Tag Archives: Focus Article

The $3 ‘Cover Charge’ Cannabis Retailers Are Leaving on the Table

By Brett Harris
No Comments

Imagine every customer who enters a dispensary paying the business an additional $3.

No new entrance fee. No increase in cannabis prices. No additional foot traffic required.

The retailer simply captures about $5 in accessory sales per customer, with an average gross margin of roughly 60%. That produces approximately $3 in additional gross profit from a person who already walked through the door intending to make a purchase.

Across hundreds or thousands of transactions, that $3 begins to look less like incidental revenue and more like a meaningful response to the cannabis industry’s profitability problem.

Yet most dispensaries remain a long way from that goal.

The industry has spent years debating how to increase traffic, protect cannabis margins, and compete against discounting. Meanwhile, it routinely allows customers to leave the store without everything they need to consume the products they just bought.

Accessories often represent only 1% to 2% of dispensary revenue, according to internal LuvBuds data, even though they are legal consumer products with some of the strongest margins available to retailers. The issue is not that customers do not want grinders, batteries, cones, trays, storage products, cleaning supplies, or glass. Most stores have not made those products visible, accessible, or easy to purchase.

 

Customers should not need a second stop

A flower customer may need a grinder, lighter, pipe, or rolling papers. A vape customer may need a compatible battery. Someone investing in premium flower may benefit from proper storage. Anyone who regularly uses glass eventually needs cleaning supplies.

These purchases should be part of the same transaction.

Traditional retailers understand this instinctively. Shoe stores sell socks and laces. Electronics retailers sell chargers and protective cases. Grocery stores place complementary products together to increase basket sizes. It is a tried-and-true strategy because making customers visit a second business is bad retail.

Cannabis developed differently. Dispensaries became highly sophisticated at managing regulated products while treating the tools used to consume them as someone else’s problem. When stores do sell accessories, the products are often placed behind glass, scattered near the register, or selected haphazardly instead of based on actual sales performance.

That approach leaves revenue on the table and creates a disappointing customer experience. When a shopper cannot find a basic accessory at the dispensary, the retailer sends that person to a smoke shop, convenience store, or online seller to complete the transaction.

Dispensaries already acquired the customer and earned their trust. They should be able to complete the purchase.

 

The opportunity is measurable

The results change quickly when retailers treat accessories as a managed category.

Across more than 120 stores participating in our merchandising and inventory programs, accessory sales have increased by at least 80%, with some locations recording gains of up to 300%.

That growth does not come from attracting a different kind of customer. It comes from bringing the right products onto the sales floor, presenting them coherently and keeping them in stock.

A successful accessories category does not require turning a dispensary into a sprawling head shop with hundreds of bongs. Most stores can capture the majority of the opportunity with approximately 40 to 50 carefully selected products.

The exact assortment should vary. An urban adult-use store, a neighborhood medical dispensary, and a tourist-focused retailer have different customers. Each should identify the products that sell consistently, maintain appropriate inventory levels, and eliminate the dead stock taking up valuable space.

The objective is not abundance. It is disciplined availability.

A $500 piece of glass probably does not belong in every dispensary. A dependable $10 or $25 piece might. Customers may not expect an enormous wall of specialty products, but they reasonably expect to find a battery, grinder, cone, or basic pipe where they purchase cannabis.

 

Displays cannot succeed without execution

Merchandising matters, but a display by itself will not solve the problem.

Products must be replenished. Sales velocity must be tracked. Underperforming items must be replaced. Budtenders must understand what is available and how it fits into the customer’s purchase.

The cannabis industry frequently underestimates the importance of that final point. Budtenders remain enormously influential, but many receive extensive education about flower, concentrates, and edibles with almost no guidance about the accessories that support those purchases.

The recommendation does not need to feel like an aggressive upsell. It can be as simple as asking a vape customer whether they have the correct battery or reminding a flower customer that proper storage can help protect the product they are buying.

That is service, not pressure.

Retailers also need someone to own the category. When responsibility is loosely spread among store managers, buyers, and frontline staff, inventory gaps appear, and displays deteriorate. Vendor-managed inventory can help, but only when the retailer and vendor remain accountable for keeping the program functioning at the store level.

The opportunity is straightforward, but the execution must be consistent.

 

A category is moving toward the dispensary

There is also a larger shift occurring outside cannabis retail.

Smoke shops have historically captured much of the accessory business, but many now depend heavily on product categories facing increasing regulatory pressure, including flavored nicotine vapes, intoxicating hemp products, and kratom. Those regulatory decisions are threatening profit centers that have historically supported their broader merchandise selections.

In Denver, where LuvBuds is headquartered, a flavored-nicotine ban that took effect Jan. 1 affected approximately 575 retailers. One smoke-shop owner told Denver7 that flavored nicotine had accounted for roughly $750,000 in annual sales — about half of her business. Whatever one thinks of these policies, the retail consequences are real.

Dispensaries have an opportunity to reclaim the cannabis-specific portion of that market.

They already possess the customer relationship, the relevant product knowledge, and the controlled retail environment. They do not need thousands of products or cases filled with novelty glass. They need the core assortment that solves the needs of most customers most of the time.

Accessories will not fix every structural problem facing cannabis businesses. They will not change tax policy, produce federal banking reform, or reverse wholesale compression.

But retailers cannot build their plans entirely around reforms they do not control.

They can control what is displayed in their stores. They can control whether essential products are in stock. They can train employees to complete the customer’s purchase. And they can capture an additional stream of high-margin revenue from traffic they already have.

In an industry where profitability often feels dependent on Washington, state regulators, or the next market cycle, earning another $3 in gross profit from the customer already standing at the register is a decidedly practical place to start.

 

 

You Aren’t Making a Profit Because Your Ordering Process is Jacked

By Andrew Watson
No Comments

Over the last several years, we have spent a lot of time studying how cannabis retailers make purchasing decisions.

Not just which products they buy, or how much they buy, but the entire sequence of events that begins once a buyer decides inventory needs to be ordered.

That sequence matters more than most operators realize.

In cannabis retail, inventory problems usually get diagnosed after the fact. A store has too much aging product. Cash is tied up in categories that are not moving. A vendor invoice arrives that does not match expectations. A buyer realizes a product was reordered twice. A store team receives items that were never supposed to be accepted.

By the time these issues become visible, the inventory is already in the building.

The mistake often happened earlier.

It happened somewhere between the purchasing decision, the vendor conversation, the submitted order, the delivery, the receiving process, and the invoice.

That is the part of retail operations we have become increasingly focused on, because it is one of the least structured parts of the cannabis buying process and one of the easiest places for margin, cash flow, and accountability to quietly break down.

 

The buyer’s job does not end when the order is placed

A lot of attention is paid to the buying decision itself. How much should we order? Which products deserve shelf space? What is selling? What is overstocked? What should we stop carrying?

Those are important questions.

But the work does not end once a buyer decides what should be ordered. In many ways, that is when the operational risk begins.

Across the hundreds of retailers we work with, orders often move through several different channels. Some are placed through wholesale marketplaces. Some are sent by email. Some happen through texts with vendor reps. Some are built in spreadsheets. Some involve PDFs. Some are internal transfers from a warehouse or production facility.

That may work well enough when one person is managing one store and has every vendor conversation in their head. It becomes much harder when a retailer has multiple locations, multiple buyers, multiple receiving teams, and multiple people involved in accounting.

The result is that a retailer may have a clear view of current inventory, but a much less clear view of what has already been ordered but has not yet arrived.

That gap creates real costs: 

  • Buyers duplicate work
  • Store teams lose context
  • Accounting teams chase down discrepancies
  • Operators make inventory decisions without knowing what is already in flight

When purchasing information is scattered, the business spends more time reconstructing what happened than managing what should happen next.

 

What arrives is often different from what was ordered

Every cannabis retailer understands that orders change.

Vendors run out of a product, a strain is no longer available, a replacement is suggested, a new SKU gets added, a case count changes, a product that looked available during the sales conversation is gone by the time the order is packed, and so on.

Some of that is unavoidable.

The bigger issue is that many retailers do not have a clean, shared record of what was originally requested, what changed, and who approved the change.

That matters at receiving.

The person accepting a delivery is often not the person who built the order. In a multi-store operation, the buyer may be working from a central office while a store manager, inventory associate, or, more likely, a budtender receives the product. If that person does not have the original order in front of them, they are being asked to make a judgment call without the context needed to make an informed decision.

  • That is how substitutions slip through.
  • That is how extra products get accepted.
  • That is how a retailer ends up carrying inventory that was never part of the plan.

A single receiving mistake may not look catastrophic. But repeated across vendors, stores, and months, those mistakes can turn into excess inventory, margin erosion, and cash tied up in products the buyer did not actually intend to purchase.

 

Accounting inherits the same visibility problem

The same issue shows up again when invoices arrive.

Accounting teams are often asked to reconcile invoices with what was received, but the original purchasing decision may live elsewhere entirely. It may be in a buyer’s email, a text thread, a PDF, a marketplace order, a spreadsheet, or a vendor conversation.

That makes reconciliation slower and less reliable.

If an invoice includes a product that was substituted, was it approved? If the quantity changed, who agreed to it? If the cost changed, was the buyer aware of it? If the delivery includes products that were not on the original request, should they be paid for?

These questions are not theoretical. They determine whether the retailer is protecting margin, managing vendor relationships, and maintaining control over cash.

Inventory is usually the largest use of cash in a cannabis retail business. When the process for ordering, receiving, and reconciling inventory is fragmented, the financial impact does not remain contained within the purchasing department. It reaches the P&L, the balance sheet, and the vendor payment schedule.

 

Inventory problems often begin upstream

When a retailer is carrying too much product, the first assumption is often that demand planning failed or the brand didn’t promote its products hard enough.

Sometimes that is true.

But many inventory issues begin after the buying decision has already been made. A buyer may have ordered the right amount, but the vendor substituted slower-moving products. A buyer may have intentionally avoided a product, but it was still added to a delivery and accepted by the store.

