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How Automation Drives Performance Advantage in Vaping

By Jacob Haugen
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extraction equipment

The vaping technology market is a constantly evolving landscape, driven by the changing needs and preferences of consumers. Staying relevant in this competitive market requires companies to deliver exceptional vape experiences. Airo Brands has risen to the challenge since its inception, offering a diverse product portfolio that includes multiple vaporizers, pod blends and flavor combinations, all crafted with the latest technology, natural ingredients and intuitive features. Airo Brand’s commitment to delivering state-of-the-art products has resulted in impressive year-over-year growth and expansion into new markets.

Maintaining Consistency Across a Diverse Product Portfolio is Challenging 

With three types of vaporizers and an array of cartridge oil formulations, Airo Brands needed a machine that could accommodate various products, streamline operations and produce consistent, high-quality devices to grow the business. But given Airo’s complex product offering, there were potential challenges with oil viscosity, temperature and dispense control, making it essential to find a reliable machine that could switch between products easily and streamline operations without compromising quality.

Finding an Easy-to-use Machine that Evolves with Time is Critical 

Airo Brands recognized the significance of investing in a machine that could handle product variations, was simple to use and could accommodate their growing footprint. Airo Brands turned to Thompson Duke Industrial, an original equipment manufacturer that creates automated solutions for filling and capping vaporizer cartridges. Early on, our teams worked together to test and revise a custom septum-fill adapter to fit their needs. Airo was impressed with our availability to troubleshoot issues and come up with solutions in real-time. As the industry evolved, Airo Brands updated to a new cartridge design and switched to automated machines, a transition that our machinery and team handled with ease.

With Thompson Duke Industrial’s IZR machine, Airo Brands’ partners can fill a variety of different products, up to 30 variations. The machine’s straightforward design allows its operators to turn over and switch between various products in only a few minutes. The IZR’s simplicity and efficiency with setup, clean-up and maintenance make a huge difference in output. Airo now has the ability to train partners on how to fill their products with one machine versus several, which has also been a huge advantage.

Strong Partnerships Go a Long Way 

As a result of our partnership, Airo Brands was able to implement automatic solutions that evolve with the industry to accommodate its diverse product portfolio and growing footprint. Erik Stewart, COO of Airo Brands said, “Thompson Duke Industrial’s machinery handles viscosity, temperature, and processing challenges with ease – and this is exactly what we need to create consistency and quality across our growing business.”

How to Choose the Right Equipment to Set Up Your Business for Success

When choosing cannabis equipment, it is important to work with a partner who is capable of developing innovative solutions that align with evolving industry needs. In the world of machinery, simplicity is key. Streamlined setup, uncomplicated maintenance processes and quick product turnover enhance operational agility. For companies managing multiple partners, the ability to train teams on a single machine is also an advantage.

As your business expands into new markets, consider your equipment’s adaptability, scalability, and capacity to deliver high-quality consistent products. Airo Brands is an example of how automation can drive unprecedented growth. Due in part to the introduction of efficiencies and speed through automation, they were able to expand their footprint across 17 states and increase their SKUs, rising from 38 to 180.

Charlotte’s Web Poised for Canadian Expansion

By Cannabis Industry Journal Staff
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Charlotte’s Web Holdings, the company that just about launched the entire CBD industry, announced this week that they have just been approved for registration on Health Canada’s list of approved cultivars (LOAC) for 2021. Three of their proprietary hemp cultivars have made the cut, gaining the company access to the Canadian market.

Jared Stanley, co-founder and chief cultivation officer at Charlotte’s Web, says they plan to lead the market in Canadian hemp-derived CBD products. “The majority of approved cultivars on the LOAC to date have been for industrial hemp grown to produce food, fiber, and animal feed,” says Stanley. “Now our approved cultivars are paving the way for full-spectrum hemp CBD demand in Canada and most importantly, will provide access to Charlotte’s Web products in Canada.”

Largely due to the difference in regulatory approaches between Canada and the U.S., the CBD product market in Canada is somewhat small. Health Canada currently regulates CBD products the same as products containing more than 0.3% THC. In the U.S., a checkerboard of state laws, the 2018 Farm Bill and the subsequent state hemp programs led to massive growth for the CBD product marketplace.

Charlotte’s Web is one of the leading hemp-derived CBD companies operating in the United States. With the soon-to-be expansion into Canada, the company hopes to develop a global footprint, says Deanie Elsner, president and CEO of Charlotte’s Web. “Today, Charlotte’s Web is the leading hemp wellness company in the U.S. with the most recognized and trusted hemp CBD extract,” says Elsner. “We aspire to be the world’s leading botanicals wellness company, entering countries with an asset light model where federal laws permit hemp extracts for health and wellness. Israel and Canada are included in the first steps of our international expansion.”

Learning from the First Wave Part 2: California’s Cannabis Supply Chain and Vertical Integration, with a Grain of Salt

By Todd Feldman
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Part One of this series took a look at how the regulated cannabis market can only be understood in relation to the previous medical market as well as the ongoing “traditional” market. Part Two of the series describes how regulation defines vertical integration in California cannabis, and conversely, how vertical integration can address some of the problems that the regulations create. But first:

A Grain of Salt

Take the conventional wisdom about vertical integration with a grain of salt. Expected benefits may not materialize under the current circumstances:

  • Overall, the business environment is highly challenging due to extensive regulation, over taxation, insufficient retail capacity and competition from the “traditional” market. As a result, integrating businesses upstream or downstream may mean capturing losses, not profits.
  • The three major types of cannabis activity span three major industrial sectors: raw materials (i.e., cultivation), manufacturing and service (distribution, testing and retail). As a result, a vertically integrated company needs to carry out very different types of activity, which require very different types of core competencies, equipment and facilities.
    • Developing core competencies is especially challenging because each of the major cannabis sectors is still evolving.
    • Realizing the benefits of vertical integration requires an additional core competency in cross-sector operations.

