Universities across the country are working in all areas of research and development to advance cannabis cultivation, medicine, drug delivery and technology. But these innovations are collecting dust because the universities are not in the business of commercializing products in the marketplace.
In 1980, the federal government passed a law that said universities that receive federal funding, which most of them do, will have the option to own whatever intellectual property or invention they develop from that federal funding. Initially, universities resisted the idea feeling they were selling their souls to the private sector and corporate America. But opinions have changed, and the marriage between universities and industries is a common and rewarding business strategy for both sides.
I interviewed Lance Anderson, a partner at the law firm Dickinson Wright who is uniquely positioned to play matchmaker to research universities, entrepreneurs and VCs to help them uncover cannabis innovations and create partnerships. Lance is also educated in life sciences, including proprietary plants, genetics and plant-derived products, and served as in-house counsel and lead IP attorney for a large public research university system and an early-stage venture capital company.
Pam Chmiel: What led you to play matchmaker to universities and cannabis businesses?
Lance Anderson: I learned that universities are interested in commercially benefiting from some of their innovations when I worked in the technology commercialization office at Texas Tech University right out of law school.
The concept of “technology transfer for commercialization” already exists in universities and presents a vast opportunity for cannabis businesses to commercialize their innovations.
Lance Anderson, an attorney at Dickinson Wright
“Technology Transfer” agreements refer to moving technology, knowledge or innovations from one organization, such as a research university, to another entity, such as a cannabis company, through licensing agreements that grant permission to use intellectual property (IP), patents or proprietary technology for commercial purposes.
Even though legalization is sweeping the country, I’m finding that academic institutions and their administrators are concerned they will lose all federal funding and are hesitant to take the chance on a cannabis research project. They are still getting comfortable with the opportunities to work with the industry, and the farm bill act of 2018 gave them the push to do so.
And why not tap into these universities, which receive millions and millions of dollars in funding? You’re not out a lot if you properly structure your relationship with them. You do not have to pay them millions and millions of dollars to get this technology. Knowing what the university wants and how to structure that relationship is key.
Pam: What are some of the benefits a business can gain by forging a partnership with a university?
Lance:
Cannabis companies benefit by gaining access to cutting-edge research, expertise and resources that can accelerate and elevate their product development and market entry.
The association with academic institutions can help build trust among consumers, investors, and lawmakers.
Working with university research students may create a pipeline of qualified employees who may want to work for the company.
Submitting a joint proposal with a university seeking government grants may lead to additional funding for the research project.
Pam: What types of partnerships do you currently see in development?
Lance: Pharmaceutical companies have collaborated with research universities for years on drug development and undoubtedly have their eye on the cannabis industry. Federal agencies like the USDA lean on academic partnerships to develop unique plant traits to improve crop production. You’ve got institutions developing new mind-blowing genetics, like polyploid species, that allow you to fine-tune the plant traits you’re interested in. There are always advances going on.
Clemson and Cornell Universities are leading the charge in cultivation by partnering with farms to develop techniques to grow better crops and increase profitability. And interestingly, many of the land grant institutions that receive federal grants, like Mississippi State, Michigan State and Texas A&M, are now diving into plant trait development. And it’s not unrealistic to think they will transition into plant-touching technologies ripe for the cannabis industry to come in and run with it from there.
“Researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be”
But the research desperately needed to move the industry forward is medical research because lawmakers want proof that cannabis has medicinal benefits before they are confident in pushing for legalization. Unfortunately, the US government has been part of the problem in making it hard to conduct research, whether clinical trials, clinical research or simple preclinical studies on cannabis. Until recently, the University of Mississippi was the only university allowed to cultivate for research. So the researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be. Not even close.
Academic partnerships are not a new concept, but the cannabis industry has yet to embrace it fully. Opportunities are beginning to develop where government agencies will participate and or fund the work in cannabis from the university standpoint. The National Institute of Health has a program that’s getting kicked off for cannabis research. And they all understand and recognize that the fact we don’t have enough clinical data available is a major hindrance to the advancement of this industry.
Pam: What is legally involved in a technology transfer partnership?
Lance: Collaboration between cannabis companies and research universities can take various forms, such as research partnerships, sponsored research agreements, joint ventures, or licensing arrangements. The specific model depends on the goals, resources, and intellectual property involved in the collaboration. An attorney can structure an agreement in a manner that lets everyone slowly advance into the relationship and get satisfied with the milestones they want and at which point this thing begins to take shape.
“Opportunities are beginning to develop where government agencies will participate and or fund the work in cannabis from the university standpoint.”
Cannabis businesses are no strangers to utilizing multiple entities in their corporate structuring. They may have a holding company that owns the real estate, a staffing company that manages the HR for the flower-touching operations, and another that holds the intellectual property. You’re seeing an entire industry familiar with IP licensing for the first time in a long time, and universities want in by licensing their intellectual property.
The university may require a licensee to have a product in the marketplace and a first sale within two years. So that introduces the concept of perishable intellectual property rights where you can default or don’t meet the licensing requirements. That perishable concept sometimes makes it hard to raise money because the investors prefer a guarantee that you have the license and will not default.
The takeaway is universities are thirsty for partnering and looking for strategic initiatives. Universities have access to patient populations, and the cannabis industry has the business know-how to take their innovations to market. It will take some culturing of both sides to understand the opportunities. But once everyone’s on the same page, the deals will look like the licenses and joint venture deals we see now with multi-state operators.
Pam: Lance, do you have any closing thoughts for our audience?
Lance: I’ve thought about this potential synergy for years as I’ve watched these two areas I practice in often. Academic partnerships are the catalyst to move the cannabis industry forward and are right in front of us. The time is now, and I’d love to be there.
As the cannabis industry continues to evolve, recent market challenges have created an environment that is more difficult for industry leaders to navigate. To find success in today’s marketplace, company leaders need to adopt a robust, data-driven approach to combat the influx of rising brands, emerging markets and pricing challenges, among other obstacles. By leveraging data, cannabis brands and companies can better make well-informed decisions to refine their business strategies and drive growth.
The Evolution of the U.S. Cannabis Market
The cannabis industry maintains its ranking as one of the fastest growing industries in the U.S. as the legalization of adult-use and medical cannabis continues to expand. When California first legalized medical cannabis in the 1990s, a lack of regulations in the market created space for new cultivation businesses and dispensaries to form. These early cannabis players leveraged capital to expand and grow, developing a business model that has been replicated many times over the years in markets like Washington, Michigan and Arizona.
“Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.”Some of the strongest cannabis brands today were formed during this time. Today, the U.S. cannabis landscape looks vastly different, and strict government regulations and stagnant federal policies make it more difficult to find success. Brands that are surviving and thriving in today’s landscape have invested heavily in data operations.
Investing in Data Operations
While data wasn’t essential for cannabis operations in the past, today, it can mean the difference between success and failure for a company. Cultivators, processors and dispensaries that analyze data have a broader perspective that allows them to pivot quickly and stay relevant.
Data-driven decision making is critical for cannabis companies looking to meet and exceed revenue goals at every level. For cultivators, data can help create an optimal environment for growth. Manufacturers can utilize data to improve environmental conditions, reduce waste, cost and more. By leveraging data, retailers can benefit significantly from learning precisely which products should have a place on their shelves.
Business leaders in the emerging cannabis industry benefit from embracing the infrastructure and business practices that are already standard practice in other industries. Many top-performing cannabis companies today are structured similarly to other CPG organizations, and those who employ these tried-and-true strategies will be primed to win. One successful approach that many cannabis companies are adopting is a three-tiered system for manufacturing and selling products similar to the one employed in the beverage alcohol industry, providing economic, regulatory and commercial benefits for all.
