Tag Archives: operation

What Cannabis Businesses Need to Do to Adapt to COVID-19

By Arthur Gulumian
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How COVID-19 Impacted Cannabis Businesses

Before jumping into what cannabis businesses can do amid this pandemic, it is crucial to explore the specifics behind how the virus impacted the industry as a whole. From a surface level, it seems obvious what happened: dispensaries had to implement social distancing protocols, require both customers and employees to wear masks and limited the number of customers that can be present on the point-of-sale floor room. But COVID-19 did not merely make shopping experiences a tab bit inconvenient.

Cannabis producers, and especially those involved in manufacturing cannabis goods, experienced an apparent disruption in their production schedules. If the metals and plastics were sourced from Wuhan, Shenzhen or any other dense industrial area in China, supplies suddenly stopped coming, and producers were left with limited production options. Businesses did not consider the value of having various vendors and instead put all their stock in one source. A disruption in production inherently impacts dispensaries.

COVID-19 impacted more than just supply chains, however. For instance, investors are now less likely than before the pandemic to invest in early-stage cannabis companies. Competition for capital now far outweighs the supply for cannabis companies, and we have seen (and will continue to see) a drop in company valuations. Indeed, COVID-19 is affecting more than just currently existing operators but those yet struggling to create cannabis businesses of their own.

Vendors & Supplies

A broad survey conducted by the Institute for Supply Management (ISM) between February 22, 2020 and March 5, 2020 found that 75% of U.S. companies had experienced supply chain disruption as a result of the COVID-19 outbreak. An estimated 90-95% of all components utilized in cannabis vaporizer pens were sourced from manufacturers in Shenzhen, China. In contrast, very few companies used domestic manufacturers. While this is just one example, it is equally important to note that cannabis-specific equipment and supply shortages were not the only factors that disrupted cannabis businesses. Shortages of personal protective equipment (PPE) presented challenges for cannabis dispensaries, producers and manufacturers that continued to operate during the “shelter in place” orders.

Operators must establish a resilient supply chain. Do not simply limit your options to one specific region, as this can be a costly mistake. Operators must cultivate an in-depth understanding of their supply chain beyond critical suppliers and their stress points; they need to develop and follow a systematic supply process that takes potential disruptions and stress points into account. When vetting potential vendors, always ask detailed questions that elicit evidence-backed responses. Ask vendors where they source their materials from, whether they have any history of experiencing disruptions in their supply chain and what kind of setbacks they have suffered as a result of COVID-19.

Investing in Your Core Business

In light of COVID-19, operators must invest in solutions that increase efficiency and improve the customer’s experience. This entails ensuring your customer safely enters and leaves your dispensary with a product they are satisfied with—the essence of any retail operation. Your operation should focus on enhancing customer flow as opposed to encouraging aimless roaming. Having an open-space, Apple store style dispensaries might have been a popular option before, but times have changed, and dispensaries must adapt.

Guided purchases offer not just more efficient transactions, but also serve to ensure that your waiting room isn’t backed up with an endless stream of unmanageable customers. Depending on your locally-mandated COVID-19 protocols, your dispensary will likely not be permitted to hold a high number of customers in the store, nor should it during this pandemic. Each customer service representative must be active as opposed to passive, directly asking customers what they are interested in, offering product or strain choices when customers seem unsure and answering questions as thoroughly as possible to avoid confusion and inherently delays. Be sure to emphasize the value of guided purchases to your employees and how they can promote the safety of both themselves and their customers.

Maintaining Urgency

The uncertainty of COVID-19 and its impact on the general economy has left many individuals “clocked out.” Simply put, many people feel that they should wait until things go back to normal before making any critical decisions. As essential businesses, cannabis operators cannot afford to make this same mistake. Now is not the time to sit back, reflect and wait for the vaccine. Instead, operators must work to precisely assess how COVID-19 impacted their business and execute a clear plan of action to address foreseeable problems.

