on what your customers want and work to satisfy their needs and you’ll watch your business really accelerate.

Step 2: Build your processes to meet these expectations

This is where your written standard operating procedures (SOPs), forms and records come into play. Your SOPs serve to memorialize your operations for consistency. Most SOPs in the cannabis industry are not written by the actual operators of a process. Rather, they are written by the legal and compliance team without review by the operators to confirm that what they are stating reflects operational reality. The audience needs to be the operators. Without effective SOPs that are utilized by your employees, your business will struggle to meet the established specifications. Cannabis businesses in Colorado, the oldest regulated adult-use cannabis market in the United States, continue to see 1 in 8 of their products fail final product testing! Cannabis businesses that understand their processes, document them in SOPs and have records to prove they follow their SOPs (see Step 3) are able to reduce errors that ultimately lead to costly rework and product failures.

Consistency in quality standards requires meticulous SOPs

Step 3: Monitor and improve

You have your requirements, you have your process, but how do you know that they are being adhered to? By the time you have results from a third-party lab, it’s too late. Look internally. Records and logs that show preventive maintenance was performed, room and canopy temperature and humidity checks, inventory reports, production records, extraction equipment report and employee training records shouldn’t be filled out only to be filed away. These records are data, which is your most valuable tool. Unfortunately, records are one of the most overlooked assets in today’s cannabis business. A team independent from operations (typically a Quality Unit) should be regularly reviewing these for inconsistencies and trends that can alert you to catastrophic failures before they occur.

Initially, the additional expenditure and learning curve may make this seem like an added burden, but keep in mind that succeeding in today’s cannabis industry requires long-term customer retention. By biting off one piece at a time, you can slowly implement a QMS that will improve your business, increase customer satisfaction, and ensure your brand is a staple for years to come. Remember, quality and compliance is a journey, not a “set it and forget it” situation.

The definition of a Quality Management System includes ‘continuous improvement’. Look forward to a future article which will discuss the importance of tools like a CAPA Program – Corrective Action Preventive Action (which all cannabis license holders in Colorado are required to have in place as of January 1, 2021) and how they complete your QMS, keeping you compliant and mitigating your business risks!

Sponsored by Agilent

Agilent Introduces New eMethods & Consumables Kits

By Cannabis Industry Journal Staff
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Sponsored by Agilent

Agilent Technologies just announced a new line of products for cannabis testing labs. Their newest tool, Agilent eMethods, are downloadable, plug-and-play instrument methods that “establish reliable efficient protocols with an end-to-end workflow that addresses the different testing needs, and offers guidance on sample preparation, consumables, and supplies.”

Those eMethods give labs a complete analytical system configuration for automating testing, sample prep, separation and detection, along with data processing and reporting abilities. The tool is designed with startup labs in mind, given how tedious developing new testing methodology can be.

According to Monty Benefiel, vice president at Agilent and general manager of the Mass Spectrometry Division, the new tool should give some labs a head start when it comes to method development. “The fledgling market of cannabis and hemp testing has an urgent need for solutions that help ensure efficiency as well as regulatory compliance,” says Benefiel. “Our new tool—Agilent eMethods—along with the Cannabis and Hemp Potency Kit and Cannabis Pesticide and Mycotoxin Kit gives labs a head start in establishing testing procedures, increasing productivity and profitability, and greatly reducing risk.”

In addition to the new eMethods, the company is also rolling out their newest consumables kits: The Cannabis and Hemp Potency Kit and the Cannabis Pesticide and Mycotoxin Kit. These are designed to help labs set up and simplify analyses for complex matrices. They include all the consumables necessary to perform each test and come with step-by-step instructions.

What Cannabis Businesses Need to Do to Adapt to COVID-19

By Arthur Gulumian
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How COVID-19 Impacted Cannabis Businesses

Before jumping into what cannabis businesses can do amid this pandemic, it is crucial to explore the specifics behind how the virus impacted the industry as a whole. From a surface level, it seems obvious what happened: dispensaries had to implement social distancing protocols, require both customers and employees to wear masks and limited the number of customers that can be present on the point-of-sale floor room. But COVID-19 did not merely make shopping experiences a tab bit inconvenient.

Cannabis producers, and especially those involved in manufacturing cannabis goods, experienced an apparent disruption in their production schedules. If the metals and plastics were sourced from Wuhan, Shenzhen or any other dense industrial area in China, supplies suddenly stopped coming, and producers were left with limited production options. Businesses did not consider the value of having various vendors and instead put all their stock in one source. A disruption in production inherently impacts dispensaries.

COVID-19 impacted more than just supply chains, however. For instance, investors are now less likely than before the pandemic to invest in early-stage cannabis companies. Competition for capital now far outweighs the supply for cannabis companies, and we have seen (and will continue to see) a drop in company valuations. Indeed, COVID-19 is affecting more than just currently existing operators but those yet struggling to create cannabis businesses of their own.

Vendors & Supplies

A broad survey conducted by the Institute for Supply Management (ISM) between February 22, 2020 and March 5, 2020 found that 75% of U.S. companies had experienced supply chain disruption as a result of the COVID-19 outbreak. An estimated 90-95% of all components utilized in cannabis vaporizer pens were sourced from manufacturers in Shenzhen, China. In contrast, very few companies used domestic manufacturers. While this is just one example, it is equally important to note that cannabis-specific equipment and supply shortages were not the only factors that disrupted cannabis businesses. Shortages of personal protective equipment (PPE) presented challenges for cannabis dispensaries, producers and manufacturers that continued to operate during the “shelter in place” orders.

