Cannabis processors and dispensaries in Colorado were hit with new rule changes over the weekend, going into effect on October 1st. The rule changes affect those producing edibles and dispensaries that sell retail and medical cannabis products.
The universal symbol required on all cannabis products in Colorado
As of October 1st, all cannabis edibles must be marked with the universal THC symbol, according to a bulletin posted by the Colorado Department of Revenue’s Marijuana Enforcement Division (MED). Both medical and retail cannabis products require labeling that includes a potency statement and a contaminant testing statement.
The rules also set “sales equivalency requirements” which essentially means a resident or non-resident at least 21 years of age can purchase up to one ounce of cannabis flower or up to 80 ten-milligram servings of THC or 8 grams of concentrate, according to the MED. The packaging must also include: “Contains Marijuana. Keep out of the reach of children.”
The universal symbol printed on products from Love’s Oven.
It seems that cannabis edible manufacturers have two clear choices for complying with the new rule requiring the THC symbol: They can use a mold to imprint the symbol on their product or they can use edible ink. Peggy Moore, board chair of the Cannabis Business Alliance and owner of Love’s Oven, a Denver-based manufacturer of cannabis baked goods, uses edible ink to mark each individual serving. The printer uses similar technology and ink used to print on m&m’s, according to Moore. “Baked goods are difficult to find a solution for marking them because they are a porous product, not smooth.” Complying with the new rules almost certainly means added costs for processors and edibles producers.
Moore said she updated all of their labels to include the appropriate information in compliance with the rules. “In terms of regulatory compliance, there have been some disparities for labeling and testing requirements between medical and retail cannabis products, however they are coming into alignment now,” says Moore. “The testing statement rule has been in place for some time on the retail side, but now we are seeing this aligned with both medical and retail markets.” This new rule change could be seen as a baby step in making the different markets’ regulations more consistent.
By Brett Giddings, Olivia L. Dubreuil, Esq. No Comments
As with any product, packaging has a vast range of sustainability considerations that should be accounted for in its design, development and use. Often the most visible component of any product, and certainly so for most forms of cannabis products, packaging is a key sustainability issue for the entire cannabis supply chain.
What is sustainable cannabis packaging and what does it look like? This can be a loaded question, but one we can revisit after considering the basic functions of packaging.
Cannabis packaging, and packaging generally, is designed to perform three basic functions: protection, preservation and promotion. If it does not adequately address these three areas then the chance of product failure, loss of consumer trust and increased waste is likely.
Let’s take a high level look at each of these:
Protection: Whilst cannabis is not currently travelling huge distances, like some of the food we consume, protection is key at each point of the supply chain. Inputs into the growing process often come packaged, flowers and such are packaged for shipping and storage, bulk-packaged cannabis is sent to dispensaries, extractors, etc, and ultimately re-packed into what will become the consumer-facing packaging. Importantly for cannabis, it may require an additional level of protection to ensure children are not able to access the contents.
Preservation: Like any consumable item, cannabis has a shelf life, and packaging plays a key role in preserving the usability of the product. Whether it is a chocolate, a cannabis-infused drink, or flowers, it is critical that each product maintains a certain level of quality and consistency.
Promotion: Packaging allows one part of the supply chain to communicate specific elements of a product to those further along the supply chain. The most obvious, and for cannabis probably the most important, is the communication of contents within a packaged item (labeling), such as the percentage of CBD in a gummy or origin of a particular bud. Packaging is also the reflection of a brand, an image.
Taking these basic elements into account, we can apply a framework for designing and choosing more sustainable packaging. This framework for cannabis packaging accounts for and balances four principles: Fit for purpose, efficient, low impact and re-usable.
Fit-for-purpose. Essentially, this involves making sure that the packaging adequately performs the ‘3-Ps’ above. Packaging commonly accounts for less than 10% of the energy inputs that have gone into a complete product (for example, a candy packaged in a foil-lined plastic wrap). If the packaging fails to protect and preserve the candy, then the energy (or the water, the material, the investment) embedded in the product it contains is wasted.
The second principle relates to material efficiency. Once the packaging works, it is then important to minimize material and resource inputs. Effectively designed packaging uses lighter-weight materials and reduced numbers of materials and components. It also reduces air space and maximizes transport yields.
The third principle involves using low-impact materials. Material inputs should come from non-controversial sources, such as verified/certified supply chains and suppliers that have been assessed to ensure appropriate sustainability-related issues are addressed. Wherever possible, consider renewable and recycled-content inputs, and those made using renewable energy.
