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Chris Lacy

The Story of Chris Lacy: Social Equity & Hope in Cannabis

By Cannabis Industry Journal Staff
7 Comments
Chris Lacy

Christopher Lacy and The TGC Group recently won a Tier 3 conditional license under New Jersey’s social equity licensing program. Their story is one of misfortune, persistence, family and the dreadful effects that cannabis prohibition and the War on Drugs has had on impoverished BIPOC communities.

Chris’s father was a sharecropper in Mississippi before he moved to Illinois and started a family. Growing up in a poor neighborhood of Chicago, Chris was surrounded by gangs and crime. He started selling drugs when he was 12 and went to prison for cannabis before he was old enough to drink. When he got out, he saw firsthand the effects that incarceration has on a person, their family and their community.

Back in 2020, Chris Lacy and his wife Taneeshia Thomas applied for a craft grow license under Illinois’s new social equity program. Taneeshia wrote an article for Cannabis Industry Journal highlighting their story.

When it was first announced, Illinois’s social equity program seemed revolutionary and one that other states soon followed, setting the stage for markets all over the country to establish social equity licensing programs. However, legal hurdles, red tape and intense litigation have bogged down the system, causing severe delays. Chris and Taneeshia are still waiting to hear back about approval of their license application, years later.

Good news came recently when they were notified that they were awarded a conditional license in New Jersey. With the help of his family, business partners and The Garden State, The TGC Group is moving forward with launching their business. We caught up with Chris, to check in on his business’s progress, hear his story and see if it might inspire others to take a similar path.

Cannabis Industry Journal: Tell me a little bit about yourself and your story with cannabis

Christopher Lacy, Founder of The TGC Group

Christopher Lacy: I grew up on a dead-end block in a little town in Illinois on the far south side of Chicago called Robbins. It has a very high crime rate and a very impoverished community so as you could imagine we grew up pretty poor. I personally didn’t feel the effects of poverty until just before I turned 13. I guess that became more obvious as I started hanging out and seeing that most of my friends had more than 2 pairs of pants. I starting selling drugs when I was 12 years old.  When I was about 16-17 years old, I had started trying to grow cannabis. Like any task, it takes time to develop the skills produce a good product. Cannabis definitely has it challenges when it comes to cultivating a product that could be considered good.

It’s not like there was an abundance of information out there specific to cannabis cultivation to aid in the task so besides the basic book knowledge of horticulture, you had to grind it out. It took me a couple years to really get it figured out. Once I did get it going, I started expanding. At first it was basements in the suburbs. We’d grab really nice houses and fill the basements with plants. When that wasn’t enough, we started doing warehouses. There was no real limit, outside of capital and the desire to not draw attention via odor or traffic from workers, if you could produce it, the demand was there. I did go to prison for a short stint when I was 20 years old for delivery of a controlled substance. 0.8 grams. After I got out of prison, I had a very successful illegal operation growing and selling cannabis. Life was pretty good for a few years. I wasn’t rich or anything like that but I was able to be around my family and provide the things that I was denied when I grew up. I don’t blame my parents for what I went through growing up. Because of my father’s age, I’m generation 1 out of the sharecropping era. My parents believed in one thing and that was learning. I tried to instill that into my kids as well. Being a father feels really good to me. Unfortunately, that dream was ended when I was arrested in one of our warehouses in Illinois. I did 3.5 years, locked down 21 hours a day for growing weed.

While serving my time I was able to really take a look at myself and develop a new me. I established some new core principles that I would hold close to my heart. One of them being not going back to jail for the sake of a dollar. I was not going back to prison. I had kids when I was young so I missed out on a big part of their childhoods. I had three daughters and two sons at the time that were of an age where having a stable home plays a huge role on how the child will turn out in the future compared to a typical American lifestyle.  When I got out of jail, my kids came and lived with me during and after high school but some serious damage had already been inflicted.  I worked a job as a truck driver and did the best that I could to support my family, but I never really gave up on cannabis in the back of my mind. My older brother used to always tell me that I didn’t learn what I knew about weed for nothing and that one day it would all make sense.

Christopher with his wife, Taneeshia

For the next few years, we just grinded it out as a family. It wasn’t the ideal situation but we made it work. And when we couldn’t make it work, we lived with it! I just was glad to be there doing Chemistry homework with the kids. That shows what happens when a father is at home with his family. We get college grads.

When the message came out that Illinois was going to do craft grow licenses, I got really excited. I figured this was my chance to do what I love and to make a living doing it. I had no idea how I was going to get to where I wanted to be but I figured if I could just put one foot in front of the other, sooner or later I would get there. I caught a break when my nephew, Edward Lacy, introduced me to someone who understood the application process. She introduced me to some of the most wonderful/helpful people in the world. People who literally wanted to help true social equity applicants like myself. With the help of these new friends, we were able to drop our first application in Illinois. After we submitted that application, that is when the first story came out about us in Cannabis Industry Journal. This story helped me get into a conversation with Cresco labs and I was able to get into a situation that really changed how I saw cannabis production. I got to work around some of the smartest people in the industry for just under a year. I can’t thank Charlie, Barrington and the rest of the guys at Cresco enough for the opportunity. From there, I knew it had to be my destiny to grow cannabis for a living. I just kept beating up the phones and emails. Something was gone give.

CIJ: When we last spoke, you were trying to get a social equity license in Illinois, can you tell me about that? How did it go?

Chris: Ultimately, after 2 years of waiting, we were denied a license in Illinois. When I first got this news. it took me about a week to get out the bed. Lol. It took my wife to pull me through. I can only imagine the pain that all the other disappointed groups are feeling, Ultimately, we all couldn’t win in Illinois so it is what it is. But definitely a big shout out to all the successful applicants that did win. You all have a torch to carry that should ignite the black and brown communities.

From the political standpoint in Illinois, it’s just not conducive for social equity applicants to succeed due to all of the legal hurdles, courts, lawsuits, etc. Not to say that the Illinois process is truly different from other states going through similar processes, New Jersey and other states went through a similar process when social equity licenses were announced. The laws that helped me qualify are what came out of the legal battles in New Jersey. The issue is the resources available for legal fees, holding property, and the time required to see these things through; this all equals dollars and that’s just something lacking in most social equity groups.