Operators must establish a resilient supply chain. Do not simply limit your options to one specific region, as this can be a costly mistake. Operators must cultivate an in-depth understanding of their supply chain beyond critical suppliers and their stress points; they need to develop and follow a systematic supply process that takes potential disruptions and stress points into account. When vetting potential vendors, always ask detailed questions that elicit evidence-backed responses. Ask vendors where they source their materials from, whether they have any history of experiencing disruptions in their supply chain and what kind of setbacks they have suffered as a result of COVID-19.

Investing in Your Core Business

In light of COVID-19, operators must invest in solutions that increase efficiency and improve the customer’s experience. This entails ensuring your customer safely enters and leaves your dispensary with a product they are satisfied with—the essence of any retail operation. Your operation should focus on enhancing customer flow as opposed to encouraging aimless roaming. Having an open-space, Apple store style dispensaries might have been a popular option before, but times have changed, and dispensaries must adapt.

Guided purchases offer not just more efficient transactions, but also serve to ensure that your waiting room isn’t backed up with an endless stream of unmanageable customers. Depending on your locally-mandated COVID-19 protocols, your dispensary will likely not be permitted to hold a high number of customers in the store, nor should it during this pandemic. Each customer service representative must be active as opposed to passive, directly asking customers what they are interested in, offering product or strain choices when customers seem unsure and answering questions as thoroughly as possible to avoid confusion and inherently delays. Be sure to emphasize the value of guided purchases to your employees and how they can promote the safety of both themselves and their customers.

Maintaining Urgency

The uncertainty of COVID-19 and its impact on the general economy has left many individuals “clocked out.” Simply put, many people feel that they should wait until things go back to normal before making any critical decisions. As essential businesses, cannabis operators cannot afford to make this same mistake. Now is not the time to sit back, reflect and wait for the vaccine. Instead, operators must work to precisely assess how COVID-19 impacted their business and execute a clear plan of action to address foreseeable problems.

Execution is far more important than perfection; you’ll need to make changes on a dime and avoid spending excessive hours obsessing over debating specific actions rather than taking them. It is far more essential to get tasks done versus ensuring they are perfect. If something is not working in your business, it must be readdressed or removed entirely from the protocol. It is far better to make necessary changes now amid the pandemic as opposed to reactively waiting and seeing what may come next following it.

Stay nimble by cutting out any factors that may be slowing down your company’s efficiency. Is your point-of-sale system causing issues? Can you use a better payment processing tool? Are any employees underperforming? Are there any internal policies that may be hindering your employees’ ability to work as optimally as possible? These are some of the many factors that must be considered to ensure your business stays agile and adaptable. Determine what is working against you and execute a plan of action to address. Do not wait and do not take shortcuts around regulations.

Understanding the Shift in Purchasing Behavior

Regardless of whether or not a vaccine for COVID-19 is completed anytime soon, operators must know that there is no “returning to normal.” People’s habits and behaviors have changed due to this virus, whereas slow browsing of items might have been preferable for some individuals before COVID-19; this is likely not the case today. Furthermore, research groups like Accenture have found that most customers expect their shopping habits to change permanently.

Source: Accenture COVID-19 Consumer Research, conducted April 2–6. Proportion of consumers that agree or significantly agree.

In the study mentioned above, shopping more consciously is one of the two top priorities for customers during this pandemic. According to Accenture, “[c]onsumers are more mindful of what they’re buying. They are striving to limit food waste, shop more cost consciously and buy more sustainable options. Brands will need to make this a key part of their offer (e.g., by exploring new business models).” Furthermore, customers are now more likely to shop locally; this is why community engagement would be especially important to ensure you develop transparency and trust between your brand and your customers. Understanding this shift in purchasing behavior will remain one of the more crucial tasks of any cannabis operator.

Expanding Sales Avenues

More and more customers are now relying on online and curbside purchases than ever before. Dispensaries must look to their current sales avenues and determine where key focuses should be made. Use your sales data to determine where customers are making their purchases the most, be it through third-party delivery services such as Eaze, standard home delivery, online ordering or curbside pickup. Focus on identifying friction and streamlining the user experience on all customer-facing platforms and services. Equally, consider which platform your customers are using the most to make purchases; are they making more online purchases, or do most still prefer direct shopping at the store? Remember that having more products doesn’t necessarily mean more revenue. You must also identify which products are performing well and which have low margins.

These considerations can help strengthen your highest performing platform while working to fix any more inferior performing platforms. As stated before, stay nimble; if something is not working out, cut it out from your business model, and move forward. Do not be afraid to cut poor-performing platforms to hone your focus on the successful ones. Since post-COVID-19 shopping behavior is likely to stay permanent, these changes may still be applicable following a slowdown or cessation of the virus.

Delighting Your Customers

Virus or not, customer satisfaction remains one of the most crucially defining points for the future of your business. Your customers must be safe and must be happy with their purchase. To ensure this outcome, you need to maintain adequate safety policies while equally promoting streamlined purchases. Although a limited number of individuals may be annoyed with over-the-top safety precautions, most customers will enjoy the heightened security that comes alongside these types of measures.

Contactless service, such as having customers scan their identification upon entry or encouraging more credit card versus cash transactions, can increase customer satisfaction, as they will feel a stronger sense of security when shopping at your dispensary. Focus on streamlining curbside pickup. Things such as requiring vehicle descriptions (e.g., license plate numbers, color, make) for curbside pickup purchases can go a long way in helping employees quickly identify customers.

