As the cannabis industry grows, companies are faced with more labor related compliance and regulatory issues, which require time and expertise. Rather than hire internal staff to manage human resources (HR) and compliance, many companies choose to outsource nearly 85% of HR functions. These functions include payroll administration, HR tasks and other employment liabilities, like insurance, to a third-party Managed Service Provider (MSP). This model frees up internal resources to grow and develop the company’s core business, while also offsetting risks associated with employment, taxes and insurance.
Nicholas Murer formed WECO in 2014 to provide human capital financial services to the legal cannabis industry, offering services like payroll management, workforce management, human resource implementation, accounting solutions, recruiting and staffing. The company has since expanded to providing consulting services, financial product representation, investor asset development, wholesale trading and advising emerging market development projects worldwide.
With markets across the country maturing at a rapid rate, change is a constant. Cannabis companies operating in new markets need to maintain compliance while focusing on their business plan, which can be a difficult task. We sat down with Nick Murer to learn more about compliance issues that cannabis businesses face, like workers comp, payroll taxes, insurance and how outsourcing some HR functions can help.
Q: What are some of the major labor compliance issues faced by employers in the cannabis industry?
Nicholas Murer: Like other industries, the cannabis industry is subject to labor related regulations like paid time off, harassment prevention training, workers compensation requirements, payroll taxes, pay transparency, unemployment insurance and reporting. Unless companies have an expert, or a team of experts, monitoring and managing compliance on both the employer and employee side, they may quickly find themselves in hot water with state regulatory agencies, or even with an employee for labor law violations.
Another issue continues to be access to banking and payment processing. Many cannabis companies continue to pay employees and vendors in cash, which creates not only problems in accurate accounting, but safety concerns for employees as well. There are banks and credit unions that will work with cannabis companies, but without a partner who has relationships with and access to a proven and trusted network of banks and processors, monthly account and transaction fees can be expensive and out of reach. With the SAFE Banking Act stalled once again in Congress, this will continue to be an issue.
Q: How can cannabis companies mitigate their risk by outsourcing HR functions?
Murer: By utilizing a Managed Service Provider (MSP), cannabis companies enter a labor contract model for payroll and HR administration. An MSP is a professional workforce management company that provides comprehensive employment services for businesses.Nick Murer and the WECO team will be at the CQC this October 16-18. Click here to learn more.
This model provides the client company with the best labor practices, risk mitigation and claims management with access to national workers compensation and unemployment insurance. The MSP is the employer of record, so is responsible for most aspects of the employee/employer relationship. The day-to-day management of the employee continues with the client company, but the company’s liability and risk are reduced. MSP compliance risk reducing services include:
Background screening and reporting
Labor related compliance management at state and local levels
Handbook and policy management and distribution to employees
A central location for employee onboarding, time and assignment tracking, payroll administration and reporting
Separation of labor cost for each location/company for 280E tax mitigation
All federal, state and local tax filings
Employment verification
Employee access to health insurance
Employee access to banking for payroll direct deposit
Outsourcing to an MSP provides cost savings to the company, including:
Reduced staff
More efficient payroll processing and legal compliance
Streamlined recruitment
Utilizing WECO to manage the employer of record process allows client companies to look beyond traditional payroll to a full workforce management solution that ensures a smooth payroll and provides the tools that can support the growth and development of a workforce including compliant banking, human resources management and employee services.
About Nicholas Murer
Nicholas Murer formed WECO in 2014 to provide human capital financial services to the legal cannabis industry, offering services like payroll management, workforce management, human resource implementation, accounting solutions, recruiting and staffing. Nick Murer has more than twenty years of professional and technical sales experience working globally in the energy, engineering and scientific industries, including a substantial background in industrial technical sales, account development, marketing, human resources, acquisitions and project management. He studied accounting and business management at the University of Pittsburgh and organization development and human resource management from Colorado State University.
History has shown that if companies fail to innovate when new technology emerges, even household name brands with enormous market share can squander their success if they are blind to anything that could ever unseat them from the top.