 Regulations Define the Supply Chain

California’s regulations define the cannabis supply chain by defining both the individual links (licensees) and the relationships between those links. Therefore, an understanding of vertical integration must be grounded in an understanding of the underlying regulatory definitions.

The regulatory definition of each link is extensive. For example, each licensee is tied to a specific facility, and must have its own procedures for production, inventory control, security, etc. When the links are strung together, this definition tends to preserve operational redundancies, and impede operational integration.

Overall, the relationships between the links are primarily defined in terms of preserving the chain of cannabis custody. On top of that, regulations define very specific (and very consequential) links between certain licenses, as discussed below.

A Taxonomy of Links

There are currently 26 types of cannabis license in California, 25 of which can be vertically integrated:

  • Cultivation – 14 licenses, including 4 sizes each for Indoor (up to 22,0000 sf), Mixed Light (up to 22,000 sf) and Outdoor (up to 1 acre), as well as Nursery and Processor (drying, trimming and packaging/labeling). Note that cultivation licenses are the only licenses that restrict the scale of activities.
  • Manufacturing – 5 licenses, including volatile extraction, non-volatile extraction, everything but extraction (i.e., infusion) and packaging/labeling.
  • Testing (Type 8), for testing cannabis according to state standards prior to sale. The owner of a testing license cannot own any other type of license.
  • Distribution (Type 11), acts as the gateway between cultivation and manufacturing on the one hand, and retail on the other. The distributor’s gateway status is entirely an artifact of regulation – cannabis must be officially tested before it is sold to a consumer, and only a distributor can order the official test. All products must stay in a “quarantine” area at the distributor until they pass testing. Products that fail testing must be destroyed if they cannot be remediated.
  • Transport (Type 13), which can move cannabis between licensees (with a narrow exception). This license does not allow for official testing.
  • Storefront Retail (Type 9), which is the best license to have, and the hardest one to get.
  • Delivery Retail (Type 10), for delivery services that are subject to the vagaries of software platforms and the intransigence of local authorities.
  • Microbusiness (Type 12), which allows the licensee to carry out cultivation (up to 10,000 square feet), non-volatile manufacturing, distribution and retail.
  • Event Organizer

Self-Distribution – A Case of Useful Integration

You may gather from the previous section that shoving a gratuitous and mandatory distributor into the middle of the supply chain creates problems for cultivators and manufacturers. Savvy operators solve this problem by getting a distribution license. This allows the cultivator or manufacturer to:

  • Pick the time and place for the testing of its cannabis products.
  • Avoid paying someone else for the storage of cannabis products as they await test results or purchase.
  • Reduce transport costs (particularly if the distributor is near the other operations).
  • Sell directly to retailers.

The bottom line is that vertical integration in California cannabis is useful as a means to an end, as opposed to an end in itself. Therefore, cannabis operators should carefully consider how vertical integration will benefit their core business before incurring the risks and expenses associated with an additional license.

This article is an opinion only and is not intended to be legal advice.

Sustainable Hemp Packaging is the Future of Industrial Packaging

By Vishal Vivek
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The future of packaging is ripe for capitalization by the drivers of sustainability culture. With the battle lines drawn and forces at play in motion, change is now inevitable. The question arises: how quickly can the industry grow in the space of the next decade?

With an increasing number of nations banning non-biodegradable and petroleum-based plastics in certain uses, the choices at hand have naturally led to bioplastics. Bioplastics are a major ingredient of the renewable packaging industry. We derive them from various renewable agricultural crops, of which hemp is among the chief examples.

The Change for Hemp

The legal ramifications of the European Green Deal and the American Farm Bill of 2018 have created a microcosm where the sustainability discussion has turned into corporate initiatives for crops like industrial hemp, which are a source for bioplastics and numerous other products. The smaller carbon footprint of industrial hemp plays its role in shaping consumer demands towards a greener future.

Farmers are now able to cultivate the plant in the U.S., due to its removal from the list of controlled substances. Agribusinesses and manufacturers are aware of the plant’s versatility, with uses in packaging, building construction, clothing, medicinal oils, edibles like protein powder and hemp hearts, hemp paper and rope. What was once George Washington’s strong consideration as a cash crop for his estate, may gradually become the world’s cash crop of choice.

Hemp’s Sustainability Beckons 

Why is the crop unanimously superior in the aspect of eco-friendliness? Its growing requirements are frugal: water, soil nutrients and pesticides are not needed in large quantities. It absorbs great quantities of carbon dioxide from the atmosphere, and uses it to create 65-75% cellulose content within its biomass. Cellulose is vital in the manufacture of bioplastics. Hemp is also flexible within crop cycles, due to its small harvesting period of only 4 months.

Thus, farmers use it as a rotational crop, allowing them to also cultivate other crops after its harvest. High-quality crops like cotton, though superior in cellulose content and fibrous softness, require far more water quantities, soil nutrients and pesticides. Farmers face greater difficulties in cultivating cotton as a rotational crop, because it requires far more space and time.

Hemp Bioplastics For Packaging                                

We manufacture bioplastics from the hurd and cellulose of the hemp plant. Hemp bioplastics are biodegradable, and take up to a maximum of 6 months to completely decompose; by contrast, normal fossil-fuel-based plastic takes up to 1000 years to decompose.