Finally, cannabis packaging should be re-usable, recoverable and/or recyclable at end of life. Consider materials and design formats that can be reused multiple times, and packaging that can be recycled and composted by consumers in the systems readily available. Linking back to the third ‘P’, Promotion can be used to make sure that your packaging clearly communicates what someone should do with your packaging. If it is recyclable, returnable, reusable or plantable, tell them it is and how to proceed.
Bear in mind that the most sustainable packaging options are often the result of thinking outside the box. The design process of your packaging should include brainstorming and researching outside of your own industry. What are new and innovative solutions, new materials, new ways to think about product conception that could negate the need for unnecessary packaging elements. New and innovative packaging solutions can raise your business’ profile, catch consumers’ attention and attract investors. It showcases your business as a forward-thinking one.
Packaging sustainability can look different for each and every cannabusiness. It is important to make sure that the four principles are part of your packaging selection/design process. As with any other sustainability issue, it is best to start thinking about packaging early on, and considering packaging as a part of the actual product system.
If you are not thinking about packaging sustainability, be assured that regulators, consumers and your industry peers are. Make sure you are driving the discussion about packaging, rather than being driven by those who may not fully understand your packaging needs.
Polyploidy is defined as containing more than two homologous sets of chromosomes. Most species are diploid (all animals) and chromosomal duplications are usually lethal, even partial duplications have devastating effects (Down’s syndrome). Plants are unique as in being able to somewhat “tolerate” chromosomal duplications. We often observe hybrid vigor in the F1, while the progeny of the F1 (F2) will produce mostly sickly or dead plants, as the chromosomes are unable to cleanly segregate.
Polyploids are generated when chromosomes fail to separate (non-disjunction) during pollen and egg generation. The chromosomes normally exist in pairs, thus having only one, or three, interferes in pairing in subsequent generations.
Chromosomal duplications, either one chromosome or the whole genome, happen frequently in nature, and actually serves as a mechanism for evolution. However the vast majority (>99.99%) results in lethality.
Thus there is polyploidy in Cannabis, and a few examples are supported by scientific evidence. The initial hybrid may show superior phenotypes and can be propagated through cloning, but there may be little potential for successful breeding with these plants.
Epigenetics and Phenotypic Consistency in Clones
One mechanism of turning off genes is by the DNA becoming physically inaccessible due to a structure resembling a ball. In addition, making molecules similar to DNA (RNA) that prevents expression of a gene can turn off certain genes. Both mechanisms are generally termed epigenetics.
These mice are genetically identical, yet their coat color phenotype is variable. Something above or beyond (epi) the gene (genetic) is controlling the phenotype.
Epigenetic regulation is often dependent on concentrations of certain proteins. Through the repeated process of cloning, it is possible that some of these proteins may be diluted, due to so many total cell divisions and epigenetic control of gene expression can be attenuated and results in phenotypic variability.
Sexual reproduction, and possibly tissue culture propagation, may re-establish complete epigenetic gene regulation, however the science is lacking. Epigenetic gene regulation is one of the hottest scientific topics and is being heavily investigated in many species including humans.
Hermaphrodites and Sex Determination
Cannabis is an extremely interesting genus (species?) for researching sex determination. Plants are usually either monoecious (both male and female organs on a single plant), or dioecious, separate sexes. Sex determination has evolved many times in many species. Comparing the mechanisms of sex determination in different organisms provides valuable opportunities to contrast and compare, thereby developing techniques to control sex determinations.
The sex organs on a Cannabis plant identified.
Cannabis is considered a male if it contains a Y-chromosome. Females have two X chromosomes. Even though female Cannabis plants do not have the “male” chromosome, they are capable of producing viable pollen (hermaphrodite) that is the source of feminized seeds. Therefore, the genes required to make pollen are NOT on the Y-chromosome, but are located throughout the remainder of the Cannabis genome. However, DNA based tests are available to identify Male Associated Sequence (MAS) that can be used as a test for the Y-chromosome in seedlings/plants.
Natural hermaphrodites may have resulted from Polyploidization (XXXY), or spontaneous hermaphrodites could be a result of epigenetic effects, which may be sensitive to the environment and specific chemical treatments.
Feminized seeds will still have genes segregating, thus they are not genetically identical. This shouldn’t lead to a necessary decrease in health, but could. A clone does not have this problem.
The other issue is that “inbreeding depression” is a common biological phenomenon, where if you are too inbred, it is bad…like humans. Feminized seeds are truly inbred. Each generation will decrease Heterozygosity, but some seeds (lines) may be unhealthy and thus are not ideal plants for a grower.
GMO– The Future of Cannabis?
Is there GMO (genetically modified organism) Cannabis? Probably, but it is likely in a lab somewhere…deep underground! Companies will make GMO Cannabis. One huge advantage to doing so is that you create patentable material…it is unique and it has been created.