Kodak developed digital camera technology in the 1970s but didn’t envision a world where the film market wasn’t dominant. Toys R’ Us failed to adapt to the changing retail landscape, and Amazon became the chief source of online toy sales. Blockbuster famously laughed Netflix out of the room when the now-$149 billion behemoth sought to sell for a measly $50 million.
A “knockbox”-style unit for producing prerolls
Brands in the cannabis landscape can also fall victim to this same misstep. New technologies are driving the industry forward, yet many brands are still standing by sub-par processes. Whether due to misplaced beliefs around automation or an unwillingness to invest, cannabis brands could suffer the same fate as many of these bygone-era brands.
The Financial Argument: Automation Reduces Overhead
The financial argument for automation is at the top of the list of motivators for most cannabis businesses. A great example of this is with pre-roll production. For cannabis brands still employing a “dexterous approach” to their pre-roll manufacturing, staying afloat to keep up with demand is a constant battle. Rebel Spirit, currently the number one pre-roll brand in Oregon, was burning through eye-welling amounts of money in labor costs to produce 300,000 pre-rolls per month. With a crew of 22 full-time pre-roll manufacturers, the team at Rebel Spirit quickly realized their process was unsustainable, and they were headed for an economic crisis if they didn’t cut costs.
The Blackbird atuomated system
They were using a knockbox-style unit which they had modified themselves in an attempt to force it to fit their needs. But this “semi-automated” solution simply wasn’t working. Rebel Spirit then turned to our team at RollPros to clean up and fully automate their production process, helping them to create quality pre-roll at scale with a fraction of the labor costs. (We are the Vancouver, WA-based designer and manufacturer of the Blackbird automated joint rolling system.) For them, it wasn’t a matter of greed, as some opponents of automation sometimes claim; it was simply a choice of going out of business or not. In competitive markets like the Beaver State, where every dollar counts, the case for automation was a no-brainer.
The Remote Argument: Automation Reduces Risk Of Human Error
It’s a basic concept: the more human interaction in your processes, the more risk for error. We, as flawed humans, are simply not capable of being as precise or consistent in our work as a machine can be. Consider the cultivation process. Most experienced cultivators will tell you that growing cannabis is easy, but growing quality cannabis is very difficult, with a lot that can go wrong.
Enter one of the most valuable automation tools for cannabis cultivators – automated irrigation systems. With your irrigation systems and nutrients on autopilot, cultivators can ensure plants get the ideal mix of nutrients regardless of whether you are on-site, remote or facing a staffing crunch. Sensors can provide real-time data so that water, nutrients or even light can be adjusted as needed. In many cases, even these adjustments can be automated. (Think AI hasn’t entered the cannabis space yet? Think again!) Sure, there is always a potential for issues no matter how advanced a system you use. But when you compare this to a farmer using a manual watering and nutrient system, there are far fewer opportunities for mistakes. Does a human feel the difference between .94 gallons of water and 1 gallon of water? No. But a well-calibrated irrigation system can tell the difference and even alert you if it goes outside of whatever tolerance limits you set.
When the cost of flower is high, human errors that lead to damaged or inferior product are often overlooked. But when flower prices drop as markets mature, success versus failure can be balanced on a knife-edge, and cultivators can’t afford to make mistakes.
The Skynet Argument: Automation Increases Productivity Without Taking Your Job
Whether AI is coming for our jobs or will destroy human creativity as we know it has been argued ad nauseum since the release of AI tools like ChatGPT and Midjourney. The good news? Automating your business doesn’t mean enlisting the T-1000 from Terminator 2 to terminate your 9-to-5. Think of automation as Arnold Schwarzenegger telling you to come with him if you want to live.
The Green Vault automated packaging system
The truth is that any task that needs to be completed frequently or on a set schedule is ripe for automation. Automation eliminates tethering your most talented employees to cog-in-the-machine work that wastes their time and abilities. Freeing them up to focus on more high-value tasks like customer service, marketing, or new product development will likely make your business more profitable long term, and make your employees happier with their work.
No industry has been spared from the impacts of industrial automation, says Amar Olgeirsson, CEO and founder of Green Vault Systems, but, “labor is typically not reduced as a result of automation.” Instead, “production is increased, and workers’ value increases because of higher production in terms of units produced per labor time. By increasing worker efficiency, companies and corporations are able to pay their workers a higher salary,” says Olgeirsson.