Equally, be sure there is hand sanitizer available near the entrance of your dispensary. This adds a further sense of security for your shoppers. Delivery should be consistent; delays and setbacks must be minimal to win the confidence of your customers. Take the extra steps to ensure your dispensary is clean and products hygienic. All these factors work to increase customer satisfaction while maintaining their safety, and more importantly, impact the level of trust your customers have in association with your brand.

Scaling Operations Taking Advantage of Limited Competition in Emerging Markets

As stated before, several individuals—including existing and emerging cannabis businesses—are clocked out following COVID-19. This mindset is not only detrimental for operations but can also impact how you scale your business. New markets are coming online and will continue to do so as regulators are increasingly incentivized to replenish government coffers. Riverside County in California, for instance, is now allowing for capless licenses for all cannabis business types. However, what remains the key focus for regulators is expanding the number of delivery and distribution operators. In Massachusetts, delivery endorsements for dispensaries are available without a set deadline to social equity applicants and do not have a defined cap. In Illinois, the cap for transporters was equally removed, and each applicant who scores above 75% will receive a license.

These types of licenses are now more valuable than ever before for two reasons. The first reason is that regulators are keener to award delivery and transporter licenses than other types. Secondly, customers now prefer home delivery over shopping in stores due to COVID-19. With more people clocked out during these times, you have far more opportunities and far fewer competitors during application processes. Use this time to truly develop a strategy for expansion, as the chance might not come so quickly again.

Conclusion

As a final point, be sure to expand your online presence during this time. Although you may not have the capacity to reflect your company’s personality and value through quick in-store transactions, you can use social media to encourage product reviews, social interactions, and recommendations. Invest in marketing through social media platforms. Platforms such as TikTok have helped form communities of like-minded individuals. Use platforms such as that to highlight your company’s personality and values, avoid being “salesy” and focus more on being funny, entertaining and just alive. Character adds value to your business.

People want to laugh, to feel safe and they want to live. Create social interactions and immersion and always prioritize being honest and transparent with your customers. This final point stands as equally as important as the rest of the considerations highlighted throughout this article. Stay nimble, stay active and stay alert! Do not view the chaos behind this pandemic as a pit, and instead see it as a ladder. Track down opportunities, do not be afraid of change, and, more importantly, do not wait for an answer to COVID-19, be the answer.

extraction equipment

Moneybowl: How Data Analytics Can Improve Extraction Processes

By Dr. Markus Roggen, Sajni Shah, Stella Zhu
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extraction equipment

When data analytics was first introduced in the sports industry, it was met with a lot of criticism. But then it began to show results; a popular example being the story of Oakland Athletics Manager Billy Beane, depicted in the movie Moneyball starring Brad Pitt. In the cannabis industry today, we face familiar hurdles. Everyone is focused on extracting as much CBD oil as they can, but not many are optimizing the process. We even hear that data analytics is too difficult, that it does not help and no one has time for it. In contrast, the sports industry nowadays widely uses statistics and analytics, because it has proved to be effective. They use data analytics to choose their players for a team so that they have the best chance to win the championship. NBA teams have entire departments focused on data analytics, so why doesn’t the cannabis industry? Focusing on basketball, what if the approach taken to pick players for an all-star team was employed in the cannabis industry? Imagine your instruments as players and their parameters as their skills. Now, all you need is data analytics to help you decide how best to optimize your team. Paying attention to the numbers, could help you win in the cannabis industry.

extraction equipmentWhen thinking about players in basketball, one factor of interest is the “Players Offensive Rating”, which is the amount of points produced by a player per 100 possessions. In this scenario, you want the player to have a higher offensive rating as it means that they have a better chance of scoring points when they have the ball. Similarly, in cannabis production, you would want your instrument to yield as much product (points) per hour (possession) as possible as well. So, the cannabis extraction analogy for offensive rating is “Yield Per Hour”. By increasing the yield per hour, the instrument can extract more product in the same time frame, increasing overall output and reducing product cost per gram. In this scenario, the biggest extractor is not necessarily the fastest, and any supercritical CO2 extractor will be slower than, for example, ethanol extractors.

Another important factor that’s considered in basketball is “Shooting Efficiency,” which looks at the number of successful baskets made by a player in comparison to the number of shots taken and where the shot was taken from. Having a player with a high shooting efficiency would result in a good chance for that team scoring points over their competitors. This principle is similar in cannabis, while a high yield (number of shots) is great, you also want a high purity (baskets made) of your target compounds or “Percent Purity”. This means you will get a higher percentage of the compounds you want, such as cannabinoids, for every gram of oil extracted. Here, the supercritical CO2 extractor shows its superiority over ethanol, as density modulation of the supercritical CO2 allows for the separation of terpenes or cannabinoids from the rest.You can see that a team that has a better synergy has a higher winning rate. For the same reason, the cannabis extraction process can be optimized by adjusting the parameters of the instrument. 

For one last example, let’s look at “Number of Steals” as well. This is the number of times a defensive player successfully tackles the ball from an opposing player before they manage to shoot a basket. If this is high, opponents have fewer opportunities to shoot and score points. Similarly, “Percent Recovery” in the cannabis industry is important to ensure that the target compounds in your flower are being extracted. The solvent should have the chance to extract the compounds (steal from the opposition), before the run ends (the opposition shoots). A high recovery gives a higher overall output for the materials that were input, generating more product overall. In theory, if you wait long enough every solvent can reach full recovery, but for supercritical CO2 in particular there is a practical ceiling around 80% recovery.