The definition of a GMO is…well, undefined. New techniques exist whereby a single nucleotide can be changed out of 820 million and no “foreign” DNA remains in the plant. If this nucleotide change already exists in the Cannabis gene pool, it could happen naturally and may not be considered a GMO. This debate will continue for years or decades.
Proponents of GMO plants cite the substantial increase in productivity and yield, which is supported by science. What remains to be determined, and is being studied, are the long-term effects on the environment, ecosystem and individual species, in both plants and animals. Science-based opponent arguments follow the logic that each species has evolved within itself a homeostasis and messing with its genes can cause drastic changes in how this GMO acts in the environment/ecosystem (Frankenstein effect). Similarly, introducing an altered organism into a balanced ecosystem can lead to drastic changes in the dynamics of the species occupying those ecological niches. As in most things in life, it is not black and white; what is required is a solid understanding of the risks of each GMO, and for science to prove or disprove the benefits and risks of GMO crops.
California’s tradition of social and political experimentation has made it the national leader in areas ranging from environmentalism and social justice to technology. Now it is poised to make the same far-reaching transformations in the cannabis industry.
As one of the world’s top ten economies and the nation’s most populated state (having a population of 38 million), California could propel the decriminalized recreational cannabis industry to $6.5 billion in 2020, according to a report by ArcView Group and New Frontier.
At the same time, California is in the process of moving from state to local zoning control, as far as issuing the OK to become licensed, effective Jan. 18, 2018. This means collectives and dispensaries have to obtain local approval before they receive a state license. It also puts greater pressure on gray market operations to become licensed.
On the regulatory front, the state is also heading toward a historic vote in November 2016 in the form of Proposition 64. This will open up the customer base to all Californians. It has a similar licensing path as the medical regulations the Governor signed last year, except it allows vertical integration between growers and dispensaries, which is not allowed under the medical regulations, except in very limited circumstances.
Credit: cannabisbenchmarks.com
“My bet is the demand will outweigh the supply for a while and the legal cannabis businesses that are licensed by the locals and have their supply chain in place will end up profiting,” says Andrew Hay of Frontera Accounting, a cannabis-focused CPA firm based in California under the umbrella of the Frontera business group.
A Huge Market Awaits
If the Adult Use of Marijuana Act passes and is enacted by 2018, the state’s legal cannabis sales are projected to hit $1.6 billion in their first year, the ArcView and New Frontier market report said. Even without the new expanded legislation and working amid a fractured medical cannabis regulatory environment, California now accounts for about half of all the legal cannabis sales nationwide, according to the report.
At the same time, the state is well positioned to capitalize on new technology and financing from Silicon Valley in terms of human talent, money and the applications of new technology in both the medical and recreational sectors. One driving force will come from the Adult Use of Marijuana Act, which mandates that 10 percent of sales tax collected on cannabis sales be re-directed towards medical research and drug abuse programs.
In addition, according to Marijuana Politics, the expected tax windfall is slated to be divided up among a variety of programs: $10 million to public universities, $10 million to business and economic development, $3 million to California Highway Patrol and $2 million for medical cannabis research at UC San Diego. The remainder will be divided between youth drug education and prevention (60%), environmental protection (20%) and law enforcement (20%).
This flow of new funds is expected to propel research into biomedical and applied research, as well as nutraceuticals, or products derived from food sources with extra health benefits in addition to the basic nutritional value found in foods. The driving new ingredients in these products will be derived from cannabis.
Consolidating the Recreational and Medical Markets
Californians will vote in November 2016 to legalize the sale of recreational cannabis. This vote will have serious repercussions since it could mean that the delineation between medical and recreational markets will disappear.
“Should California vote to legalize recreational use this November, we expect implementation of a combined regulated market as soon as 2018,” says Matt Karnes, founder of GreenWave Advisors. Karnes says a merged California market is significant, not only because of its sheer size (it represents about 55% of the U.S. market), but also because it “would mark the first state to implement regulations for a fully legal market without initial oversight of medical use purchases. This could serve as a catalyst for similar action in Nevada, Arizona, Massachusetts and Maine which will also vote to fully legalize cannabis this November.”
In the report, “Mid Year Update: The Metamorphosis of the U.S. Marijuana Market Begins,” the firm said it projects cannabis sales in the U.S. to hit $6.5 billion for 2016. The firm forecasts that by 2021, revenues should reach about $30 billion. This assumes that marijuana will be legal in all 50 states to various degrees. The firm also notes that this year’s election choices can potentially generate $4.2 billion in incremental retail revenues by 2018 and $5.8 billion by 2021.