The Performance Argument: Automation Guarantees Consistent Quality Every Time
Expansion across state lines means consumers know they can buy the same quality product whether they buy it on the East Coast or West Coast. You know that you can buy your favorite Red Blend wine whether you’re in Denver or Atlanta and expect to enjoy the same tasting glass (barring any unintended oxidization). If a customer purchases that same glass of wine, and it doesn’t meet their expectations of what it should be (it’s inconsistent with the last time they had it), a brand is essentially breaking a promise to that customer. When a customer doesn’t get what they want and expect out of a product, they’ll quickly move on to a competitor. Consistency builds loyalty… inconsistency destroys it.
A preroll infusion automated system
The cannabis industry is notorious for producing inconsistent products. It’s not surprising, considering the near-total ban on state-to-state commerce, (thanks federal government!) And, of course, the variation that can occur from crop to crop, batch to batch or facility to facility. There are so many variables to just the cultivation process; the amount of light a crop gets, the type and dosage of nutrients, the growing medium that’s used, the amount of air flow in the facility… The list goes on, and that’s just the first of many processes needed before a product ends up on shelves! It’s nearly impossible for humans to manually manage and ensure consistency of all these variables without the help of some level of automation.
Nohtal Partansky, ex-NASA-JPL engineer and CEO of Los Angeles-based Sorting Robotics, teamed up with fellow NASA Jet Propulsion Laboratory colleagues Cassio Santos and Sean Lawlor to found their firm that creates next-generation hardware and software for cannabis industry producers.
“Automation in the cannabis industry plays a crucial role in maintaining product consistency by reducing human error and standardizing processes across cultivation, extraction, and packaging,” says Partansky. “If brands are going to expand across states, consistency is a requirement if customer loyalty is ever going to be a market driver for sales.”
The Contamination Argument: Automation Limits Human Error & Contamination Risk and Improves Product Safety
Our industry demands very strict safety standards. Our customers deserve safe products, but beyond that, the testing requirements mandated by regulations in most markets are very, very strict. Each and every human touchpoint in your processes carries with it additional contamination risk. Even with stringent protocols, mold, mildew and other unwanted crits can more easily venture their way into final products as the human variable increases.
Automation minimizes these risks and improves the safety of the product for consumers, and reduces the risk of recalls or other regulatory issues. Consider that for many cannabis businesses in hyper-saturated, competitive markets, a significant product recall can be the end of the road. Automating production processes provides a reliable and consistent solution in an industry that demands the highest safety and quality standards.
“The new and burgeoning Cannabis industry and its consumers are no exception and possibly benefit it more than other industries. The medicinal qualities of Cannabis products make consistency, quality, safety, and traceability paramount to the consumer. Cannabis products are most often consumed by ingestion into the lungs which means product cleanliness and quality are essential to safety. Chemically derived oils and extracts would not be possible without automation equipment. Again, industrial automation is a huge benefit to the Cannabis space, to the producers, their employees, and maybe most importantly to the consumer”.
Amar Olgeirsson, CEO & Founder, Green Vault Systems
Olgeirsson’s take on products created on specialized automation equipment? “Products produced on purpose-built machinery are more consistent and of a higher quality which lends itself to better oversight, enhanced traceability, and improved product safety.”
The Physical Argument: Automation Eliminates Tedious & Overhead-Heavy Tasks
In an increasingly competitive marketplace like cannabis, streamlining processes and reducing the liabilities that come with human labor – like being sidelined from Carpal Tunnel – is key. Let’s consider the trimming component of the post-harvest process. Manual trimming is monotonous, low-paying for workers, and an unrealistic way to harvest cannabis at scale. Also, it’s hard to be successful when team-wide prescriptions for night-time wrist splints are a threat.
The Mobius M108S Trimmer
Leaning into “hand-trimmed” as a differentiator for your brand? Many connoisseurs will argue that hand-trimmed bud is superior because buds stay aesthetic and trichomes aren’t lost. That may have been true in the early days of automated trimming machines, but with today’s crop of super-sophisticated trimming technology, it is now nothing more than a myth. (Yes, myths and misled traditions can be difficult to overcome in our industry, but I digress…)
The Mobius M108S Trimmer, for example, allows operators to reduce the staff required to process thousands of pounds of product every year without compromising quality. It’s next-gen tech not found on traditional trimmers can produce hand-trim quality buds with minimal trichome loss.