While thinking about these variables in isolation is the first step, it is just as important to see how the variables interplay with each other. A concept is introduced here called “synergy”. A team member must establish a good cooperation with the entire team according to their own characteristics. For example, taller and stronger players whose “Offensive Rating” is higher are more suitable for guards, while those with a high “Shooting Efficiency” are more suitable for forwards. You can see that a team that has a better synergy has a higher winning rate. For the same reason, the cannabis extraction process can be optimized by adjusting the parameters of the instrument. For example, if you increase the extraction speed, which is “Yield per Hour”, you may need to compromise on “Percent Purity” as the increased speed may not allow for the optimal extraction of target compounds. Similarly, you may also need to compromise on “Percent Recovery” as a slower extraction rate will do a better job at having a higher recovery. Thus, in order to improve the overall process of extracting oil, there needs to be a focus on analyzing the synergies between different factors to guarantee optimal parameters for your benefit.

These examples highlight some of the basic data analytics that can be conducted on your instruments. However, there’s still one challenge to consider, most professional NBA teams have entire departments just for data analytics. How can you possibly accomplish conducting these analytics for your entire cannabis LP in addition to your regular job roles? That’s where we come in. Other than the “Yield per Hour”, “Percent Purity” and “Percent Recovery” listed above, CBDV can perform customized data analysis based on your company’s data. Let our team help you integrate the “boring” and “half-baked” data, and present you with a visual and clear data analysis report. Let us help you lead your team to win that championship in cannabis!

Acknowledgements

  • David “Davey” Jones
  • Dr. Tara Zepel

Managing Supply Chain Challenges During a Crisis

By Daniel Erickson
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Discussion of supply chain disruption has permeated media reports almost daily since the advent of the current COVID-19 crisis – from shortages of toilet paper to cleaning products and meat. Cannabis businesses have not been immune to impacts on their supplies, and for an industry that faces unique challenges during normal times, a disrupted supply chain has emerged as one of the biggest issues to business due to the coronavirus. Deemed essential in many states, cannabis has weathered the storm relating to government-imposed restrictions only to face logistics problems or a scarcity of supplies necessary for manufacturing and/or distributing products to consumers. For many companies, cannabis ERP software has provided a necessary and supportive structure to efficiently manage and mitigate supply chain challenges during this unprecedented time – facilitating continuity and trust in the supply chain for their customers.

What is COVID-19’s impact on the cannabis supply chain?

During this pandemic, the global supply chain has been disrupted due to factory closures, worker illness, slowed production, closed ports and altered transportation routes – leading to shipping delays and fewer supplies available, from cultivating essentials and vaping accessories, to baking ingredients for edible manufacturers and packaging materials. A quarantined workforce, as well as a shortage of healthy crop care and production workers necessary to grow and harvest crops, has also had an effect. Similar to other current supply issues, there has been significant inventory depletion as consumers prepared to stock up on cannabis products for “stay at home” orders in anticipation of spending extended periods of time at their residence. Uniquely pertinent to the cannabis industry, due to the lack of federal legalization, regulation occurs at the state level and therefore each state governs its cannabis inventory available for sale. These factors have all led to the two biggest problems facing today’s cannabis industry – companies lacking visibility into their inventory and the fact that many do not have alternate vendors for their supplies to meet current consumer demands.

How a cannabis ERP software solution can help

During a disruption to the supply chain such as the COVID-19 outbreak, natural disasters, or other unexpected events, here are three ways an industry-specific ERP system supports effective supply chain management for the cannabis industry:

1) Continuous management and monitoring of inventory and effective material planning – With a real-time tracking system that monitors the movement and storage of inventory by managing and automating transactions and providing lot tracking and traceability, cannabis companies have up-to-the-minute access to crucial inventory data. Accurate analysis of future requirements, as well as procurement guidelines that include minimum order quantities and safety stock levels, ensure the proper planning and reordering of materials – avoiding lags in production due to inventory shortages. Using the information recorded in an ERP solution’s centralized database, such as vendor lead times, shelf life and production timelines, buyers and planners are able to effectively utilize materials requirements planning (MRP) functionality to factor supply, demand and forecasted requirements to plan production and purchasing. Customer purchasing fluctuations throughout the year for holidays and seasonal consumer trends are also tracked in the system, and its analytics software provides growers, cultivators and manufacturers with the visibility to mitigate supply shock and analyze previous periods of hardship to provide actionable insight.

An integral part of inventory control includes testing protocols and quality processes that are automated in an ERP solution. These workflows and approval processes ensure that specific quality standards are met and non-compliant raw materials are quarantined, removed from production and issues are rectified – keeping undeclared substances, harmful chemicals and impure ingredients from infiltrating the supply chain or ending up in finished goods. During these critical and trying times, assurances that materials and ingredients are safely managed and monitored is imperative.

2) Maintenance of supplier information and rankings – A cannabis ERP solution provides features for managing supplier and item specific details to monitor and control which materials can and should be purchased from each vendor. A strong relationship with each supplier is critical in gathering this information, as this helps assign and manage a risk level with each supplier. Current and accurate information (either provided by the vendor or acquired from on-site visits) regarding sanitation programs in place, security measures, physical distancing policies and other details ensures that a cannabis company starts with a foundation of quality raw materials for their products. An ERP solution maintains a list of these approved suppliers to provide already vetted and documented alternatives should a primary supplier’s materials be unavailable. Once vendors are recorded they can be ranked in order of preference and/or risk level so that if a supplier becomes unavailable, another can be quickly identified and used in its place. An ERP’s maintenance of approved supplier lists is an industry best practice that provides supply chain visibility to enhance the assurance of safety.