CIJ: So, what made you look at New Jersey?

Chris: After I had submitted my application in Illinois, I began looking for financial support. I knew this would be my limiting factor because access to the type of capital required to get a grow facility off the ground is quite substantial. For the most part no one returned calls but I called one financial institution in particular, VenCanna Ventures, and for some miraculous reason, they returned my call. I’m not sure what made them; but we kept an open line of communication going all while we were dealing with Illinois. I knew these guys were good because they were behind an impressive project in Ohio that actually won LEED certification. When I look back on it, it felt like a one-year interview. Then one day this past winter David McGorman, the CEO, asked me to partner up with him in New Jersey. It was exactly what we both needed. He has the expertise in finance and I bring the operations side.

Christopher with his daughter, Janeace Lacy

Once we had that team together, we put together a strategy to try and apply in New Jersey. We built the application and New Jersey actually had some very unique laws. If you had a cannabis conviction, you could qualify. Also, my oldest daughter, Janeace, whom I think my prison time hurt the most, actually lives in New Jersey with my granddaughter. So, she’s our resident in the state that helped us win the application and now a part owner, which led us to where we are now. I just couldn’t be more excited about all of this. It just feels right

We won a tier 3 conditional license and now we’re working on finding a good facility and building the operation.

CIJ: How did you set up your social equity license application for NJ?

Chris: It was a process very similar to Illinois except that the process was split into two phases. A conditional license and an annual license. Phase one was winning the conditional license. This is a more condensed application compared to what I was used to. After filling out the application, we had to submit a bunch of documents and proof of incarceration. That was for the conditional license. We still have to convert the conditional to the annual. The conditional basically tells us that we qualify and we can move forward with the rest of the business plan, find some property and spend some money on a lease. We’re still in that process for converting to annual, but we have won the conditional.

CIJ: What is your plan now that you’ve received conditional approval?

Chris: Right now, we’re working on property and securing a space for our facility. We are pretty close to nailing down a couple good locations. One of the locations that I am really excited about is in Somerset County. If we can lock down the property, submit everything to the state as far as our SOPs, security plans, cultivation plan, design, etc. we can try get approval to convert to the annual license and then we can start the build out. The good thing about the two-step process is that it really helps when it comes to spending money. Basically, if you don’t win a conditional, don’t go out spending tons of cash trying to hold onto property.

CIJ: You’ve come a long way from being put in prison for cannabis, to now being close to establishing a business in New Jersey. What made you decide to stick with the business of cannabis?  

Chris: You know, I can’t really describe it very well. It was just one of those feelings, you know it felt good to me. It drew me in when I was a young kid, although, I actually didn’t try using cannabis until I was 21. That’s when I first used it and it really jelled with me. Also, I’ve always loved gardening.

Chris Lacy

My father was a sharecropper in Mississippi, when our family moved to the suburbs of Chicago the first thing he did was plant a huge garden. I grew up in the garden and around plants. He used to spend so much time in that garden and I loved being there with him. We grew everything out there year after year until he was too old to keep it up. I can’t imagine a more peaceful environment then out in the fields with the plants.

It was also therapeutic, not just the obvious therapeutic aspects of cannabis, but also how therapeutic gardening is. Working with cannabis plants can be a challenge. To try to achieve unique terpene and cannabinoid profiles has always been a lot of fun for me. I love the challenge. Pushing genetics as far as I can to really experience what different cultivars have to offer. It is just one of those things that has always stuck with me and I really enjoy it. Once it became legal, a world of opportunity opened up for me.

You know, people say if you do something you love, you’ll never have to work a day in your life. I was a truck driver after I got out of prison, and I really didn’t like it. I had to have neck surgery from the pounding my spine took. I had to work long hours, man I hated doing it. On the flip side, cannabis is something I love to do. And this is about me trying to control my own destiny, control my own life. I don’t have to struggle mentally and physically just to provide for my family. That’s what keeps me going – the drive to do what I love to do to provide for my family. I see cannabis cultivation as more of an art than I do anything else. The guy behind the growing at any facility in the country could share with people what he believes to be fire. I just love to provide an experience and there’s nothing more satisfying than a satisfied customer. Everything about this process seems to fit perfectly with my life.

CIJ: It’s a pretty inspiring story. How do you hope your story might inspire others to follow in your footsteps?

Chris: I don’t want someone to follow in my steps as far as breaking the law and going to prison. I had to learn this the hard way, you know I didn’t agree with the law, but it doesn’t matter. Whether you agree or disagree with the law, I don’t advise anyone to be a criminal.

On the other hand, I do believe that black and brown people have been impacted by the war on drugs the most. In whatever capacity they can, they should chase the opportunity in this country as the cannabis market evolves. It’s a new industry, it’s a way for people to build wealth, to maybe raise their families out of poverty. So in that sense, yes, I do hope people see my story and see that they could do this too. And if you still out there getting it the best way you know how, God Bless you! Lord knows it breaks my heart every time I see someone get arrested for cannabis. Hopefully that shit stops soon and we can get these mothers and fathers who are basically prisoners of a bogus war, reunited with their families and hopefully they get a chance to rebuild.

This a chance to build generational wealth if it’s done right. I would hope that anyone looking for an opportunity, look into the cannabis space. I know its evolving fast and the window might seem like its closing but that isn’t the case. This is more like the 2nd inning of a baseball game. There plenty of time to get going.

 I don’t think I’m the best role model. I just keeping fighting. And my advice for black and brown folks that might have gone to prison or might be put in a similar situation is this: Its never over. It’s never too late, no matter what somebody does. It’s not the end of the road. It’s just a bump at that moment. Just keep fighting. One step at a time. I do hope that people reach out to me.

I would love to work with anyone as long as they on a positive path, especially convicted felons. God Bless the felons! That’s my number one priority on my list. The guys that have been to prison, the non-violent drug offenders. Our society has a way of shunning those people. Some of the smartest people I’ve met in my life were in prison. It doesn’t speak to the character of an individual because they went to jail. If the system is supposed to work then why is it so hard for a convicted felon to get another chance? Of course, a few people have traversed this path successfully but there are so many more.

