According to a press release published in December, Digipath Labs, based in Las Vegas, Nevada, was recently accredited to the updated ISO standard, ISO 17025:2017. The laboratory received their accreditation from Perry Johnson Laboratory Accreditation (PJLA).
ISO 17025:2005 has long been the standard that labs seek accreditation to, but their newest 2017 edition was recently rolled out and introduced to the market. The new 2017 standard includes some broad changes to terminology, process approach, scope, and it importantly introduces the concept of risk-based thinking.
That concept of risk-based thinking is particularly relevant to the cannabis testing market, where many have argued for more transparency and uniformity in different state regulations and markets. Introducing risk-based thinking in the standard means that assessors also look at the risk of bias, impartiality and assessing measurement uncertainty, which certainly adds a layer of subjectivity to the accreditation.
Tracy Szerszen, president/operations manager of PJLA, says the newer standard also includes a provision for a quality management system review among other changes. “We are making sure they are following the standard from a technical standpoint, meaning they have the right equipment, the appropriate personnel and also have a quality management system,” says Szerszen. “November 29, 2020 is the deadline for moving to the new 2017 standard.”
According to Todd Denkin, CEO and founder of Digipath, obtaining the new ISO accreditation poises them for future growth and expansion. “Digipath Labs has now brought its standard of excellence in cannabis testing under the updated ISO-17025:2017 umbrella as we seek to expand our dominance in cannabis testing markets,” says Denkin. “This is a major step in positioning Digipath as a global leader in testing services.”
According to a press release published earlier this week, DB Labs achieved accreditation, becoming the first ISO 17025-accredited cannabis laboratory in Las Vegas. DB Labs received their accreditation with the help of Perry Johnson Laboratory Accreditation, Inc., an organization that provides third-party assessments to ISO/IEC 17025:2005. DB Labs was also the very first cannabis-testing lab in the state of Nevada.
According to Susan Bunce, president of DB Labs, ISO accreditation is one way the cannabis lab space is being standardized. “As the first cannabis-testing laboratory in Nevada, DB Labs has always taken patient safety very seriously and has always tried to raise the bar,” says Bunce. “The world of cannabis testing is often compared to the Wild West: each lab uses state regulations to set their standards, but it leaves a lot of room for subjective interpretations. The ISO accreditation removes the ambiguity and guarantees a consistent level of testing to users. We are proud to be a part of that.”
According to Tracy Szerszen, president and operations manager at Perry Johnson, ISO/IEC 17025:2005 is an international standard utilized to accredit testing laboratories. “This accreditation provides confidence to end-users that the test results they receive are reliable,” says Szerszen. “Laboratories achieving this accreditation have demonstrated their ability to adequately perform tests using appropriate equipment, environmental conditions and technical staff.” She says another requirement for that accreditation is a quality management system, which essentially helps manage operations and client needs. “Achieving this type of accreditation is quite challenging for laboratories especially with all of the new up-and-coming regulations, technologies and methods in the cannabis industry,” says Szerszen. “Laboratory testing is such a critical part of this industry and becoming accredited provides assurance that they are performing to the highest standard.”
As Szerszen points out, laboratory accreditation can provide a consumer that sense of confidence and trust in the product’s lab testing. “PJLA would like to commend DB Labs for achieving their ISO/IEC 17025:2005 accreditation and their commitment towards meeting the standard,” says Szerszen.
The news of their accreditation comes at an opportune time: With surging consumer demand at the outset of recreational sales, the state has raked in millions of dollars in sales within the first weekend. Recreational cannabis sales in Nevada began on July 1st, and a statewide cannabis product shortage recently led to Governor Sandoval issuing a statement of emergency, allowing more applications for distribution licenses to be considered.
On July 1st, dispensaries in Nevada began recreational cannabis sales, where thousands flocked to retail shops on opening day throughout the state. In Las Vegas, 38 dispensaries were flooded with customers in long lines, with waits up to three hours, according to the Las Vegas Sun. Nevada joins four other states, Oregon, Colorado, Washington and Alaska, in legal recreational cannabis sales.