The Impact on Branding, Music and Culture
As the nation’s culture manufacturing center for films, TV and music, the cannabis business is also expected to shape artistic direction for years to come. Jeff Welsh is a partner at Frontera, a business group that holds a suite of services including the Frontera Law Group, Frontera Advisors, Frontera Accounting and Frontera Entertainment, which is headquartered in Sherman Oaks with a specific focus on the cannabis industry. Welsh says he sees more partnerships between the cannabis industry and mainstream entertainment outlets. Welsh recently signed Chris Sayegh, the herbal chef who uses liquid THC to create elegant restaurant-quality food, in a deal with the United Talent Agency. This marks a cultural breakthrough that links the cannabis and culinary industries.
Because Los Angeles is the largest market, this cultural nexus is expected to contribute more new alliances between celebrity branding and cannabis products.
Luke Stanton, founder and managing partner of Frontera, also said less stringent regulations in the cannabis legal environment could find their way into the regulations and laws of other states that often adopt California laws as templates for their own state. “We have seen this happen in other areas, such as environmental and criminal justice, so it would not be surprising to see our state regulations and policies being enacted in states nationwide, and even in some countries outside of the U.S.,” Stanton says.
California has also been the site of innovative marketing efforts between cannabis patients and growers. The Emerald Exchange held in Malibu, was the first event in cannabis that allowed a direct conversation between Northern California cultivators and the Southern California patient community. According to Michael Katz of Evoxe Laboratories, a California cannabis product manufacturer, “Often the farmers don’t have a chance to really engage with patients, and we wanted everyone to be able to come together, discuss practices, provide information and ultimately support the entire ecosystem of the cannabis community.”
Caveats for Investors
While the California market looks very attractive, it may be the siren’s call for investors until issues related to finding solid companies and taxation are settled.
Since more operations will have to become fully compliant with state regulations, these businesses will face more significant expenses to meet security, taxes, licensing fees, accounting and reporting operations requirements. This could drive smaller operations out of business or force them to become more efficient.
In addition, California’s huge potential and changing regulatory environment is attracting large growers into the state that will compete with smaller, established operations. According to Jonathan Rubin, chief executive officer of Cannabis Benchmarks, these regulations affecting commercial growing vary greatly by municipality. For instance, Mendocino and Humboldt counties have enacted measures to protect local growers, while other counties have not, Rubin says.
Credit: cannabisbenchmarks.com
In addition, cannabis wholesale prices have been falling due to changes in cultivation methods and variations in supply.
Andrew Hay, a CPA at Frontera Accounting, believes investors should make sure there is a solid plan behind any cannabis company investment. “I’ve seen significant money thrown behind ‘cannabis brands’ with no substance,” Hay says.
“In these cases, the winners are the growers, manufacturers, distributors and dispensaries that are licensed (or are in the process of getting licensed), who pay their taxes and have a successful track record. I wouldn’t invest until you see the underlying operational structure, their tax/regulatory compliance and financials that prove there have been sales,” he says.
Another major problem for investors lies in the IRS accounting regulations. “The biggest hurdle I see facing the California cannabis business is the IRS / IRC 280E, which only allows cost of goods sold deductions. Every cannabis business should be planning their operations around IRC 280E, as there is no way to legitimately survive in the cannabis industry without doing so,” according to Hay.
“IRC 280E is here to stay regardless of California legalization. It is up to the Federal government to fix this issue, which I don’t see happening any time soon. Every cannabis business should hire a CPA and business attorney that work well together to devise a cost accounting strategy to minimize IRC 280E and its impact. Without this, an investor’s profits can go up in smoke to the IRS,” Hay says.
Update: On September 21, 2016, Governor Rick Snyder signed the bills into law, regulating the market officially.
The Michigan House of Representatives voted in concurrence with last week’s Senate vote, approving a series of bills that would establish a regulatory framework for the state’s medical cannabis industry, according to a Michigan Live article. Governor Rick Snyder is expected to sign the bills into law very soon.
The package of bills approved today includes provisions for a 3% tax on retail income, a licensing system for growers, dispensaries and patients as well as establishing a traceability system. The bills, if signed into law, would institute a regulatory framework akin to other states that have legalized cannabis recently. Packaging, labeling and testing requirements for THC, other cannabinoids and contaminants are included in the overhaul.
In 2008, voters approved the legalization of medical cannabis, since then however there has been little action from the state on regulating the safety, sale or distribution of cannabis. The bills are meant to eliminate the previous ambiguity in the laws surrounding the state’s patients, caregivers and dispensaries and establish a legitimate system for patients to access medical cannabis.