When flower prices are high, especially in the case of newly-legalized markets, it can be easy for operators to overlook the cost of trimming, and pay their employees higher wages to offset the physical risks to their bodies. But what about when product prices inevitably fall once the post-legalization honeymoon period wears off? It’s unrealistic (and unethical, I believe), to pay employees minimum wage while putting their health and safety at a significant risk. In the above example, at some point, your operations will grow to a point where hand-trimming will dig you further into a fiscal hole every time you harvest.
The Future Argument: Automation Isn’t Going Away (and Your Competitors Know It)
Automation could cause you to lose people, just not in the way you might think. Ultimately, competitors in any space will invest in new technology to streamline people, processes and tools to establish a competitive advantage. This investment puts them in a better position to attract talented employees that stick around for the long term.
Automation is like a boat motor in the 21st century, and companies that don’t use it are paddling against the current. Sure, you can use a wooden oar, but your competitors know paddling is too much work and will strap a motor to theirs. The truth is that companies that drag their feet out of stubbornness or inability to see how the current situation could ever change will often find their employees jumping ship to go elsewhere.
An automated vape cart filling system
“I strongly believe that automation not only propels our industry forward but also sets the stage for a more profitable future in cannabis production for those that embrace technology rather than fight it,” says Ryan Hoitt, CEO, developer & founder of Vape Jet in Portland. “I can confidently say that it enables businesses to fine-tune operations, improve product quality, and achieve unmatched consistency.”
Saying that you will eventually be forced to automate sounds harsh, but it’s largely true. As soon as your competitors deploy automated processes, they gain an advantage. If you don’t do the same, it will become more difficult to compete, stay profitable and stay in business.
The Consumer Argument: Automation Provides Consumers More Options
Automation isn’t going away, and it’s certainly not a fad like pogs or planking. Automation drives lower production costs, which means lower-priced products for consumers. This process has been behind the dramatic increases in global living standards and population growth since the birth of the Industrial Revolution and is not likely to change anytime soon.
Automation allows producers to manufacture a broader range of products and focus on providing the consumer with more options. Consumers want to be in control of their purchasing decisions, and companies that deliver variety will be the ones to reap the rewards.
Embrace the Future with Automation
History has shown us time and again that failure to innovate can lead even the most prominent brands to fall victim to their inability, or unbelief, in the necessity to evolve. Automation is a no-brainer in crowded and competitive markets.
No doubt, the future of the cannabis industry will trend toward automation. Businesses embracing it will have a significant advantage over those that do not. Companies that drag their feet in the face of disruptive automation risk resigning to the same fate as those brands that underestimated technology at the expense of their own existence. No industry is immune from disruption, and there will be dynamic entrepreneurs who will come along and see to it. Embrace the change, embrace automation and technology, and you’ll increase your chances of winning in the cannabis industry!
In 1996, the Harvard Business Review published an article called Making Differences Matter: A New Paradigm for Managing Diversity, in which the authors argued that companies should adopt a radically new way of understanding a diverse workforce. Instead of hiring employees of different backgrounds and asking them to blend in, or limiting people to areas of work based on their identity, they suggested embracing and bringing together the varied perspectives and approaches to work that members of different identity groups bring. Since then, a steady stream of companies – from GE to PricewaterhouseCoopers to cannabis companies – have implemented several new practices, initiatives and programs under the category of Diversity, Equity and Inclusion (DE&I).
DE&I has become highly important over the last few years, and many companies are seeing the benefits. Today, 83% of professional investors are more inclined to invest in stock of a company well-known for its social responsibility. On the other hand, a company that is seen as not responsible stands to lose as much as 39% of its potential customer base, with one in four consumers telling their friends and family to avoid it. As these benefits draw more companies to focus on DE&I, it’s important to remember that your plans should ultimately be centered around uplifting employees from all backgrounds.