CIJ: I know your business is called The TGC Group. Out of curiosity, what does that acronym stand for?

Chris: We’re called TGC New Jersey under our license there and we applied in Illinois under the name, The TGC Group. TGC stands for a lot of things. It has a lot of meanings. I came up with it when I was in prison. I called it The Gathering Company. It was an idea I had because I was reading The Wall Street Journal every day in prison. I wanted to gather people under one umbrella.

But also, my name is Chris, my wife’s name is Taneeshia, (whom I am forever grateful for helping me pull my life together) and we have a son we named Grant. So, the first letter of each of our names also make TGC. It also stands for The Good Choice, because it is a good choice. The Ganja Connoisseur is another good one. I just hope that it grows to be known as a quality brand of cannabis that one can count on for consistent high-quality cannabis. Consistency and quality are what we’re striving for relentlessly.

I hope people read this article and feel inspired. We have a responsibility to give back to the community. We have a responsibility to rebuild what’s been destroyed in our communities. I am just trying to do my part. I was not a nice guy growing up, you know I was a gangbanger. But now, I want to rebuild and give back to my community the best way I can in Chicago. Not just my community, I want to give back to New Jersey communities, because we’re in their house now. I want to give back to Mississippi communities, where my family comes from. I’m not in this to get rich, I am in this to build communities. God willing, we will

Soapbox

Give a Voice to Scientists in the Executive Suite

By Dr. Markus Roggen, Amanda Assen
2 Comments

What do Aurora Cannabis, Tilray and Pfizer all have in common? They all produce and sell products used for medicinal purposes, they are top competitors in their field and they all have statements on their websites claiming that science is one of the most important things to their business. But unlike Pfizer, Aurora and Tilray do not have any positions in the executive suite for scientists or medical personnel. This led us to wonder, why does the structure of their corporate ladder (as well as so many other cannabis companies) not align with what they claim to be their values?

According to Aurora Cannabis, “Science is at the core of what we do”.1 Look up the definition of “core” and you will get “foundational, essential, central, and enduring.”2 Sounds important. Meanwhile, Tilray’s main page states: “For the therapeutic value and risks of cannabinoid-based medicines to be fully understood, Tilray believes it is critical to evolve current scientific understanding of the field.”3

aurora logoYou would assume that somebody in the executive suite would have a position and an educational background relating to the central and enduring part of a business, right? We looked at 10 of the biggest Canadian cannabis companies, their founders’ educational backgrounds and whether there were executive positions for science, R&D or medicine (Table 1). We also looked at the same data for the top 10 biggest pharmaceutical companies (Table 2). As expected, every pharmaceutical company had upper-level (C and/or P level) positions for scientists and/or medical personnel. However, only 2 of the 10 cannabis companies had this.

tilray-logoTo figure out why this is, (as scientists) we did some research. It turns out, the consensus is scientists are bad at commercialization. Scientists are rarely successful as CEOs because they are (usually) not good at attracting customers and get confused by things like revenue models.4 As Akshat Rathi bluntly put it, “just because you are the smartest person in the building does not make you capable to run a company.” In fact, many CEOs of life science companies got to the top by pursuing business, finance, marketing or sales. In the 90s, some life science companies took a chance on scientists and hired them as CEOs, but when they hit financial turmoil, they quickly undid this.5

So maybe scientists aren’t always cut out to be the CEO of a company. But that still doesn’t explain why so few large cannabis companies have a chief scientific/medical officer, or even a president of R&D.

Maybe we are looking in the wrong place. Maybe their value of science can be demonstrated by their spending on research. Typically, a larger agricultural company will spend 9% or more on R&D, and a smaller company will spend 2-4%.6 Meanwhile, the major pharmaceutical companies we looked at spent between 12 and 25% of their revenue on R&D during their most recent fiscal year. Since a cannabis company falls somewhere in between we approximate they would spend around 9-12%.

Canopy_Growth_Corporation_logoHowever, Canopy Growth was the only company that fell into our prediction range, spending 10.5% of their revenue on R&D in 2021.7 Tied for a distant second place were Charlotte’s Web and Aurora Cannabis (a subsidiary of Tilray), spending 4.6%. At the very bottom were Tilray which only spent 0.16% on R&D and TerrAscend which spent 0.21% during their most recent fiscal year.8,9 With most of the cannabis companies, we saw a gradual decrease in R&D funding over time, which intensified with the Covid-19 pandemic.

So why the heck are these companies going on about how they value science? To give them the benefit of the doubt, maybe they do think they value science, but they don’t know how to value it.

 It’s hard for a company to take actions that show they value science if there are no voices for scientists at the executive level. After all, how can you make decisions based on science if nobody in the room understands it? Sure, we saw the argument that people who make it to the top can “learn enough science to ascend to the executive suite without much trouble”.5 But what is “enough science”? The mitochondria is the powerhouse of the cell?

This leads to our argument for putting scientists in the executive suites of cannabis companies and giving them a more powerful voice. Whereas scientists are not good at marketing, those in managerial roles tend to overly rely on intuition – even when the evidence is against them.10 For those relying on intuition, R&D is an easy target during times of crisis (like a global pandemic). Cutting costs in R&D yields a short-term immediate increase in profit and the negative impacts are often not felt until years later.11 However, cutting R&D investment is the opposite of what you should do during a time of crisis. Evidence suggests companies that maintain or even increase spending in marketing and R&D and focus on operational efficiency (such as process optimization) are the ones that will come out as the top competitors in the long run.12,13 Having a chief scientific officer or an executive for R&D with a scientific background can help sustain companies by promoting R&D during hard times and indicating what projects will be the most promising to help the company optimize their processes.

Having a scientist in the executive suite can also help keep everyone in check. “Senior execs live in a feedback loop of positive reinforcement making them unlikely to question their decisions,” according to Stefan Thomke and Gary Loveman.10 They claim the best way for those in managerial roles to avoid over relying on instinct and break out of that positive feedback loop is by “thinking like a scientist”. This involves not letting bias get in the way of truth, studying anomalies, being skeptical, developing strong hypotheses, producing hard evidence and probing cause and effect. To add to this, we think a major part of thinking like a scientist is by having at least one high up in the team. In our own company, giving equal value to scientific voices has resulted in all parties learning and thriving by making fact-based decisions.