Stephen Goldner, Esq, founder of Pinnacle Laboratory and Regulatory Affairs Associates
According to Stephen Goldner, founder of Pinnacle Laboratories in Michigan, the market will get regulated into five discrete categories for licensing: growers, dispensaries, testing labs, processors, and transporters. “The basic legislation that will become law is very sensible and almost completely mirrors what has already been passed by the Michigan House, thus rapid conformance is nearly guarantied,” says Goldner. “There is a clear intent to require all products to be tested before sale, and setting up an integrated reporting system by product batch code from production, through transport and to final sale.” Goldner believes this comes with an overriding intent to establish standardization across the board, and points to the Foundation of Cannabis Unified Standards (FOCUS) for ready-to-implement, vetted standards.
“Michigan requiring method validation and other requirements, such as adverse event reporting, thereby builds in greater assurance of product safety and compliance,” says Goldner. Pinnacle Labs has been preparing for this day for quite some time. “We have invested the past 18 months preparing for exactly this legislation,” says Goldner. “We look forward to helping the medical cannabis patients in Michigan get cost-effective, desirable products delivered legally and easily.”
If passed, this kind of legislation will present a litany of challenges for the state and all stakeholders involved. Growers dealing with contamination issues previously will now have to navigate legally mandated testing requirements. According to Goldner, the greatest challenges are those that other states already deal with. “The greatest challenge for dispensaries and other business in the chain of distribution is the lack of adequate banking services,” says Goldner. The state will have to hire inspectors, establish robust oversight and review applications while maintaining a smooth transition to a regulated market.
Until Gov. Snyder signs them into law, the state’s cannabis industry and the 203,000 patients remain in a state of uncertainty.
Last week, news of problems facing Oregon’s cannabis laboratory accreditation program surfaced, leading some to speculate about possible delays for the recreational cannabis market. According to The Register-Guard, ORELAP administrator Gary Ward believed the program was “on the precipice of collapse.”
According to Jonathan Modie, spokesman for the Oregon Health Authority (OHA), the Oregon Environmental Laboratory Accreditation Program (ORELAP) was anticipating over 30 cannabis laboratories applying for accreditation and they doubled their staff from two to four to prepare for the uptick in applications.
In June, the agency had zero labs applying for accreditation but within two months, 37 labs applied. However, the Oregon Department of Environmental Quality (DEQ) just provided three additional staff members on Monday to help with the application process, says Modie.
Some believe the issues could mean the state may not have enough accredited labs by October 1st, when the recreational cannabis market is expected to go into full swing. “It is difficult to say exactly how many labs we can accredit by October 1,” says Modie. “We have seven labs today which would bring it to nine labs waiting for assessment, but our goal is to get as many labs assessed and hopefully accredited as soon as possible.”
With the additional staff members, Modie is hopeful this will jumpstart the program. “We really appreciate our collaboration with the DEQ and look forward to boosting our capacity a bit to help us get through this busy time,” says Modie.
Part of the reason some laboratories might have trouble meeting prerequisites is simply because the requirements are very strict. “The process involves submitting a quality manual, standard operating procedures, method validation, submitting proficiency testing data and finally undergoing an ORELAP assessment by our staff, so it is a very rigorous process,” says Modie. “This speaks to our concern for making sure they have the right systems in place so public health is protected.” Modie said there were at least three labs that did not pass the assessment.
Roger Voelker, lab director at OG Analytical
Bethany Sherman, chief executive officer of OG Analytical, believes the hardest part of the process involves getting accredited for testing pesticides. OG Analytical, based in Eugene, Oregon, has already received their accreditation, one of the first to do so. “The pesticide testing requires our most expensive instrumentation and the sample preparation for testing pesticides is the most time consuming,” says Sherman. “Not only does it require very specific instrumentation, it also requires a real know-how and expertise to ensure we are cleaning samples appropriately, minimizing background noise and looking at the pesticides in trace quantities.” According to Sherman, laboratories are also left to their own devices to develop methodologies specifically for the cannabis matrix, adding to the difficulties.
Rodger Voelker, Ph.D., lab director at OG Analytical, seems confident that the state will be able to handle it. “It is a relief they were able to get some resources from the DEQ and I think the state will not allow a program with this kind of importance to fall apart,” says Voelker. He believes after this initial phase of putting the program in place, the workload will go down. “It is easier to maintain a program than it is to implement,“ adds Voelker. In his eyes, it is crucial for the program to require rigorous science. “People are forced to reconcile that there is a tremendous amount of controls to be considered to produce legally defensible data and I think it is great that the requirements are so strict.”