Manufacturers incorporate these ingredients into existing manufacturing processes for regular plastics, such as injection molding. Thus, we can apply bioplastic ingredients to similar plastics applications, such as packaging, paneling, medical equipment and more. New technologies aren’t necessarily needed, so companies and manufacturers do not have any reservations about its viability as an industry.

Here are a few types of bioplastics derived from hemp:

  1. Hemp Cellulose-based Bioplastics

This is a substance found in plant cell walls. We use cellulose to manufacture a broad range of unique plastics, including celluloid, rayon and cellophane. These plastics are usually entirely organic. We mix cellulose and its variations (such as nanocellulose, made from cellulose nanocrystals) with other ingredients, such as camphor, to produce thermoplastics and the like. Using natural polymer, we process a broad range of bioplastics and corresponding polymers. The difference in their chemical properties is down to the nature of the polymer chains and the extent of crystallization.

  1. Composite Hemp-based Bioplastics

Composite plastics comprise organic polymers like hemp cellulose, as well as an addition of synthetic polymers. They also have reinforcement fibers to improve the strength of the bioplastic, which are also either organic or synthetic. Sometimes, we blend hemp cellulose with other organic polymers like shellac and tree resins. Inorganic fillers include fiberglass, talc and mica.

We call any natural polymer, when blended with synthetic polymers, a “bio composite” plastic. We measure and calibrate these ingredients according to the desired stiffness, strength and density of the eventual plastic product. Apart from packaging, manufacturers use these bioplastics for furniture, car panels, building materials and biodegradable bags.

A composite of polypropylene (PP), reinforced with natural hemp fibers, showed that hemp has a tensile strength akin to that of conventional fiberglass composites. Furthermore, malleated polypropylene (MAPP) composites, fortified with hemp fibers, significantly improved stress-enduring properties compared to conventional fiberglass composites.

  1. Pure Organic Bioplastics With Hemp

We have already generated several bioplastics entirely from natural plant substances like hemp. Hemp fibers, when made alkaline with diluted sodium hydroxide in low concentrations, exhibit superior tensile strength. We have produced materials from polylactic acid (PLA) fortified with hemp fibers. These plastic materials showed superior strength than ones containing only PLA. For heavy-duty packaging, manufacturers use hemp fibers reinforced with biopolyhydroxybutyrate (BHP), which are sturdy enough.

With the world in a state of major change due to the coronavirus outbreak of 2020, the focus is back on packaging and delivery. In this volatile area, perhaps the industry can learn a few new tricks, instead of suffocating itself in old traditions and superficial opportunism. The permutations and combinations of bioplastic technology can serve a swath of packaging applications. We must thoroughly explore this technology.

Hemp’s Future in Packaging

Fossil fuel-based plastic polymers are non-renewable, highly pollutive and dangerous to ecosystems, due to their lifespans. They are some of the most destructive inventions of man, but thankfully could be held back by this crop. Industrial hemp upheld countless industries through human history and now is making a comeback. After existing in relative obscurity in the U.S. due to false connotations with the psychoactive properties of its cousin, it is now back in business.

With the American hemp industry on the verge of a revolution, hemp packaging is primed to take over a significant part of the global packaging sector. The political, economic and environmental incentives for companies to adopt bioplastics are legion. Its lower cost lends to its allure as well. Consumers and agribusinesses are following suit, making the choice to be environmentally-conscious. By 2030, it is estimated that 40% of the plastics industry will be bioplastics.

We can only mitigate the plastic pollution in oceans, landfills and elsewhere, with the use of biodegradable bioplastics; otherwise, animals, humans and plants are getting adversely affected by imperceptible microplastics that pervade vast regions of the Earth. With hemp bioplastics, we use the cleaner, renewable matter of plants to conserve the planet’s sanctity. We can expect this new technology to continue to light the way for other nations, societies and companies to build upon this sustainable plan.

The Hopes of Illinois Social Equity Applicants

By Taneeshia Thomas
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It is almost impossible to turn on the tv and not find a show or news conference or even live footage of an ongoing protest over “Black Lives Matter” or “Economic Equality.” The same situation exists with social media platforms, radio broadcast, etc. All sharing the common theme of social equity. While we all seek a solution, the state of Illinois is doing their part by awarding the coveted adult use cannabis business licenses for craft growing, infusion, transportation and dispensaries to social equity applicants by using a scoring system that favors the social equity applicant. We believe in this vision at TGC Group and our dream is to pay it forward.

Taneeshia Thomas and her husband, Christopher Lacy, who did 3.5 years in prison for growing cannabis in 2009.

We see the world, especially for minorities living in poverty, quite differently because of where we come from. “Black Lives Matter” is a movement to save the lives of all people and have human life viewed equally no matter the race of an individual. Economic equality is a totally different fight. Our communities that are impoverished need cash infusions. There needs to be financial infrastructure that recirculates the dollars from the poor communities and that comes from having business owners in the affected community to put their profits back into their community. There needs to be a system of lending that is not based on credit scores and criminal background checks because most people at the bottom will never qualify. An example would be my husband, Christopher Lacy: he went to prison for 3.5 years for growing cannabis back in 2009. He is not a violent man; he never even had a fight in prison. He spent much of his time in prison teaching inmates how to read, write and most importantly, he tried to teach them economics. He is educated about cannabis because he has been intimately involved with this plant and has been growing it for just about 20 years. Yet when he tried to apply for jobs in Illinois for growing cannabis, his invisible barrier starts with the resume. Just think about it, my husband, knows more about cannabis than most people in the industry today and could manage a facility with ease. No one could see his worth because of his background and work experience? This is the same situation with so many others in our poor communities. We know for a fact that there is hidden talent in the impoverished communities and prison system, and we intend to find it and empower these individuals to rebuild what was destroyed by the war on drugs. I speak for all the ghettos when I say this: give us access to the capital and we will get the rest done on our own. Conventional banks have their hands tied with this approach because they are regulated, but private funds have more flexibility. The excess capital needed to rebuild will not come from jobs, it only comes from ownership. Luckily, J.B. Pritzker and Toi Hutchinson are aware of this and hence created the social equity fund to help the social equity applicants fund their projects if and when they are awarded a license. We must find a way to give to the bottom so that the dollars can trickle up. Trickledown economics is kind of like that movie “Platform” on Netflix. There are never enough resources to get to the bottom because the people sending the resources down have no idea how to get them to the bottom floors of society. Trickle up economics can start at the very bottom rungs of society and still will reach to this highest level of the economic system because its built in such a way that it will inevitably get there.