A buyer may have planned around current inventory, but another order was already in flight and not visible. A buyer may have made a smart purchasing decision, but the receiving and reconciliation process failed to preserve that decision.

This is why purchasing workflows deserve more attention.

Cannabis retailers are already dealing with difficult inventory dynamics: changing consumer preferences, fast SKU rotation, strain variability, inconsistent product availability, promotional pressure, vendor minimums, and limited cash. The business is hard enough when the order process works cleanly.

When it does not, the retailer absorbs the cost as overstock, aged inventory, unnecessary discounts, strained vendor relationships, and lost time.

 

The industry has underbuilt for the buyer

One reason this problem persists is that cannabis retail technology has not been built deeply enough around the buyer’s actual day-to-day workflow.

There are systems for:

  • compliance
  • point of sale
  • wholesale marketplaces
  • accounting
  • and spreadsheets fill in the gaps between all of them.

But the buyer’s job cuts across all of those systems. A buyer has to forecast demand, manage assortment, control spend, communicate with vendors, coordinate receiving, understand store-level needs, and protect cash flow.

That is a much bigger role than the industry often acknowledges.

When we study retail inventory performance, we inevitably end up studying the buyer’s workflow. The two are inseparable. If the buyer cannot clearly manage what is being ordered, what is already in flight, what vendors are changing, and what stores are receiving, inventory health suffers.

This is the part we obsess over because the impact is so large. A better purchasing process makes the buyer’s life easier, but more importantly, it helps stores avoid buying products they do not need, gives receiving teams better context, gives accounting cleaner records, and helps operators make decisions with fewer blind spots.

On average, retail stores across the US are overstocked by $50k per month per location. This number hasn’t changed in over 2 years, since we’ve been analyzing it. 

When we say that mismanaging inventory can cost a retailer a ton, this is what we mean.

 

What better looks like

Retailers do not need more complexity in their operations. They need cleaner handoffs.

A mature purchasing process should make it easy to answer basic questions:

  1. What did we order?
  2. Who submitted it?
  3. What is still in flight?
  4. What changed before delivery?
  5. What did the store actually receive?
  6. What should accounting expect to see on the invoice?

Those answers should not require digging through inboxes, texts, PDFs, spreadsheets, and vendor portals. They should be part of the business’s operating rhythm.

Retailers that improve this process will save administrative time, which I’m sure they’d appreciate. They will also make better inventory decisions, reduce avoidable overstock, improve vendor accountability, and protect cash flow, which will help them open new stores rather than fight to survive.

That is why the order sequence deserves more attention, and why we centralized order management in our platform, Happy Buyers.

Many of the inventory problems cannabis retailers see on the shelf started long before the product arrived there.

 

What Pre-Roll Complaints Reveal About Your Manufacturing Process

By Shahar Yamay
No Comments

Pre-roll complaints do not always show up the way other product issues do.

A failed device may come back to the store. A vape problem may create a clearer return path. A broken package or hardware issue is easier to document.

Pre-rolls are different.

They are also too important to treat casually. In Headset’s recent report, From Afterthought to Front of Shelf: A Pre-Roll Deep Dive, the company reported that pre-rolls were the fastest-growing major cannabis category in the U.S. in Q1 2026 and the top-selling category in Canada. As the category grows, the quality signals around it become more important to understand.

Sometimes a customer tells a budtender that the joint won’t stay lit. Someone says the last pack “smoked better.” Next thing you know, a buyer quietly reduces the next order, or a budtender stops recommending a SKU because they have heard the same complaint too many times. There may be no formal return, detailed report, or obvious product failure sitting on a counter. But there is still feedback.

Pre-roll complaints are often the first place manufacturing weaknesses become visible. They may sound like retail problems at first, but many of them begin much earlier, inside the production process.

A pre-roll is a simple product from the consumer’s point of view. From a manufacturing perspective, it is not simple at all. The flower has to be cultivated correctly. The grind has to behave consistently. The cone has to fill evenly. The density has to support airflow without restricting the draw. The product has to survive handling, packaging, transport, retail storage, and real-world consumer use. When one of those variables drifts, the consumer usually notices — and often describes it in very plain language.

“It Won’t Stay Lit” Is Rarely Just a Burn Problem

When someone says a pre-roll will not stay lit, it can be tempting to treat the complaint as vague or subjective. Sometimes, that is true. But when the same complaint recurs, manufacturers should look more deeply.

A pre-roll that does not stay lit may indicate a moisture imbalance in the flower. Material that is too moist can resist combustion, forcing the consumer to relight it again and again. Cannabis that is too dry can create a different problem — burning hot, fast, and unevenly. Pack density also plays a role. If the pre-roll is too tight in certain sections, airflow becomes restricted, and the cherry cannot move smoothly. If other sections are too loose, the burn may accelerate there.

Then there is the grind. Particle size matters. Too much fine material can reduce airflow, while larger pieces burn differently from smaller particles. When the grind is inconsistent, the product may look acceptable after filling but will not behave consistently when lit.

The complaint is simple. The cause usually is not.

 

Canoeing Shows Where the Product Is Out of Balance

Canoeing is one of the clearest examples of a consumer complaint that can function as a manufacturing diagnostic. When a pre-roll canoes, one side burns faster than the other, flower is wasted, and the consumer has to correct the burn or abandon the product.

From a production standpoint, canoeing tells us the burn found an easier path through the pre-roll. If one side has looser material, more airflow, drier flower, thinner paper, or a different density than the other side, the burn may follow that path. It does not take a dramatic defect to create the issue — sometimes the difference is small: a little more fine material on one side, a moisture pocket, or a twisted tip that concentrates paper unevenly at the crown.

Lighting technique and smoking environment can affect the burn, too. But when canoeing follows a SKU across different consumers, stores, or batches, the manufacturer has to ask what the product is revealing.

“Too Tight” Usually Means the Consumer Is Feeling Your Process

Consumers may say the pre-roll is too tight, plugged, hard to pull, or difficult to smoke. That complaint often connects back to fill behavior. If fill pressure is inconsistent, the pre-roll may have tight zones that restrict airflow. If the material includes too much powder or fines, the draw can become heavy. If larger and smaller particles separate during handling, the cone may not fill evenly from top to bottom.

A hard draw is not always visible during a quick inspection. The pre-roll may look straight, weigh correctly, and pass a visual QA check — then the customer lights it and immediately feels the problem. Appearance alone is not enough. A pre-roll can look consistent and still perform inconsistently.

“It Didn’t Feel the Same as Last Time” Is a Serious Warning

One of the most important complaints is also one of the easiest to overlook. “It didn’t feel the same as last time.” That sentence can mean many things — the burn was different, the draw was different, the flavor faded faster, the product felt harsher. The customer may not know exactly what changed, only that something did.

For a manufacturer, that kind of feedback should raise questions about batch-to-batch consistency. Cannabis is an agricultural input, so variation will always exist. The goal of manufacturing is not to pretend those changes do not exist — it is to control the process well enough that the finished product remains consistent for the consumer.

What changed between runs? Was the grind the same? Was the material conditioned the same way? Did fill settings drift? At small volumes, experienced operators may catch some of these issues by feel. At larger volumes, feel is not enough. The process has to make variation visible before the consumer becomes the quality control system.

 

Stale Flavor Often Starts After the Pre-Roll Is Made

When a consumer says a pre-roll tasted stale, lost flavor quickly, or lacked the expected aroma, the manufacturer should look at post-production exposure.

Once flower is ground, it becomes more vulnerable. More surface area is exposed, and moisture moves differently through the material. Aroma compounds are more exposed to oxygen, time, and handling conditions. A pre-roll may be filled correctly and still lose quality if it is not protected after production.

Packaging also plays a major role. The package is not just the final step before the product leaves the facility — it is part of the quality system. It affects how the product holds up during storage, transport, retail display, and the time between purchase and consumption. This is one reason manufacturers look at Modified Atmosphere Packaging (MAP), which replaces the air inside a package with a controlled gas mixture to limit oxygen exposure after production.

 

Reading Complaints as Manufacturing Data

One of the challenges with pre-roll quality is that feedback is often informal. A customer tells a budtender. The budtender tells a manager. The manager may or may not tell the buyer. By the time the brand sees the impact, it appears as slower reorders, weaker velocity, or less enthusiasm from the retail team — not as a manufacturing alert.

Pre-roll dissatisfaction rarely looks dramatic. Consumers simply switch brands. Budtenders steer people toward another product. No one says, “We have a manufacturing issue.” But the market is still responding.

This is why complaints should not be handled only by sales or customer service — they should make their way back to production. The best manufacturers do not treat them as isolated opinions. They read them as data points and look for patterns. Are burn complaints tied to one strain? Are the draw complaints showing up in one cone size? Are stale flavor comments connected to longer retail dwell time?

Pre-rolls depend on so many small variables working together, and the consumer experiences them all in a few minutes. That makes them unusually good at exposing process weaknesses. “It won’t stay lit” may indicate moisture or improper material preparation. “It keeps canoeing” may point toward uneven grind distribution or inconsistent pack density. “Too tight” may point toward fill pressure or fines. “It didn’t feel the same” may point toward process drift. “It tasted stale” may point toward packaging or storage conditions.

No single complaint gives the whole answer, but repeated complaints create a map. The customer describes the issue in simple terms. The manufacturer’s job is to listen.

The Power of AI and How it Will Transform Cannabis Medicine

No Comments

Biotechnology, cannabis medicine, and the rapid advancements in artificial intelligence (AI) and machine learning (ML) are beginning to converge.

Hemant Kumar Bid, program director for the Master of Science in Biotechnology and the Medical Cannabis concentration at Morehouse School of Medicine, believes this convergence could dramatically accelerate the development of cannabis-based therapies. With AI, cannabis medicine may move beyond today’s trial-and-error approach toward more personalized, precise treatments.