Unlocking Efficiency with Pricing
Pricing challenges have plagued the cannabis industry for the past 18 months. While an inflationary environment has caused the prices of products in many sectors to rise, cannabis has been largely unaffected. Yet, because cannabis is not yet legal at a federal level, markets have become segmented, and prices are highly dependent upon demand factors in each state. This unique dynamic, combined with increased competition, has forced many producers to accept lower profit margins rather than pass on costs to consumers.
“Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need.”These challenging market conditions have made it critical for companies to drive more efficient operations. By implementing data-driven technology, cannabis leaders can operate more precisely to minimize costs and produce high-quality products. Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.
Leveraging Data for Growth and Innovation
For retailers, running a successful cannabis operation with sustained growth is nearly impossible without leveraging in-depth industry data and analytics. Consumer data offers key insights to guide in-store activations, including promotions and discounting, to boost sales for retailers. By utilizing data, including data from loyalty programs, retailers can optimize their product mix based on what consumers are actually buying, and improve scaling and segmenting. From analyzing a store’s traffic to monitoring product, brand and category performance, data is indispensable when it comes to elevating business performance.
Data is also essential for innovation planning, pipeline building and analyzing location-specific variances. Seasonal trends influencing cannabis products often depend on various geographic and socioeconomic variables. While in the past large retail chains often ran the same shelf assortments at each location, utilizing data allows retailers to account for variances that make a significant impact based on location and consumer set.
While some cannabis industry leaders are accustomed to making business decisions based on their gut instinct, data enables them to quantify predictive levels of success and plan for what sales will look like once products hit shelves. Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need. As the cannabis industry continues to expand quickly, an increasing demand for products will encourage innovation that will be powered by data-driven intelligence for years to come.
In every industry, there’s an underlying threat and worry that as AI advances, jobs will be at risk. This programming is deeply instilled in labor workers who have grown accustomed to income security to maintain their expenses or quality of life. But what if we’re looking at robots all wrong?
Instead of seeing a robot job apocalypse, what if they’re the machines to lift us to our highest degree? Robots are already proving to improve efficiency and cut company costs, so it’s inevitable they’ll come to a job near you soon.
For the budding cannabis industry, everything is fresh and new as the market is in its infancy. That means new systems and new workers have the opportunity to implement robotics to get ahead of the competition and boost morale earlier than most.
So, here, let’s de-program the way we think about robots today and cover the top three ways robots can help, not hurt, the cannabis industry—and the livelihoods of its workers too!
#1 Labor Shortage Gaps Need To Be Filled
Let’s get real—the cannabis industry is feeling the labor shortage just as much as anyone. Even more, it’s extremely difficult in this day and age to only pay a minimum wage to workers. This is true from coast to coast, but especially in lucrative cannabis markets like California, which have a higher cost of living for workers to meet.
“Robots aren’t here to hurt the cannabis industry, they’re here to help”Another predicament for facility owners? You can’t pay more for low-level repetitive tasks without significantly decreasing margins for your company while remaining competitive in such a bustling market. Moreover, humans just aren’t built to sit in closed, highly regulated areas, repeating the same motions over and over, to fill pre-rolls, vape carts, package jars and beyond.
By implementing robotics and automation tools, cannabis industry owners can not only fill labor shortage gaps but also alleviate labor costs for an improved bottom line. In addition, this will allow executives to better leverage labor costs towards more valuable positions that are more rewarding for employees too.
#2 Human Productivity Declines Over Extended Periods of Time
You know how you move with speed and precision when you first begin a repetitive task? Think exercising. When you first start your set of mountain climbers, your body moves mechanically, hitting the steps on point, repeatedly. But by the end, you’re struggling to get 1 or 2 last pushes in to hit your reps.
An automated pre-roll infusion robot
Manual labor and repetitive tasks are no different. In fact, there are companies in the world that hire workers to pack cases for just one hour a day. Why? Because their analytics have shown that after just one hour of work, the employees zone out and lose focus, which decreases productivity over time and increases the chance of human error.
In cannabis, someone has to fill the pre-rolls, and someone has to pack the jars into boxes. But, scheduling one worker for one hour shifts all day every day is a logistical nightmare to get the most productivity from the time you have. With no creative minds of their own (sorry, not sorry), robots are quite literally built for this type of labor and produce accurate results, too.
This allows cannabis owners to pay one up-front investment for the ’employee’ and can rest assured, financially and operationally, that the position will always be filled with no wage raises to consider.
#3 – More Robots Allows For More Rewarding Roles
Last but not least, there are few people in the world who actually desire or dream of the manual labor that’s required to keep the cannabis industry’s momentum moving upward for good reason. The human mind is meant to explore, create and evolve by putting it to use day in, and day out.
Hence, the uptick in investments towards upskilling in the cannabis industry and the passion for retraining employees for more technical roles. For employees, they’re more fulfilling and hold higher value. For employers, you have more human minds at work towards what matters versus the tasks that just need to get done.
Implementing robots in cannabis facilities for these mundane, repetitive, and low-level tasks help open the doors for more fulfilling roles for employees that share an interest in the plant. In the end, allowing them to put that passion and their unique skills, ideas and creativity towards helping your company prosper.
The Bottom Line – Cannabis Robots Are Here to Stay
With any new trend or shift in the labor and job landscape, it’s natural to be cautious of how it may affect you or your workers, both personally and professionally. However, as you can see, robots aren’t here to hurt the cannabis industry, they’re here to help.
As cultivators and other manufacturers struggle to turn a profit, now is the time for the overwhelmingly cottage industry to go big or go home. Because, whether you like it or not, there’s one thing we can all agree on: robots are the future of manufacturing, the cannabis industry included.
Coda Signature is a leading cannabis edibles company that has won countless awards for their creations. Founded in 2015 in Trinidad, Colorado, a small town just north of the New Mexico border, the women-led company has since become a fixture of the infused products market. Coda Signature prides itself on its innovative lens, focusing on what consumers want and framing their products around a luxury experience.
Lauren Gockley co-founded the brand in 2015 after a 20-year culinary career that started with professional training in France, working in Michelin-starred restaurants and Parisian pastry shops. They launched their first line of products in March of 2016 and three weeks later, the awards started coming in. Today, the company is a leader in the cannabis industry and constantly raising the bar. Last year they rolled out products with nanoemulsions, offering fast-acting edibles with a shortened onset time. In May of this year, Coda Signature debuted their low dose Fruit Notes, their foray into microdose formulations.
We caught up with Lauren Gockley to see what inspires her, hear the story of how the business came to be and get some insights on what’s next for the cannabis space.
Cannabis Industry Journal: I saw that you have a culinary background. Can you tell me about your background and how you got involved in the cannabis industry?
Lauren Gockley, Co-Founder and Chief Innovation Officer, Coda Signature
Lauren Gockley: I have been working in the culinary world for almost 20 years. I have been blessed to have a wealth of different experiences from my professional training in France at Valrhona’s L’Ecole Du Grand Chocolat and the Parisian pastry shops of Pierre Hermé, to the fine dining restaurants of Jean-Georges Vongerichten and Thomas Keller. I also spent several years as a raw vegan chocolatier where I gained a totally new understanding of chocolate and flavor creation using unconventional ingredients.
The transition into cannabis was an unexpected turn in my culinary career, especially considering the level of acceptance of cannabis in its early legalization period. I had been living in New York for almost eight years. I was working two jobs and trying to start a chocolate business. One night, my partner (and fellow co-founder), Brien Sauchelli, brought over a cannabis chocolate bar. At the time, I was not terribly familiar with cannabis edibles, but I sure was familiar with chocolate! I tasted the chocolate bar, and thought, “this tastes pretty good, but what if I could do it better?” The idea of elevating the cannabis edibles experience to the same caliber of excellence that we revere food made so much sense.