State Sen. Toi Hutchinson (D-Park Forest), now The Illinois Cannabis Regulation Oversight Officer

These new licenses, literally pathways to financial freedom if operated correctly and efficiently, are revenue machines capable of changing our community. This change does not come from providing jobs (although jobs do help and will be available), but by providing capital to rebuild. These funds can provide scholarships, business loans, even small infrastructure projects can get accomplished via the tax revenue generated by the local governments. We have already made a written commitment to give a portion of net margins to the village. Capital in the right hands can make dreams come true. In theory, poverty can be solved. Poverty is not a prerequisite to the American way of life. That is why we were so proud to get zoning approval by our village. They see what we see. We can change neighborhoods like Beacon Hill. The dollars must recirculate in the community. Wherever you see high poverty rates you see high crime rates. This is not a coincidence. If you can lower the poverty rate you can lower the crime rates. This raises the quality of life for everyone. We see the state is on board, the county is on board, the Village of Park Forest is on board and the citizens of the community are on board. Now all we need is the license and capital to get the resurrection started.

Unlike other applicants, we were only capable of applying for one license for a craft grow facility. Some may see this as a disadvantage because only 40 licenses will be issued for this purpose. I wish we could have applied for more to increase our odds, but resources were scarce and applying was not cheap. We decided to stick with the efficient market theory and put all our eggs in the one basket that we know we can carry and be successful with. Without the help of Justice Grown, we would’ve never completed the application so shout out to them and anyone else that helped “true” social equity applicants apply.

The wheels are in motion so all we can do is wait to see who wins. I would hate to be on the team who must decide who wins these licenses. Everyone knows large corporations found ways to apply as social equity applicants because they only needed a certain number of “social equity” employees to qualify. But if you go ask the employees, not the owners, if they have been cured of their financial burdens and see if $15 has raised their quality of life to a middle-class level. The answer is emphatically NO. You cannot give out band-aids for heart attacks. If these large corporations are awarded the licenses, it will perpetuate the cycle of poverty. We do not personally have anything against the big companies. Like Toi Hutchinson said regarding the first round of dispensary and cultivation licenses: we needed the big company dollars to fund the next round of licenses. Well, the next round is here. Let’s do right by the communities that were truly affected by the war on drugs and on a more personal level and my reason for applying: let’s do right by my husband because he lost 3.5 years of his life and was excluded from participating with his family for doing what is now legal.

The Great European Cannabis Cosmetics Confusion

By Marguerite Arnold
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If the “recreational” discussion is off the table for now except in a few local sovereign experiments (Luxembourg, Switzerland, Denmark, Holland), and the medical discussion is mired in “efficacy” and payments (Germany, UK), where does that leave this third area of cannabis products?

Namely cosmetics.

The answer? Because this conversation involves cannabis, as usual, the discussion is getting bogged down in confusion even as industry groups press for clarification and guidelines.

The Problem

Cosmetics, including externally applied creams, lotions and potions, are of course subject to regulation and testing beyond cannabinoids. Think of your favourite cosmetic product and the notices about no animal testing (et al). Yet when the conversation comes to cannabis, of course, even of the hemp kind, the current discussion in the EU is mired in confusion, and of course ongoing stigma. Not science. Or even logic.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

According to the EU Working Group on Cosmetic Products earlier this year, ingredients containing CBD (even derived from hemp) should be banned from cosmetics production because of the ban on cannabis as an illicit substance under the 1961 Single Convention on Narcotic Drugs. Guidance under the Cosing Catalogue (a database of allowed and banned ingredients)  gives individual EU member states a framework to set national rules for cosmetics.

To add to the confusion, the EU also added new entries to the EU inventory of cosmetic ingredients which outlaw CBD derived from extracts, tincture or resin. But – in a bizarre bureaucratic swerve, they did approve “synthetically produced CBD.”

Opponents of the ruling – including the European Industrial Hemp Association (EIHA) have of course opposed the newest guidelines on regs. CBD, as the EIHA has mentioned repeatedly, is not referenced specifically in the 1961 Convention.

The EIHA wants the EU to treat cosmetics like other CBD products – namely requiring that they have less than 0.2% THC.

The EIHA Proposal

The EIHA has its own proposal for setting guidelines under Cosing. Namely that extracts from industrial hemp and pure CBD should only be prohibited from use in cosmetic products if they are not manufactured in compliance with laws in the country of origin.

Further, the EIHA has also pointed out that the seeds and leaves of industrial hemp and any products derived from the same are also clearly excluded from the 1961 Convention.

However, and herein lies the rub – even within the EU, there is not yet harmonization on these standards between countries. So, what may pass for “legal” in the country of production may also not pass for products that are then exported – even within the EU and or in Europe.