Biotechnology combines biological science with advanced technology to develop medical solutions, including drug discovery, genetic engineering, and diagnostic tools. “Modern biotechnology focuses on molecular biology, genetic engineering, and advanced cell culture techniques. This is where it will advance cannabis medicine,” explains Bid.

 

The Foundational Elements of AI and Machine Learning

AI and machine learning are closely related but serve distinct roles.

AI refers to computer systems designed to perform tasks that usually require human intelligence, such as reasoning, pattern recognition, and decision-making. Machine learning, a branch of AI, identifies patterns in large datasets, improves as it processes more data, and predicts future outcomes.

Many AI systems rely on deep learning, a method using neural networks to detect complex patterns across massive datasets. Another important capability is natural language processing (NLP), which allows computers to understand and generate human language and analyze vast bodies of scientific literature, uncovering insights and connections that might otherwise take researchers years to identify.

Machine learning is already widely used in biotechnology to analyze complex biological data and predict how molecules behave in the body.

 

AI in Drug Discovery and Development

AI is rapidly transforming how new drugs are discovered and developed.

Traditionally, drug discovery depends heavily on animal models and laboratory testing—a slow, expensive trial-and-error process. Machine learning can now analyze large molecular datasets to predict which cannabinoid compounds interact with specific receptors, such as CB1, CB2, TRPV1, GPR55, and serotonin receptors. This capability can significantly reduce both the time and cost of traditional drug discovery.

AI can also predict toxicity and safety risks in drug formulations before human testing begins. “Once a clinician knows that toxicity will exceed 70%, they can decide not to move forward,” says Bid.

In addition, NLP tools can mine extensive cannabis research literature to identify emerging therapeutic targets and gaps in current studies.

 

Personalized Cannabis Medicine

Many diseases are complex, and scientists are still uncovering their underlying causes. Conditions such as cancer may be influenced by a combination of genetics, lifestyle, and environmental factors.

Deep learning systems can analyze pathology images and genetic data at a level beyond human capability. They can detect subtle changes in DNA, RNA, or protein structures that influence disease progression and treatment outcomes. These insights are opening the door to how personalized approaches can be applied to cannabis medicine.

Machine learning models are already being applied to pharmacogenomic data to predict how a patient will metabolize cannabinoids based on genetic variation, particularly in liver-metabolizing enzymes like cytochrome P450, which play a key role in metabolizing THC and CBD.

“That means this genomics and pharmacogenomics approach, using machine learning models, could help predict efficacy and adverse effects before treatment begins,” says Bid.

AI and ML systems can also analyze genetic mutations, disease risk, and patient data to suggest individualized treatment plans. Factors such as genetics, medical history, symptoms, prior cannabis use, disease severity, and previous treatment responses can all inform personalized decisions. Because everyone’s DNA and endocannabinoid system differ, a one-size-fits-all approach to cannabis medicine is ineffective.

 

Identifying Endocannabinoid Dysfunction

Bid emphasizes that more genetic research is needed to understand how the endocannabinoid system varies across populations worldwide. Without sufficient patient data, it is difficult to identify patterns of endocannabinoid dysfunction or determine which cannabis treatments are most effective.

Mobile applications like Strainprint are already tracking cannabis use and therapeutic outcomes, collecting valuable real-world patient data. These platforms can generate large datasets on dosing, product type, symptoms, and treatment results. AI can use this data to predict treatment response and support personalized medicine.

Such datasets may also help researchers identify patterns of endocannabinoid dysfunction and develop needed standardized diagnostic tools.

Today, many cannabis physicians still rely on trial and error when determining dosing and treatment protocols. AI-driven analysis of large patient datasets could dramatically accelerate the development of evidence-based guidelines.

 

Connecting Microbiome Insights

Emerging research increasingly links the gut microbiome to a wide range of diseases. AI-driven microbiome analysis, paired with endocannabinoid profiling, can identify biomarkers of gut health and guide interventions—from dietary modifications and probiotics to customized cannabinoid formulations.

Since most cannabinoid receptors reside in the gut, endocannabinoid deficiencies often intersect with microbiome imbalances. This integration highlights the importance of combining microbiome and endocannabinoid insights for effective treatment.

 

AI for Cannabis Safety and Patient Monitoring

AI applications in electronic health records and patient-reported databases can accelerate the detection of adverse effects associated with cannabis use. Traditional pharmacovigilance methods can take months or years to identify safety signals, but AI-driven analytics can flag potential risks in near real-time. This allows healthcare providers to optimize treatment plans, mitigate harm, and make data-driven decisions.

 

Transforming Clinical Trials

Clinical trials are the gold standard for evaluating new medicines and are required for FDA approval. Yet they remain costly, time-consuming, and often slow the development of innovative therapies.

AI can identify patients most likely to respond to specific treatments, improving trial success rates while reducing costs and timelines. By accelerating clinical trials, AI could speed the development of standardized cannabis medicines, strengthen regulatory oversight, and bring safe, effective therapies to patients faster.

 

AI and Cannabis Plant Science

Advances in plant science are shaping the future of cannabis medicine. Researchers now understand much of the cannabis genome and the biosynthetic pathways that produce cannabinoids, terpenes, alkaloids, and flavonoids. Breeders and cultivators have the ability to manipulate these pathways to achieve precise therapeutic outcomes.

New cannabinoids are being discovered faster than physicians can test and integrate them into treatment plans. Because cannabis plants are highly variable in their chemistry, AI could bring precision and consistency to breeding and cultivation. Machine learning models trained on spectroscopic data can predict cannabinoid and terpene content without the need for extensive lab testing.

“Since the plant is highly variable in its chemistry, we need AI to ensure precision and consistency in breeding and cultivation,” says Bid.

 

The Need for Data and Expertise

Despite the need for AI-driven cannabis medicine, large-scale datasets required to train effective machine learning models remain limited. And relatively few physicians have formal training in cannabis medicine.

Meanwhile, the pace of cannabinoid discovery in plant science continues to accelerate, widening the gap between scientific knowledge and clinical practice.

 

Potential Risks and Ethical Considerations

While AI offers enormous potential, it also raises important ethical and practical concerns. Large healthcare datasets pose privacy and data-breach risks, and implementing advanced AI systems can be expensive and energy-intensive.

As the cannabis industry integrates biotechnology and AI, careful attention is needed to ensure these technologies are deployed responsibly, safely, and equitably.

 

“Everything starts with education,” Bid emphasizes. By training the next generation of scientists and practitioners, the field of biotechnology and medical cannabis can fully leverage AI and ML—from precision cannabinoid medicine and endocannabidomic profiling to microbiome integration, accelerated drug discovery, and AI-guided patient monitoring. Introduction to these tools will prepare future leaders to innovate, expand applications, and advance AI-driven precision medicine in the cannabis industry.

Are Pharmacies the New Dispensary Model? Utah Thinks So

No Comments

Georgia has captured national attention by allowing medical cannabis to be sold through independent pharmacies. Utah has spent the past six years developing another version of the pharmacy model, one designed specifically for cannabis.

Utah’s medical cannabis pharmacies do not dispense conventional prescription drugs. They sell cannabis products exclusively, but each location must have a licensed pharmacist available to consult with patients about dosage, delivery methods, medications, and possible drug interactions.

With medical marijuana’s move to Schedule III and adult-use reform hopefully not far behind, the outlines of a national medical model are beginning to take shape. Cannabis businesses preparing to participate in a federally regulated medical market may need more clinical oversight, stronger manufacturing standards and tighter inventory controls than most dispensaries currently provide.

Narith Panh, chief growth officer at Dragonfly Wellness, believes Utah offers an early look at how such a system could operate.

“Utah is the blueprint for what a future Schedule III medical cannabis future looks like,” he said.

 

A Pharmacy Instead of a Dispensary

Utah opened its medical cannabis market in 2020 with physician involvement, patient cards and a limited number of licensed pharmacies. State lawmakers have shown little interest in legalizing adult-use cannabis, leaving the medical program as the only regulated path to marijuana in the state.

Dragonfly operates two of Utah’s 15 medical cannabis pharmacies. Patients are required to consult with a pharmacist when they enter the program, regardless of their previous cannabis experience.

The pharmacist reviews why the patient is seeking cannabis, what medications the patient takes and whether there are potential contraindications. The consultation can also cover dosage, product format and how the patient has responded to cannabis in the past.

Panh points to the difference between walking into a retail dispensary and asking a budtender what to buy.

“We have people who have real conditions that are seeking cannabis as an alternative treatment,” he said.

Many are using cannabis for the first time. Some want symptom relief without feeling high. Others are older patients or people managing serious conditions while taking several prescription medications.

Panh said cannabis should not be presented as completely risk-free merely because it is considered safer than many other controlled substances. Consumers should be aware of possible drug interactions and how delivery method and dosage can affect the experience.

“If you really want to consider cannabis as medicine, it’s important to understand your medical history,” he said.

A first-time patient would not be directed toward a concentrate or another high-potency product without understanding the possible effects. The pharmacist can recommend a lower dose or a delivery method more appropriate for the patient’s needs.

 

Medical and Adult Use May Follow Different Paths

While medical marijuana has moved to Schedule III and adult-use cannabis remains federally illegal, Panh believes the two markets could eventually operate under different federal systems. Medical cannabis would move through physicians, pharmacists, and licensed healthcare facilities. Adult-use cannabis could eventually be regulated more like alcohol.

Businesses would then have to decide which market they intend to serve.

Panh does not expect adult-use dispensaries to disappear. He sees a continued place for products sold to consumers 21 and older without physician involvement. Participation in a medical market would carry different responsibilities and costs.

A company could continue selling to adult consumers, enter a medical system or create separate operations for each. Businesses choosing the medical path may need pharmacists, DEA registration, pharmaceutical quality systems, and more extensive documentation than state cannabis laws currently require.

The elimination of the Section 280E tax burden has been one of the most anticipated financial effects of Schedule III. Panh said the industry should also account for the cost of meeting medical standards. Hiring licensed pharmacists adds a considerable payroll expense. Pharmaceutical quality management systems can be costly to implement and operate, while facilities may need additional security, inventory controls, manufacturing procedures, and employees trained to maintain federal records.