CIJ: Tell us how you co-founded and started Coda Signature. I’d like to hear the origin story
Lauren: Well, like so many cannapreneurs, I started in my kitchen with a crockpot, a Ziploc bag of trim and a massive amount of research. Fast-forward a few months to March 2015, and my partner and I are traveling across the country to Trinidad, Colorado—the new home of Coda Signature. Once unpacked, we dedicated almost a full year to product development, raw material sourcing, packaging design, facility construction, and most importantly we defined the mission, vision and core values of Coda Signature. One of our most significant core values is legacy. This was not meant to be an aspirational statement about the impact we hoped to have many years into the future, but rather an opportunity for us in every moment to ask, “What will my legacy be today?” We launched our first products in March of 2016. Three weeks later, we won the High Times Cannabis Cup for Best Edible with our Crescendo truffle collection.
CIJ: Your job title is Chief Innovation Officer – How is your company innovating the cannabis product space? What does your day-to-day look like?
Lauren: When it comes to innovation, we have identified four key areas of focus for Coda Signature products:
1) Flavor. We are leaning into our brand legacy of bold flavors and aromas, quality ingredients and impeccable craftsmanship. This legacy is reinforced by industry data. According to BDSA Trending Consumer Insights, flavor is the No. 1 driver of consumer purchase decisions, and second is brand loyalty.
2) Microdosing. According to BDSA Consumer Research, 73% of adults nationwide are now “bought in” to consuming cannabis. Understanding that much of this population is still getting acquainted with cannabis-infused products, we believe strongly that microdosed products are an essential factor for safe and customized experiences. We are one of the few infused products companies to defy the industry “standard serving size” with our new 1mg THC Fruit Notes.
3) Minor cannabinoids. We define the Coda experience through the integration of minor cannabinoids such as CBN, CBG, CBC and most recently THCV. This is no longer a market solely driven by milligrams of THC per dollar. Products innovating with minor cannabinoids are rapidly taking top-selling positions in both brand share and the market as a whole.
4) Fast-acting. After two years of intense R&D, Coda launched our first “Fast Acting” products in Q3 of 2021. “Fast Acting” decreases not only the onset time from 1-2 hours to 15-20 minutes, but also shortens the overall duration. This technology is a strong example of the incredible innovation redefining the cannabis edibles experience.
To answer your second question: My day-to-day is a blend of hands-on product creation; ongoing research into industry trends and new technologies; working with my colleagues in operations, quality and compliance to ensure our systems and procedures continue to deliver safe and consistent products; brand development and expansion; and of course, eating a lot of chocolate! The past few weeks have been particularly exciting for me as I have been back in the kitchen revitalizing our signature truffles that will be returning this holiday season.
CIJ: Where do you think cannabis will innovate next? What excites you about the future of product innovation in this market?
Lauren: Innovation in the cannabis industry can be particularly challenging due to the ongoing legalization limitations. However, like most life forms in nature, it is through limitations that we adapt, grow stronger and defy expectations. The fact that 73% of adults nationwide are open to the idea of cannabis means that we are just scratching the surface of innovation with this incredibly powerful plant.
Post-pandemic, I think a lot about our social habits. As a chef, there is a level of social intimacy I identify with food that I feel is not fully present in cannabis. I get very excited about the opportunities for more open cannabis consumption and how that will elevate and inspire the Coda product experience.
In 2002, Dale Katechis revolutionized craft beer. A seemingly simple packaging decision, putting craft beer in a can, sparked an international movement and put craft beer on the map.
Before the craft beer market really gained steam, consumers associated good beer with glass bottles and larger brands selling cheap beer with cans. Through education, creative marketing and a mission to put people over profits, Dale helped the craft beer market expand massively while sticking to his roots. He also managed to convince people to drink good beer from a can.
When Dale founded Oskar Blues about twenty years ago, he didn’t just succeed in selling beer. Through collaboration and information sharing, Dale propelled craft beer as a whole and lifted all boats with a rising tide. He’s hoping to achieve similar results with his new role in the cannabis space.
Dale Katechis, Founder of Oskar Blues & recent addition to the Veritas Fine Cannabis team
Veritas Fine Cannabis, the first craft cannabis cultivator in Colorado, announced that Dale joined the company’s leadership team. Jonathan Spadafora, partner and head of marketing and sales at Veritas, told us that he’s excited about working with Dale. He says Dale is already helping them open a whole world of branding and marketing opportunities. “This is our Shark Tank moment – we’ve got someone who’s been through the fire before and will help us keep differentiating, finding new avenues and new ways to solve problems,” says Spadafora.
His colleague, Mike Leibowitz, CEO of Veritas, shares the same sentiment. “Dale maintained company culture and quality as he grew Oskar Blues into a household name,” says Leibowitz. “Maintaining our unique company culture is paramount as we work to build Veritas Fine Cannabis into the same.”
Dale’s role in the leadership team at Veritas is about sticking to his roots. Through raising industry standards in the best interest of quality products and consumers, the team at Veritas hopes to expand the brand nationally, just like Oskar Blues did, while instilling a culture of disruption and innovation without compromising quality.
We caught up with Dale to learn more about his story and what he hopes to bring to Veritas, as well as the cannabis industry at large. And yes, I had a couple of Dale’s Pale Ales (his namesake beer) later that evening.
Aaron Biros: Your success with Oskar Blues is inspiring. Taking an amazing beer like Dale’s Pale Ale and putting it in a can sounds simple to the layperson, but you launched a remarkable movement to put craft beer on the map. How do you plan to use your experience to help Veritas grow their business?
Dale Katechis: I am hoping that I can apply some of the lessons that I’ve learned through making mistakes of growing a business from the ground up. There’s obviously a lot of road blocks in cannabis and that is certainly one of the qualities of Veritas – how they’ve grown and how they had to do it in an environment that is much more challenging than the beer space.
My experience in small business development could potentially help them navigate this next renaissance of the space. I’m going to help them compete and bring the industry to a level that helps everybody win. I certainly felt that way in the craft beer movement. It was very important to us to bring the whole industry along because we were educators, we weren’t salesmen. In doing that, lifting everyone to a level where the industry benefits as a whole is a part of small business growth. To me that’s the most fulfilling part. It wasn’t just about the Oskar Blues ego at the time, it was about the craft beer scene. And what’s happening in cannabis now is very similar to what happened in the nineties with the craft beer scene.
Aaron: How did you get interested in joining the cannabis industry? What made you choose Veritas?
Dale: Most of my life, I’ve been an enjoyer of cannabis. Very recently, in the last two years, I’ve been intrigued by getting involved in the space. I’ve been shopping around for opportunities and nothing really excited me until I met Jon Spadafora and Mike Leibowitz.
It was really the two of them, the comradery and how they treat their staff that was so similar to the culture at Oskar Blues. Call it a “passion play” if you will, but this was the best opportunity to get involved with a small company and hopefully be a value add for them being in the room and sharing ideas.
Aaron: As a pioneer and leader in the craft beer space, do you notice any commonalities between the growth of the craft beer market and the legal cannabis market?
Dale: It is kind of crazy how many similarities there are. Not just the industry as a whole, but specifically the commonalities between my business, Oskar Blues, and Veritas. Overall, that’s really what allowed me to want to lean in a bit more. I wasn’t in the place where I wanted to start anything on my own. I didn’t want to be involved in fixing anything. I’ve been involved in those situations before and I’m at a point in my life that I don’t want to fix anything. Thankfully there’s nothing that needed to be fixed at Veritas. That was an exciting piece of the equation for me.