EIHA also has proposed new wording for the definition of Cannabidiol based on the International Nomenclature of Cosmetics Ingredients (INCI), the most comprehensive and widely recognized international list of ingredients used in cosmetics and personal care products.

Where Does This Cross With Novel Food?

Of course there is also the confusion in the room about cannabis extracts as “novel food.” Cosmetics of course are designed for external application, but cannabis tinctures and extracts containing “CBD” are being put in that category right now by regulators in the EU. The fact that novel food is also in the room may in fact be the reason that regulators are apparently sanguine about synthetic CBD in cosmetics, but not that derived from the actual plant.

The cannabis discussion is going to be in the room for many years to come and on all fronts – from medication to food to cosmetics.Bottom line? There are, at present, no easy answers. This leaves the CBD industry in the EU, at all levels, as the planet barrels into the third decade of this century, in basically a state of limbo. If not absolute confusion.

What Is The Outlook?

While it may not be “pretty” right now, the industry is clearly moving through channels to pressure and challenge regulators at key international points and places.

What is increasingly obvious however, is that the problem with cannabis – at all levels – will not be solved soon, or easily. Even calls for “recreational reform” or even “descheduling” will not cure them.

Cannabis as a plant, if not a substance used in everyday living has been so stigmatized over the last 100 years that a few years of reform – less than a decade if one counts the organization of the industry since 2013 globally – will not come close to fixing if not ironing out the bugs.

The cannabis discussion, in other words, is going to be in the room for many years to come and on all fronts – from medication to food to cosmetics.

North Carolina Gets First Accredited Cannabis Lab

By Cannabis Industry Journal Staff
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In a press release published on Monday, the American Association for Laboratory Accreditation (A2LA), announced the renewal of accreditation for Global Laboratory Services, Inc. for ISO 17025:2017 in cannabis testing. The laboratory, based in Wilson, North Carolina, becomes first cannabis testing laboratory accredited in that state by adding the industrial hemp testing to their chemical scope of accreditation.

According to Kim Hesse, business development manager at Global Laboratory Services, they plan to expand their services in the hemp market with additional types of hemp testing. “At Global Laboratory Services, we always strive to keep pace with industry needs,” says Hesse. “We saw the need for an accredited laboratory in the hemp industry and therefore added CBD and THC testing to our scope. Our next step is to expand our service offerings to include agrochemical analysis of industrial hemp.”

Adam Gouker, general manager at A2LA, says accreditation plays a vital role in the cannabis industry and its regulatory requirements. “We congratulate Global Laboratory Services on becoming the first cannabis testing laboratory accredited in the state of North Carolina, specifically for industrial hemp,” says Gouker. “A2LA realizes the vital role that accreditation plays in the cannabis industry to support compliance with regulatory requirements, and we are thrilled to see that our service has been adopted in a new state. We look forward to our continued relationship with Global Laboratory Services in the provision of their accreditation needs.”

CBD Health Claims Spur FDA Warning & Product Seizure Threats

By Greg Boulos
3 Comments

The 2018 Farm Bill gave cannabis businesses around the country a legal path to market and sell hemp and hemp-derived products. Despite the groundbreaking law, several regulatory uncertainties remain. The FDA has been a source of many of those uncertainties, but recent action suggests that the agency plans to impose heavy burdens on companies selling CBD products that claim to provide health benefits. Recently, the FDA held a public hearing during which it signaled that health claims associated with cannabis-related products was a primary concern. Congress subsequently pressured the FDA to develop a regulatory framework for the cannabis industry and the agency announced that it was expediting its efforts to do so, promising an update on its progress by this fall.

FDAThen, on July 22, the agency issued a warning letter to Curaleaf regarding its claims that several of its products provide specific health benefits. The agency included a threat to seize Curaleaf’s products if the issues raised in the letter are not resolved. How the FDA ultimately regulates cannabis products going forward will have a significant impact on the industry as a whole. Indeed, the agency has significant powers over product manufacturers, including the ability to seize products through the U.S. Marshalls. This article will delve into the specifics on the FDA’s warning letter and address how manufacturers can limit the risks associated with making health-related claims.  

The FDA’s Warning: Beware of “Unsubstantiated” Health Claims

The FDA’s letter explained that it determined several of Curaleaf’s CBD products “are unapproved new drugs sold in violation of sections 505(a) and 301(d) of the Federal Food, Drug, and Cosmetic Act (FDCA).” The letter goes on to say that one of Curaleaf’s pet CBD products “are unapproved new animal drugs that are unsafe.” Curaleaf has 15 days to respond to the agency’s letter. The agency cited the following health claims as problematic, among others.

  • “CBD has been demonstrated to have properties that counteract the growth of [and/or] spread of cancer.”
  • “CBD was effective in killing human breast cancer cells.”
  • “CBD has also been shown to be effective in treating Parkinson’s disease.”
  • “CBD has been linked to the effective treatment of Alzheimer’s disease ….”
  • “CBD is being adopted more and more as a natural alternative to pharmaceutical-grade treatments for depression and anxiety.”
  • “CBD can also be used in conjunction with opioid medications, and a number of studies have demonstrated that CBD can in fact reduce the severity of opioid-related withdrawal and lessen the buildup of tolerance.”
  • “CBD oil is becoming a popular, all-natural source of relief used to address the symptoms of many common conditions, such as chronic pain, anxiety … ADHD.”
  • “What are the benefits of CBD oil? …. Some of the most researched and well-supported hemp oil uses include …. Anxiety, depression, post-traumatic stress disorders, and even schizophrenia …. Chronic pain from fibromyalgia, slipped spinal discs . . . Eating disorders and addiction . . ..”
  • “[V]ets will prescribe puppy Xanax to pet owners which can help in certain instances but is not necessarily a desirable medication to give your dog continually. Whereas CBD oil is natural and offers similar results without the use of chemicals.”
  • “For dogs experiencing pain, spasms, anxiety, nausea or inflammation often associated with cancer treatments, CBD (aka cannabidiol) may be a source of much-needed relief.”