“If you want to talk about this big 280E relief that you’re going to get, you’re giving all that right back to all of these extra costs,” Panh said.

Small independent dispensaries could have the hardest time absorbing those expenses.

 

Manufacturing Standards Will Carry More Weight

Dragonfly manufactures cannabis products under good manufacturing practice standards, according to Panh. The company collects safety and sourcing information from suppliers and uses internal systems to document materials and production.

Panh said Utah’s requirements have already pushed Dragonfly toward the standards expected of conventional controlled-substance manufacturers.

He expressed concerns over the need for product consistency when cannabis is used by patients with cancer, autoimmune diseases and other serious conditions. Manufacturers must be able to document what is in a product, where its ingredients came from, and whether one batch is consistent with the next.

Finished-product testing provides only part of the record. A certificate of analysis can report cannabinoid potency and screen for designated contaminants, but it does not document every supplier, material or production step.

“How are you going to prove to anybody what is actually in your product?” Panh said. “How are you going to prove that your product was derived safely?”

Quality management systems used in pharmaceutical production track each stage of manufacturing. They also document deviations, investigations, and corrective actions when a batch does not meet specifications.

Panh expects medical buyers to look closely at testing, residual solvents, pesticides, ingredient sourcing and manufacturing records before purchasing cannabis products. A pharmacist or medical facility unfamiliar with cannabis is likely to favor suppliers whose standards resemble those already used for other medicines.

Dragonfly has invested heavily in these systems, he said. The added controls increase production costs and may prevent the company from offering the least expensive products in the market.

 

Dragonfly Is Preparing for Interstate Commerce

Utah’s limited-license system restricts how much Dragonfly can expand inside its home state, limiting its growth opportunities.

State law prevents a single operator from controlling more than 25 percent of Utah’s pharmacy licenses. Dragonfly currently has two locations, while Curaleaf holds four.

Utah plans to open a 16th medical cannabis pharmacy in Moab. A 17th license is expected to follow, although existing Utah operators will not be eligible to receive it, according to Panh.

“We don’t have an opportunity to grow if there is no opportunity to go interstate commerce,” he said.

Dragonfly is pursuing DEA registration partly to be ready if federally authorized interstate sales become possible.

Panh envisions a system in which a DEA-registered manufacturer supplies another registered medical facility. A conservative state without a cannabis program could provide patients with access without first licensing in-state cultivation and manufacturing.

Idaho is a like prospect since it shares a border with Utah but has not established a medical cannabis program. A future federal system could allow an Idaho pharmacy to obtain products manufactured by a registered Utah company, depending on the rules adopted by federal and state regulators.

Panh believes transactions between DEA-registered facilities could eventually offer the ability to do business across state lines.

“If you are a traditional pharmacy in another state and you want products that are GMP manufactured, that are registered with the DEA, who are you going to buy those from?” he said.

Schedule III does not currently establish unrestricted interstate commerce for products made under state cannabis programs. DEA registration, FDA requirements, and state licensing laws will determine which businesses may manufacture, transport, and dispense them.

Dragonfly does not intend to become the immediate test case through an unauthorized shipment, Panh said. Its registration and manufacturing investments are intended to put the company in a position to act once regulators establish a workable route.

 

We Still Need FDA Approval

The FDA has remained conspicuously absent while state cannabis markets developed without a federal framework for their products. Schedule III could finally bring the agency into a more active role.

Companies seeking approval for products intended to treat a specific condition must provide evidence of safety, efficacy, and manufacturing consistency. GMP compliance supports an application but does not replace clinical research.

Panh believes whole-plant products may have a future under the FDA’s botanical drug pathway, which accommodates complex plant-derived mixtures rather than a single isolated compound. Manufacturers must prove consistency across raw materials, production processes and finished products, a challenge when cannabis varies by cultivar, growing conditions, harvest and extraction method.

Panh pointed to German pharmaceutical company Vertanical and its whole-plant cannabis drug candidate for chronic lower back pain. Its progress could help establish how regulators evaluate medicines containing several cannabis compounds.

Few cannabis businesses have the capital to conduct late-stage clinical trials or complete a new drug application. Pharmaceutical companies have much larger research budgets and extensive experience with FDA approval.

 

Utah’s Need for Medical Cannabis

Dragonfly entered the Utah market partly in response to the state’s opioid epidemic and mental health needs. Panh said Utah’s conservative culture and religious attitudes toward alcohol and other substances have contributed to a greater reliance on medications prescribed by doctors.

Utah has consistently reported a higher rate of lifetime depression than the country overall, while its suicide death rate also exceeds the national rate.

Medical providers remain reluctant to recommend cannabis, however. Panh estimated that about 1,100 of Utah’s more than 30,000 providers participate in the program.

“I don’t fault them,” he said. “You want me to just start prescribing cannabis, and I don’t even know about it?”

Utah may also face a shortage of cannabis-trained pharmacists. Panh estimated that roughly 100 pharmacists have completed the education required to work in the state program. Demand for cannabinoid training could rise quickly if pharmacists become part of a national medical cannabis model.

 

Bringing Cannabis Into the Healthcare System

Utah still operates cannabis separately from conventional medicine.

Patients need a qualifying condition and state authorization, purchase products from cannabis-only pharmacies, and pay out of pocket.

Panh believes Schedule III could eventually move medical cannabis into the existing healthcare system. A doctor could prescribe it as a controlled substance, a pharmacy could dispense it and insurance could help cover the cost. Patients would no longer need to enter a separate state program.

Cost will be critical. Panh contrasted a $10 insurance copay for an opioid prescription with approximately $40 for an eighth of cannabis.

“It’s actually not a real choice that people have,” he said. “They’re going to take the opiates all day long because it’s all that they can afford.”

FDA approval, insurance reimbursement policies, and new federal regulations would be required before medical cannabis could operate this way. Utah’s use of pharmacists and medical providers offers an early version of the care model, even though it remains outside the conventional prescription and insurance system.

 

What Happens to the Dispensary?

Utah adopted a pharmacist-led system while much of the cannabis industry was moving toward adult use. Federal policy is now favoring a model centered on medical marijuana.

Dispensaries may have to look more like healthcare facilities as cannabis enters the medical system. Some states may require pharmacists in cannabis-only stores, as Utah does. Others may allow traditional pharmacies to dispense cannabis, following Georgia’s lead.

“Customers are transactional,” Panh said. “Patients, you’re building a relationship for a lifetime with them. Real patient care. It’s a very different model.”

From The Lab

What Cannabis Manufacturers Can Learn from the Pharmaceutical Industry About Trace Metal Impurities in Plastic Materials

By Robert (Rob) Thomas
No Comments

Plastics and polymers are widely used materials in the manufacture of cannabis and hemp consumer products, including vessels, containers, bottles, bags, transfer lines, carts, pods, and other components. However, they are not typically associated with metal contamination of the cannabinoids being produced. By far the most common source of trace-element contamination is heavy metals in the soil, growing medium, or fertilizer. These metals can be taken up through the plant’s root system and ultimately find their way into leaves, shoots and flowers and, finally, into extracted cannabinoids.

A secondary source of metal contamination has also been shown to be from stainless steel vessels, containers and equipment used in the production process. In addition, metal components such as coils, atomizers, tanks, and electrical/battery connections used in vaping cartridges are of particular concern nowadays, as they can leach metal particles into vaping liquids due to manufacturing defects and/or long-term storage of the devices. Some of the metals used include stainless steel, nichrome, brass, solder, and other alloys.

However, it is well documented in the pharmaceutical industry that plastic materials used in manufacturing equipment can potentially contribute to elemental contamination of drug products. The United States Pharmacopeia (USP) has devoted several chapters to this issue.

So, if metal impurities in plastic materials are something the pharmaceutical industry takes seriously, why isn’t this receiving the same attention in the manufacture of cannabis consumer products?

To investigate this question, it is useful to first look at how the pharmaceutical industry approaches the problem—and then examine what evidence exists in the public domain indicating that it could also be an issue for cannabis manufacturers.

 

What Can the Pharmaceutical Industry Teach Cannabis Manufacturers?

Drug products can chemically interact with their associated packaging systems and with the plastic materials and components used during manufacturing, storage, and administration. It is therefore logical that these interactions should not adversely affect either the suitability of the drug product or the packaging system. While suitability for use encompasses many quality attributes, the impact of plastic materials on patient and consumer safety is particularly important.

To address these issues, the United States Pharmacopeia (USP) has developed general chapters covering the quality and suitability of plastic materials used in pharmaceutical applications, including:

  • USP Chapter <661> — Plastic Packaging Systems and Their Materials of Construction Used in Pharmaceutical Manufacturing. [3]
  • USP Chapter <1661> — Evaluation of Plastic Packaging and Manufacturing Systems and Their Materials of Construction With Respect to Their Impact on User Safety.

 

The Potential for Contamination

Pharmaceutical manufacturing involves numerous steps required to convert raw materials into an active pharmaceutical ingredient (API) and ultimately into a drug product. Many of these steps use components that are wholly or partly constructed from plastics or polymers.

These materials can also contain additives such as:

  • antioxidants
  • stabilizers
  • lubricants
  • plasticizers
  • colorants

All of these materials have the potential to contain elemental impurities. It is therefore possible for raw materials, process streams, production intermediates, APIs, and finished drug products to come into contact with plastic components during manufacturing. These interactions can potentially introduce process-related impurities and alter the quality of the pharmaceutical product.

The issue becomes particularly important when plastic vessels are used in liquid storage systems, because the opportunity for interaction between the plastic and the liquid increases.

 

Manufacturers Have a Responsibility

The pharmaceutical industry places the responsibility on manufacturers to establish that plastic components and systems are suitable for their intended use.

This is accomplished through a comprehensive risk-assessment approach in which the materials are appropriately characterized, tested, and evaluated.