Dale takes in the view, getting up close and personal with the plants at a Veritas cultivation facility
Back to your question, how the consumer looks at cannabis versus how the consumer looks at beer in the craft beer space is very similar. There is a bit of an educational piece that’s happening where it’s almost a requirement in the cannabis industry and Veritas is leading that charge out front.
That’s what’s going to catapult Veritas and other companies if they follow suit. It’s their mentality and their philosophy of bringing the industry along as a whole, and I think it’s going to end up boding well for the consumer. The craft beer space was the same.
We had to educate people on a beer can and why we felt like a can of beer was important and exciting. The industry and the consumer associated cans of beer with large, industrial lagers and the can got a bad rap as a result. Not because it wasn’t a great package, but because they were putting bad beer in a good package. So, we had a long road of educating the consumer on the benefits of the can and I think what Veritas is doing with packaging now, how they use quality as such a fundamental pillar of their business, how they focus on the employee experience and the consumer experience sets them up for success, instead of just looking at the bottom line.
I’ve said it throughout my entire career, and at Oskar Blues, we never focused on the profits. You do the right thing for the biggest group of people moving the ball forward and the bottom line takes care of itself. Jon and Mike understand that so I don’t need to fight that battle. It’s another big similarity to the craft beer space.
Aaron: How can cannabis companies keep their craft? How can we, as an industry and as individual businesses, celebrate craft cannabis and follow in the footsteps of independent craft beer?
Dale: I believe that we’re starting to see some of that consolidation [that has been taking place in the craft beer market]. We’re at a time in the market right now where companies with such a solid foundation like Veritas don’t need to go that route to grow. I think we’ll start to see a lot more consolidation in the cannabis industry soon.
Veritas CEO Mike Leibowitz (right) showing Dale (left) a fresh harvest
Back to the point of bonding together as an industry and as a whole. Championing some of the regulatory hurdles that are coming and sticking together is crucial. One company can’t do it. There’s going to have to be some comradery in the industry among everyone trying to hold the bar up high instead of racing to the bottom. You die by a thousand cuts. I’ve lived that life in craft beer and we saw what happened 6-7 years ago when the industry overexpanded because of exponential growth. A lot of egos got in the room, and a lot of breweries spent a lot of money building out capacity and then that same year the market popped out. Everyone who didn’t have a solid foundation, got washed out of the industry.
That’s why I appreciate what Jon and Mike are doing and how they built Veritas. It’s very similar to how we built Oskar Blues. We had humble beginnings; we didn’t spend money on things outside of our core competency. We focused on quality, employee experience, morale and holding on to the culture of Oskar Blues. That’s what Jon and Mike are doing with Veritas and I think that’s really important.
Regardless of their size, all consumer package brands spend a significant amount of money and resources on packaging to attract consumers’ attention. We are all very visually oriented and gravitate to items that pique our interests. Cannabis brands are no exception when it comes to branding their products. Packaging plays a big part in carrying their brand forward and standing out on the dispensary shelves. When I was in Las Vegas at a CBD tradeshow in early 2020, I visited a dispensary, and it was beautiful. I remember commenting to a colleague that was with me how spectacular the product packaging was in the glass cases. One had unique artwork on each different product they offered, and it was indeed art. Yes, I did purchase this one that pulled me in.
The cannabis industry in the United States presents a challenge to brands because there is no overall federal guidance for packaging. Each state is controlling the cannabis legislation and, with it, the packaging guidelines. So multi-state operators (MSOs) have to manage each state as a separate entity and abide by the packaging regulations, which is not very efficient and adds a cost burden. As the industry matures and becomes federally legal across the country, packaging regulations will be easier to implement.
Louis Vuitton bags are one of the many goods that are commonly counterfeited Image: UK Home Office, Flickr
Let’s take a look at counterfeit products across all product categories. There is a significant global problem with counterfeits, as articulated by the below statistics.
Fake luxury merchandise accounts for 60% to 70% of that amount, ahead of pharmaceuticals, entertainment products and representing perhaps a quarter of the estimated $1.2 trillion total trade in luxury goods.
Customs and Border Patrol confiscated $1.3 billion worth of counterfeit goods in the U.S. for Fiscal Year 2020. (The value of 2020’s seizures are actually down compared to the $1.5 billion worth of counterfeit goods seized by CBP in 2019).
Unfortunately, the figures above are concerning, and the cannabis industry will face the same counterfeit issues that will add to these stats in the future. What can be done to help fight the problem and alleviate the pain for cannabis brands? Smart technology.
The trend towards “smart technology” varies by sector, but the underlying concept involves building levels of technology systems designed to impede or limit the highly sophisticated counterfeiter from replicating or replacing products. These levels typically include a forensic level control on the product, digital systems to track the material and customer facing systems to articulate the underlying value to the consumer.
Building these levels of smart technology into cannabis-products and packaging allows consumers to authenticate real versus fake, and in the case often in cannabis, legal versus illegal. Molecular technology is one forensic level of control option that can be used as a unique identifier for product authentication. Each brand would get its unique identifier to apply to the raw materials that make up its product, such as oil or an isolate. Then a sample can be tested at the origin point and subsequent nodes in the supply chain using a remote testing device. All the digital data is captured in a secure cloud database for traceability and transparency to the end consumer, to show them the authenticity of the product they are consuming. The same molecular technology can be applied to the ink or varnish for packaging and labels. A great application to help combat counterfeits and product diversion across the globe.
Counterfeiters can create near duplicate versions of the original
Another engaging platform is called StrainSecure by TruTrace Technologies. Their SAAS platform allows cannabis manufacturers to track all their product batches and SKUs tied to a blockchain. It also facilitates the interaction between the manufacturer and third-party testing facilities to conduct product testing and reporting. The data is captured within the platform, and with easy access dashboard views, it provides the insights to authenticate products at any time.
A company out of Australia called Laava is producing a product called Smart Fingerprints. It’s the next evolution of QR codes. The Smart Fingerprints can be applied to each package, providing a unique identifier that consumers can read with a mobile phone application. The consumer is provided with information concerning the product’s authenticity and any additional information the brand wants to share with the user. Smart Fingerprints are a great example of customer engagement at the point of activity that is secure.
The above three solutions show the availability of advanced technologies the cannabis industry can implement on its packaging and products to ensure authentic and safe products are sold to consumers. It provides consumers with vital information and insights about products so they can make informed buying decisions. There is no one silver bullet solution that provides all the answers. As with every high value product, counterfeiters will work to create near duplicate versions of the original until it becomes unsustainable to do so. It will take a technology ecosystem to seamlessly connect and provide actuate and timely information between supply chain partners and ultimately the end consumer. As the US works to separate the legal from illegal production for both the adult use and medical supply of cannabis, the looming challenge will be on protecting and communicating authenticity, packaging will be the first step in this.
Natural cannabinoid distillates and isolates are hydrophobic oils and solids, meaning that they do not mix well with water and are poorly absorbed in the human body after consumption. By formulating these ingredients using a patented delivery system technology, trademarked VESIsorb®, Geocann has overcome common obstacles associated with fat-soluble active ingredients, including poor stability, bioavailability, absorption, and solubility. In addition, Geocann has peer-reviewed, published evidence of the dramatic improvements in Cmax, AUC, and Tmax (“time to peak absorption” directly related to “fast-acting” benefits).