“Listen, test, learn and then listen again!”While still relatively new to the cannabis sector, one DE&I initiative that is making some headway towards that goal is the Employee Resource Group (ERG). Essentially, it’s a group of employees who join together in their workplace based on shared characteristics or life experiences. ERGs work to create communities which bring people together, with internal and external partnerships to support those groups, and they are gaining popularity. In fact, according to a Bentley University report, almost 90% of Fortune 500 companies utilize them. They’re often used because issues are addressed from within an organization by the people who are most directly impacted by them. They can also serve as a direct pipeline of communication between employees and employers, as well as a place for new ideas and solutions to problems to blossom.
When it comes to recruiting and retention, ERGs have their own specific benefits. According to a survey conducted by Software Advice, 70% of respondents between 18 to 24 years old and 52% of respondents between 25 and 34 reported they would be more likely to apply for a role at a company that had ERGs. With regards to retention, 50% of survey respondents across all ages stated they would remain at a company because it had an ERG.
While some in the cannabis sector have already implemented ERGs, this new practice is one that all cannabis companies should consider – particularly as this industry grapples with its own unique DE&I challenges and history. To that end, check out the tips below to help get you started.
Gauge interest: Many ERGs start organically. The first question you need to answer before you can start building an ERG is to ask if your employees want one. The statistics indicate they likely will, but it’s important to establish that leadership is willing to listen. Employees should play a major role in this process from the beginning. However, remember that the DE&I strategy is not their responsibility, and ERGs should be a part of a more comprehensive plan.
Find the willing and work with them: You’ve got to find the people that these topics matter to and embrace them. Participation is key, and if the topic at hand is one that someone is not personally connected to, your ERG may not live up to its full potential. ERGs are a significant time investment, so you have to make sure those taking part are ready, willing and capable of balancing their job responsibilities with their additional role in the group. Participation goes both ways, too. You have to make sure that managers are aware that someone is in an ERG. “Be open to making mistakes and learning from them, and then changing for the better.”
Use executive sponsors: An essential piece of successfully incorporating ERGs into your organization is recruiting executive allies from the corporate side to serve as sponsors. This can help break through barriers, get decisions made, and keep all parties organized. Executive sponsors are also great for employee development, as they can see firsthand the talent in the organization and become a mentor. Executive sponsors are often an important request from ERGs, and they are worthwhile to recruit for. Sponsors don’t have to be from the same affinity as the group, and in some ways, that can actually be a good thing. Solidarity is another important factor to company health, and allyship is imperative for solidarity.
Set goals: Define a mission early on. It’s important for ERGs to have a strong mission statement with core goals that the group is formed around achieving. Keep in mind, these need to be tangible goals with specific benchmarks. It can’t just be “increase diversity in hiring.” Set a number you’d like to reach and a date you’d like to reach it by. Having clear objectives keeps a track record for your ERG, and is the foundation for success. These will also ensure that your ERG is not just for marketing purposes. Achieving substantive goals will keep the group going, as confidence gets built on the inside and from the outside.
Be clear: ERGs are all about communication, so clarity has to be a top priority. None of the above tips work without that. You have to make sure the groups are not questioning what is expected of them, what resources they have to work with and what goals they are working towards. It’s always going to be a learning process, and there will certainly be unforeseen challenges, but being on the same page from chapter one will make the process that much more beneficial to all involved.
As stated above, ERGs are still new, just like the industry we want to bring them into. Be open to making mistakes and learning from them, and then changing for the better. That process is what ERGs are about at their core, after all. Listen, test, learn and then listen again!
Dr. Linda Klumpers has a Ph.D. in clinical pharmacology of cannabinoids. Originally from the Netherlands, she began much of her career in studying cannabis there. She now lives and works in the United States, where she has worked on a number of projects, started her own company and is continuing her research on cannabis as an effective medicine.
After studying neuroscience at the University of Amsterdam, she went on to train at the Centre for Human Drug Research and Leiden University Medical Center, where Dr. Klumpers obtained a clinical pharmacology degree and a Ph.D. in clinical pharmacology of cannabinoids. She has been researching cannabinoids in humans since 2006. Dr. Klumpers co-authored a number of peer-reviewed cannabinoid publications and she has received five honors and awards for her work, including the BJCP Prize from the British Journal of Clinical Pharmacology.