Among the criteria considered are:

  • The components should be constructed from well-characterized materials intentionally selected for their intended use.
  • Their general physicochemical properties should be established.
  • Their biological reactivity should be appropriately evaluated.
  • Their safety should be established through appropriate chemical testing, including extractables and leachables profiling, together with toxicological assessment of the results.

The question isn’t simply, “What plastic are we using?” The more important question is: “What can potentially come out of that plastic and enter the product?”

 

How Are Plastic Materials Tested?

Because pharmaceutical manufacturing uses a wide variety of plastic materials and exposes them to many different conditions, there is no single extraction procedure that perfectly represents every manufacturing situation. At the same time, it would be impractical to impose a substantial number of extraction conditions on every manufacturer. The pharmaceutical approach therefore uses a standardized set of extraction conditions designed to assess both organic and inorganic impurities.

USP Chapter <661.3> describes five model extraction methods shown in Table 1.

Table 1: Chemical extraction conditions used to evaluate the suitability of plastic components for the manufacture of drug products or substances.

 

For the assessment of extractable metals, the plastic component is either filled with the test solution, or an appropriate amount of plastic is placed into a high-purity borosilicate flask containing the test solution.

The material is then heated to approximately 55 °C for 96 hours, cooled, and analyzed for relevant metals using ICP-OES or ICP-MS in accordance with USP Chapter <233>.

 

What Metals Are Important?

A well-characterized plastic or polymer should be tested for relevant metals that are known components of the material.

These metals can originate from:

  • starting materials used to manufacture the plastic
  • catalysts and other reagents
  • stabilizers
  • colorants
  • plasticizers
  • other additives

Relevant metals have been identified in compendial and regulatory documents, such as USP Chapter <232> [6] and ICH Q3D guidelines [7], which lists 24 elemental impurities and permitted daily exposure (PDE) limits in micrograms (µg) according to the route of administration and the toxicity of the element as shown in Table 2.

Table 2: USP Chapter 232 and ICH Q3D guidelines permitted daily exposure (PDE) limits for elemental impurities [6,7]. Note: These values are typically based on 10g maximum of the drug product per day, so they should be divided by 10 to calculate the allowable limit in µg/g in the drug product.

The potential significance of a metal depends not only on its concentration but also on how the final product is consumed. For example, the limits for some elements are considerably more restrictive for inhalation products than for orally administered products. [6,7] That distinction is highly relevant to cannabis products, particularly vaping products, where inhalation is the route of exposure.

It’s also important to emphasize that most state-based cannabis regulations in the US only require the monitoring of the  Class 1 “big four” heavy metals (Pb, Cd, As, Hg) to be compliant. This means that if any other metals were present in the cannabis products due to equipment contamination, they would escape scrutiny because there is no requirement to measure them. So, there is clearly a need to expand the elemental panel beyond the  “big four” to ensure consumer safety.

 

What Metal Impurities Are Actually Found in Plastics?

So what metals are actually present in plastics and polymers?

There have been numerous studies investigating toxic metals in plastic materials, although much of this work has focused on laboratory plastics such as flasks, beakers, and tubing. One landmark study was published in Analytical Chemistry in 1977 by John R. Moody and Richard M. Lindstrom.

The researchers evaluated common laboratory container materials and demonstrated that many were unsuitable for trace-metal analysis. For experienced ICP-MS practitioners working at the ultra-trace level, this is hardly surprising. Low-quality plastic laboratory ware can contribute significant contamination, which is why high-purity materials are routinely used when the lowest possible limits of quantitation are required.

Some polymers, including polypropylene and polyethylene, can contain significant concentrations of alkali metals, alkaline-earth elements, transition metals, and other elements, as exemplified in Table 3, which is taken from a study that provides an excellent illustration of the problem. In addition, additives, plasticizers, coloring agents and mold-release agents can introduce additional metals.

Table 3: Trace metals found in common plastic and polymer materials

Other Evidence in the Public Domain

Other studies have investigated toxic-metal concentrations in plastic materials used for food packaging.

Although the results do not necessarily establish that the metals actually leach into food, they provide compelling evidence that a broad range of metallic impurities can be present in plastic and polymer materials.

One particularly relevant study investigated heavy metals and metalloids in various types of plastic bags. The researchers examined polyethylene, HDPE, LDPE, and PVC materials and used closed-vessel microwave digestion followed by ICP-OES analysis.

The results demonstrated that many elemental impurities were present at concentrations in the tens of parts per million, while some elements—including copper, zinc and barium—were present at concentrations exceeding 100 ppm. A subset of this data is shown in Table 4.

The results were not isolated to a single material, as similar findings were obtained from other types of plastic bags.

Table 4: A panel of elemental impurities found in polythene bags (results in mg/kg)

These concentration levels are quite significant. But again, there is an important distinction. The presence of metals in a plastic material does not automatically mean that those metals will migrate into a cannabis product. Without an appropriate extractables study, we do not know the answer to that question.

 

What Does This Mean for the Cannabis and Hemp Industry?

This brings us to the key question. What are the implications for cannabis producers?

The pharmaceutical industry has spent decades developing a comprehensive approach to elemental impurities. The ICH Q3D risk-assessment framework considers potential sources throughout the manufacturing process, including:

  • raw materials
  • manufacturing equipment
  • water
  • container-closure systems
  • drug substances
  • excipients
  • packaging
  • processing steps

Plastic materials therefore become one component of a much larger risk-assessment strategy.

A classic way to visualize this is with a fishbone—or Ishikawa—diagram, designed to identify potential root causes of elemental contamination, as shown in Figure 1.

Figure 1: Classic fishbone diagram of the pharmaceutical manufacturing process to identify the root cause of a problem to better understand elemental impurities in drug products.

 

A Cannabis Elemental-Impurity Risk Assessment

So, the question is, could this approach be adopted by the cannabis industry?  Every stage of the cannabis production process, including cultivation, extraction processing, manufacturing, packaging, and delivery, could potentially contribute elemental contaminants.  And in particular, what plastic components and materials are most likely to be leaching metals when in contact with the multitude of chemicals and solvents used in the extraction process, as well as cannabinoids, terpenes, and diluents used in the formulation of the cannabis consumer products? A proposed fishbone diagram for the cannabis manufacturing process is represented in Figure 2.

Figure 2: Proposed classic risk assessment fishbone diagram for cannabis consumer products

The objective would be to determine which metals could enter the final product at each stage. This approach was proposed in a recent Journal of Testing and Evaluation (JTE) publication that examined the use of a risk-assessment strategy to identify sources of heavy metals in cannabis and hemp products.

The key question is:

Where can the metals come from—and can we demonstrate that each potential source is under control? We know from the published studies that plastic materials can contain measurable concentrations of metals. But what would happen if those same plastic materials were subjected to an extractable metals procedure similar to that used by pharmaceutical manufacturers?

Would the metals actually be released?

 

What Should Cannabis Manufacturers Do?

In today’s disjointed regulatory environment, there is no clear guidance for cannabis producers. However, if a similar situation occurred in a pharmaceutical manufacturing plant, the plant would be expected to investigate the potential source of elemental contamination due to the industry’s regulatory framework and FDA oversight. For cannabis manufacturers, however, there is currently no comparable requirement to conduct such a systematic evaluation.

As a result, a potentially important source of contamination could be escaping scrutiny.

The pharmaceutical approach provides a useful model. Cannabis manufacturers could develop their own risk-based extractables and leachables testing program for plastic components that come into contact with cannabis extracts and finished products.

For example, instead of using extraction conditions developed for pharmaceutical manufacturing, cannabis-specific studies could investigate commonly used cannabis formulations, diluents, solvents, and carriers, including:

  • MCT (medium-chain triglycerides) oil
  • glycerin
  • propylene glycol
  • ethanol
  • terpenes
  • hemp seed oil
  • vegetable oil

Plastic components could be exposed to these materials under controlled conditions and subsequently analyzed for relevant elemental impurities using ICP-MS or ICP-OES. The results could then be incorporated into a broader elemental-impurity risk assessment.

This would allow manufacturers to move from simply asking: “Is this plastic food grade?”….to asking a much more scientifically meaningful question: “Have we demonstrated that this plastic is suitable for its intended use with our cannabis product?”

 

Final Thoughts

With the current state-driven regulatory system, there is very little incentive to fully understand the sources of heavy metals throughout the cannabis production process—or in the final consumer products. And in particular, there is no reason to look beyond the “big four” if state regulators don’t require it. However, there is compelling evidence in the public domain that additional metals could be leaching from plastic materials, particularly when cannabinoid extracts and oils are stored in them for extended periods.

But there has not yet been enough testing to definitively establish the extent of the problem. A suitable leaching procedure could be developed based on approaches already used by pharmaceutical manufacturers. But instead of extraction protocols described in USP Chapter <661>, cannabis-specific protocols could use common diluents used in cannabis formulations to investigate extractable metals from plastic components.

At present, there are no comprehensive state regulations requiring cannabis producers to address this issue. So, until the industry adopts a meaningful risk-assessment approach, we simply don’t know whether plastic materials are a significant source of elemental contamination in cannabis products.

We can only hope that when the industry eventually comes under the scrutiny of federal regulators, we might find out the answer. But until then, we can only keep on asking the questions….and maybe someone is listening!

The Overlooked Risks of Hardware in Pipes, Vapes and Dab Rigs

By Dusty McLean
No Comments

For years, much of the conversation around cannabis quality has focused on what goes into the product: potency, pesticides, solvents, microbial contamination, terpene profiles, and certificates of analysis.

That scrutiny is necessary, but it stops one step too soon.

Cannabis is burned in a pipe, heated inside a vaporizer cartridge, exposed to a high-temperature surface in a dab rig, or otherwise passed through hardware before it reaches the user. That means the materials, manufacturing quality, temperature tolerance, and cleanability of the device also deserve consideration.

We have developed remarkably sophisticated ways to characterize the plant while often overlooking the engineering of the device that heats, holds, or delivers it. That “hardware-blind” approach creates a gap between the chemistry we measure in the laboratory and the actual experience at the point of inhalation.