Geocann is a cannabis formulation company with its headquarters in Fort Collins, Colorado, and additional offices in Chicago, Illinois and Zurich, Switzerland. The company is led by an impressive leadership team of scientists, pharmacists, researchers and natural product industry leaders. Geocann’s technology platform has been successfully applied to a wide range of cannabis product applications, including soft gel and hard-shell capsules, functional foods (e.g. gummies) and beverages, powder systems, tinctures, sublingual sprays and topically applied formulations. Brand partners in the U.S. utilizing Geocann’s technology for hemp applications include Nestlé Health Science, Cannaray and Onnit, and brand partners for medical and adult-use cannabis applications include Curaleaf, Sunderstorm and CannaCraft, among others.
We spoke with Jesse Lopez, CEO and Founder of Geocann, about their product formulation technology in cannabis and how they work with brand partners in the U.S and internationally. Lopez started Geocann in 2018 alongside the success he’s experienced at SourceOne Global Partners (founded in 2003 by Lopez), a leading formulation company in the nutraceuticals space with a reputation for pioneering innovative products that combine science-backed ingredients with patented drug delivery system technologies to address the most pressing consumer health concerns, such as heart health, cognitive function, inflammatory response, metabolic syndrome and type II diabetes, among others.
Aaron Green: Jesse, first off, how did you get involved in the cannabis industry?
Jesse Lopez: Our focus at SourceOne Global Partners has been on natural products for nearly two decades. Some of the folks involved with our natural products business decided that they would get involved in the cannabis business and they asked for my support at the Advisory Board level. I agreed to serve and figured I better learn about the cannabis industry! We realized that there was a tremendous opportunity for utilizing our drug delivery system technology to enhance the value of these cannabis-based products. Due to the regulatory environment, strategic legal counsel and new investments necessary to take an immediate leadership position in the cannabis industry we launched Geocann in 2018 with an office in a fully legal state at the time, Colorado.
Green: How do you select the natural products you work with at SourceOne?
Jesse Lopez, CEO and Founder of Geocann
Lopez: We really focus on science-backed natural product ingredients that may require high doses to reach therapeutic blood levels. By combining these science-backed ingredients with patented technologies – which we own the global rights to – these products offer desirable differentiation for leading brands, such as dramatically improved absorption and bioavailability, patent protection and trademarked “intel inside” branding.
Green: What are some of the other natural products you have experience with?
Lopez: We work with a range of some of the most popular nutraceuticals such as coenzyme Q10 and omega-3 fish oil to the more innovative natural products like resveratrol. We also work with vitamin D, and other immunity-based ingredients that can be enhanced using our delivery system technology to deliver greater benefits to the people that are taking those products.
Green: What is the technology and how does it work?
Lopez: I think it’s important to recognize our technology partner, Vesifact, in Zurich, Switzerland, who is the inventor of the VESIsorb® technology platform and serves as the scientific research, technical support, production, and product development arm of SourceOne and Geocann. We are very proud of this symbiotic relationship where our role at Geocann and SourceOne is to provide the commercial development, sales, marketing and strategic distribution infrastructure. We promote our partnership openly on our website and in our marketing materials because of their unrivaled leadership position in the global marketplace.
They have consistently been recognized as a top 10 global organization for health-related nanotechnology patent activity, ahead of many of the most well-known pharmaceutical companies in the world. It is an intellectual property portfolio that has been used to provide solutions to the most difficult product formulation challenges over the years in pharmaceuticals, medical devices, nutraceuticals, cosmetics, and now cannabis applications. Together, our focus has been on delivering novel solutions in these diverse fields of use and product applications based upon VESIsorb® formulation technology.
Each active compound identified with its own set of formulation, absorption and bioavailability challenges requires a customized solution that allows the full potential health benefits to be realized from success in the lab to commercial scale up. This is the process and we have successfully delivered unmatched solutions for close to twenty years from coenzyme Q10 to now both psychoactive and non-psychoactive cannabinoid product formulations in a wide range of product applications.
We saw the exploding interest in CBD with our nutraceutical partners and demanding consumers worldwide but chose to start Geocann to keep the markets served separate. We were confident that the VESIsorb® technology would provide much needed solutions for CBD as a wellness product, but also adult-use and medical cannabis products regarding “fast acting” and “product stability” needs.
Green: What’s the problem in cannabinoid bioavailability that Geocann’s technology helps to solve?
Lopez: It is well-recognized in the scientific literature that CBD, THC and other cannabinoids, in general, show limited bioavailability due to their lipophilicity, poor aqueous solubility and extensive first-pass metabolism.
Our VESIsorb® technology was designed to address the poor bioavailability of drugs and natural bioactives like cannabinoids exhibiting poor water solubility but high membrane permeability (Biopharmaceutical Classification System: Class II compounds). The VESIsorb® technology is a lipid-based formulation that self-assembles on contact with an aqueous phase into a colloidal delivery system. This colloidal solubilization improves the transport of the cannabinoids through the aqueous phase of the GI-lumen to the absorptive epithelium, dramatically improving bioavailability.
VESIsorb® is typically characterized as a SEDDS (self-emulsifying drug delivery system). What’s unique about our VESIsorb® SEDDS is the long history of safe and effective use worldwide and the large number of products that, over the years, we’ve successfully developed. With decades of experience delivering novel formulation solutions, there is significant and valuable “know how” that we bring to each formulation challenge. This “know how” allows us, for example, to develop cannabinoid formulations that provide lymphatic absorption pathway advantages in addition to standard gastrointestinal absorption, therefore optimizing therapeutic blood levels for maximum benefits.
Needless to say, there are various methods that attempt to address the poor cannabinoid bioavailability. Unfortunately, too often, companies make claims that they have water soluble cannabinoids but offer little evidence to validate their claims. The popular misconception is that some degree of water solubility will consistently translate to improved bioavailability. This is clearly not accurate. We know scientifically that pharmacokinetic performance is highly variable. A review paper I read recently comparing water soluble delivery system formulation types illustrated this fact. There was greater than an eight-fold difference in bioavailability amongst the various water-soluble formulations.
Green: Can you tell me some details about your global license with Vesifact?
Lopez: Our technology exclusivity is based upon given categories. So, when we say we have global exclusivity for nutraceuticals, that can be as I’ve already mentioned, omega-3, coenzyme Q10, or resveratrol as examples, and this business is managed by SourceOne. With regards to our global exclusivity for cannabinoids and terpenes– whether we formulate these ingredients to create a functional drink, or we’re creating a gummy, or creating a softgel capsule or powder-filled hard-shell capsule, or sublingual, or topical – all of those product applications are covered by ourexclusivity for the technology and is managed by Geocann.
The beauty of our technology is that we’ve already achieved success with all of those product applications. That’s one of the big advantages of our technology versus some other approaches trying to address the challenges of cannabinoid bioavailability.
Green: What kind of validation and clinical studies have you done so far in the cannabinoid space?
Lopez: We were the first to have stability data with creating our formulation in a soft gel capsule with CBD. We recently submitted to the European market for novel food application. We invested hundreds of thousands of dollars in proprietary safety studies that are required to achieve novel food status in Europe and FDA GRAS in the U.S. We have proprietary stability data as well as proprietary toxicology data from multiple, self-funded clinical studies. Many companies that submit for the EU novel food application are only referencing the existing scientific literature about the pharmacokinetics of cannabinoids, whereas we have our own peer-reviewed, published study. In our study, we compared our VESIsorb®-CBD formulation to the industry standard MCT Oil-CBD formulation in a crossover design where we were able to demonstrate how we could dramatically improve the bioavailability of CBD.
Green: Can you talk about the benefits of your technology with regards to bioavailability and onset time?
Lopez: When you start talking about onset time we move into a broader discussion relative to cannabinoids. We’ve been very successful with marijuana, especially as it relates to THC, because of the dramatic improvement in time to Tmax, and how much faster we reach Tmax than a standard THC formula. Our formulation is generally four times faster compared to standard formulations.