3) Establishment of supplier transparency through audit rights and communication – An ERP’s ability to manage and monitor all supplier transactions and communications helps facilitate audit rights to evaluate the financial viability of vendor partners. Data is collected regarding vendor price points, historical transactions, average lead times and quality control results in order to identify vendor trends and build a risk assessment with a scorecard rating system for each supplier. Potential supply chain issues can be identified in real-time – such as price increases or delivery delays – prompting communication with suppliers to address problems or triggering the change to an alternate source for materials. Transparency and open communication are key to vendor analysis by researching all suppliers. An ERP solution’s maintenance of current, accurate information is essential to keeping a consistent inventory.

A centralized ERP system facilitates the maintenance and management of the supply chain when a crisis of the magnitude of COVID-19 hinders supplies from arriving or the safety of vendor materials comes into question. Inventory management best practices within the solution help to avoid production lags due to inventory shortages, materials planning provides insight into scheduling and production, and quality assurance procedures prevent harmful products from being sold to consumers. By utilizing features such as the approved supplier and alternative supplier processes within the system should a primary suppliers’ materials be unavailable, there is no need to scramble to find replacement vendors, as they are already vetted and documented within the solution. The system also provides transparency of supplier information to make key decisions regarding vendor rankings and risk level. While the cannabis supply chain is relatively new and untested, proactive companies have the technological tools available in an ERP solution at their disposal to weather the current crisis and face future industry challenges head-on.

How to Streamline Labeling from Seed to Sale in The Time of COVID-19

By Travis Wayne
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As if the cannabis industry doesn’t regularly go through enough rapid change, with COVID-19, cultivators, processors and dispensers of all sizes are trying to do more with less. Lower operational headcount and unpredictable production volume, along with a rapidly-changing supply chain – make eliminating manual steps a necessity. Labels include barcodes or various barcode symbologies to help companies manage inventory, identify products and ultimately ensure that the right products get to the right customers at the right time. By eliminating manual steps in your labeling environment, you can address these issues through automation, scalability, efficiency and accuracy: benefits that will last through the pandemic and position you well for the recovery period.

Automation

Automation of many kinds is being implemented from seed to sale including barcode label printing automation. Integration of labeling software and seed to sale traceability systems including METRC, BioTrack, Leaf Data and others enables streamlined barcode label data population and high-volume label printing to counteract the decreasing operational headcount and eliminate manual touchpoints.

Print automation can be defined as “a centralized technology that replaces the manual process of triggering a print job within a labeling environment.” Look for a labeling software solution that allows you to:

    • Completely automate your label printing process
    • Print to a greater number of printers
    • Initiate printing directly from any business system
Integrating your label printing system with your seed to sale traceability system can minimize errors, increase print speeds and maximize your ROI.

By integrating your label printing system with your seed to sale traceability system, you can expect to minimize errors, increase print speeds and maximize your ROI. Your business system already holds the variable data such as product names, license number, batch or lot codes, allergens, net quantity, cannabis facts, warning statements and more. By systematically sending this data to the right label template at the right time, labeling becomes an efficient and cost-effective process.

Scalability

One of the most important considerations for cannabis cultivators, processors and dispensers is to invest in solutions that can grow and pivot quickly as the business changes. Whether you are responding to temporary requirements or changes, or your business needs to scale up quickly to respond to a spike in demands as a result of COVID-19 or to prepare for coming out of this pandemic. Whatever your needs are, think about short-term and long-term goals for sustainable business solutions. Scalability includes:

Printing to a greater number of printers

As needs and automation requirements change, and your printer inventory has the possibility of increasing, make sure your labeling design software can be licensed per simultaneous user, with cost-effective, multi-user networking licenses. That way, you don’t run the risk of paying for more printers as you grow or going over budget with each additional printer.

Print documents and labels from the same application

If you use the same data for your documents (like order receipts, bills of materials or packing lists) and labels, moving document printing into your label design software makes sense logistically. An advanced label creation and integration software enables label and document printing standardization by allowing multiple database records to be on one file. That means when new documents or labels come into your database, your software can seamlessly integrate.

Efficiency and accuracy

In a time where responding to the changing market needs to happen very quickly, where costs are being scrutinized and when errors cannot happen – you need to set up your labeling environment to have high levels of accuracy and control. With increased accuracy you will reduce waste, eliminate returns due to mislabeled product, efficiently track product and gain more efficiencies that will save you money and time.

Cutting manual steps out of the process

Removing manual steps in your printing process is a sure-fire way to gain efficiency and accuracy in your labeling environment. Look for labeling software features that allow you to add variable data from a device to your labels automatically, which limits the human interaction with your labels and in turn helps minimize human errors. Other efficiencies include:

On-demand color labeling streamlines efficiency and accuracy across a wide variety of labeling needs.
  • Increased print speed within your labeling environment
  • Reduced label waste
  • Collection of data from several devices such as:
    • Scanners
    • Scales
    • Keyboards

On-demand color labeling

On-demand labeling is specifically helpful in the cannabis labeling world because of all the regulations you must comply with. Each state has its own regulations, which means each label throughout the cannabis supply chain must be compliant with whichever state they are located. With on-demand labeling, cannabis companies print labels as needed and make changes as they go without the risk of wasting obsolete pre-printed label stock. This is beneficial as pre-printed labels often have large minimum order quantities. On-demand labeling also helps companies maintain better control of their own branding and graphics.