This is especially relevant as cannabis increasingly moves toward a more sophisticated medical and wellness marketplace. A carefully cultivated and thoroughly tested product can still be undermined by poorly designed or poorly documented hardware. The device affects how heat is applied, how efficiently material is vaporized or combusted, and what additional compounds may enter the inhaled stream. Conversely, appropriate hardware can make the use of a well-characterized product more consistent and controllable. The point is not that technology can rescue unsafe or poor-quality cannabis—it cannot—but that the quality of the plant and the quality of the delivery system are inseparable parts of the same consumer experience.

Consumers therefore need to ask two separate questions:

What is in the cannabis?

And:

What is the cannabis touching before I inhale it?

The answer varies by consumption format.

Pipes and Water Pipes: Material Integrity and Cleanability

Traditional pipes and water pipes are mechanically simple compared with electronic vaporizers, but simple does not mean irrelevant.

Here, the concerns begin with four phases: material composition, heat resistance, surface quality, and sanitation.

A well-made glass device should tolerate the normal temperature changes associated with use without cracking, deforming, or shedding coatings. Consumers should be particularly cautious about mystery materials, painted surfaces in high-heat or smoke-contact areas, poorly finished components, and products for which the manufacturer cannot explain what materials were used.

The issue is not that every inexpensive pipe is inherently dangerous or that every expensive one is inherently safe. Price alone is not a materials specification.

The more useful questions are:

What type of glass or other material is being used? Is decorative material isolated from the smoke path and heated surfaces? Can the product be inspected for damage? Can it be thoroughly cleaned? Are replacement parts appropriately fitted? Does the manufacturer provide meaningful product information?

Water filtration also should not be mistaken for purification.

Research on waterpipe smoking in other inhaled-product categories has demonstrated that passing smoke through water does not eliminate many important smoke toxicants. In one controlled waterpipe study, the bubbler did not significantly reduce carbon monoxide, nitric oxide, polycyclic aromatic hydrocarbons, or dry particulate matter, although it reduced some other constituents. The research involved tobacco rather than cannabis, so it should not be treated as a direct cannabis-risk calculation; instead, it illustrates a broader engineering principle: water filtration is not synonymous with purification.

For reusable cannabis hardware, sanitation creates another practical consideration. Water, resin, and residue accumulate in places consumers may not routinely inspect. A device with complicated internal spaces that cannot be effectively cleaned may be a poor long-term choice regardless of how attractive it looks.

A medical-minded purchasing standard therefore favors known materials, sound construction, inspectability, and cleanability over aesthetics alone.

Vape Hardware: The Device Becomes Part of the Chemistry

Vape cartridges present an entirely different problem.

A cartridge is not merely a container. It is a miniature heating system containing components such as metal alloys, ceramics, seals, electrical contacts, and a heating element, all of which are in close proximity to cannabis oil.

That hardware can matter.

A 2021 study published in Chemical Research in Toxicology analyzed cannabis vaporizer cartridges and their aerosols. Researchers reported that metals, including chromium, copper, and nickel—and smaller amounts of lead, manganese, and tin—could migrate into cannabis oil and the inhaled vapor phase. The researchers concluded that the heating device itself could be a source of metal contamination.

More recent research has reinforced that concern. A 2025 study examining legal Canadian cannabis vape products detected particles containing several metals in vape liquids and found cobalt, chromium, nickel, lead, tin and zinc in aerosols produced from the tested products. Examination of cartridge components provided evidence that device hardware was a source of at least some contamination.

That makes hardware compatibility, component quality, storage stability, and traceable manufacturing especially important in vaping.

Temperature matters as well. Heating conditions influence aerosol chemistry, and higher power is not automatically better simply because it produces more vapor.

There is also an important historical lesson to be learned from the 2019 EVALI outbreak. CDC investigations found vitamin E acetate strongly linked to the outbreak, particularly in THC-containing products obtained through informal sources, while noting that other contributing chemicals could not be completely ruled out. The broader lesson remains relevant: inhalation formulations and hardware should not be treated like ordinary consumer products, and uncertain ingredients or supply chains deserve particular scrutiny.

For patients and other consumers, a professionally manufactured vape product should therefore inspire questions well beyond cannabinoid percentage:

Who manufactured the cartridge?

What materials contact the oil?

Does the hardware supplier document those materials?

Was the final filled product evaluated appropriately?

Are the oil formulation and hardware designed to work together?

Is the product traceable to an accountable manufacturer?

In a mature cannabis market, the cartridge should be considered part of the finished inhalation product—not disposable packaging that escapes scrutiny.

Dab Rigs: Temperature Is the Critical Variable

Dabbing creates yet another risk profile because concentrates are applied directly to a surface that may reach very high temperatures.

Here, the primary engineering issue shifts from cartridge construction toward thermal behavior.

Quartz, ceramic, and titanium components do not behave identically under heat. Their heating and cooling characteristics differ, as do durability, maintenance requirements, and responses to repeated thermal cycling.

But the surface material is only part of the story.

The temperature at which a concentrate is heated can change the chemistry of what is inhaled.

Researchers at Portland State University studying terpene degradation under simulated dabbing conditions identified several thermal degradation products, including methacrolein and benzene. Subsequent research examining gas-phase components from cannabis vaporization and dabbing likewise identified concerning thermal degradation products.

In plain English, heat does more than turn a concentrate into vapor. At sufficiently high temperatures, some naturally occurring compounds in cannabis extracts can chemically break down, forming new compounds. In the laboratory conditions used in this research, those degradation products included methacrolein and benzene. That does not mean every dab produces identical levels of those compounds, but it demonstrates why temperature is not merely a matter of flavor or preference: it can change the chemistry of what is inhaled.

This makes the familiar debate over “hot” versus “low-temperature” dabs more than a matter of flavor preference.

From a product-quality standpoint, a better-designed system is one that gives the consumer predictable, controllable heat rather than simply achieving the highest possible temperature.

That creates another set of questions:

Is the heated component actually made from the material it claims to be?

Is the manufacturer identifiable?

Can the component tolerate repeated heating and cooling?

Is temperature measurable or controllable?

Are consumers given appropriate instructions rather than being encouraged to simply heat the surface as aggressively as possible?

For this category, “medical-grade” should mean more than premium branding. It should suggest known composition, consistency, and an understanding of how the product behaves at its actual operating temperature.

“Medical-Grade” Should Be a Standard of Evidence, Not a Sticker

The cannabis-accessory market has a terminology problem.

There is no universal regulatory certification that makes the phrase “medical-grade” a guarantee of cannabis-hardware quality. Depending on the manufacturer, the term may refer to a particular material specification, an internal quality standard, or little more than marketing language. That is precisely why consumers and retailers should ask what evidence sits behind the label.

Words such as medical-grade, surgical-grade, premium and laboratory-grade can sound reassuring, but a label by itself does not establish safety.

Consumers should ask what the claim actually means.

A meaningful higher-quality standard should include as many of the following as are relevant to the device:

  • clearly identified materials;
  • traceable manufacturing;
  • quality-control documentation;
  • appropriate temperature resistance;
  • product-specific testing;
  • disclosed coatings or finishes;
  • appropriate electrical and battery protections for powered devices;
  • replacement-component compatibility;
  • cleaning and maintenance instructions;
  • accountable manufacturers or distributors;
  • and transparent specifications that can be checked rather than simply advertised.

Responsible retailers have a role here too, and that role begins with educating themselves before attempting to educate the public. We should be able to explain why one device costs more than another without resorting to vague terms like “premium” or simply repeating a manufacturer’s suggested retail price. If the meaningful differences are borosilicate glass, documented materials, improved temperature control, replaceable components, stronger quality assurance, or a legitimate warranty, say so. Those differences matter, and retailers should be able to translate them into plain language for patients and customers.

That does not mean every retailer needs to know everything. Nobody does. Sometimes the honest answer will be, “I don’t know yet.” In a market built on trust, admitting that and finding the answer is more valuable than pretending to have expertise.

Cannabis Product Safety Cannot Stop at the COA

The industry has made enormous progress in teaching consumers to ask for laboratory testing of cannabis itself.

The next step is teaching them to look at the entire delivery system.

A pipe presents questions about material integrity and sanitation.

A vape cartridge introduces a complex interaction between oil, metals, heating elements, storage, and aerosol formation.

A dab rig adds the chemistry of extreme heat and thermal degradation.

These are not interchangeable concerns, and none can be solved by placing the words “medical-grade” on a product page.

The better standard is transparency.

Consumers do not need every retailer to become a materials scientist or toxicologist. They do, however, deserve products whose manufacturers can answer basic questions about what they are made of, how they are intended to be used, and what quality controls are in place behind them.

For an industry working to be taken seriously as both a medical and mainstream consumer market, that should not be an extraordinary expectation.

It should be the baseline.

California Court Orders DCC to Overhaul Cannabis Track-and-Trace System

No Comments

An Orange County Superior Court judge has ordered California’s Department of Cannabis Control to take steps to bring the state’s cannabis track-and-trace system into compliance with California law, concluding that the system does not currently flag irregular transactions for investigation.

The August 4, 2026, final judgment in HNHPC Inc. v. Department of Cannabis Control represents the latest development in nearly five years of litigation brought by HNHPC, the parent company of California cannabis retailer Catalyst. Jeff Augustini, the attorney who represented HNHPC, said the ruling confirms that the DCC has failed for more than eight years to fulfill its statutory duty to design and implement a compliant tracking system.

The decision follows an earlier ruling from California’s Fourth District Court of Appeal, which revived HNHPC’s case after a lower court had dismissed it. The appellate court held that the existence of contracts to develop a track-and-trace system did not establish that the DCC had actually fulfilled its legal obligation to create a database capable of flagging irregularities.

 

A system that collects data—but does not flag problems

California Business and Professions Code Section 26067 requires the DCC to establish a track-and-trace program covering the movement of cannabis and cannabis products through the licensed supply chain. The statute also requires the department’s electronic database to be designed to “flag irregularities” for investigation.