The letter explicitly warned, “Failure to correct the violations promptly may result in legal action, including product seizure and injunction.” The FDA has a history of seizing products it deems non-compliant with its regulations. Recently, the U.S. Marshals, at the direction of the FDA, seized 300,000 units of a cosmetic company’s product. The impact of such a seizure on a business’ profits and operations is staggering. FDA action also has a direct impact on publicly traded cannabis companies’ stock price. When news of the FDA’s Curaleaf letter circulated, Curaleaf shares plunged 8%.

Balancing Regulatory Risk and Business Objectives

While the FDA’s letter appears to create a new risk for the cannabis industry, the stock market’s reaction is arguably overblown. The fact that the FDA would question a product’s ability to kill cancer cells is not surprising. I am not familiar with Curaleaf’s research efforts and it is not my goal to pass judgment on their claims. Rather, my point is that manufacturers need to make sure legitimate scientific studies underpin all of their health claims, regardless of the industry. Manufacturers will never be able to avoid regulatory scrutiny or even litigation regarding their health claims entirely. Instead, cannabis companies should take steps to ensure that they can credibly respond to regulatory scrutiny or present strong defenses in potential litigation. Establishing a robust research department is a start. But manufacturers must develop institutional knowledge of the most cutting-edge research regarding their products.Developing in-depth institutional knowledge regarding the state-of-the-art scientific research on your product is a must. 

Manufacturers that market products primarily for their health benefits should consider working with clinical researchers to study their products. There should be written policies and guidelines, as well as employee training, for conducting these studies and dealing with researchers in order to protect the quality of the study. For purposes of mitigating regulatory and litigation risks, the perceived quality of these studies can be just as important as their actual quality. Regulators and plaintiff’s attorneys can easily misinterpret (sometimes intentionally) written communications between a manufacturer and researcher in ways that suggests a particular study was outcome-driven and not a legitimate scientific undertaking. Manufacturers should consult with attorneys experienced in defending product liability and mass tort litigation so that their labeling and research practices are based on historical examples of successful (and sometimes, unsuccessful) product manufacturers.

Key Takeaways

Manufacturing consumer products comes with substantial litigation and regulatory risks. There are several historical and current examples of product labels, health claims, and warnings leading to thousands of lawsuits filed simultaneously across the country against a single manufacturer. Fees associated with defending against even meritless claims can force a manufacturer into bankruptcy. The regulatory risks can also have devastating effects on the day-to-day business operations of any manufacturer. Eliminating these risks is impossible, but addressing them upfront before a product launch, regulatory crackdown, or lawsuit is considerably less expensive than dealing with costly litigation or government seizure of entire inventories. Developing in-depth institutional knowledge regarding the state-of-the-art scientific research on your product is a must. Also, consider working with a clinical researcher to support any claimed health benefits or even discover new health benefits associated with your product. Finally, consult a lawyer with experience in product liability and mass tort litigation to strengthen your policies and procedures regarding research, develop credible health claims, and craft strong warnings.

The 2018 Farm Bill Legalized Industrial Hemp. Now What? Get Your Answers Here.

By Josh Smart
2 Comments

The Agriculture Improvement Act of 2018 legalized the growth, sales and transportation of industrial hemp across state lines. Although it looks identical to other types of cannabis, this cannabis plant contains less than 0.3 percent THC, and can be used to make building insulation, beauty products, car dashboards and more. Most significantly for farmers, it can serve as an ideal rotational crop because of its ability to reduce soil toxicity.

Until this update to the Farm Bill, hemp was considered a controlled substance and few U.S. farmers were granted rights to plant and harvest it. Now, the agricultural commodity is expected to raise the crop’s already growing GDP to that of liquor and beer sales and some estimate it should reach $20 billion in as little as five years.

Agribusinessesand farmers alike will now be looking to secure processors and other commodity buyers ahead of planting industrial hemp and purchasing the necessary equipment for its harvest. Because hemp can be grown in any climate, it may be especially attractive to tobacco growers and dairy farmers who have been less profitable as of late. 

Now that it’s been legalized, what’s the risk?

As more agribusinesses and farmers look to confirm viability of industrial hemp growth, potential liabilities will surface. The 2018 Farm Bill left many questions unanswered. Here are a just a few FAQs:

Question: Can I just add hemp to my crop rotation, or is additional insurance required?

Answer: The standard multi-peril crop insurance policy DOES NOT provide coverage for planting hemp, or endorsements for its storage and transportation- yet. Instead, industrial hemp must be insured on separate private policies for: harvest, extreme weather and crop storage and transportation. There’s a strong push to get industrial hemp into the federal crop insurance program as early as crop year 2020. As hemp planting, harvesting, storage and transportation become more understood and predictable, new policy options will likely become available. Inquire about new coverage options at your next annual renewal.

Q: How will the FDA regulate industrialized hemp?

A: The FDA will develop rules and regulations on industrial hemp throughout 2019, and will be ready for rollout during the 2020 crop year. Because it’s impossible to distinguish a cannabis plant with THC from an industrial hemp plant in the field, crop lifecycle testing and documentation will likely be required. The question remains if this testing and documentation will be incumbent on the farm/agribusiness, or FDA agents. Some states are further along in this process and have already hired testing and compliance officers.