When it comes to area under the curve and Cmax, we show improvements of four to six times a standard THC or CBD product. Further, when we start looking at the differences between other studies that have been published, we show an even greater improvement based upon study comparisons to what other people have done, even compared to products like GW Pharmaceuticals’ Sativex Oromucosal Spray.
Green: Can you address the SEDDS formulation and liver metabolism?
Lopez: We’ve dramatically overcome challenges with the first-pass effect. We have also formulated our products to address lymphatic absorption. So, we’re coming at it from a number of different angles.
We disagree with people who talk about water solubility as an end-all be-all solution. When you look at the range of published studies, whether it’s nanoparticles or liposomal systems or micro-emulsions, they all are water soluble systems, but yet the data shows there’s dramatic differences in the real efficacy of those approaches, and what the actual improvement in blood levels are. Ultimately, those blood levels represent the efficacious nature of the products whether we’re talking about CBD, or talking about THC.
Green: As a Colorado-based company you work with cannabis partners across the US. Can you tell me about your relationship with marijuana product formulators and brands and how you structure your licensing agreements across state boundaries?
Lopez: In a recent article about the leading fast acting gummies, the two companies they focused on were Sunderstorm with the Kanha Nano gummies and Curaleaf with their Select Fast Acting Nano gummies. Both of those companies use our VESIsorb® technology. We’re very proud of our relationship and the success they’re having as leaders in most dominant states with that particular product application.
Onset time has always been a challenge with gummies. And we’ve dramatically improved onset. Actually, we’ve shown statistically significant improvements for all measured pharmacokinetic parameters in a recent peer-reviewed published study. We demonstrated much higher total absorption in maximum plasma concentration (Cmax), total exposure [area under the curve (AUC)]) and the time to reach the peak concentration (Tmax).
We say powered by VESIsorb® technology the product is faster, stronger, longer.
Green: How does the experience differ from a standard oil- or isolate-based formulation?
Lopez: The only way that I can answer that question is we’ve had 100% success with the companies we work with in their initial trials. When someone tells me that a group of employees are going to try the product and they’re heavy users of cannabis and they are smokers, I think, “wow, you know, gummies have to be really successfully formulated for someone like that to be pleased with the high.” Then they come back and say, “that’s the best that I’ve had in four years!” and they’re totally blown away. That’s completely different than a peer reviewed published study, but for sure, that’s the kind of feedback and anecdotal evidence that we get. I think that’s why that application is growing so much faster now because we’ve overcome this onset issue.
Green: Do you give exclusive rights on a state-by-state basis?
Lopez: We’re very selective about who we work with. Exclusivity is always part of the discussion. But at the same time, it’s really more about protecting the investment in the people that we partner with and not cannibalizing a given market. So, there are some exclusive relationships in the U.S. and internationally, like Heritage Cannabis and Pathway Health Corp in Canada, but for the most part, I would say simply, we were very selective about who we do business with and open to new partnerships.
Green: What kind of support do you provide to your licensing partners?
Lopez: We provide 100% formulation and technical support. We provide the SEDDS and then they use their own legal, licensed cannabis and their own equipment. Our system requires no special equipment or investment in changes to their process. So, not only do we provide formulation expertise, but our system is really easy to use both in a lab environment as well as producing large scale commercial productions.
Green: What geographies are you in currently with the cannabinoid formulations?
Lopez: We are global in scope. We’ve been very fortunate to have success not only in the US and Canada, but Europe, Brazil and Australia as well. Our level of participation will vary whether we’re talking about medical marijuana, adult-use or hemp extract and CBD.
Green: If somebody is interested in learning more about your product or potentially becoming a license partner, how would they how would they reach out to you to set that up?
Lopez: If they went to our website, www.geocann.com, it’s pretty easy to reach us and I am grateful that so many companies are doing that.
Green: Great, thanks Jesse that concludes the interview!
National Agriculture Day (March 23, 2021), is an annual event held by the Agriculture Council of America (ACA), a not-for-profit 501-c (6) organization, to increase the public awareness of agriculture’s vital role in our society.
The ACA believes that every American should:
Understand how food and fiber products are produced.
Appreciate the role agriculture plays in providing safe, abundant and affordable products.
Value the essential role of agriculture in maintaining a strong economy.
Acknowledge and consider career opportunities in the agriculture, food and fiber industry.
We investigated how the hemp and cannabis industry is disrupting agriculture in positive ways, from automated trimming, to controlled environment agriculture, to water conservation and beyond. We interviewed Aaron McKellar, CEO and President of Eteros Technologies, parent company of Mobius Trimmer and Triminator, Mark Doherty, Executive Vice President of Operations, urban-gro, Inc. and Derek Smith, Executive Director at Resource Innovation Institute (RII) to get their perspective on agricultural innovation.
Aaron McKellar, CEO and President of Eteros Technologies
Aaron Green: Why is hand-trimming inefficient at scale?
Aaron McKellar: Hand-trimming is inefficient at scale because it is so labor-intensive and time-consuming, not to mention repetitive and frankly boring. It’s hard to stay fully engaged as a worker trimming by hand, so the consistency of your finished product isn’t reliable with a crew of hand-trimmers.
Aaron McKellar, CEO and President of Eteros Technologies
A hand-trimmer can produce good quality trim on about 2 or 3 pounds per day. A scaled-up facility running just one Mobius M108S Trimmer can realize up to 120 pounds per hour, replacing many dozens, or even into the hundreds of hand-trimmers. The HR nightmare this presents, and all the associated costs of paying and facilitating dozens of employees (parking, washrooms, lunchrooms, PPE and gowning, etc) is simply unworkable. And that’s before COVID.
Green: How does automated trimming benefit large producers and how does the quality compare to hand-trimming?
McKellar: Not all automated trimmers are created equal. Any of the machines out there will help to reduce the need for hand-trimmers by taking off the bulk of the leaf, leaving a small team of “hand-polishers” to finish it up. The Mobius Trimmer is the only automated trimmer on the market today that leaves the technology of the original machines in the past and employs next-gen technology to truly mimic hand-trimmed quality with stunning through-put rates.
We have high-end producers using Mobius Trimmers whose own QC department cannot discern Mobius-trimmed flower from hand-trimmed flower. Hand polishing crews tend to be far smaller when using a Mobius vs first-gen machinery, and many Mobius users don’t touch up at all, instead going straight to market right out of the trimmer. For a look at how our technology differs from the rest of the field, check out this look under the hood.
Mark Doherty, Executive Vice President of Operations, urban-gro, Inc.
Aaron Green: What is controlled environment agriculture?
Mark Doherty: Cannabis cultivators understand growing indoors because, prior to legalization, they had been doing it for years in the gray market. It is by way of that experience that cultivators learned how to manipulate a highly-valuable, complex plant in an indoor setting. As cannabis legalization spread across the United States, many government regulators required that it be cultivated indoors according to strict regulatory protocols. Fast forward 10 years, and we have an industry that is keenly aware of the indoor environmental conditions required to be successful. Critical factors like heating, cooling, ventilation, dehumidification, and how to best mimic Mother Nature’s energy through lighting are all deliberately optimized.
Mark Doherty, Executive Vice President of Operations, urban-gro, Inc.
With cannabis cultivation driving the advancements of controlled environment agriculture, market and regulatory forces demanded higher efficiency, reduced energy and resource consumption, and clean crops. In most states, cannabis crops have more stringent testing than food crops. For instance, the lettuce in Massachusetts will not pass the standards for cannabis in Massachusetts. It’s through rapid innovation and technology adoptions that the cannabis industry has paved the way for lettuce to be profitably grown indoors.