Dr. Linda Klumpers
In 2016, she moved to the United States and founded Cannify, an online tool that helps patients and clinicians with product matching and providing legitimate cannabis education based in sound science. In 2018, Dr. Klumpers joined forces with Dr. Michael Tagen, another clinical pharmacologist, to launch Verdient Science, a consulting partnership. Their work at Verdient Science includes helping clients set up human studies, advise on FDA submissions, creating course materials, adjusting product pipelines and product development strategies, among other areas of focus.
Right now, Dr. Klumpers is waiting to hear back from a grant application they submitted to study THC and CBD ratios for medical efficacy in chronic pain patients. We sat down with Dr. Klumpers to hear her story, what she is working on now and how she hopes to continue researching cannabis as an effective medicine.
Cannabis Industry Journal: Tell us about your background as a research scientist. How did you get involved in cannabis?
Dr. Linda Klumpers: During my Ph.D. work, we studied the effects of so-called cannabinoid receptor antagonists that block the effects of THC – I prefer to say “we”, as research is always done by multiple people. The problem with studying these compounds in healthy volunteers is that you can’t observe acute effects, which means that you won’t measure any effect after a single dose. To circumvent this issue, we applied a trick and developed a ‘challenge test’: after you give the ‘invisible’ blocking compound, you stimulate the cannabinoid system by giving people THC. If the subjects don’t feel the effects of THC, you know that the blocker worked. One thing lead to another and we ended up studying various administration methods, such as intrapulmonal (via the lungs) with vaporization, oral and sublingual. We studied the behavior of cannabinoids in the body and how the body responded to them.
CIJ: Can you share some information on the projects you are working on? What is Cannify and what is Verdient Science?
Dr. Klumpers:Cannify was founded in 2016 after I saw that too many people had opinions about cannabis that were more based on emotion than fact. Besides, I noticed that a majority of the scientific literature on cannabis pharmacology was left unnoticed and unapplied to the people getting exposed to cannabis, such as patients, the cannabis industry – that was in a very different stage at that time – healthcare providers and regulators. With my Ph.D. in cannabis pharmacology, I wanted to add a level of objectivity to cannabis education and research. Cannify’s goals are to understand the science of cannabis, and share this with others.
The way we do this is multi-fold:
Cannify Quiz: Patients with an interest in cannabis often want to know the science about cannabis and their condition. Our quiz helps these people by asking in-depth questions and showing them relevant scientific literature in a personalized report. After that, an overview is given with products and product matching scores. Our account system allows users to track their progress over time. Product manufacturers, dispensaries and other companies can use the quiz for their websites and their stores to help out retail employees and save them time, and to receive insight with our analytics on customer desires and behavior. Needless to say, an educated customer is a better customer. It is important that customers come and leave stores well-informed.
Education: Speaking of education, our website contains educational articles about everything cannabis: from plant to patient and from product to mechanism of action. We regularly publish educational quizzes for people to test their knowledge level. With a free Cannify account, you can find all of our educational quizzes and save your results. We also provide customized courses, and have educated a wide audience varying from industry professionals to CME-accredited courses for healthcare providers. On top of that, our educational videos in dispensaries (in collaboration with our partner, Enlighten) reach customers and retail employees.
One of Cannify’s educational graphics, showing the difference between topical and transdermal product administration
Research: To expand the knowledge on cannabis, performing and especially sharing research is essential. We have already performed and published some of Cannify’s results on descriptive statistics and effect prediction during conferences, as well as a review paper on cannabis therapeutics in a peer-reviewed journal and a book chapter. This year, we expect to co-publish the results of a survey in different sleep patient groups. We collaborated with the Centre of Excellence for Epilepsy and Sleep Medicine in the Netherlands on a peer-reviewed paper from which we expect new research to follow to benefit these patients. We have also co-submitted a grant to study THC and CBD ratios in chronic pain patients: fingers crossed! Another important next step is to test a healthcare provider-specific version of Cannify’s quiz in the clinic once COVID dies down. I want to add that after working in a clinical lab for many years, it is important to combine the results of clinical trials to what people do in real life, which is what we do with Cannify.