Finally, scientists deliver! To be a scientist (with a PhD), one must master the field, find a gap in the knowledge, then fill that gap – all for little pay and no guarantee of a job at the end. This makes them dedicated workers whose main goal is to contribute something unique to their field, or in this case, their company.14 Having someone up top who is dedicated, passionate, innovative and trained to look for gaps in knowledge can be an invaluable voice in the executive suite. They are likely to point out potential money-saving solutions (i.e.: optimizing extraction conditions) that others up top may not have thought of on their own.

If you feel strongly that science is at the core of what you do, and you already know that R&D is crucial for the long-term survival of your company, you are already on the right track. In addition to this, consider giving a voice to scientists at the executive level in your company. The cannabis industry is still in its infancy. This means there is potential for R&D in more than just new product development. Basic stuff like extraction, modifying plants to be heartier against harsh conditions and pathogens, curing and safety testing processes have all barely been studied and optimized to reduce costs. These things won’t be solved by a Juris Doctor, an MBA or even an engineer, they will be solved by scientists, and it will take a scientist up top to ensure the whole company recognizes the importance of these projects.

Table 1: Top cannabis companies stats on founders and their educational backgrounds, presence of scientific executive positions and spending on research and development

Company Founders Founder’s Educational Backgrounds Science executive position? % Revenue spent on R&D
Aphria Inc.

(now owned by Tilray)

 

Cole Cacciavillani and John Cervini Cole: B. Eng

John: Born into a family greenhouse business

Chief science officer

Garry Leong: B.Sc. Chem,

M.B.A. Quality Management 15

NA
Canopy Growth Corp

 

 Bruce Linton and Chuck Rifici Bruce: Ba Public Policy, Minor: Economics. 16

Chuck: B. Eng, MBA

no 10.5% 17
Aurora Cannabis Inc.

(subsidiary of Tilray)

Terry Booth, Steve Dobler, Dale Lesack and Chris Mayerson Terry: Master Electrician18

Steve: B. Eng

Chris: Concrete business

Dale: Electrician and homebuilder

no 4.6% 19
Village Farms International Inc.

 

Michael A. DeGiglio BSc Aeronautic Science no No data available on R&D expenses
Tilray Inc

 

Brendan Kennedy, Christian Groh, Michael Blue Brendan: Ba. Architecture, Msc: Eng, MBA20

Christian: Ba. unknown, MBA21

Michael: Ba. Finance, MBA22

 

no 0.16% 23
Ayr Wellness Inc

 

Jonathan Sandelman Juris Doctor, Law Degree24

 

no No data on R&D spending available
TerrAscend Corp

 

Michael Nashat Pharm. D . Post doc in Neuroscience25 no 0.21% 26
HexoCorp

 

Sebastien St-Louis Ba. Economics, MBA 27

 

no 3.09% 28
Fire & Flower Holdings Corp

 

Trevor Fencott Ba (unknown), and Law degree29 no No data on R&D spending
Zenabis Global Inc

(now owned by hexo corp)

Rick Brar, Mark Catroppa, Monty Sikka Rick: Ba. (unknown)

Mark: Ba. Finance 30

Monty: Ba Accounting and Finance31

 

Chief science Officer:

Natasha Ryz PhD experimental medicine.32

 

 

NA

Table 2: Top pharmaceutical companies founders and their educational background, presence of executive positions for scientists and spending on R&D

Company Current Executives Educational Background Science executive positions? % Revenue spent on R&D
Amgen Robert A. Bradway BSc. Biology, MBA33

 

Chief Medical officer: Darryl Sleep, M.D. 33

Senior VP in R&D:

Jean-Charles Soria PhD molecular Biol, MD

18.5% 34
Sanofi Paul Hudson Ba. Economics, honorary doctorate in business35

 

Executive VP, R&D:

John Reed, MD, PhD in Immunology35

14.51% 36
Bristol-Myers Squibb Giovanni Caforio MD.37

 

Chief Medical Officer: Samit Hirawat, MD.

Rupert Vessey:

Executive VP: R&D PhD molecular immunology 37

 

24.58% 38
Takeda Christophe Weber PhD. pharmacy and pharmacokinetics, Msc. pharmaceutical marketing, accounting, and finance39

 

 

Director

President, R&D:

Andrew Plump, MD.  Ph.D. in cardiovascular genetics 39

14.25% 40
AbbVie Richard A. Gonzalez No college degree. Practical experience in biochemistry research. Vice chairman and president, R&D:

Michael E. Severino, MD, Bsc biochem41

 

12.60% 42
Novartis Vasant Narasimhan Bsc. Biology, MD, Msc Public policy President, Biomedical research, James Bradner M.D.

President innovative medicine, Victor Bulto: Msc. Chemical engineering, health economics, and pharmaeconomics, MBA. Chief medical officer, John Tsai BEng. MD43

 

18.04% 44
Merck Robert M. Davis Ba Finance, MBA, Juris Doctor45

 

Executive VP and president of Merck Research Laboratories; Dean Li MD, PhD cardiology45 25.14% 46
Johnson & Johnson Joaquin Duato

Vanessa Broadhurst

Peter Fasolo

Joaquin: MBA, Master of international management

Vanessa: Ba, Master of Business Administration

Peter: PhD in organizational behavior, Msc. Industrial Psychology, Ba Psychology47

 

Executive VP, Chief Medical Safety Officer; William Hait MD. PhD Oncology

Executive VP, Pharmaceuticals R&D; Mathai Mammen MD. PhD Chemistry

15.69% 48
Pfizer Dr. Albert Bourla

Sally Susman

Payal Sahni Becher

Rady Johnson

Albert: Doctor of Veterinary Medicine (biotechnology)

Sally: Ba Government

Payal: Ba psychology, Msc Psychology

Rady: Accountant49

 

 

Chief Development Officer:

William Pao: MD. PhD oncology

Chief Scientific Officer, Worldwide R&D:

Mikael Dolsten; MD. PhD Tumor Immunology49

17.01% 50
Roche Dr. Severin Schwan, William N. (Bill) Anderson, Dr. Thomas Schinecker, Dr. Alan Hippe Severin: Ba economics, PhD law

William: Msc in management and chemical engineering

Thomas: Bsc genetics, Msc molecular biology, Phd molecular biology

Alan: Ba, Phd in administration51

 

 

CEO Roche Diagnostics; Dr. Thomas Schinecker; PhD in Molecular Biology51

 

23.563% 52

References:

  1. Aurora Webpage. Auroramj https://www.auroramj.com/#science.
  2. Definition of Core. Merriam-Webster Dictionary https://www.merriam-webster.com/dictionary/core?utm_campaign=sd&utm_medium=serp&utm_source=jsonld.
  3. Tilray Brands WebPage. https://www.tilray.com/.
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  5. Mintz, C. Science vs. Business: Who Makes A Better CEO? Life Science Leader (2009).
  6. Fuglie, K., King, J. & David Schimmelpfennig. Private Industry Investing Heavily, and Globally, in Research To Improve Agricultural Productivity. US Department of Agriculture, Economic Research Service (2012).
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  8. Tilray R&D expenses. Ycharts https://ycharts.com/companies/TLRY.TO/r_and_d_expense.
  9. TerrAscend R&D expenses. Ycharts.
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  14. Madisch, I. Why I Hire Scientists, and Why You Should, Too. Scientific American (2018).
  15. Havn Life Sciences Inc. Announces Appointment of Gary Leong as Chief Science Officer. https://apnews.com/press-release/accesswire/science-business-life-sciences-inc-aphria-inc-319a516963144b308d146d97dee0dc69 (2020).
  16. Bruce Linton. Elite Biographies https://elitebiographies.com/biography/bruce-linton/.
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  22. Micheal Blue Profile. Bloomberg https://www.bloomberg.com/profile/person/18227502.
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  24. A Jonathan Sandelman Profile. zoominfo https://www.zoominfo.com/p/Jonathan-Sandelman/2245250.
  25. Dr. Michael Nashat Appointed President & CEO of TerrAscend. https://markets.businessinsider.com/news/stocks/dr-michael-nashat-appointed-president-ceo-of-terrascend-1012862002 (2018).
  26. TerrAscend Page. Ycharts https://ycharts.com/companies/TRSSF.
  27. Sebastien St-Louis Profile. Linkedin https://www.linkedin.com/in/sstlouis/?originalSubdomain=ca.
  28. HEXO Corp Page. Ycharts https://ycharts.com/companies/HEXO.
  29. Trevor Fencott Profile. bezinga.com https://www.benzinga.com/events/cannabis-conference/speakers/trevor-fencott/.
  30. Mark Catroppa Profile. linkedin https://www.linkedin.com/in/markcatroppa/.
  31. Monty Sikka Profile. linkedin https://www.linkedin.com/in/monty-sikka-3024a1a6/.
  32. Natasha Ryz Profile. crunchbase https://www.crunchbase.com/person/natasha-ryz.
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  34. Amgen Stocks Page. YCharts https://ycharts.com/companies/AMGN.
  35. Sanofi Executive Team Page. https://www.sanofi.com/en/about-us/governance/executive-committee.
  36. Sanofi Stocks Page. Ycharts https://ycharts.com/companies/SNY.
  37. Bristol Myers Squibb Leadership Team. https://www.bms.com/about-us/leadership/leadership-team.html.
  38. Bristol Myers Squibb Stocks Page. YCharts.
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  52. Roche Holding AG Stock Page. YCharts https://ycharts.com/companies/RHHBY.

CDPHE Certifies More Labs for Hemp Testing

By Cannabis Industry Journal Staff
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Aurum Labs, a cannabis testing laboratory based in Durango, Colorado, announced last week that they have become certified by the Colorado Department of Public Health and Environment (CDPHE) for all of the compliance testing required for hemp products. The press release says they are the first independent lab that is actually based in the state to receive the CDPHE certification for every compliance test.

Last year, Colorado rolled out hemp testing regulations that are some of the most comprehensive in the world. The required pesticide screening includes testing for more than 100 different types of pesticides. The new rules, along with the certification requirement, make it difficult for labs to enter the market, with only eleven total labs certified by the CDPHE for various hemp compliance panels and only five certified for every type of test, according to the department’s website.

Most of the companies on that list certified to conduct hemp compliance testing are familiar labs with large footprints, such as Eurofins, Kaycha Labs, Columbia Labs, SC Labs, InfiniteCAL and ACS Labs. Most of these labs are out of state and by the looks of it, only four independent, Colorado-based labs are certified so far: Aurum Labs, Gobi Analytical, Botanacor Labs and Minova Labs. Gobi and Minova, however, are not yet certified for pesticide testing, while Aurum appears to be certified for all compliance testing. Botanacor Labs, based in Denver, was certified back in June of 2021 to every compliance test except for pesticides.

“It’s difficult to compete with these large, private-equity-funded labs, but Aurum is passionate about serving the evolving hemp industry” Liz Mason, director of operations at Aurum Labs, said in a press release. “We are committed to staying on the scientific forefront to give the most comprehensive services to our clients.”

Pennsylvania Recall Overturned by State Courts

By Cannabis Industry Journal Staff
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Back in December of 2021, The Pennsylvania Department of Health sent emails to registered medical cannabis patients, notifying them of a safety review being conducted on ingredients found in cannabis vape products.

Then in February this year, the state’s health agency sent a third email. This one notified patients that they were recalling more than 650 products and ingredients. “As you know, the Department recently conducted a statewide review of all vaporized medical marijuana products containing added ingredients,” reads the email to patients. “After finishing this review, the Department has determined that certain vaporized medical marijuana products containing some added ingredients have not been approved for inhalation by the United States Food and Drug Administration (FDA).”