Execution is far more important than perfection; you’ll need to make changes on a dime and avoid spending excessive hours obsessing over debating specific actions rather than taking them. It is far more essential to get tasks done versus ensuring they are perfect. If something is not working in your business, it must be readdressed or removed entirely from the protocol. It is far better to make necessary changes now amid the pandemic as opposed to reactively waiting and seeing what may come next following it.

Stay nimble by cutting out any factors that may be slowing down your company’s efficiency. Is your point-of-sale system causing issues? Can you use a better payment processing tool? Are any employees underperforming? Are there any internal policies that may be hindering your employees’ ability to work as optimally as possible? These are some of the many factors that must be considered to ensure your business stays agile and adaptable. Determine what is working against you and execute a plan of action to address. Do not wait and do not take shortcuts around regulations.

Understanding the Shift in Purchasing Behavior

Regardless of whether or not a vaccine for COVID-19 is completed anytime soon, operators must know that there is no “returning to normal.” People’s habits and behaviors have changed due to this virus, whereas slow browsing of items might have been preferable for some individuals before COVID-19; this is likely not the case today. Furthermore, research groups like Accenture have found that most customers expect their shopping habits to change permanently.

Source: Accenture COVID-19 Consumer Research, conducted April 2–6. Proportion of consumers that agree or significantly agree.

In the study mentioned above, shopping more consciously is one of the two top priorities for customers during this pandemic. According to Accenture, “[c]onsumers are more mindful of what they’re buying. They are striving to limit food waste, shop more cost consciously and buy more sustainable options. Brands will need to make this a key part of their offer (e.g., by exploring new business models).” Furthermore, customers are now more likely to shop locally; this is why community engagement would be especially important to ensure you develop transparency and trust between your brand and your customers. Understanding this shift in purchasing behavior will remain one of the more crucial tasks of any cannabis operator.

Expanding Sales Avenues

More and more customers are now relying on online and curbside purchases than ever before. Dispensaries must look to their current sales avenues and determine where key focuses should be made. Use your sales data to determine where customers are making their purchases the most, be it through third-party delivery services such as Eaze, standard home delivery, online ordering or curbside pickup. Focus on identifying friction and streamlining the user experience on all customer-facing platforms and services. Equally, consider which platform your customers are using the most to make purchases; are they making more online purchases, or do most still prefer direct shopping at the store? Remember that having more products doesn’t necessarily mean more revenue. You must also identify which products are performing well and which have low margins.

These considerations can help strengthen your highest performing platform while working to fix any more inferior performing platforms. As stated before, stay nimble; if something is not working out, cut it out from your business model, and move forward. Do not be afraid to cut poor-performing platforms to hone your focus on the successful ones. Since post-COVID-19 shopping behavior is likely to stay permanent, these changes may still be applicable following a slowdown or cessation of the virus.

Delighting Your Customers

Virus or not, customer satisfaction remains one of the most crucially defining points for the future of your business. Your customers must be safe and must be happy with their purchase. To ensure this outcome, you need to maintain adequate safety policies while equally promoting streamlined purchases. Although a limited number of individuals may be annoyed with over-the-top safety precautions, most customers will enjoy the heightened security that comes alongside these types of measures.

Contactless service, such as having customers scan their identification upon entry or encouraging more credit card versus cash transactions, can increase customer satisfaction, as they will feel a stronger sense of security when shopping at your dispensary. Focus on streamlining curbside pickup. Things such as requiring vehicle descriptions (e.g., license plate numbers, color, make) for curbside pickup purchases can go a long way in helping employees quickly identify customers.

Equally, be sure there is hand sanitizer available near the entrance of your dispensary. This adds a further sense of security for your shoppers. Delivery should be consistent; delays and setbacks must be minimal to win the confidence of your customers. Take the extra steps to ensure your dispensary is clean and products hygienic. All these factors work to increase customer satisfaction while maintaining their safety, and more importantly, impact the level of trust your customers have in association with your brand.