38 dispensaries are open for rec sales in Las Vegas Photo: David Stanley
Another article on the Las Vegas Sun claims the state did a total of $3 million in total rec cannabis sales in the first four days of it being legal. Over the next six months, it is estimated the state will do $30 million in total cannabis sales. According to that article, that generated roughly $500,000 in tax revenue for the state in those first days.
An article in the Reno Gazette Journal quotes Nevada Dispensary Association Executive Director Riana Durrett as estimating roughly $1 million in tax revenue for the state in the first four days. The four dispensaries in Reno that are open for recreational cannabis sales reaped hundreds of thousands of dollars within a few days, according to Will Adler, executive director of the Sierra Cannabis Coalition.
Blum, a dispensary with locations in Las Vegas and Reno, owned by Terra Tech, did roughly $100,000 in revenue on the first day at their Reno location, according to the Reno Gazette Journal. On Friday, July 7th, after a week of record sales, the state acknowledged there might be a shortage of cannabis, with growers unable to meet market demands. In an email sent on Friday, the Nevada Department of Taxation announced Governor Brian Sandoval endorses a ‘statement of emergency’, giving officials the ability to consider more applicants for distribution licenses, according to the Reno Gazette Journal. “Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately,” says Department spokeswoman Stephanie Klapstein. “Some establishments report the need for delivery within the next several days,” says Klapstein. Nevada legalized recreational cannabis on Election Day in 2016, when voters approved Ballot Question 2.
Election Day last year also yielded legal recreational cannabis in Maine, Massachusetts and California, all of which are expected to roll out regulations and implement recreational sales in 2018. Given Nevada’s massive numbers in sales and tax revenue in the first week, many anticipate high opening day sales revenue numbers in Maine, Massachusetts and California.
Derek Peterson, chief executive officer of Terra Tech
Terra Tech, with the recent acquisition of Blum, a dispensary in Oakland, and the line of concentrates, IVXX, is sweeping the cannabis industry by setting standards for safety and quality. Terra Tech, publicly traded in theOver-The-Counter market, is well known as an agricultural company, with the subsidiary brand, Edible Garden, selling produce to Whole Foods, Wal-Mart and Kroger’s. In December of last year, we covered Terra Tech’s entrance into the cannabis marketplace and their experience with large-scale, sustainable agriculture. We sit down with Derek Peterson, chief executive officer of Terra Tech, to get an update on their progress and quality controls.
CannabisIndustryJournal: In January, Terra Tech announced revenue guidance of $20-22 million for 2016. Can you share some of your strategy going forward to meet your goals?
Terra Tech is taking organic and GFSI-certified agricultural practices to growing cannabis
Derek Peterson: We have always played both a long game as well as a short game, meaning while we are building our longer term business, like in Nevada, we are also focusing on short term accretive acquisitions, like we did with Blum in Oakland. We want to make sure we capture short-term revenue growth while we plan our future revenue production. We feel confident about achieving those results.
CIJ: How big of a role does the acquisition of Blum and IVXX brand expansion play in meeting those goals?
The Oakland location of Blum dispensary
Derek: Blum is a significant factor even though we are only capturing three quarters of revenue considering we closed the deal on March 31st of this year. So for the full year of 2017 we will have growth from this level considering we will be able to report a full year of Blum revenue. IVXX presents us with the best opportunity for growth in the coming years. As the market in California and Nevada grows we can continue to expand our IVXX footprint throughout the state. Being able to wholesale to thousands of other retail facilities affords us a significant opportunity to grow our sales.
CIJ: How do you think the brand of Edible Garden positions you well for expansion in the cannabis industry?
Produce ready for distribution at Edible Garden facility in Belvidere, New Jersey
Derek: One of the reasons we were so successful in the Nevada market was because regulators and legislators felt a high degree of confidence in our abilities considering we are USDA organic, Kosher and GFSI-certified. Our traditional agricultural experience has been very synergistic with our cannabis division from both an optics and operational perspective.
CIJ: Could you give us an update on progress in Medifarm LLC in Nevada? And on your distribution plan for IVXX in California?