And here’s some information on Verdient Science:
Verdient Science is a consulting partnership I have with clinical pharmacologist Dr. Michael Tagen. We provide clinical and translational pharmacology expertise to improve the quality of product development & clinical testing. While both working as independent consultants, we decided from 2018 to start working together to offer better services. Since then, our work has been very variable and includes helping clients set up human studies, advise on FDA submissions, creating course materials, adjusting product pipelines and product development strategies to make them more efficient and cheaper, performed scientific due diligence and much more. When clients want additional services that are beyond our expertise, we are typically able to introduce them to various people per expertise area, or refer them to our partner companies, Complex Biotech Discovery Ventures (CBDV) with Dr. Markus Roggen, and Via Innovations with Dr. Monica Vialpando. A benefit of working with the same partners includes smooth handovers and the feeling of a one stop shop.
CIJ: How does Cannify match available products to consumer needs? Is there an algorithm you developed that matches moods or feelings to cannabinoids or chemical profiles?
Dr. Klumpers: That is a great question and the core of what we do! So back to the Cannify quiz: there are three steps:
Users fill in questions;
A personalized report is generated with the relevant science;
The user gets a product overview with product matching scores.
Another Cannify educational graphic, showing THC distribution throughout the body over time
The report and the matching scores are generated using algorithms that are regularly updated. These algorithms are based on various data sources:
Literature: There is a lot of available literature, and we make sure to select the most relevant and reliable studies;
Raw data: There is only so much one can find in the literature, and lots is hidden in the raw data. Therefore, we piled up data from studies done at various research institutions, including the University of Kentucky and Johns Hopkins University, and used them in our algorithms;
Internal studies: From the thousands of users filling in their results, there is a lot of information that we should learn from. This feedback loop helps us to better understand how the lab relates to real life situations.
CIJ: The world of cannabis research has been historically stymied by red tape, DEA interference and a host of federal regulations. How have you managed to work through all that? Do you have a DEA license? What did it take to get it?
Dr. Klumpers: Luckily, a majority of our research was and is done outside of the US. You still need to obtain the appropriate licenses, but I was perhaps lucky to have filled in every form very thoroughly and we got the licenses within months. The process is quite meticulous, as you need separate licenses for almost every step from manufacturing to administration. An additional complication is that our cannabis is not stored in our own building, but in the hospital pharmacy across the street, involving transport via the public road. Despite the roadblocks, including a legal procedure about this matter that was going on in parallel, I had no major issues getting our work done. For our research in the US, we were lucky to have been working with partners that already have the required license.
Also with publishing, I have never had an issue with the cannabis stigma. Generally, in my field of science, good quality science is very much welcomed and appreciated, and this was even before the time that there were four different cannabis-related journals, as is the case nowadays.
CIJ: Looking to the future, where do you hope to focus your research efforts? Where do you think the cannabis community should be focusing their efforts in the next 5-10 years?
Dr. Klumpers: Besides continuing to analyze the data generated from Cannify, I keep my fingers crossed for the grant application I mentioned earlier on THC and CBD ratios in chronic pain patients. Although we know that CBD is able to influence THC-induced effects, it is not known at what dosages, which ratios and how the effects are related to each other. For example: is CBD able to decrease certain side-effects of THC without decreasing pain-relieving effects?
Whatever is done, wherever in the community: good quality data are keyNext to that, I am also interested in other neurological and psychiatric disorders, and, of course, my Ph.D. love: the cannabinoid antagonists. Sadly, all the research efforts on this compound group were halted more than a decade ago. However, there is a renewed interest. I would love to help turn these compounds into effective and safe medicines.