The OHA’s job is to essentially safeguard public health and they do not want to leave any stone unturned when it comes to potential contamination, says Modie. “This is not just about getting as many labs accredited as possible, this is about protecting public health.”
On August 11, 2016, the widely anticipated Drug Enforcement Agency (DEA) announcement on federal cannabis policy yielded fairly anticlimactic results. According to the statement, the federal agency denied two petitions to reschedule cannabis under the Controlled Substances Act (CSA). The U.S. Food and Drug Administration (FDA) and the National Institute on Drug Abuse (NIDA) conducted a scientific and medical evaluation that deemed cannabis “does not meet the criteria for currently accepted medical use in treatment in the United States, there is a lack of accepted safety for its use under medical supervision, and it has a high potential for abuse.” The announcement reiterates the agency’s previous statements on the matter, stating that they believe clinical trials under the investigational new drug (IND) applications and the drug approval process are how the FDA can assess the safety and effectiveness of cannabis-derived medicine.
This avenue for bringing a cannabis-based drug to market is extraordinarily cost-prohibitive, allowing only pharmaceutical companies with deep coffers in the space. The DEA did however make one announcement in the statement that has the potential to lift many barriers to researching the plant’s medical value. The policy change allows more institutions to grow cannabis for research, which was previously allowed only at the University of Mississippi under a contract with NIDA. This is a very significant policy change that could be viewed as a step in the right direction. There is plenty of research currently that proves cannabis’ medical value and its safety and efficacy, but allowing more research opportunities signals that the DEA could be open to revisiting a rescheduling recommendation in the future.
One can speculate endlessly about when the DEA may reschedule cannabis, but in reality, no one knows when that might happen, no one knows what a new administration would do, if Congress would act on it or if the courts would. It seems even the FDA and DEA are sitting on their hands as the federal government does what they do best– inaction.
However, one important ruling in the U.S. Court of Appeals for the 9th Circuit highlights the baby steps taken toward some form of federal acceptance of legal cannabis. The court ruled that the Department of Justice couldn’t prosecute individuals in states where cannabis is legal. More specifically, the court ruling “prohibits the Department of Justice from spending funds to prevent states’ implementation of their medical marijuana laws.” The ruling basically reaffirms the Rohrabacher-Farr amendment, which states that the DOJ cannot interfere with states where cannabis is legal, but this time also for those individuals complying with state law.
The DEA’s inaction on rescheduling cannabis should not be perceived as a loss to the legalization movement, rather as an upholding of the asinine status quo. Policy change in the United States is an arduous and very slow process. These things take time. One can look to the same-sex marriage movement and find striking similarities to the cannabis legalization movement. For example, Massachusetts and California were some of the first states to introduce legislation legalizing same-sex marriage and are also some of the first states that have introduced legislation legalizing cannabis. These states that are typically drivers of national policy have opportunities to pass important ballot initiatives this November that could have ripple effects throughout the country. Five states have ballot initiatives for recreational legalization and potentially up to eight states with initiatives for medical legalization, all being voted on this November.
What can the average citizen do to help with progress in cannabis legalization? For starters, you can vote. If you live in a state that has a ballot initiative for legalizing cannabis, show up at the polls and make your voice heard. If you live in a state where no such ballot initiative exists, you can still take action to get cannabis legalized. You can sign this petition or write your member of Congress to support the Compassionate Access, Research Expansion, and Respect States (CARERS) Act (S. 683). The CARERS Act, among many other important changes, would most notably reschedule cannabis to Schedule II.
So not all is lost with the DEA’s inaction. As more states legalize cannabis, we are seeing a rising tide lift all boats.
David Goldstein, co-founder and chief executive officer of PotBotics, launched a medical cannabis recommendation engine called PotBot with the goal to better inform patients to target their conditions with more accurate recommendations based on scientific research. “This is a tool to help move the market away from the thousands of strain names that are mainly just marketing or branding indicators,” says Goldstein. The medical application is designed to inform patients on peer-reviewed data, research on the treatment of their ailments with cannabis and the specific cannabinoids that are necessary for treating their condition. They began development on PotBot in October of 2014, launching the beta version to 400 users in November of 2015. On April 20th, 2016, Goldstein launched officially in the Apple Store, and the program will be available on Android in July.
David Goldstein (left) alongside co-founder, Baruch Goldstein (right)
Rather than focusing on strain names, PotBot focuses on the cannabinoid values to help patients gain an understanding of the correlation between which compounds might best target their condition. “This is a great tool for patients trying to familiarize themselves with what strains might work best,” says Goldstein. “For example, insomnia patients generally need cannabis with higher CBN levels, so we first educate the patient on cannabinoid ranges to shoot for and what strains might help. PotBot would recommend the strain Purple Urple because it is an indica found to have higher CBN values,” adds Goldstein. The program goes into great detail with the patient’s preferences including everything down to consumption methods so they know why it might recommend certain strains.