According to the judgment summary provided by Augustini, Judge Lee Gabriel found that the DCC’s current system—operated through the state’s California Cannabis Track-and-Trace program, commonly known as METRC—does not satisfy that requirement.

The court reportedly found that the system generates large volumes of reports and raw transaction data, but does not automatically identify potentially irregular activity using objective criteria. Instead, DCC analysts are manually reviewing the data without established definitions explaining what constitutes an irregular transaction.

All annual and provisional California cannabis licensees are required to use the state’s CCTT–METRC system to record inventory and product movement, regardless of whether a local jurisdiction uses another tracking platform.

 

Industry reaction

Hirsh Jain, a respected cannabis industry analyst, called the ruling “one of the most consequential cannabis regulatory decisions California has seen in years.” Jain said the judgment is significant not simply because Catalyst prevailed, but because it concludes that the DCC failed to implement the track-and-trace system California law requires.

He argued that the findings lend credibility to longstanding operator concerns that METRC imposes substantial compliance costs—including tagging, data entry, inventory reconciliation, employee training, audits and correction of reporting errors—without effectively identifying diversion or meaningfully disrupting the illicit market.

“If the system is not effectively identifying suspicious transactions or reducing diversion,” Jain said, “then it is imposing a significant compliance tax on the legal industry without delivering the public benefits that were used to justify those costs.”

Jain also said the implications could extend beyond California. Because METRC is used in numerous state cannabis markets, he expects policymakers elsewhere to question whether they are paying for systems that deliver the public benefits they promise. The decision could ultimately be cited in future litigation, legislative hearings and regulatory reform efforts in other METRC states.

 

The “burner distributor” problem

HNHPC’s lawsuit arose from allegations that certain intermediary distribution businesses—often described as “burner distributors”—were being used to move licensed cannabis into the illicit market. The company argued that inadequate monitoring allowed large volumes of product to be diverted and enabled the evasion of state taxes and cannabis regulations.

The appellate court’s 2023 decision did not determine whether those allegations were ultimately true. Instead, it held that HNHPC had adequately stated claims for a writ of mandate and injunctive relief, allowing the case to proceed. The court specifically rejected the idea that contracts and budget documents alone demonstrated the DCC’s compliance with its statutory obligations.

The final ruling now requires the DCC to take action.

 

Six months to establish objective criteria

Under the order described by Augustini, the DCC has six months to establish objective criteria defining an irregularity. Those criteria are intended to enable the state’s report-driven tracking system to detect and flag suspicious transactions without requiring analysts to search manually through unstructured data.

The order does not necessarily require California to replace METRC altogether. Rather, it appears to require the DCC to configure or supplement its existing system so that it performs the flagging function mandated by Section 26067.

METRC remains the state-required compliance platform, and licensees will continue to be responsible for entering inventory, shipment, transfer, and sales information into the system unless the DCC announces a change. The judgment is principally directed at the department’s oversight and enforcement architecture, not at eliminating operators’ existing reporting obligations.

 

Implementation and appeal could determine the impact

The outcome of the ruling will depend on how the DCC responds. The department could establish new criteria, modify its reporting processes, add automated detection tools or pursue appellate relief. In a LinkedIn post following the judgment, Augustini predicted that the DCC could appeal and resist meaningful implementation, potentially prolonging the dispute by another one to two years.

The DCC’s likely next steps will be closely watched by licensed operators competing with California’s illicit market. A state-commissioned study by ERA Economics for the Department of Cannabis Control found that unregulated channels supply about 2.4 million of the 3.8 million pounds consumed locally. The illicit cannabis market in California commands roughly 60% of total state consumption, meaning the legal market captures only about 40%.

 

A significant challenge to California’s regulatory model

The ruling is a significant judicial rebuke of California’s track-and-trace oversight, but it should not be overstated. The court did not necessarily find that every function of METRC is defective, nor did it hold that every transaction recorded in the system is unreliable.

Whether the ruling produces meaningful reform—or another prolonged legal and administrative fight—will become clearer over the next six months. For now, the decision gives California’s legal cannabis industry a formal judicial finding that collecting track-and-trace data is not enough.

 

 

 

“One-Gram Ceramic 510” Is Not a Cartridge Specification

By Harry Huang
No Comments

Cannabis brands often approve a cartridge sample and then place a production order based solely on the product description. That shortcut leaves the filling partner, packaging team, and vape supplier to resolve important details after the purchase order has been submitted. A “controlled specification packet” must include formulation, critical dimensions, closure process, materials, lot records, and change rules, all decided on before the production clock starts.

Consider a production meeting in which purchasing has an approved sample, but the filler cannot locate the delivered cartridge consistently in its tray. The purchase order offers little insight into why the elements don’t work since the description only says “one-gram ceramic 510.”

Nobody necessarily shipped the wrong item. The company looking for a vape supplier based its purchasing decision on a basic product description rather than specifying defined configurations.

That distinction matters because a vape cartridge is handled by more than its buyer. It has to accept a particular formulation, go through a filling and closing process, fit a fixture, survive packing and distribution, and remain traceable to the approved version. If those interfaces live in separate email threads, the first production lot becomes the point at which the team discovers what it forgot to agree on.

A controlled specification packet gives the team a common target for validation, testing, and jurisdiction-specific legal review.

 

The RFQ should begin with the oil

Catalog labels encourage buyers to start with capacity, coil type, and thread. Operations usually need a different first question: what will go into the cartridge?

“Cannabis oil” does not describe one set of flow characteristics. A formulation may behave differently as temperature changes or after added terpenes and other permitted ingredients alter it. Those differences can affect how readily the reservoir fills, whether oil reaches the intake openings as intended, and how much time the operator has before closing the unit.

The brand does not need to disclose a proprietary recipe in an initial request for quotation. It can provide a bounded process description: the viscosity range measured at a stated temperature, planned fill temperature, target fill amount, and any known material restrictions. For qualification, the parties can agree on a representative fluid or a controlled sample of the intended formulation.

This is where shortcuts are tempting. Sending a representative fluid sample takes time, and some suppliers will offer a quick recommendation based on a broad oil description. That recommendation may be a sensible starting point. It is not a substitute for confirming the final model with the actual formulation and operating conditions.

ASTM International publishes separate classification and guidance documents for cannabis/hemp extract vaporizers.¹ For a buyer, the practical starting point is simply to use consistent terms for the device being evaluated. Suitability for a particular extract still has to be established for the selected model and operating conditions.

“One gram” leaves a volume question unanswered

Brands sell by net weight. Reservoirs are physical volumes. Treating the two as interchangeable creates avoidable arguments at the filling line.

The specification should distinguish the cartridge’s nominal reservoir volume from the target net fill. It should then state the allowed fill tolerance and the agreed maximum fill level or headspace for the selected formulation. These are related values, but they are not the same value.

There is no responsible universal conversion to paste into every specification. Density is part of the formulation, and usable volume depends on the particular cartridge and closing process. The correct numbers come from measurement under defined conditions.

The filling instructions should capture the details that change the result: product temperature at dispense, needle position, dispense approach, and maximum interval between filling and closure. If the center airway collects oil during filling, the first question should not be whether the cartridge is “good” or “bad.” The team should first confirm that it used the same fill conditions under which the hardware was qualified.

 

Approve a drawing, not a photograph

A commercial image helps identify a style. It cannot locate a part in a nest or size a carton insert.

The released drawing should show the dimensions used downstream, including overall height after closure, maximum diameter, base geometry, connection details, and the surfaces used to locate the part in a tray or fixture. The team should mark which dimensions are critical to fit or function. Cosmetic dimensions and fixture interfaces should not receive the same attention merely because both appear on the page.

Buyers sometimes ask for tighter tolerances everywhere because it feels safer. That can add cost without improving the process. The better discussion is specific: Which dimension controls centering under the fill needle? Which surface determines press depth? Which assembled height controls the package? Those are the dimensions that purchasing, the supplier, the filler, and packaging must understand the same way.

The drawing also needs a part number and revision. The approved sample, quotation, purchase order, inspection record, and packaging file should point to that revision. A model name alone cannot do this job. Suppliers may improve tooling or substitute a subcomponent while continuing to sell under the same name.

 

A press-fit mouthpiece is a process step

The words “press fit” do not tell an operator how to close a cartridge.

A workable closure instruction identifies where the fixture contacts the part, how the cartridge is supported, the required final position, and how the operator confirms that closure is acceptable. If force or travel limits are part of the qualified process, those limits belong in the instruction along with the equipment and fixture used to establish them.

Mouthpiece geometry, seal design, materials, and equipment vary, so a closure-force value from another model may not apply. The supplier should provide model-specific starting information, and the processor should establish the operating window during qualification.

This step is also where three schedules collide. The supplier wants to release hardware. The filler wants final nests and closing tooling. Packaging wants the post-closure dimensions. If the brand approves artwork and inserts from an early rendering, a small change at the closure interface can create packaging rework even when the cartridge functions as intended.

 

“Ceramic” identifies one component, not the assembly

Cartridges described as ceramic still contain an assembly of materials. Depending on the model, that may include metal alloys, glass, polymers, seals, adhesives, surface finishes, and a ceramic heating or wicking component. The relevant disclosure maps each material to a component and identifies its relationship to the formulation and aerosol pathway.

The material record serves a practical purpose. In a peer-reviewed study of unused cannabis vape pens, researchers observed metal-containing particles in the liquid and reported variation between devices filled with liquid from the same product lot. The identified particles included metals used in common device alloys.² Section 5.3.5 of Health Canada’s industry guide states that studies suggest coil type and composition, device power setting, device type, and user behavior could contribute to the release of elements. The same section recommends that manufacturers control harmful elements in devices and parts so their transmission to aerosol under normal use is minimized.³

Those findings do not predict the performance of a particular cartridge or create a universal test plan. They are a reason to ask what a certificate actually tested.