With on-demand labeling, label information can be populated by using pre-approved label templates in order to save you time with the variations of cannabis labels. This gives you the ability to print the specific label you need without having to waste your pre-printed label stock, or spend time switching out your pre-printed label stock in your printer.

Cannabis cultivators, processors and dispensers are faced with many obstacles during these challenging times due to COVID-19 – ensuring workers are safe, keeping operations at 100% capacity with potentially fewer people, creating contingency plans that may be changing daily. In an environment that is changing very quickly, consider how labeling solutions can evolve. You may also need to lean more on your partners than you ever have in the past.

5 Factors to Keep in Mind When Entering the Regulated Market

By David Perkins
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It’s a different world growing cannabis in California- in fact, it’s a completely different experience than it was even four years ago. It can be overwhelming to begin the process, which is where an experienced cultivation consultant can help. This article will highlight 5 factors to keep in mind before you begin growing in California’s regulated recreational market.

Start Up – Costs, needs & endless variables

So you’ve decided to begin a recreational grow, here are the factors to consider before you get started.

Permitting, the necessary pre-cursor to cultivation, can be time- consuming, extremely expensive, and overwhelming. General experience dictates that any grow will take longer than planned and cost way more money than you ever expected or anticipated. Always account for more money and time than you think you need. Working with an experienced consultant can help you plan and account for all the costs and variables you may not have considered, prior to beginning cultivation, in order to ensure your success.

Understand that growing boutique style cannabis is very difficult on a large scale, consistently.

Equipment. When choosing what equipment to use, stick to reputable equipment manufacturers. Don’t just go with the latest high-tech gear because you see it on Instagram being advertised by a big, fancy grow operation. Stick to what you know best. Do your homework and research the equipment as much as possible, prior to purchase. Use equipment that has been tested and well documented with success. Some questions to ask yourself: is this necessary? Is it cost effective? Will it help me reach my goals?

Grow your business slowly and naturally. Getting too big too quick will most likely expose inefficiencies in your operating plan, which will be further compounded when production increases. Don’t sink before you can swim and start out on a massive scale before you have perfected your process.

Cultivation – It pays to design it right the first time

Success begins in the grow room. Never forget that. A properly engineered cultivation plan can be the difference between 3 and 6 harvests per year. Again, it is imperative here to do your homework. A well-thought-out plan can make or break you, and that is where an experienced cultivation consultant can help.

Set realistic expectations. Understand that growing boutique style cannabis is very difficult on a large scale, consistently. Don’t expect to grow perfect cannabis every time – it is unrealistic and can ultimately lead to failure if your financial model depends on it. Growing a plant, while mostly in your control, involves too many variables to rely on a perfect outcome round after round. You can do everything in your power, yet something unexpected can still happen and be detrimental to your yield, and therefore your profit. You must expect and plan for this.

Automating as much of your grow as possible is always a good idea. This will greatly reduce labor costs and more importantly, minimize human error. In some instances, it will even allow you to review data and information remotely, in real time, allowing you to ensure your cultivation site is always running as efficiently as possible, even when you aren’t there.

Processing – Don’t skimp on the process

If you are going to be harvesting cannabis for flower, it is imperative to have a properly built facility for drying, curing and storing your product. You must consider that this building will need to be large enough to house and properly store all of your harvest at once. This can make or break your crop at harvest time. If you don’t have the capacity to handle your harvest properly, it can lead to disastrous issues such as mold or too quick of a cure – conditions which make your cannabis unsellable in the regulated market.

dry cannabis plants
Rows of cannabis plants drying and curing following harvest

Although costly, if done correctly, you can also design this area to serve as your propagation, trimming, and breeding areas, which will ultimately save on costs in the long run.

Also keep in mind, hand trimmed cannabis will always look more appealing to the consumer than machine trimmed cannabis. However, hand trimming can be time-consuming, labor-intensive, and therefore far more costly than machine trimming. These are factors you will need to consider and budget for when deciding how to proceed. If you use a machine, you may save money up front, but will you be able to sell your cannabis at full price?

Distribution – Have a plan

It is a good idea to have a plan for distribution, prior to start up. If you have an agreement with a retail outlet (or contract with a distributor) in writing, you will protect yourself from financial failure. Cannabis will never grow more valuable over time, therefore, you want to have a plan in place for distribution, as soon as the cannabis is harvested and processed. Just as was the case in the black-market days, you never want to hold on to your cannabis for long periods of time.

Do not distribute without agreements in writing! While some oral agreements may be enforceable, it will be extremely costly to litigate. Therefore, you should plan to hire a lawyer beforehand to create fail-proof agreements that will hold up in court, should a distributor not pay you for your product.

Sales – Build your brand, but be realistic

Building your brand is important. And if you don’t produce your own high-quality flower you cannot expect to have a product up to your standards. Your brand will not be successful if you cannot consistently provide consumers with high quality cannabis. Relying on other growers to produce your cannabis for you is risky to your brand. Even if you are a manufacturer, you may not be able to rely on other suppliers to maintain the quality volume you need in order to manufacture your products consistently.

The regulated market in California is new. Therefore you must necessarily account for a great degree of price fluctuations in the market. When creating your budget at the outset, you must account for fluctuations in profit. Knowing when prices are going to be at their lowest can help you avoid having an oversupply of inventory. It can also help you avoid such situations by planning your cultivation/harvest accordingly.

There are both consumer and government influenced market trends that can affect your bottom line. These must be accounted for at the outset.

On the consumer level, you must know what people are buying and how they are consuming. And these factors can change quickly with the introduction of new technology, methods or new devices intended for cannabis consumption. You must stay on top of these trends.