The recall generated a lot of controversy for the state’s medical cannabis market, leaving patients, dispensaries, processors and other cannabis businesses with little guidance from the state’s health department. Cannabis companies in Pennsylvania, like Curaleaf, Jushi and Trulieve, formed a coalition and sued the state’s health department in February, alleging that regulators ordered the recall preemptively and did so without going through the proper channels, according to the Philadelphia Inquirer.

On June 2, the coalition of cannabis companies won and a judge stopped the recall. The very next day, the health department took issue with the judge’s decision and filed an appeal with the PA Supreme Court. For now though, as the appeal makes its way to Pennsylvania’s top court, the recall is lifted and dispensaries can restock their shelves with vape products.

2022 Infused Products Virtual Conference: June Program

By Cannabis Industry Journal Staff
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2022 Infused Products Virtual Conference: June Program

Sponsored by Millipore Sigma, Berlin Packaging and Cannabis Safety & Quality (CSQ)

Click here to watch the recording

Agenda

Elevating Edibles: Defining the Next Cannabis Experience
Sam Rose, Director of Operations, Herve

Attendees will learn during this session:

  • Luxury edibles and form factor: Moving away from get high first and think about what you’re consuming second, a pivot from sugar filled, bad tasting edibles to delicious and refined ingredients. Non-juvenile form factors, healthier options, efficacy
  • Concentrates and infusion: Providing the consumer with the right high using the right ratios and concentrates. Bioavailability, highlighting the plant, absorption method (sublingual)
  • Giving the consumer what they NEED not what they WANT: We’re at a fragile point in time where people are either trying cannabis for the first time or experimenting with it again for the first time in a long time. We need to make sure these people have a good experience and not scare them away. High MG edibles and high % Flower is not the way to do this – the how high for cheap model is really toxic for the industry. We need to educate, we need to provide clean low dose edibles and more curated flower.

TechTalk: Millipore Sigma

Dr. Sunil P. Badal, Senior Scientist, Innovations/Advanced Analytical R&D, MilliporeSigma

Cannabis Beverages: The Rise of a New Market & a New Consumer
Christiane Campbell, Partner, Duane Morris, LLP

Attendees will learn during this session:

  • The current landscape and regulatory red tape surrounding cannabis beverage brands
  • Selecting and adopting a cannabis beverage brand
  • Protecting a cannabis beverage brand

TechTalk: Berlin Packaging

Julie Saltzman, Director of Cannabis Business Development, Berlin Packaging

One Symbol to Rule Them All! Harmonization is Finally Here!
Darwin Millard, Owner & Founder, TSOC LLC, ASTM Subcommittee Co-Chair

A picture is worth 1000 words, but with a hogbog of “universal” symbols, is something getting lost in translation? ASTM International’s new standard, ASTM D8441/8441M, Specification for an International Symbol for Identifying Consumer Products Containing Intoxicating Cannabinoids, serves to establish a truly harmonized international warning symbol. Learn about the significance and use of this all-important standard from one of the members of ASTM Committee D37 on Cannabis who helped developed it.

TechTalk: Cannabis Safety & Quality (CSQ)

Tyler Williams, Founder & CTO, Cannabis Safety & Quality (CSQ)

Evaluating the Safety of CBD – Data Needs
Dr. Steven Gendel, Principal & Advisor, Gendel Food Safety, LLC

Attendees will learn during this session:

  • Understanding how regulatory agencies think about safety for the ingredients in edibles
  • What we can learn from the EFSA data call
  • What is a realistic time frame for the process

Click here to watch the recording

Study Finds Only 7% of CBD Brands Conduct Proper Lab Testing

By Cannabis Industry Journal Staff
2 Comments

Leafreport released the findings from their expansive CBD testing study that revealed some pretty alarming results. According to their study, only 7% of CBD brands they sampled actually conduct legitimate contamination testing for pesticides, heavy metals and microbial contamination.

Leafreport is an Israeli company founded in 2019 that does product reviews, independent testing and provides educational resources for consumers. The company produces studies on CBD products in the market and reports their results on its website. Back in 2020, the watchdog company conducted independent lab testing on 22 different CBD-infused beverages and found a lot of inconsistencies with the actual amount of CBD found in the beverage and what the product’s label claimed.

In this latest study, finalized in late May of 2022, the consumer advocacy group found a lot of inconsistencies throughout the CBD market. For their study, they reviewed 4,384 products from 188 brands, with the goal of looking at overall transparency in the CBD products market. Judging by the results they share, the CBD market is unsurprisingly not very transparent.

Here are some highlights from this most recent study:

  • 20% of the brands reviewed didn’t carry out any purity tests to check for the presence of microbes, pesticides, or heavy metals. In 2021, 25% of the brands Leafreport reviewed didn’t carry out any purity tests.
  • 42% of brands test almost all of their products for potency (90%-100% accurate) and share their third-party lab results with consumers — the same as in 2021.
  • Only 12% of brands had all their products fall within acceptable potency variance limits.
  • 88% of brands that tested their products for potency had at least one product test beyond the 10% variance for potency, in comparison to 84% in 2021.
  • 28% of brands didn’t carry out any testing at all for pesticides (such as glyphosate), 26% didn’t test for the presence of any heavy metals (such as arsenic), and 24% didn’t test for microbes (like bacteria).
  • Two brands carried out no lab testing at all for either purity or potency, compared to 3 brands in 2021.

New Non-Profit Seeks to Provide Medical Education

By Cannabis Industry Journal Staff
1 Comment

The Center for Scientific Cannabinoid Information (CSCI) announced their launch on June 14. In a press release announcing their launch, the non-profit organization says they want to serve as a resource for healthcare professionals, psychologists, doctors, athletic trainers and others looking for information on the safety and efficacy of cannabinoids. The organization is focused on providing current, research-based information on cannabis.

The advisory board for the CSCI includes: Margaret Roche, a dietitian; Dr. Steven Salzman, a surgeon; Dr. George Gavrilos, a pharmacist; Joseph Cachey, an attorney and former hemp executive; Dr. David Kushner, a hospitalist; Dr. Bonni Goldstein, a physician; Dr. Kylie O’Brien, an integrative medicine specialist; and Dr. Jason Canner, an oncologist.