When reviewing a report, ask what was actually tested. Was it raw material, empty hardware, liquid after contact, or generated aerosol? Which model and revision? Which formulation, storage interval, operating conditions, sample count, method, and acceptance criteria? Does the report identify a production lot?

That checklist is a procurement recommendation, not a requirement taken from the cited study. Its purpose is to prevent a valid report from being applied to a product it did not evaluate.

 

Decide which evidence belongs to the model and which belongs to the lot

Two folders often get mixed together.

The first supports model qualification. It may contain the released drawing, component-level material declarations, relevant test reports, process information, and records of validation of the brand’s formulation and filling method.

The second travels with production lots. It should identify the part number and revision, lot or batch code, manufacturing date where applicable, quantity, and agreed inspection or conformance records. The exact contents depend on the risk assessment and the parties’ quality agreement.

The distinction keeps document requests honest. Asking a supplier for “all certifications” produces a large attachment folder and very little certainty. Asking for the test report applicable to revision C and the conformance record for lot 2407 makes the traceability question answerable.

Receiving inspection should be equally focused. Verify the few characteristics that would stop production or break traceability: correct revision, lot identity, packaging condition, and the critical dimensions or assembly features selected during qualification. The sampling method and acceptance rule should be agreed before delivery so receiving staff are not forced to improvise when a result falls outside the target.

 

Expect resistance to change control

Change notification is easy to endorse and harder to negotiate. Suppliers may treat sub-supplier identities, detailed bills of material, or proprietary processes as confidential. Buyers may respond by asking for everything, which usually produces boilerplate rather than usable control.

A narrower agreement works better. Define the changes that affect the approved interface or risk assessment: formulation and contact materials, heating components, seals, critical dimensions, assembly method, tooling, manufacturing site, and critical sub-suppliers. Then agree on the notice period and the response. Some changes may require only a document review. Others may require samples or requalification.

This negotiation has to happen before the order. Once inventory is built and a launch date is fixed, both sides have an incentive to treat a change as minor.

If a supplier will not disclose proprietary composition, the brand can still request stable material identifiers, a declaration of no change, or an agreed-upon notification category. The objective is not to acquire the supplier’s trade secrets. It is to know when the qualified configuration is no longer the configuration being shipped.

 

The two-page packet is better than the twelve-page packet nobody uses

Start with the smallest controlled document that can travel across purchasing, quality, filling, and packaging. For many teams, the core can fit on two pages plus attachments.

Page one identifies the product: part number, revision, intended formulation conditions, nominal reservoir volume, target fill, and approved configuration. Page two controls the handoffs: critical drawing references, fill and closure instructions, fixture and packaging interfaces, required lot records, receiving checks, and change-notification rules.

Figure 1 summarizes how those handoffs connect from formulation through packaging while lot evidence and change notification preserve the approved revision.

The drawing, material declaration, and test reports sit behind those pages as controlled attachments. One owner maintains the packet. Each affected function approves the fields it actually uses.

This will add work to the RFQ. It should. The choice is whether the team resolves those questions while it can still change a drawing and schedule a trial, or after thousands of cartridges are waiting beside a filling line.

Q&A: Hirsh Jain on Cannabis Rescheduling, Interstate Commerce and the Next Wave of Market Growth

By Hirsh Jain
No Comments

Cannabis federal reform has finally reached a historic moment. Medical cannabis is moving through the rescheduling process after decades under federal prohibition, marking one of the biggest developments in the industry’s history.

The final outcome could determine how companies expand, whether cannabis can move across state lines, and which markets become the next major opportunities.

Hirsh Jain, CEO of Ananda Strategy, shares his perspective on where rescheduling stands, whether interstate commerce will be allowed, and which states businesses should be watching next.

 

Where does the process stand today?

I think it is helpful to separate the rescheduling process into two parts: the rescheduling of medical marijuana and what is being described as the full rescheduling of marijuana.

Medical marijuana was rescheduled through the Todd Blanche order issued on April 23. The question now is whether that action survives the legal challenges that have been brought against it.

The lawsuits argue, among other things, that the process did not comply with the Administrative Procedure Act and that the government should have gone through a formal notice-and-comment process.

The key issue right now is standing. Before the court even considers the arguments on the merits, the plaintiffs need to demonstrate that they have suffered a concrete injury as a result of the rescheduling decision.

The Department of Justice has argued that some of the plaintiffs cannot meet that threshold. For example, one argument against MMJ Biopharmaceuticals is that it does not yet have a product on the market, meaning it has not suffered an economic injury from rescheduling.

If the court agrees that the plaintiffs lack standing, the case could be dismissed. If the court finds standing, the next question is whether to grant a stay, which would pause the rescheduling process while the broader lawsuit proceeds.

 

What about the broader rescheduling hearing?

The hearing to consider the full rescheduling of marijuana concluded on July 15. The parties have until August 17 to submit their final briefs.

I expect that this process will continue for several months.

Some people have suggested we could see a final rule by late summer or early fall, but I think that timeline is unlikely.

After the administrative law judge receives the final briefs, they need to issue a recommendation. There is no statutory deadline requiring that decision to come quickly.

Then the decision moves to the DEA administrator, who has the authority to disagree with the administrative law judge’s recommendation as long as they provide a reasoned explanation.

We have historical precedent for this. In 1988, administrative law judge Francis Young recommended that cannabis be rescheduled, but the DEA ultimately rejected that recommendation.

After the DEA administrator weighs in, the matter moves to the Attorney General for a final rule. Then there is a 30-day window where parties can challenge the decision legally.

So while I am cautiously optimistic, I think we should recognize there are many procedural opportunities for delay.

 

The DEA appeared to take a narrower approach during the hearing by focusing on medical use rather than legalization. Does that improve the chances of rescheduling?

I think that strategy made a lot of sense.

The DEA was very clear that the question before them was not whether cannabis should be legalized or whether cannabis is harmless. The question was whether marijuana has a currently accepted medical use.

By narrowing the issue, they created a stronger legal argument.

I am optimistic about the substance of the hearing. My concern is less about the underlying argument and more about the procedural mechanisms that opponents can use to slow the process.

 

Companies like Trulieve have successfully uplisted to major exchanges. What does that signal about investor confidence?

I think it demonstrates that exchanges are evaluating cannabis through a very technical legal lens.

Trulieve and Glass House structured their businesses to emphasize their medical operations and create a pathway toward federal legality.

Other companies, like Curaleaf, have taken a more cautious approach and indicated they want to wait until full rescheduling occurs before pursuing uplisting.

I think the broader takeaway is that if we are in a world six months from now where full rescheduling has occurred, we could see many more operators pursue uplisting.

 

Could rescheduling finally open the door to interstate commerce?

This is one of the biggest questions facing the industry.

Historically, interstate commerce did not exist because cannabis was federally illegal, but I think the more complete explanation is the structure created by the Cole Memorandum.

After Colorado and Washington legalized cannabis in 2012, the federal government essentially allowed states to experiment as long as they avoided certain enforcement priorities. One of those priorities was preventing diversion across state lines.

That created the foundation for state-based markets.

Even after the Cole Memo was rescinded, states continued operating under that framework. Over time, every state built its own isolated system.

Rescheduling could change that conversation by creating a stronger argument for federal legality. That could make courts more receptive to challenges based on the Dormant Commerce Clause.

But this would not happen overnight.

There are three potential pathways:

First, courts could determine that state restrictions on interstate commerce violate the Dormant Commerce Clause.

Second, individual states could reform their cannabis laws to allow interstate commerce.

Third, states could create interstate compacts in which participating states agree to allow commerce among themselves.

I think interstate commerce will happen gradually. It will likely begin with groups of states that are willing to work together, rather than a nationwide opening all at once.

 

How would interstate commerce change the industry?

It would completely change the strategy of scaling cannabis businesses.

Right now, companies often have to build cultivation, manufacturing, and distribution infrastructure in every state where they operate.

If interstate commerce becomes possible, companies could manufacture products in one location and distribute them across multiple states.

That would dramatically change the industry’s economics and reduce some of the pressure operators face today.

 

Which states do you see driving the next wave of cannabis growth?

The industry has been starved for growth over the past few years.

Between 2016 and 2023, we saw a steady stream of states launching adult-use markets. Over the past three years, that momentum slowed.

The exciting thing is that by 2027, I think we can identify several meaningful growth markets.

The biggest one is Virginia.

Virginia is currently a limited medical market, but adult-use sales are scheduled to begin in 2027. Most analysts believe the state could eventually become a multibillion-dollar market.

What makes Virginia particularly interesting is its geography. It borders states including North Carolina and Tennessee that do not currently have adult-use programs.

Virginia could become a destination market for consumers across the region.

 

What about Minnesota?

Minnesota is another market I think people should watch.

One thing Minnesota has done particularly well is create pathways for hemp operators to transition into the regulated cannabis market.

That is a model other states should consider.

The challenge in Minnesota has been supply. The state licensed retailers, but cultivation capacity and testing infrastructure have not kept pace.

The result is that many stores have limited inventory and high prices.

I think 2027 could be a turning point because more cultivation comes online, testing capacity improves, and retailers have more products to sell.

 

What medical markets are worth watching?

I think Georgia and Texas are two of the most exciting medical markets in the country.

Together, those states represent more than 40 million people.

Georgia is particularly interesting because of the changes it has made to its medical program, including expanding qualifying conditions and allowing additional product formats.

The pharmacy model is also important.

Pharmacies are trusted healthcare providers. Many consumers who may hesitate to enter a dispensary may feel comfortable visiting a pharmacy.

Georgia has the opportunity to demonstrate a different model for cannabis distribution.

 

Final thoughts: What should cannabis businesses be watching over the next year?

I think the biggest thing is understanding that the industry is moving into a new phase.

Rescheduling, interstate commerce, new state markets, and changing distribution models all have the potential to reshape how cannabis companies operate.

But none of these changes happen instantly.

 

The long-awaited moment has arrived. After building markets state by state under federal prohibition, companies are ready for a new chapter in the industry.