A screenshot showing a recommended cannabinoid ratio for a patient
The recommendation tool is accessible via kiosks at dispensaries, on a desktop version for the computer as well as on the Apple Store for iPads and iPhones. “I do not see it as a way of replacing budtenders, rather supplementing them with knowledge,” says Goldstein. PotBot is designed as a tool to supplement the budtender’s understanding of cannabis, so the budtender does not need to know everything off the top of their head or recommend strains based on anecdotal information, according to Goldstein.
Goldstein’s team at PotBotics performed extensive research prior to launching PotBot, spending two years doing strain testing to develop the program. “There is currently no regulatory body [for strain classification] so we took it upon ourselves to work with the best testing laboratories for truly robust analyses and properly vetted growers to get the most valid data,” says Goldstein. “The current strain classification system and nomenclature is rather unscientific so we focus on cannabinoid values and soon we will be able to incorporate terpene profiles in the recommendation.” Moving away from the common focus on taste, smell and other qualitative values, they focus on medical attributes of cannabinoid profiles because they have the most peer-reviewed research available today.
As an OEM, the company designed the tool to work with each dispensary’s inventory, to provide recommendations for strains that a patient can access on site, however anyone can access the recommendation tool for free at PotBot.com. Goldstein’s company and their mission represent an important development in the cannabis industry; this could begin a key transition from thousands of understudied strain names to a more scientific and calculated method to treating patients’ conditions with cannabis.
As many probably already know, last month the DEA announced that the organization was going to reconsider its position on cannabis and would come to a decision about whether or not to reschedule cannabis on The Controlled Substance Act (CSA) by June of this year. Many would say this is long overdue, considering the DEA has cannabis listed as a Schedule I drug, the same as heroin and LSD.
Rescheduling cannabis to Schedule II would place it in the same category as Vicodin, cocaine, methamphetamine, Adderall, oxycodone, and many more. These substances are defined as drugs with a high potential for abuse, with use potentially leading to severe psychological or physical dependence. However, they are recognized as having some potential medical benefits.
If cannabis were to become a Schedule II drug, it would allow further research on the plant. This could be beneficial to the industry because further medical research would finally provide the scientific validation that cannabis does have medical benefits and that it should be accepted as a form of medicine.
Those benefits come with a steep cost.
If cannabis becomes Schedule II it means the federal government finally sees cannabis as a plant (drug) that can provide some medical value. Which, at face value, is good because that is what many advocates have been fighting for. On the other hand, the only reason that larger pharmaceutical companies have largely kept out of the industry so far is because it is a Schedule I drug and the government did not officially recognize that it had any medical value. If this were to change, there is no reason for those pharmaceutical companies to continue watching from the sidelines. There is also no industry better fit than the pharmaceutical industry to run, manufacture, control, and profit from medical cannabis. The infrastructure is already in place.
There is also not another industry that has the money and the historical relationship with the FDA like the pharmaceutical industry. If the FDA were to regulate cannabis, it would have to regulate every single product on the shelf of every single dispensary, which would require more stringent lab testing guidelines. Just because one of your brownies made it through the FDA regulation process, does not mean the cookie next to it will. Entering into this process would take companies years to complete and cost more than $1 billion per product. Think about how many products some dispensaries have. Think about the number of different strains that dispensaries carry. That requires years of testing and multiple billions of dollars, just for the strains.
Big Pharma is positioned perfectly to come in and take control of the entire process if this happens. It will be a mad rush from all pharmaceutical companies to come in and quickly obtain market share. I know that as an industry we think we are seeing a lot of money in sales and profit, but compared to the pharmaceutical industry, it is merely a drop in the bucket. These companies will easily, and willingly, out-spend every company currently in the industry to the point where we can no longer compete. All the work that advocates and business professionals have put in to get the industry to where it is today could be lost.
Schedule II status would also turn the adult-use industry into utter chaos. The only reason we are able to have an adult-use market right now without the interference of the FDA is because cannabis is federally illegal. If cannabis is moved to Schedule II it will be recognized by the government, which means the FDA will have to come in and start the approval process for every product on the shelf. How smoothly do you think that will go for the adult-use retail centers in the industry? The cost alone will force shops to close. There is also not another substance that has a Schedule II classification that we have an adult-use industry for. Could cannabis be the first? I would not want to take that chance with the government or have to go through that process as an adult-use cannabis business owner.