The government regulations can also affect these trends. Products used for cultivation can become banned, i.e. products you once relied on in your cultivation can be found to have contaminants known to cause test failures, even in “approved products.”

Ultimately, all of these factors can make or break your success, and therefore, must be considered, researched and accounted for prior to beginning your cultivation in the regulated market. Working with a consultant with over 20 years of grow experience, and more importantly, extensive experience in large scale cultivation in the regulated market, can help you achieve the success you desire. Cultivation in the regulated market is costly, but working with a consultant can help you cut costs at the outset, and save you from unexpected expenses in the long run.

Cannabis Economics & Creating Efficiencies for Profit Margin

By Laura Breit
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News of cannabis glut and falling wholesale prices has been dominating the airwaves of late, despite some recent reports showing that prices are remaining steady. As legalization continues to spread across the nation, the industry is poised to become commoditized, especially in those areas where it has been legal for a longer period of time. Whether specializing in retail cannabis products or industrial hemp, companies in the cannabis industry should be taking note of the sweeping economic implications of a maturing marketplace.

As is true in any industry, rapid growth and significant investments are sometimes followed by a slowdown (think dot-com, but less extreme). There are measures that companies can take in order to avoid negative outcomes, and a step in the right direction includes focusing on the bottom line and planning for future growth. Company leaders need to educate themselves on the competitive landscape and take the long view toward solutions for their operations.

Sounds easy enough, but how do we actually do this? One key step is to pay attention to overall expenses and create efficiencies wherever possible in order to remain competitive. This means that during the facility and systems design phase, all outcomes need to be taken into account. One of the most important – and cost conscious – things to consider is energy usage. Energy Star, the EPA-backed program for energy efficiency, says that facilities can “reduce their energy use by up to 30 percent through low or no-cost measures.” Generally, this means that efficiencies are built-in to the design with energy cost savings and sustainability in mind.

One of the largest energy outputs for a cannabis operation includes the facility’s HVAC and electrical systems. We have found that when clients step back to consider a range of alternatives, they have a more comprehensive base for this important decision. Considering outside factors, such as growth projections and specific goals, cannabis companies can make a more educated decision on the system that will provide the best economic outcome for their business. Often, those that plan ahead and look past the initial system cost, find longer term savings and lower energy usage over time.

A plant in flowering under an LED fixture

As an example, we had a client looking to build an indoor cannabis cultivation operation. They had originally chosen to build their facility with high pressure sodium lighting to save money up front. Because this method of lighting typically has a lower first cost, it appeals to many companies that are starting out and wary of their budget. However, this particular client was poised for growth and looking to make sustainable choices that would impact their bottom line and meet their goals for environmentally sound business practices. We were able to create a model for them to illustrate the long-term benefits of installing LED lighting. This type of lighting allows growers to keep room temperatures higher, without compromising plant health with issues like tip burn. In addition, LED lights are more efficient and reduce the cooling load. This means mechanical systems were able to be downsized reducing first costs, and these systems also consumed less energy, reducing operational costs. Despite a higher first cost of the LED lights, the company ended up saving enough money in the reduced mechanical equipment size, as well as in the reduction of energy use from the lights and the mechanical equipment. The first costs between an HPS system and an LED system were much more comparable than originally expected, and they were able to keep their operational costs to an absolute minimum. This type of scenario has proven true over and over when models are built to show longer-term cost benefits for electrical and HVAC systems, using analysis from an experienced team of designers and engineers.

While the greater economic outlook for the cannabis industry is in flux, a thoughtful approach can help operations avoid negative outcomes. As more and more companies continue to enter the space, investments roll in and supply rises, we will all watch to see if demand will match this growth. Taking note of incremental methods for impacting the bottom line, such as smart HVAC and electrical system selection, can mean the difference between success and failure (and profit margins!) in this turbulent landscape.

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Increase Density in your Canopy

By Carl Silverberg
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One goal all growers seem to agree on is the need to increase density in their houses. How that gets done, well, there are a variety of ways and here’s one way a grower chose to do it:

With 45,000 square feet of greenhouse space, Nathan Fumia, a cannabis grower and consultant for a commercial operation in California, wasn’t pleased with what he was seeing. “If I put my hand inside the canopy and I can see sunlight on it, I’m losing money,” was how he described the situation. Unfortunately, the operators and staff of the greenhouse disagreed. They thought increasing density would rob the leaves of needed light.

He chose to test his theory by increasing the number of plants on one of his benches from 140 to 150 plants. To ensure the validity of the research, Nathan grew the same strain on Bench 1 as Bench 2, and to make sure all the metrics were equal, he even processed the crops separately. After weighing, Bench 2 (his research bench) showed an 8% higher yield than Bench 1.

“The post-harvest data from the weight, yield confirmed my decision to maximize density by increasing the total number of plants per bench,” says Fumia. “Whenever I saw red on the canopy heat map from LUNA, I knew there was room for improvement and I knew that I wasn’t making the money that I should have from those areas.”

His next challenge was where to place the extra ten plants? Did it make a difference or could he just shove 150 plants in a space that was originally planned for 140? Again, his greenhouse system was able to pinpoint the best sub-sections on the benches and Nathan was able to see exactly which plants were growing the fastest. That also gave him the ability to understand why certain quadrants of the bench were doing better than others.

“We were able to determine which quadrant on which bench was already at 100% density, and determine which quadrant wasn’t. Without that data, it would have been pure guesswork.”