Regarding the cannabis community: 5-10 years sounds really far away for an industry that is relatively new to many, but a lot has already changed since I started cannabis research more than 14 years ago and time has flown by. Some changes have been positive and others less so. Whatever is done, wherever in the community: good quality data are key. Many companies gather data and even publish them in peer-reviewed journals, but that does not always mean that the data are useful or that the studies were done well. Only a few minor changes to how and which data are gathered, and so much more can be done. What can help with achieving this is to let the right people do the right thing: many call themselves a ‘cannabis scientist’ or ‘cannabis expert’, but that does not mean anything. What has someone truly achieved and what is their exact expertise? A Ph.D. in chemistry is not going to help you in setting up effect studies, neither will I be able to improve your product’s shelf life or extraction yield. Getting the right people in the right place is key. Lastly: the cannabis community should stay critical. The length of one article in Cannabis Industry Journal wouldn’t be enough to lay out all the misconceptions that people have about cannabis. Make sure that those misconceptions do not live on and do not be afraid to admit you don’t know something, irrespective of the branch you work in: only then, can the cannabis community progress to the benefit of all.
If you are in the business of growing cannabis, you should be aware of the common reasons for production losses, how to address root causes and how to prevent future occurrences in a sustainable way. Human error is the number one root cause identified in investigations for defects in the cultivation business. Sadly, little is known about the nature of these errors, mainly because our quest for the truth ends where it should begin, once we know it was a human error or is “someone’s fault.”
Yes, human error usually explains the reason for the occurrence, but the reason for that error remains unexplained and consequently the corrective and preventive actions fail to address the underlying conditions for that failure. This, in turn, translates into ineffective action plans that result in creating non-value added activities, wasting resources and money as well as product.
Human error can occur when workers are in direct contact with the plant
So after investigating thousands of human error events and establishing systems to improve human reliability in manufacturing facilities, it became even clearer to me, the need to have good, human-engineered standard operating procedures (SOPs).
In the cannabis growing process, there are different types of mistakes that, when analyzed, all can be addressed in the same manner. For example, some common errors that we see are either overwatering or nutrient burn, which can occur when the plant is overfed. The same is true in the opposite scenario; underfeeding or under watering lead to problems as well. If your process is not automated, the reason for these failures was most likely human error. Now, why did the person make that mistake? Was there a procedure in place? Was the employee trained? Is there a specific process with steps, sub-steps, quantities and measures? Were tools available to be able to do the task correctly? There is so much that can be done about these questions if we had clear, well-written and simple, but specific instructions. The benefits greatly outweigh the effort required.
Also, besides providing step-by-step instructions to avoid commission errors (to perform incorrectly as opposed to omit some step), there are other types of errors that can be avoided with SOPs.
Decision making like detecting nutrient deficiencies can lead to human error.
Decision-making is another reason why we sometimes get different results than the ones expected. If during your process there are critical, knowledge-based decisions, workers need to be able to get all the information to detect as well as correct situations. Some decisions are, for example, when (detection) and how (steps) should I remove bud rot? Is there a critical step in the process (caution) to avoid other plants from becoming affected? Any information on the what, how, when, where and why reduces the likelihood of a decision error, later described as obvious.
When we face manufacturing challenges like nutrient deficiency in a particular stage, mold, fungus, gnats or even pollination of females, we want to do whatever we can to prevent it from happening again. So consider that from avoiding to detecting errors, procedures are a critical factor when improving human performance.
Here are some guidelines when writing procedures to prevent human error.
Use them. Enforce the use of procedures at all times. As humans, we overestimate our abilities and tend to see procedures as an affront to our skills.
Make sure it is a helpful procedure and users are involved in the process. People that participate in writing rules are more likely to follow them.
Make sure they are available for their use.
All critical activities should have a procedure.
The procedure needs to be clear, have a good format, clear graphics, appropriate level of detail and specific presentation of limits.
Make sure that facts, sequence and other requirements are correct and all possible conditions are considered e.g. “what if analysis”.
Human error won’t be eradicated unless we are able to really identify what is causing humans to err. If eliminating or “fixing” the actual individual eliminates or potentially reduces the probabilities of making that mistake again, then addressing the employee would be effective. But if there is a chance that the next in line will be able to make the same mistakes, consider evaluating human factors and not the human. Take a closer look and your process, system and ultimately your procedures.
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With markets across the country maturing at a rapid rate, change is a constant. Cannabis companies operating in new markets need to maintain compliance while focusing on their business plan, which can be a difficult task. We sat down with Nick Murer to learn more about compliance issues that cannabis businesses face, like workers comp, payroll taxes, insurance and how outsourcing some HR functions can help.
About Nicholas Murer