Q: How can farmers ensure that the THC content of their plants does not exceed .3%?   

A: Farmers must have a contingency plan for monitoring their hemp’s THC content which should include employing a seasoned agronomist who can institute controls, keep plants properly hydrated and create a plan to maintain optimal THC levels. In the heat of the summer, THC levels typically remain low, but rise with cold and rain. Should there be a local cold spell, high rainfall, or if the hemp plant was seeded late in the season and the harvest runs into the fall, THC levels could rise quickly. When this happens, farmers will have to chop down the plant to control the level and harvest the plant’s flower before its next THC test.As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown. 

Q: Can I transport hemp across state lines to a processor in another state?

A: On paper, industrial hemp is legal across all 50 states, and therefore can be transported across state lines and sold as any other commodity. In reality, though, hemp is undistinguishable from cannabis to the naked eye, and therefore, shipping an entire biomass directly from the field across state lines has a good chance of being confiscated.

When hemp is confiscated on the side of the road – even if it is eventually returned – there could be significant lag in delivery, storage is uncertain and quality control can’t be maintained. Alternatively, farmers are now shipping their hemp in smaller, unmarked loads, which is forcing them to hold onto product for longer than usual.

As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown. On the flip side, industrial hemp offers small farmers and agribusinesses alike an unprecedented opportunity to get in at the ground floor of a new crop. If you do, make sure to work with your insurance broker to secure proper coverage immediately.

Flooring Tips for Cannabis Growing Facilities

By Sophia Daukus
5 Comments

In the burgeoning cannabis market, grow facilities are facing more and more competition every day. New indoor cultivation enterprises are often being set up in formerly vacant industrial buildings and commercial spaces, while in other cases, companies are planning and constructing new grow facilities from the ground up. For all these establishments, continually lowering production costs while supplying the highest possible quality in ever-increasing yields is the way forward.

Whether in existing or new structures, concrete floors are ubiquitous throughout the majority of cannabis growing facilities. With the right treatment, these indoor concrete traffic surfaces can greatly contribute to a company achieving its operational objectives. Alternatively, insufficiently protected concrete floors can create annoying and costly barriers to accomplishing company goals.

Challenges in Cannabis Grow Facility Construction

As with any emergent industry, mainstream acceptance and market growth is bringing regulation to cannabis cultivation. Local governments are paying more attention to how cannabis growing facilities are constructed and operated. In addition to the standard business matters of building safety, employee working conditions and tax contributions, elected officials are increasingly under pressure from constituents to analyze the overall effect of grow facilities on their communities at large.

High consumption of energy for grow room lights and high water usage are just part of the equation. The temperature and humidity needs of a grow facility can be similar to that of an indoor swimming pool environment. While warmth and moisture are ideal for cannabis growth, they also provide the ideal conditions for the growth and proliferation of fungi and other undesirable microorganisms. Therefore, to help preserve plant health in the moist indoor climate, fumigation often comes into play.

Carbon dioxide (CO2) enrichment of grow room air, a common practice proven to increase crop yields, presents another set of safety and health considerations in dense urban environments.

Adding to these challenges, many cannabis grow facilities are producing plants destined for either pharmacological or nutritional use. This in itself demands scrutiny by regulators for the sake of the consuming public.

As a result, grow room managers and owners must stay informed about the evolution of the industry in terms of local and federal agency regulations concerning their facilities, their overall operation and their products.

Bare Concrete Floors in Grow Rooms

As a foundational construction material, concrete continues to lead the way in commercial and industrial construction. Despite the many advantages of concrete floors, when left unprotected they can present significant challenges specific to cannabis grow rooms.

  • Untreated, bare concrete is naturally porous, easily absorbing liquids and environmental moisture. Substances found in grow rooms, such as fertilizers, fungicides and other chemicals, can leach through the porous concrete floor slab into the soil and ground water. Whether organic or synthetic, concentrations of such substances can be highly detrimental to the surrounding environment.
  • Whether in an existing or newly constructed facility, it is not uncommon for the under-slab vapor barrier to be compromised during construction. When this occurs, moisture from the soil beneath the floor slab can enter the concrete and move osmotically upward, creating a phenomenon known as Moisture Vapor Transmission (MVT). The resulting moisture and moisture vapor tends to become ever more alkaline as it rises upward through the concrete slab. MVT can result in blistering, bubbles and other damage to floor coverings.
  • The warm temperatures, regular watering of plants and high relative humidity maintained within many grow rooms can contribute to a weakening of the structural integrity of unprotected grow room slabs.
  • Within the confined space of a grow room, the warm, moist air invites microbe proliferation. Food and pharmaceutical plants are high on the priority list when it comes to facility hygiene levels, as demanded by code.

Public health guidelines for cannabis cultivation facilities in various parts of the country are increasingly mirroring those of food processing. Typical requirements include having smooth, durable, non-absorbent floor surfaces that are easily cleaned and in good repair, possessing proper floor slope towards a sanitary floor drain, with no puddling, as well as an integral floor-to-wall cove base. These directives cannot be met with bare concrete alone.

Optimal Grow Room Flooring Performance

In some locations, cannabis growing facilities are already subject to strict building codes and regulations. This will no doubt be spreading to other regions in the near future. For example, the Public Health Agency of Los Angeles County publishes construction guidelines to ensure cannabis facility floors meet standards mirroring the food processing and pharmaceutical manufacturing industries, where sanitation, facility hygiene and safety are paramount. In these types of facilities, bare, unprotected concrete floor slabs are not allowed as a general rule, due to the material’s innate porosity and absorbency.