Green: How can controlled environment agriculture help alleviate supply chain stresses?
Doherty: By growing food closer to the consumer, you reduce food miles; meaning, that link in the food supply chain gets a lot shorter and is less prone to disruption. Whether you have hyper small cultivation facilities on every street corner, or a larger cultivation facility geographically close to consumers, you can grow 24/7/365. Furthermore, growing locally allows for better prediction of facility output—10 boxes of greens on Monday, 50 boxes of greens on Tuesday, and five boxes of greens on Thursday. This eliminates harvesting a large crop before it is ripe and likely requiring cold storage. The controllability of controlled environment ag is that consistent, reliable contribution to the food supply chain and shortening that path to the consumer.
Derek Smith, Executive Director at Resource Innovation Institute (RII)
Derek Smith, Executive Director at Resource Innovation Institute (RII)
Derek Smith: Until this report, if you searched for cannabis water usage, you’d basically find one cited statistic. It was “six gallons per plant per day.” We knew this was from a model based on one extreme illicit market scenario. Based on the data we were seeing and the conversations we were having, this number seemed way off. So, we pulled together a multidisciplinary Water Working Group as part of our Technical Advisory Council. The objective of the Water Working Group was to establish a scientific understanding of how, and how much, water is used for cannabis cultivation so that cultivators have confidence in taking steps to be more efficient, and so that industry leaders, governments and media can be accurately informed about the range of water practices of today’s regulated market.
Green: What key points should cannabis cultivators take away from the report? What key points should regulators and policymakers take away from the report?
Smith: As the cannabis industry matures, water use efficiency will become more important, as it has for other agricultural crops. Pressures to use water efficiently will mount from multiple channels including – reducing input and energy cost, protecting the environment, meeting regulatory standards and simply being good stewards. We recommend that industry and regulators focus efforts on the following areas:
When grown outdoors, water for cannabis production should be assessed like any other agricultural crop and be subject to state and local regulations that apply to other crops. Our research indicates that cannabis neither uses a massive share of water nor uses more water than other agricultural crops. Applying the same standards to cannabis as to other agricultural crops will correctly categorize outdoor grown cannabis as an agricultural crop.
In areas where there may be conflict between water use for cannabis and environmental concerns, regulators and the industry should focus (1) on the timing of water use and (2) the potential of storage to mitigate environmental conflict. Our results show that in many parts of the country legal cannabis farmers have ample water storage to satisfy their needs. In areas where storage is insufficient, increasing storage should be a priority for farmers and regulators.
Our research shows there are still massive differences between cannabis production techniques. As farmers continue to experiment and improve, we expect to see water use be a more important part of cannabis farming decisions and expect new plant varieties and growing techniques to be developed that increase water use efficiency. Yet more data from actual farms and facilities are needed to point the way toward the technologies and techniques that drive optimal efficiency and productivity. It is recommended that producers benchmark their performance and governments consider requiring energy and water reporting by producers. The Cannabis PowerScore can assist in these efforts.
As indoor production continues to grow, especially in areas that have unfavorable climatic conditions for outdoor growing, we expect more cannabis users to rely on municipal water sources. Yet, it is unclear if municipal water suppliers are equipped to work with the cannabis industry. We suggest outreach efforts between the cannabis industry and municipal water suppliers to incentivize efficiency where possible.
The culture of the cannabis industry is filled with passion that many envy, and for valid reasons. The roots of the cannabis plant go back thousands of years. As of this writing, there are no documented human deaths that were caused by a phytocannabinoid overdose. However, it is not all rainbows and unicorns.
Before breaking ground, fundraising, proper facility design, competitive application and permitting requirements are just the start. Once operating, businesses struggle to stay current with regulations that continue to evolve. Cannabis cultivators struggle to scale while mitigating pest infestations, which is a part of life in the conventional agricultural industry. A lack of consistent products frustrates consumers, while regulators and policy makers continue to struggle on the best way to regulate a commodity that has seemingly endless demand. The reality is dizzying!
However, amidst all of the challenges and opportunities, a continually overlooked tool stands out: a Quality Management System (QMS). Merriam-Webster defines a system as “an organized set of doctrines, ideas, or principles usually intended to explain the arrangement or working of a systematic whole.”
A QMS documents processes, procedures and responsibilities that ultimately direct an organization’s activities to meet customer and regulatory requirements as well as continually improve its effectiveness and efficiency. In other words – it steers innovation through the collection of data while ensuring products are safe for the consumer. For further reading, the American Society for Quality (ASQ), now over 70 years old, is an excellent resource and provider of resources and formal training programs that are recognized and revered around the world.
Step 1: Define your stakeholder requirements
This all starts with knowing your stakeholder (e.g., customer, regulatory body) requirements. For simplicity’s sake, let’s start with your customer; at a fundamental level, they expect safe, consistent and reliable products that impart a certain experience.
How does that translate into specifications? Let’s look at them one at a time.
What does “safe” mean? For an edible, safe means the product is free of physical, chemical and microbial hazards. Knowing what potential impurities could be in your product requires understanding your raw materials (inputs) and the manufacturing process. To take a deeper dive, some of the aspects of safety and quality, product specifications and testing considerations are discussed in this recent Cannabis Industry Journal article by Dr. Roggen and Mr. Skrinskas here.
An example of a compliant label in Oregon
What does “consistent” mean? This builds off and complements the safety profile. It could mean a consistent fill level, an acceptable range of cannabinoid concentration, and so on. For example, in the US Pharmacopeia’s peer-reviewed article about quality attributes of cannabis inflorescence (commonly known as flower or bud), they recommend 20% as the acceptable variance in cannabinoid content. For a product labeled as having 25% THC, the product will actually test to between 20% and 30%. This may be surprising, and discomforting for some, but the reality is that products on the market consistently fail to meet label claims.
What does “reliable” mean? That could mean that you always have inventory of certain products on the shelves at your dispensary. Defining “always” as a SMART goal – perhaps it means that you will have your top 3 products in stock at least 90% of the time. Customers need to feel like they can rely on your business to provide them with the products they want. Take the time to capture the data on what your customers want and work to satisfy their needs and you’ll watch your business really accelerate.
Step 2: Build your processes to meet these expectations
This is where your written standard operating procedures (SOPs), forms and records come into play. Your SOPs serve to memorialize your operations for consistency. Most SOPs in the cannabis industry are not written by the actual operators of a process. Rather, they are written by the legal and compliance team without review by the operators to confirm that what they are stating reflects operational reality. The audience needs to be the operators. Without effective SOPs that are utilized by your employees, your business will struggle to meet the established specifications. Cannabis businesses in Colorado, the oldest regulated adult-use cannabis market in the United States, continue to see 1 in 8 of their products fail final product testing! Cannabis businesses that understand their processes, document them in SOPs and have records to prove they follow their SOPs (see Step 3) are able to reduce errors that ultimately lead to costly rework and product failures.
Consistency in quality standards requires meticulous SOPs
Step 3: Monitor and improve
You have your requirements, you have your process, but how do you know that they are being adhered to? By the time you have results from a third-party lab, it’s too late. Look internally. Records and logs that show preventive maintenance was performed, room and canopy temperature and humidity checks, inventory reports, production records, extraction equipment report and employee training records shouldn’t be filled out only to be filed away. These records are data, which is your most valuable tool. Unfortunately, records are one of the most overlooked assets in today’s cannabis business. A team independent from operations (typically a Quality Unit) should be regularly reviewing these for inconsistencies and trends that can alert you to catastrophic failures before they occur.