Scaling Operations Taking Advantage of Limited Competition in Emerging Markets

As stated before, several individuals—including existing and emerging cannabis businesses—are clocked out following COVID-19. This mindset is not only detrimental for operations but can also impact how you scale your business. New markets are coming online and will continue to do so as regulators are increasingly incentivized to replenish government coffers. Riverside County in California, for instance, is now allowing for capless licenses for all cannabis business types. However, what remains the key focus for regulators is expanding the number of delivery and distribution operators. In Massachusetts, delivery endorsements for dispensaries are available without a set deadline to social equity applicants and do not have a defined cap. In Illinois, the cap for transporters was equally removed, and each applicant who scores above 75% will receive a license.

These types of licenses are now more valuable than ever before for two reasons. The first reason is that regulators are keener to award delivery and transporter licenses than other types. Secondly, customers now prefer home delivery over shopping in stores due to COVID-19. With more people clocked out during these times, you have far more opportunities and far fewer competitors during application processes. Use this time to truly develop a strategy for expansion, as the chance might not come so quickly again.

Conclusion

As a final point, be sure to expand your online presence during this time. Although you may not have the capacity to reflect your company’s personality and value through quick in-store transactions, you can use social media to encourage product reviews, social interactions, and recommendations. Invest in marketing through social media platforms. Platforms such as TikTok have helped form communities of like-minded individuals. Use platforms such as that to highlight your company’s personality and values, avoid being “salesy” and focus more on being funny, entertaining and just alive. Character adds value to your business.

People want to laugh, to feel safe and they want to live. Create social interactions and immersion and always prioritize being honest and transparent with your customers. This final point stands as equally as important as the rest of the considerations highlighted throughout this article. Stay nimble, stay active and stay alert! Do not view the chaos behind this pandemic as a pit, and instead see it as a ladder. Track down opportunities, do not be afraid of change, and, more importantly, do not wait for an answer to COVID-19, be the answer.

Priorities During the Pandemic: How to Run a Lab Under COVID-19

By Dr. Peter Krause, Udo Lampe
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During the COVID-19 pandemic, most testing laboratories have been classified as relevant for the system or as carrying out essential activities for national governments. Therefore, it is crucial to maintain activities and optimally assess the changes that are occurring, framed within the spread of the SARS-CoV-2 virus. Analytica Alimentaria GmbH, a testing laboratory with its headquarters in Berlin, Germany and a branch office in Almeria, Spain, decided to focus its management on the analysis of events and the options available, at the legal and employment level, to ensure continuity of activities and reducing, as much as possible, the damage for the parties involved: employees and company. Accredited by the International Accreditation Service (IAS) to ISO/IEC 17025:2017, Analytica Alimentaria GmbH is required to implement risk-based thinking to identify, assess and treat risks and opportunities for the laboratory. Since March 12, 2020 a crisis committee was established, formed by the six members of the company’s management, covering general management, human resources, direction of production, finance and IT. The committee meets every day and it intends to:

  • Minimize the risks of contagion
  • Be able to continue providing the service required by our clients
  • ensure that the company as a whole will survive the economic impact of the crisis
  • Take measures that are within the legality of both countries where the laboratory operates (Spain and Germany),
  • Manage internal and external communication related to the crisis

To achieve correct decision making, daily meetings of the committee were established, to review the situations that were presented day after day and the actions that should be carried out. Each decision was analysed in a prioritized, objective, collaborative and global way.

The basis of the lab’s action plan was a well-developed risk assessment. In addition to the risk of getting a droplet or smear/contact infection with the coronavirus SARS-CoV-2 (risk I) by contact with other people, psychological stress caused by changing working conditions (home office), contact options and information channels were also identified (risk II).