According to Dr. Steven Salzman, who is named as CSCI Chief Medical Officer, their organization will help fill the knowledge void in the healthcare space. “As a physician and practitioner working with cannabinoids, I’ve heard from many other practitioners who have been searching for reliable, evidence-based information on cannabinoids, and realized there was a void,” Says Dr. Salzman. “The CSCI fills this void by serving as a valuable resource where practitioners can access accurate, up-to-date information on CBD and other cannabinoids to help them gain a better understanding of this emerging field.”

The press release says that the organization will compile the latest research and clinical best practices for cannabinoid treatments and share the information with their community. The CSCI invites folks interested in medical cannabinoid research to check out their website and join their community to receive up-to-date scientific information.

2022 Cannabis Labs Virtual Conference: June Program

By Cannabis Industry Journal Staff
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2022 Cannabis Labs Virtual Conference: June Program

Sponsored by Millipore Sigma

Click here to watch the recording

Agenda

Protecting Consumer Health: The Need for More Stringent Lab Testing Rules

  • Milan Patel, CEO, PathogenDx

In this session, Milan Patel discusses:

  • The current problems with testing in the cannabis industry.  (Loose regulation and enforcement, allowing operators without scruples to endanger consumers, E.G. increasing moisture to products to increase weight, while also increasing risk of mold.
  • Potential solutions to this problem. (Bring more attention to the problem, states need to follow CGMP for recreational markets, companies should test at every step of the supply chain)
  • Why this matters (beyond protecting consumers, this will help protect the reputation of the industry and individual companies within it.)

TechTalk: Millipore Sigma

  • Maria Nelson, Technical Consultant, AOAC International

Why Use an Accredited Laboratory to Test your Cannabis 

  • Tracy Szerszen, President & Operations Manager, Perry Johnson Laboratory Accreditation (PJLA)

This presentation will educate listeners on the various aspects laboratories must meet in order to obtain ISO/IEC 17025 accreditation. This will include an overview of what the ISO/IEC 17025 standard mandates on laboratories, the accreditation process and timelines as well as best practices to become prepared for an assessment. Utilizing an accredited laboratory is critical to this market resulting in less retesting and reliable results to support safe products.

How Authenticity Testing Can Help Cannabis Businesses

  • Dr. Arun Krishnamurthy, NMR Spectroscopist, Purity-IQ

Attendees of this session will learn:

  • NMR and cannabis, an innovative analytical tool
  • How CAPS measures product quality
  • How to improve your bottom line

Click here to watch the recording

An Interview with Metrc CEO Michael Johnson

By Aaron Green
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Metrc combines a software platform with radio frequency identification technology to track plants and cannabis products from seed to sale. The track-and-trace model quickly became adopted by dozens of states to regulate their cannabis markets over the years, becoming an important standard in the industry.

With government contracts in nineteen states and counting, Metrc has become an omnipresent fixture in the United States cannabis market. States work with Metrc to provide their market’s traceability software for the entire supply chain, which helps prevent diversion to the black market, offers security and safety, aids in recalls and regulatory compliance tools.

We sat down with Michael Johnson, CEO of Metrc, to discuss retail challenges, regulations, cybersecurity, compliance and more.

Aaron Green: What are the major compliance challenges retailers face?

Michael Johnson: Major compliance challenges that retailers face will vary from state to state, however, we do see common themes across state lines. Financial services, for instance, has been a historical industry hurdle, as most big banks and credit card companies deny access to their network, making it difficult for retailers across the board – from bank account setup to limited customer and patient payment options to security issues when managing a cash-only retail business. The tides are starting to change with more credit unions and state-chartered banks opening their doors to the industry, along with new payment technologies for consumers to use instead of cash.

Michael Johnson, CEO of Metrc

We also see common operational challenges, including inventory management issues due to human error, lack of consistent quality assurance, and product theft. Retailers regularly face strict packaging, labeling, and product safety laws along with requirements for public health, storage and sanitation procedures and additional layers of security and surveillance.

Finally, access to compliant and retail-friendly technology systems is important as it can have a major operational impact. If a retailer can choose, selecting the right platform will manage all their operational needs – from ID-scanning at check-in to inventory management to banking – while properly integrating with their state’s track-and-trace technology. That’s a major benefit and one that Flowhub brings to the industry, alongside Metrc.

Aaron: How does compliance for retailers differ from cultivators and manufacturers?

Michael: It is important to note that proactive compliance sits at the center of cannabis regulation. Not only does it ensure the maintenance of license(s) and overall businesses, it helps expand and enhance the industry as a whole. As a highly regulated sector, transparent and consistent compliance initiatives provide the necessary foundation for a safe and secure environment, strengthening all levels of the supply chain and the industry at large.

All industry players must adhere to specific licensing and documentation requirements – an expired or illegal license may lead to serious fines and carries the potential of losing the business. In a handful of states, employees may need a license as well. Real estate also comes into play for all license holders, with special cannabis zoning restrictions, such as requiring distance limits between select institutions.

Since retailers are customer- and/or patient-facing, they may experience unique operational requirements compared to cultivators and manufacturers, including ID-checking policies, customer or patient delivery laws, additional packaging and labeling rules, strict dispensation regulations, in-store and on-shelf product placement, retail signage, and product promotion rules, and more.

Just like retail, cultivation and manufacturing compliance will also vary across states, but with a host of additional compliance requirements to keep in mind – for example, biological, chemical, and physical hazards are something that play a larger role at facility operations, which are subject to Occupational Safety and Health Administration (OSHA) rules. Other compliance issues to highlight on the cultivation and manufacturing side include state requirements on inventory reporting, security patrols, waste removal, and meticulous logging.

Aaron: What is your process for evaluating vendor integrations?

Michael: At Metrc, we maintain an efficient and consistent process for evaluating vendor integrations – an example of our commitment to ensuring the safety and security of legal cannabis markets.

First, integrators petition access into specific instance(s) by filling out a form with their basic information (business name, software name, contact info, etc.), along with any state-required agreements that must be signed. The integrator is then given a set of steps to perform in each instance requested. The steps provided are then evaluated by our API Support team. When all steps are performed accurately, the integrator is added into production and an API key is generated for their use. Licensees must also issue the TPI a User API key to gain access to the API. Overall, the process is a combination of meeting state, Metrc, and licensee requirements.