Initially, the additional expenditure and learning curve may make this seem like an added burden, but keep in mind that succeeding in today’s cannabis industry requires long-term customer retention. By biting off one piece at a time, you can slowly implement a QMS that will improve your business, increase customer satisfaction, and ensure your brand is a staple for years to come. Remember, quality and compliance is a journey, not a “set it and forget it” situation.
The definition of a Quality Management System includes ‘continuous improvement’. Look forward to a future article which will discuss the importance of tools like a CAPA Program – Corrective Action Preventive Action (which all cannabis license holders in Colorado are required to have in place as of January 1, 2021) and how they complete your QMS, keeping you compliant and mitigating your business risks!
Heat-not-burn is a non-combustion technology consisting of a heating source and either an oven that the user packs cannabis into or a stick pre-filled with cannabis. The cannabis is heated to a lower temperature than a combusted joint or bowl to create an aerosol that the user inhales. Heat-not-burn in this way is distinct from traditional vaping where a liquid or oil is heated to become a vapor and inhaled.
Omura is a design company that has developed a platform product for the heat-not-burn market.
We spoke with Mike Simpson, CEO and co-founder of Omura. Mike co-founded Omura in 2018 after an international design career where he spent much of his time in Japan working with consumer products.
Aaron Green: Mike, what trends are you following in the market?
Mike Simpson: I’m always tracking trends in the heat-not-burn space. Because of my background, I know that the tobacco industry inspires a lot of the technology in the cannabis space. If you look at all the vape pens, that technology was initially developed for big tobacco, which then later was adopted by cannabis. I’m always looking to stay educated on what’s happening in the tobacco industry, as I know it’s directly tied to my work in cannabis.
I’m also looking at what’s happening all over the world with legislation. I’ve been studying it for years, but this past year has been phenomenal. Seeing five new states go to some level of legalization, the federal law and new states legalizing cannabis in the 2020 Election. I believe the Biden/Harris victory will have a major impact on the industry, however we still have to see what happens with the Senate. These next couple of years are going to be very interesting to see how things shape out for cannabis.
Aaron: What are you personally interested in learning more about?
Mike Simpson, CEO and co-founder of Omura
Mike: I am interested in learning how the world is going to behave next year with this new life that’s been thrusted upon us. How effective is the new vaccine going to be? How are people going to retrospectively look at this year, and the lifestyle that they used to have before going into COVID? How much of it’s going to become permanent? How much of this Zoom life will we continue to enjoy? In the future, will office spaces become obsolete? How much will we still be using home deliveries? Do we actually want to go to restaurants again? That’s what I’m very interested in learning about is how human behavior and the world will change because of what’s happening right now.
Aaron Green: How did you get started at Omura?
Mike Simpson: Great question. I moved to Japan as a designer working for Lego and set up their design office for Lego toys. After Lego, I started working instead with Nike and Adidas designing performance sneakers and apparel for a couple of years until I found Big Tobacco — which is where my Omura story begins. I rapidly found myself in a position where I was creating new technologies, for the consumption of nicotine and tobacco. While working on an early project, I was asked if I knew any science fiction writers. Thanks to Lego, I just so happened to know Syd Mead, the designer for popular sci-fi films including BladeRunner, Tron and Aliens. So, I called him and we worked on a project which was aimed at setting the future of the smoking industry. Obviously, this was a brilliant project for someone like myself to get involved in. We came up with several scenarios that depicted the future of what tobacco consumption would look like, and each of them essentially included vaporization. This was before the vaporization days which made it kind of a difficult sell. I spent many years working on where we could use existing technologies in order to execute some of these scenarios. Ten years later, I moved to California, and I started studying the cannabis space for Big Tobacco which ultimately led me to Omura.
Aaron: Can you give me a reference point on the date when you were back in California?
Mike: I came here eight years ago, and I was in Japan pretty much 10 years prior to that.
Essentially what I realized when I got to California was that cannabis was perfect for heat-not-burn because of all the cannabinoids and the terpenes. You heat it up, and you get all of the good properties out of it without the need for combustion. There were already hundreds of products in the market, which validated that people love doing it.
However, there was a ritual: you needed to buy the flower, grind it, pack the device, select the temperature and then use the same mouthpiece repeatedly. And it doesn’t stop there. When the session is finished, you dig out the used flower with a metal spatula or brush. After every 10 or 15 times you have to clean it with rubbing alcohol to get rid of any existing residue from those sessions. This is just a big messy job with a massive amount of inconsistency and variability. For me, it was mind blowing that people would even go through this procedure. With Omura, I knew we needed to simplify that process. Our product comes with a pre-filled flower stick with an exact dose, that you place in the device very simply. You then use the stick as the mouthpiece and when you’re finished, throw the flower stick in the trash. It’s compostable and biodegradable. So we eliminated all of those pain points.
Aaron: Great! Where are you guys based out of?
Mike: Venice, California.
Aaron: So, what makes the Omura vaporizer different from other heat-not-burn products? You mentioned you have the disposable cartridge. Is there a design philosophy around it that you can talk more about?
Mike: Omura comes with 12 flower sticks in child-proof packaging. What makes us different is that we have our proprietary flower stick and device that work together. With our heat-not-burn technology, you get all the terpenes, but when you set fire to it, as you would with other products, you mask that with smoke. Our product is different from anything else in the market, because it has simplified the user experience through efficiency, user interaction and also through design as well.
The other founders come from deep design and technology backgrounds, designing technologies for Apple and Philips Electronics, so it was an important focus for us with Omura. Our newest device, the Series X was designed by Michael Young, a world-renowned industrial designer who has built an impressive portfolio of innovative products.
The Omura Series X
With Omura, we’re bringing sophistication of the design world into the cannabis world. It’s not just about simplifying the experience and making a great kind of efficient method of consumption, it’s also about creating something for everyday use that is beautifully designed and easy to use.
Aaron: The Series X is Omura’s latest device. Can you tell me what changes you’ve implemented to make it better than the first version?
There are a few differences between the Series 1 and Series X: First, the new design fits in the palm of your hands so it’s discreet. It comes with a USB-C charging base that automatically connects with magnets. We’ve also improved the efficiency of the oven. The first device boiled 94% of the cannabinoids, this one now boils 99%. We’ve increased user-efficiency, by removing the button from the Series 1 making it so all you have to do is put the flower stick in and the device starts automatically. Additionally, we wanted to give users an option between a hotter or cooler experience so we added an extra heat curve, as we recognize that some of our CBD users prefer more of a terpene experience.
Aaron: Can the user modify that with an app?
Mike: It is a very simple switch on the bottom of the device that allows you to toggle between the higher and lower temperature curves
Aaron: Okay, cool. Can we talk about your supply chain a little bit here? Do you manufacture everything in Los Angeles? Or do you have partners?
Mike: Everything is designed in the US and manufactured in China. Which is fairly common throughout the industry. Shenzhen is well known for making products for the vaping industry. We create empty tubes filled in a batch production process. All the flower is grown here in the US. To clarify, we aren’t a plant-touching company. We don’t have a cannabis license. When it comes to THC, we have partnership deals. We work with select cannabis brands which is how we are able to sell in dispensaries. On the other hand, our CBD model is split. We have two brands of our own. Libertine, which is more of a male-focused Gen Z brand. Then we have Oriel, which is more of a wellness brand, catered to women.
Aaron: So how would an aspiring brand get on your platform?
Mike: Good question. Any brand or company who is interested in partnering with Omura can contact us through our website, www.omura.com,on Instagram @Omura or via email: hello@omura.com. We would then assess them to see if they’re a good fit. Currently we’re looking to span quite a large kind of demographic as far as appeal. So, if these prospective partners are in a territory, whether it be California or another state, have good market share and high-quality flower, then we would be very open to having a conversation.
Aaron: That’s the end of the interview — thanks Mike!
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