As a result of the risk assessment, the conclusion was that a mix of various measures is the best form of prevention:

  • Keep distance
  • Avoid “super spreader” events
  • Personal hygiene
  • Regular communication between managers and personnel about the current situation and possible scenarios

The risk assessment took both areas into account. The following assessment was developed together with an external specialist and focused on risk I:

Risk I Assessment Protective measures / hygiene plan
Organisation
Working hours and break arrangements High Limit the gathering of people and ensure a minimum distance:

  • Relocated work, break and mealtimes
  • Create fixed groups of shift-working staff
  • Time gap of 20 min. between the shifts
  • Enable home office wherever it is possible
Third party access Moderate Few but “well-known” visitors:

  • Reduce the number of visits and keep internal contacts to a minimum
  • Ensure the contact chain
  • Inform visitors about the internal rules and obtain written consent
Dealing with

suspected cases

High Isolation and immediate leave of the company:

  • Contactless fever measurement (in case of typical symptoms)
  • Leave the company or stay at home
  • If the infection is confirmed, find contact persons (including customers or visitors) and inform them about a possible risk of infection
Contact with other persons
Traffic route from home to work Moderate Avoid public transportation:

  • Take a car, bicycle or go by foot
  • Enable mobile work and teleworking
At work High Always keep a sufficient distance of 2.0 m from people:

  • If minimum distances cannot be maintained, wear protective masks or install physical barriers (acrylic glass)
  • Organize traffic routes so that minimum distances can be maintained (one-way routes, floor markings indicating a distance of 2 m)
  • Use digital meetings instead of physical ones
Sanitary facilities Moderate Remove virus-loaded droplet as often as possible:

  • Provide skin-friendly liquid soaps and towel dispensers
  • Shorten or intensify cleaning intervals
  • Hang out instructions for washing hands at the sink
  • Include instructions for proper hand-disinfection
Canteens, tea kitchens and break rooms High One person per 10 m² = minimum:

  • Reduce the number of chairs per table
  • Informative signs in every room, indicating the maximum number of permitted persons
Ventilation High Diluting or removing bioaerosols (1 µm virus-droplets):

  • Leave as many doors open as possible
  • Regular and documented shock ventilation every 30 minutes or more frequently, depending on the size of window
  • Operate ventilation and air-conditioning systems, since the transmission risk is classified as low here
Use of work equipment Moderate Use tools and work equipment for personal use:

  • Regular cleaning with changing use (PC, hand tools, coffee machine, …)
  • If possible, use gloves when using equipment for a larger number of users
Protective masks Moderate
  • Use of protective masks as an additional measure, indicating that this does not replace keeping distance
  • Recommend wearing masks in commonly used areas and explain that they do not protect yourself, but help to protect others
  • Give clear instructions (written and oral) on how to use a mask correctly and explain the use and purpose of different mask-types
  • Distribute masks freely

A number of guidelines and concrete measures addressing the risks related to health issues are already in place. Those health issues in risk group II are more closely related to the psychological effects of the crisis, however, are also more complex to mitigate. The key strategy is communication and, in particular, actively listening to all employees of the company.

Analytica’s robust company culture, based on values established in coordination with the whole staff, has been of significant help during the crisis. The some 150 staff members are organized by over 22 team coordinators. During the crisis, active communication has been intensified significantly. The crisis management team set up regular alignment meetings with all the coordinators and with individual persons with particular situations. This way, not only was it possible to explain the development of the crisis and the subsequent measures, the conversations with coordinators were also the most important source of information enabling the appropriate decisions. The coordinators, closely aligned and in sync with management, were then able to communicate with their team members with a high degree of confidence. One outcome of the communication was a measure that proved very effective in fortifying trust within the company: all measures and evaluations, as well as a chronological review, are published in a dynamic internal report and are made available, with full transparency, to all staff members. Besides the many individual and group alignment meetings (usually held by video conference), this has been a key measure to establish confidence and security within the company.