Aaron: Can you address the cybersecurity landscape METRC faces? What is METRC’s process for dealing with cybersecurity threats?

Michael: Cybersecurity threats are shared across industries and although not unique to Metrc or the cannabis sector, cybersecurity threats and the value of data continues to change. Maintaining strict safeguards around data privacy and the security is a top priority at Metrc and we keep a constant pulse on changes in the cybersecurity landscape, to maintain this safeguard for our customers, industry users, and Metrc as a whole.

Aaron: What trends in cannabis regulation are you following?

Michael: Cannabis rules and regulations are ever evolving, which is why it is vitally important for anyone in the industry to stay up to date. Examples of some we are following closely at Metrc include the SAFE Banking Act, Marijuana Opportunity Reinvestment and Expungement (MORE) Act, and Cannabis Administration Opportunity Act (CAOA); and more generally federal legalization, public health protection, and environmental regulations.

Aaron: What’s next for METRC?

Michael: We continue to expand our customer and user feedback loop to ensure our roadmap meets the unique needs of markets and an overall evolving industry/regulatory landscape. Examples include continued performance improvements, more robust analytics capabilities, user-driven functionality updates, and exploring the design of a more sustainable RFID tag.

An Interview with Flowhub CEO Kyle Sherman

By Aaron Green
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At its core, Flowhub is a point-of-sale and compliance software company, but they offer much more than that. After becoming the first company to integrate with Metrc in 2015, the platform quickly became a leading software company in the space.

The system helps dispensaries manage inventory, report sales data to regulators, manage payment processing, manage workflows and simplify compliance. Following a few stints at Dixie Elixirs, Weedmaps, and Neos Vape Pens where he saw the day-to-day inefficiencies of cannabis compliance, Kyle Sherman launched Flowhub about eight years ago.

As Founder & CEO, Sherman and his team have taken Flowhub to the next level, with over 1,000 dispensary partners processing $3 billion in annual sales. We caught up with Sherman to ask about compliance challenges facing the industry, 4/20 sales data, integration technology and more. 

Aaron Green: What are the major inventory and point-of-sale challenges that retailers face?

Flowhub Founder & CEO Kyle Sherman

Kyle Sherman: Cannabis has yet to be federally legalized and the industry remains a highly regulated environment that’s subject to a patchwork of state and local regulations. Dispensaries face an influx of challenges compared to traditional retailers due to strict compliance requirements. Cannabis retailers are required to report all sales activities and inventory movements to their state regulators, sometimes in real time. If physical inventory does not match what has been reported to regulators, their license is at risk for suspension. Maintaining accurate inventory records across systems (including point of sale, Metrc, and ecommerce menus) is one of the biggest struggles we hear from retailers.

In addition to compliance, lack of financial services and support from large banks and credit card companies is a big challenge for the cannabis industry. This means most transactions in the industry are limited to cash. Managing such large quantities isn’t easy and it puts dispensaries at risk of theft, both internally and externally. While cash alternatives like ACH are becoming increasingly accessible, some retailers are choosing partners with predatory financial terms or those that don’t operate in compliance.

Flowhub’s point of sale software enables a dispensary to provide best-in-class customer experiences without worrying about compliance. The software is purposefully built for the cannabis industry, focused on making the jobs of dispensary owners and staff members as streamlined as possible. Flowhub also helps dispensaries hide the complexities of a cash-intensive industry by allowing customers to use alternative forms of payments at checkout, like ACH and Point of Banking. Cannabis businesses should be able to transact as easily as if they were selling coffee and doughnuts.

Aaron: We’re about a month past 4/20, how was 2022 different and how can retailers prepare for next year?

Kyle: 420 2022 was the highest cannabis sales day in history! Dispensaries brought in twice the revenue compared to an average Saturday which is typically the busiest day of the week.

While ecommerce has become a major trend for dispensaries since the pandemic, traditional retail shopping is still by far the preferred mode of purchasing for consumers. With loosening COVID restrictions, 420 2022 saw a return to in-store shopping and in-person events. We also saw that while flower still stands as the most popular product category, customer product preferences are beginning to shift toward alternative options like edibles, beverages, vapes and concentrates.

To prepare for next year, retailers should analyze their 420 data to understand customer preferences. Dig into customer demographics to find out who was shopping, at what times, and for which products. This information can be used to curate a strategic marketing and execution plan in 2023. With many dispensaries offering similar products, it’s more important than ever to have a distinct experience that differentiates from the competition. Consider forming unique partnerships, ways to give back to your local community and how you can facilitate a shopping experience others cannot replicate.

At Flowhub, you can track your dispensary analytics from your smartphone with our mobile View app. Retailers can see real time performance metrics including sales data (track your sales, before and after-tax, by product category, average basket size, and total number of transactions), employee data (see top selling budtenders for the most recent day, week, month or quarter), and inventory data (view total identified inventory discrepancies by room, or see your most popular vendor and products at a glance). With data at your fingertips, you can stay on the pulse of your business and more adequately prepare for key dates and specific times of year, like 420.

Aaron: Flowhub was the first to integrate Metrc. What synergies were unlocked with this integration?

Kyle: Flowhub has always been involved in federal legalization advocacy. In 2014, I lobbied the CO Department of Revenue to build an open API to Metrc. Integrating with Metrc opened the door for cannabis operators to accelerate workflows, increase accuracy and simplify compliance. Prior to the API, tracking and reporting cannabis sales was painful. We were all handcuffed to manual pen and paper processes. Flowhub paved the way for other software companies to integrate to the Metrc API which is now the standard for track and trace systems in most legal cannabis markets.

Aaron: What’s next for Flowhub?

Kyle: Flowhub is strategically growing alongside the cannabis industry. We’re looking forward to supporting newly legal markets like New Jersey, where AU is now legal. We also recently integrated with Aeropay to offer dispensaries compliant ACH payments. Later this year we’ll have some major product developments coming out that I can’t disclose just yet but they’re very exciting! Stay tuned.