When discussing this matter with several colleagues, some would ask “But what about now? We are in direct violation of the federal law right now, and they are leaving us be.”
Yes, that is for the most part true, but it is true because cannabis is now a Schedule I, federally illegal drug. Meaning the government does not even recognize it. The FDA will not regulate anything that is not recognized by the federal government because they are a federal agency. If the FDA were to implement regulations and an approval process, that would mean that a federal agency is recognizing cannabis as a consumer product. Right now that goes directly against the government’s public stance on the issue. And pharmaceutical companies cannot start selling a drug that is federally illegal and has been classified by the government as having no medical value. But as soon as the government recognizes cannabis as a form of medicine, it opens the doors for these organizations to get involved because it is justifiable now.
If that were to happen all the money that has been generated in this industry, and has made several people very wealthy and successful, will slowly, but surely get stuffed into the pockets of Big Pharma, the FDA and the government.
In my mind, rescheduling cannabis to a Schedule II substance will create more issues for the industry than it will benefits.
If the government were to take any stance on cannabis, it should completely declassify it. It should not be listed on any type of controlled substance list by the government. It is a natural plant, not a man-made substance. If the government will not declassify cannabis, I would rather them keep it as a Schedule I substance. At least this way it protects the industry and keeps it as is, belonging to the people.
Opportunities like the cannabis industry are once in a lifetime. It would be a shame to see it taken by Big Pharma, or controlled by the government.
For those that have made it this far down on this post, please understand that this is a worst-case scenario. A very drastic, but realistic outcome down one of the many paths the industry could go. But the motto in this industry since the beginning was, “prepare for the worst, and pray for the best.” I think we should follow those instructions now more than ever.
Editor’s Note: This article represents the opinion of the author, not necessarily that of Cannabis Industry Journal. We invite all readers who agree or disagree with the author’s opinion to join the conversation in the comments section below the article.
The average commercial cannabis cultivator seems to be following the modern agricultural paradigm. That model is based on questionable and, one might say, ineffective soil systems management.
In the high-yield cannabis world, amidst decades of prohibition, following the lead of the modern agricultural model has resulted in the adoption of cultural practices that go something like this: Use and destroy the soil, then dispose of it once it is rendered lifeless and useless due to repeated heavy applications of chemical fertilizers, pesticides, and other poisons.
(Left) unimproved site soil next to (right) improved site soil. Notice the root mass developing on the right
Certainly conventional agricultural food production and the soil management systems underpinning them are faltering, evidenced by soil systems deteriorating many times faster than they are being improved. This qualifies as a failure in my book.
What will be the fate of profit margins, sustainability and medicine in the cannabis industry if we continue to follow blindly in the footsteps of chemical agriculture? Perhaps it is time to turn over a new leaf.
Well…world agricultural production accounts for about three-quarters of the soil erosion worldwide. This steep decline in arable soil is occurring during a time when the world’s demand for food is rapidly increasing. It is estimated that the world will need to grow 50% more food by 2050, and it is important to note that, the total volume of food necessary, remains relative to the nutrient density of the food.
Time for a radical solution, and cannabis can lead the way.
Currently, cannabis is the most profitable crop per land area and very likely the most resource-consumptive crop grown (due to the current legal and regulatory climate and thus limited supply vs. demand).
As the cannabis industry continues to grow, now more than ever we have the opportunity, and I believe the responsibility, to cultivate in ecologically mindful ways, improve the end product and it’s positive impacts, increase both short-term and long-term profits, decrease or eliminate waste and lower the carbon footprint of cannabis cultivation operations.
A cover crop under trellis’ with cannabis plants
Most importantly, we have the opportunity to fund, implement and lead the way in research and development of sustainable, medical, phytonutrient-dense crop production methodologies.
Only by implementing more rigorous scientific methods to cannabis cultivation can we hope to provide truly meaningful improvements in and contributions to the fields of agriculture, science, medicine and human health.
While dumpsters of potting soil continue to roll off to the landfill, complex health and human science and the cultivators truly engaged in science will continue to provide meaningful data regarding plant compounds and what factors influence the best outcome for the desired end product.
The same crop pictured above, now two weeks into flowering, using cover crops
I am willing to bet that what is best will not be coming from the business models employing antiquated, wasteful and destructive cultivation strategies, and that in due time these models will fade into distant memories.
This is the first in a series of articles, in which we will explore topics related to the pursuit of high yield, phytonutrient-dense “high brix” cannabis production.
The next article will provide a historical and geologic context to the cannabis plant, as viewed from the scope of soil biology and the progression of ecosystems and soil types, and how maximized genetic expression, through maximized soil and plant health influence the production of high quality cannabis.
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