IVXX concentrates
Derek: We are continuing to expand our IVXX line throughout the state and increasing our sales force. In addition we will continue to develop new products to distribute into our existing supply chain, like we just did with our new pre filled cartridge line.
We are opening our Decatur location in Las Vegas in early July and Reno and Desert Inn towards the end of August. Our cultivation and extraction facilities should be complete no later than January 2017. We will have our entire infrastructure in place if the recreational bill passes in Nevada this November.
Blum Las Vegas location will open in July
CIJ: Tell us about the role of laboratory testing in your business.
Derek: Laboratories play a significant role, as they are becoming a mandated step in most new legislation around the company. Independent lab testing is extremely important to maintain safe access for consumers and patients. We work primarily with Steep Hill Labs and CW analytics.
CIJ: Can you expand on your integrated pest management and your growing practices?
Platinum Cookies ready for packaging and labelling
Derek: Well we cannot say organic, however we do cultivate all naturally. We also cultivate traditional produce that we sell to major retailers. We are USDA organic-certified and we implement similar processes in our cannabis cultivation. Pest control is extremely challenging for any farmer but we rely primarily on bio control, meaning the good bugs eat the bad bugs. This has been very effective for us in the cultivation of all our products.
CIJ: How is your business different from the slew of other dispensaries and growers in California?
Consistency in quality standards requires meticulous SOPs
Derek: Service and consistency; we have over 42,000 registered patients and our operations team has over 19 years of experience in California. One of the reasons we have become one of the largest dispensaries in the state is because of that experience. In addition, consistency is extremely important. Consumers expect the same product in every other business and ours is no different. If they come in for our Platinum Cookies one month and the next month it has different characteristics you are going to lose patient confidence. So in the front of the house, we are focused on pairing patients’ needs with the correct product and in the back of the house we are focused on providing a meticulously cultivated product, produced at the highest standards.
CIJ: Can you delve into some of the processing for concentrates? How do you meet such rigorous quality standards?
Extraction equipment in one of the processing facilities for IVXX
Derek: Through research and development, we have engineered a proprietary process in which our solvent profiles used under our proprietary conditions ensures solvent residual levels which are not detected by instrumentation at 3rd party testing agencies such as Steep Hill Labs. In addition, any good scientific method requires repetition and corroboration of results. In order to accomplish this we also rely on random routine testing in which we send out extracts out to other 3rd party testing labs. Proprietary conditions include, but are not limited to, heat, vacuum, agitation, etc. By utilizing the correct amalgamation of solvent profiles, extraction conditions, purging conditions, as well as rigorous quality control standards, we are able to ensure a product that is void of any residual solvents, without sacrificing potency or identity of the cannabinoids and terpenes. Cannabinoids and terpenes are of chief interest when extracting cannabis for patients so that they have access to these essential oils without any of the actual leaf and bud.
All solvents used are the highest grade available to us, which ensures a truly medical product for the patient. In addition, all of our extraction equipment is routinely cleaned and sterilized using medical grade cleaning agents.
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ISO 17025:2005 has long been the standard that labs seek accreditation to, but their newest 2017 edition was recently rolled out and introduced to the market. The new 2017 standard includes some broad changes to terminology, process approach, scope, and it importantly introduces the concept of risk-based thinking.
Tracy Szerszen, president/operations manager of PJLA, says the newer standard also includes a provision for a quality management system review among other changes. “We are making sure they are following the standard from a technical standpoint, meaning they have the right equipment, the appropriate personnel and also have a quality management system,” says Szerszen. “November 29, 2020 is the deadline for moving to the new 2017 standard.”
According to Susan Bunce, president of DB Labs, ISO accreditation is one way the cannabis lab space is being standardized. “As the first cannabis-testing laboratory in Nevada, DB Labs has always taken patient safety very seriously and has always tried to raise the bar,” says Bunce. “The world of cannabis testing is often compared to the Wild West: each lab uses state regulations to set their standards, but it leaves a lot of room for subjective interpretations. The ISO accreditation removes the ambiguity and guarantees a consistent level of testing to users. We are proud to be a part of that.”