On the other hand, the company made a great effort to balance the effect of the general closure of kindergartens and schools in Spain and Germany. Each case where staff members were required to care for children at home was studied individually and agreements were established, adapting shifts and making use of time accounts, to allow childcare at home without significant loss of income.

The success of the measures is shown by the continuous work of both laboratories during the crisis. Besides the personal tragedy of a possible infection, the identified risk to the company has the consequence of a (partial) quarantine due to an infected person in contact with the staff and the consequent loss of work-power which might lead, in extreme cases, to a closure of the laboratory. According to the governmental regulation in Germany, if an infection occurs (confirmed by the health department), contact persons cat. 1 (more than 15 min. contact face to face) are identified and sent to quarantine. Other contact persons, e.g. contact persons cat. 2 (same room without face to face) must be identified quickly with the collaboration of the infected person and notified and, if necessary, sent in quarantine. In this case, there is a confirmed emergency plan that maintains the laboratory’s ability to work, defining replacements and alternative work-flow strategies.

It has been part of our strategy to validate all our measures with the relevant guidance documents made available by the official competent institutions. The German Federal Office for Public Safety and Civil Protection (Bundesamt für Bevölkerungsschutz und Katastrophenhilfe) has published a guide, “Crisis Management in Companies, 9-point Checklist” especially for critical infrastructure companies in the CoVid-19 crisis.

Having been classified as a core business enterprise (Spain) and “relevant to the system” (Germany), we consider it important to use them as a reference to confirm our level of alignment with your proposal for crisis management.

An important effect, relevant to any leader in times of crisis, is that the confirmation of all points of such a checklist provides certain peace of mind regarding the question: Have we done everything we could?

Thinking of Hiring a Cultivation Consultant? Here’s What You Can Expect

By David Perkins
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Hiring an experienced cultivation consultant is yet another cost, amongst the laundry list of never-ending expenses in the setup of a regulated, recreational grow. However, in the big picture it can actually save you a significant amount of time and money by providing you with the information you need to formulate a realistic budget, profitable cultivation site and a well-trained workforce. This article will explore just some of the many benefits a cultivation consultant can provide to your company.

An experienced consultant will have a vast array of knowledge to ensure the success of your company. One important area they can advise you on is budgeting. With years of experience cultivating, in both medical and recreational markets, an experienced consultant will have knowledge of not only start-up costs, but also hidden costs you must prepare for in advance. They will also be able to advise you on strategies to avoid future costs and problems. There may also be expenses in the build-out of your cultivation site you have not considered. For example, you may need a waste water treatment plan if you have any fertilizer run off that will flow to a sewage drain. It is important to know all possible costs when securing your investment or planning out your budget for the year.

Setting up a large-scale cultivation site in a regulated market can be extremely costly. Gone are the days of putting up a few lights in a closet; growing in a regulated market requires a larger scale, and therefore, larger costs and more complications. A consultant experienced in design and implementation of such large-scale, intricate cultivation plans will provide you with the knowledge you need to properly set-up and maintain your facility in order to ensure your company’s success. They will also know the tips and tricks to save you money along the way.

Something as simple as a centralized irrigation distribution zone can save you a lot of time and money.

A good consultant will be able to advise you on the design of your facility to ensure that the layout supports productivity, and that there is a proper workflow. It is important to hire a consultant before you get started with the build out of your facility, as it will be much more costly to have to correct mistakes in your design later on down the road. An experienced consultant will implement superior facilities layout and design to avoid future problems at the outset. Something as simple as a centralized irrigation distribution zone can save you a lot of time and money.

Once you have created the proper space, cultivation planning is important to avoid unnecessary problems from arising, which will ultimately delay profit. A well thought out cultivation plan will help you plan for success. A consultant will know what does and doesn’t work. For example, some equipment will run off an app on your phone; while convenient, there are some that don’t perform well which could end up costing the entire crop. These are things you want to know and work around, before you spend money unnecessarily.