He dialed down even further to find out which cultivars grew the best on a particular bench in the greenhouse. “Some cannabis cultivars need more light, some need less, some need warmer climates, and some need cooler climates,” Fumia noted. “Additionally, in order to increase the density of flowering points/buds, we began focusing on better pruning techniques in the vegetative phase, directly increasing branches for flowering.”

With optimization even more important now than it was 12-18 months ago, Nathan summed up the impact on his bottom line. “With a crop cycle averaging just over six a year, at that time we were averaging $600-$800 a pound depending on the strain. Some were even more. Ten extra plants per bench per cycle was a nice bounce for us.”

Obviously, this isn’t the only way to increase density. What’s your suggestion? Share your ideas with the rest of us by posting your comments below.

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Taking the Guesswork out of Horticultural Lighting

By Leora Radetsky
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With 33 states and the District of Columbia having passed laws legalizing marijuana in some form, cannabis cultivation is quickly becoming a booming new business across much of the US. From an energy standpoint, unfortunately, it’s not easy being “green”.

New Frontier Data’s 2018 Cannabis Energy Report found that legal cannabis cultivation in the US consumes approximately 1.1 million megawatt hours of electricity annually – enough to power 92,500 homes or a community the size of Newark, NJ, and accounts for carbon emissions equivalent to that of 92,600 cars. And that consumption is forecasted to increase 162 percent from 2017 to 2022. The report recommended that the industry “evaluate energy-efficient and renewable energy technologies” to nip this challenge in the bud.

Growers seeking to reduce their electricity usage through more efficient lighting face a confusing landscape of options, however. It can be difficult to know what will save electricity and work well for their operations. Technology is advancing quickly and questions abound, from how long a fixture will last and whether a manufacturer’s claims about efficacy are accurate to the effectiveness of various wavelengths for growing a particular plant.

Here’s the good news: there are reliable, third-party lighting and safety standards to help indoor growers make the leap from old-school lighting to state-of-the-art light-emitting diodes (LEDs) that use a fraction of the electricity and are increasingly effective for growing crops from cannabis to tomatoes. Here’s a closer look:

Most lighting fixtures in the North American market go through rigorous inspection by certified third-party testing labs. The first part of the check is for safety – an official UL safety standard tailored for the unique challenges of the greenhouse environment was recently released (UL 8800, the Standard for Horticultural Lighting Equipment and Systems). This standard and similar safety certifications at other major labs address wiring, environmental conditions, ingress protection and worker safety related to prolonged photobiological exposure to the eyes and skin. Growers should always ask a fixture manufacturer about safety certification specifically targeted for horticultural environments.

Next on the standards checklist for horticultural fixtures is performance testing. This often happens at the same labs that do safety testing, but is designed to verify efficacy, output, spectrum and other important performance variables. Commercial labs are certified for specific standards, so that a test on a fixture is repeatable at any other lab certified to the same standard. This performance testing results in a report summarizing items like photosynthetic photon flux (PPF), input power (watts), photosynthetic flux efficacy (PPE, measured in μmol/J or micromoles of photosynthetic photons per joule of electrical input power), and spectral content (flux per nanometer (nm) between 400 and 700 nm).

Then, there are flux maintenance standards (such as IES LM-80 and IES TM-21) that help make sure the photosynthetic light output of LED products degrades at an acceptable rate to make a grower’s investment worthwhile. The testing and calculation methods that go into these standards were painstakingly developed through a consensus of knowledgeable lighting stakeholders. A key difference between general lighting and plant lighting, however, is how flux maintenance is measured and benchmarked – the bar is significantly higher for plants compared to people since their metabolism and growth are dependent on the light spectrum and amount.

A plant in flowering under an LED fixture

What’s described above just scratches the surface of the detailed testing used to determine and communicate performance features for commercial horticultural lighting fixtures. There’s a lot of important information to know, but it takes an informed reader to analyze this information and use it to select appropriate horticultural lighting. Our organization, the DesignLights Consortium (DLC), strives to make the vetting process easier for everyone, freeing up growers to focus on their core business.

In the early days of LED lighting, electric utilities had to compare these different lighting factors and reports to inform their energy efficiency rebate/incentive programs. The DLC was founded to fill this need, serving as a central clearinghouse for setting energy efficiency and other product performance minimum standards, and to evaluate products against those standards. Then and now, lighting products that pass review qualify for an online qualified products list (QPL) that utilities use to quickly and accurately incentivize high-performing products.

Credit: ProGrowTech

With its new minimum performance standards for horticultural light fixtures, the DLC seeks to accelerate the adoption of new energy-saving LED fixtures in controlled agriculture environments. To be on the new DLC Horticultural QPL, an LED fixture must be at least 10 percent more efficacious than the best non-LED alternative – a 1,000-watt double-ended high-pressure sodium (HPS) fixture. It also must have a Q90 of 36,000 hours (the number of hours before the photon flux output depreciates to 90 percent), and its driver and fan (if included) must have a rated life of at least 50,000 hours.

Most importantly, every product is listed online in a searchable, filterable database to help growers and facility designers quickly narrow their options. For example, in a retrofit, a grower might know what PPF is needed from each fixture but might also need to stay within a power budget to avoid rewiring circuits. The DLC’s Horticultural QPL can be filtered to quickly find and compare conforming products.

When a new technology is introduced, there is always uncertainty about how to optimally apply it. The horticultural world is no different. We look forward to research supporting additional predictive metrics that allow us to take advantage of the full benefits of high-performance LED and controls technologies. In the meantime, the established standards described here allow for energy efficient and safe cultivation facilities where growers can confidently produce more with less.