Flooring in grow rooms, like in their food and pharma industry counterparts, should optimally:

  1. Provide a monolithic and virtually seamless surface to help eliminate crevices, grout lines and other dark, damp locations where soil and pathogens tend to hide
  2. Be impervious and non-porous, providing a surface that can isolate toxic materials on the surface for proper clean-up where needed
  3. Enable correction or improvement of the floor slope for proper drainage, with no low spots to help avoid puddling
  4. Be installed with integral floor-to-wall cove options for easier wash-down and sanitizing
  5. Have the strength and thermal shock resistance, plus the tenacious bond, to undergo steam-cleaning and/or hot power washing, where needed
  6. Enable seamless, continuous surface installation over concrete curbs and containment areas
  7. Offer antimicrobial options for highly sensitive locations
  8. Demonstrate high compressive strength and impact resistance for durability under heavy loads
  1. Display excellent abrasion resistance, allowing the system to perform under grueling daily wear-and-tear
  2. Present customizable slip-resistance options that can be balanced with easy clean-ability
  3. Facilitate the use of floor safety markings, such as color-coded traffic and work area designations
  1. Be formulated with low odor, low-VOC chemistries that meet all EPA and similar regulations
  2. Be able to contribute LEED Green Building Credits, where desired
  3. Include options for refurbishing old or damaged concrete surfaces to allow reuse of existing facility resources, as opposed to having to be demolished, thus unnecessarily contributing to landfill waste
  4. Withstand and perform in continually damp grow room conditions, without degrading
  5. Be compliant with FDA, USDA, EPA, ADA, OSHA, as well as local regulations and/or guidelines
  6. Include MVT mitigating solutions where Moisture Vapor Transmission site issues are present
  7. Provide waterproofing underlayment options for multi-story facilities
  8. Demonstrate excellent resistance to a broad range of chemicals, fertilizers and extreme pH substances

Finding an affordable floor system with all the above features may seem like a tall order. Luckily, innovative manufacturers now offer cannabis facility flooring that meets sanitation, regulatory compliancy, durability and budgetary needs of growers.

Resinous Flooring Value for Cannabis Facilities

Choosing the right floor solutions for a given cultivation facility may be one of the most important decisions an owner or manager makes. Since floors are present throughout the structure, poor selection and compromised protection of concrete slabs can end up wreaking havoc with profits and yields over time.

Few facilities can afford the inconvenience and expense of an otherwise unnecessary floor repair or replacement. Having to suddenly move cumbersome plant beds and heavy pots in order to give workers access to the floor area can be headache. In addition, the unscheduled downtime and overall juggling of resources that invariably must take place make a strong case for investing in optimal grow room flooring from the start.

An excellent long-term value, professional-grade resinous floor systems present cannabis growers with a unique set of solutions for cultivation rooms. Not only does this type of flooring offer all the desirable features listed above, but also furnish a host of added benefits to grow room operations, including:

Very High Gloss Finish

  • Highly reflective floor surfaces enable light entering the space from overhead to bounce back upward, exposing the underside of leaves to the light and potentially increasing yields
  • Exceptionally high gloss floor finishes in light colors help make the most of your existing lighting sources, significantly increasing room illumination
  • Achieving greater illumination without adding fixtures helps reduce energy consumption and associated costs

Virtually Seamless Surface

  • Fluid-applied resin-based flooring provides an impermeable, monolithic surface that is exceptionally easy to clean and maintain
  • The virtually seamless finish of resinous coated floors greatly reduces the number of locations for soil, pathogens and microbes to gather
  • Resinous floors, by incorporating integral cove bases to eliminate ninety degree angles, correcting floor slope to eliminate puddling, and allowing for a virtually seamless surface, provide an optimally sanitary flooring solution

Outstanding Moisture Tolerance

  • Designed specifically for use in wet industrial environments, cementitious urethane flooring is a top choice for humid grow rooms
  • Also called “urethane mortar”, this type of floor can help mitigate certain undesirable site conditions, such as Moisture Vapor Transmission (MVT)

Chemical, Acid and Alkali Resistance

  • Whether organic or synthetic, many soil enhancers and substances used to eradicate undesirable fungi and pests can damage concrete and shorten the usable life of foundational slabs
  • Protecting concrete slabs with monolithic, non-absorbent and appropriately chemical resistant coating systems allows concrete to perform as designed, for as long as intended
  • A proper barrier coating on the floor allows spilled or sprayed substances to be properly cleaned up and disposed of, rather than allowing the liquids to seep through the porous slab, and into the surrounding natural environment

Added Safety

  • Resinous coating systems’ slip-resistance is completely customizable at the time of installation, enabling growers to request more traction in pedestrian walkways and less slip-resistance under raised beds.
  • Epoxy, urethane and polyaspartic resinous flooring systems accommodate the installation of safety and line markings, as well as varying colors to delineate specific work areas
  • The antimicrobial flooring options available from some manufacturers offer further hygiene support in highly sensitive facilities
  • Today’s industrial resinous floor coatings from reputable suppliers are very low to zero V.O.C. and compliant with EPA and other environmental regulations

Resinous coating systems provide ideal value to informed growers who require durable, reliable and long-lasting high performance flooring for their facilities.

Support from the Ground Up

From incredible medical advances to high tensile fiber in construction materials, the expanding cannabis industry is bringing exciting opportunities to many areas of the economy. As more and more growers enter the market, so increases the pressure to compete.

By choosing light reflective, seamless and moisture tolerant resinous flooring that meets regulatory guidelines for grow rooms, managers can help reduce their overhead costs on multiple fronts — and get a jump on the competition.