An experienced consultant will have previously worked in various types and scales of cultivation sites, and from that experience will be able to teach you which processes and techniques work, and which ones don’t. Someone with less experience may believe that watering plants by hand would be an easy method to keep your garden irrigated, but it is actually the most time-consuming labor task (and therefore extremely costly), while an automated watering system can be very simple and cost-effective to install.

Some equipment will run off an app on your phone; while convenient, there are some that don’t perform well which could end up costing the entire crop

A skilled consultant can provide necessary training for your employees. Let’s face it, this is an entirely new industry, and therefore, most people applying for entry-level jobs at a cultivation site are unskilled. However, the best path to success when dealing with large-scale cannabis cultivation is to have skilled, happy employees. Educating and properly training your employees is essential. It helps to teach employees not only how to complete a task, but to help them understand why they are doing a given task. This will give your staff the skills and confidence they need to complete the task properly. Unskilled hands in your garden can jeopardize the success of your cultivation.

Don’t make the same mistakes others have made. Hiring a cultivation consultant can help you to avoiding problems before they occur. A professional consultant has the knowledge required to predict issues and problems before they occur, or implement a solution when corrective measures are necessary. Oftentimes issues can be avoided just by knowing the cause and effect of decisions and the potential outcomes they will have.

A cultivation consultant should also have a wide network of professional contacts to help you address any issues or problems that arise. Having a network of professionals to employ when necessary is critical for ensuring the success of every project. For example, wholesale contacts for cultivation equipment can help you not only to get the best price, but also ensure you are using the best equipment possible for your situation.

If you are still unsure about whether or not you need a cultivation consultant to help plan out your grow, or fix your grow if you’ve encountered problems, feel free to contact me to discuss your needs. I assure you there are ways I can save you money, improve your yields, and help your company be more successful in this ever-changing market.

Soapbox

Stemming the Cannabis Black Market

By Matthew Zandi
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On July 18, 2019, the Riverside County Sheriff’s Department in California served search warrants at 56 illegal cannabis cultivation sites. This operation was spearheaded by 390 law enforcement personnel, whose mission was to combat the ongoing problem of illegal cannabis cultivation sites throughout California.

The raids resulted in:

  • 47,939 marijuana plants confiscated
  • 2,132 pounds of processed cannabis
  • 47 tons of cannabis plants disposed
  • 2 Butane Honey Oil Labs located
  • 71 firearms
  • 49 arrests

The target of the operation was illegal cultivation sites. Individuals or licensed businesses with permits to grow cannabis legally were not affected.

Illegal cultivation is far from just a California problem. For example, if Oregon halted cannabis production today, the state would not experience a shortage as it has a six-year surplus.

The fear for investors and legal growers is that, if some growers turn to the black market to unload excess inventory, federal enforcement will come into play, which will set back the legal cannabis industry to the stone age. Oregon is currently making moves to limit licensure for legal production, but some active licenses may also need to be revoked, which would leave those licensees with vast investment losses. In other words, legalized cannabis’s massive economic market is not without financial problems of its own.

Don’t Make a Federal Case Out of It

Several states have legalized recreational cannabis with the intention of reimagining this vast underground market as an above-board business that bolsters the state’s economy via transparent dealings. To date, however, the federal government has refused to budge regarding cannabis’s status as an illegal Schedule 1 substance. This classification puts cannabis on a par with opioids. As such, those states that have legalized recreational cannabis are extremely motivated to keep these businesses on the up and up and not to pique federal interest.

Black Market Vulnerability

One of the tenets of legalizing cannabis is stemming the proliferation of black-market suppliers and minimizing the negative effects that the “war on drugs”has had in minority communities. These positive impetuses have yet to flourish. As a result of the illegal status of cannabis at the federal level, cannabis-legal states are forced to operate as islands.

Generally, taking legally purchased cannabis across state lines – from a legal to an illegal state – is illegal, and this is not only confusing but is also a recipe for complications. This leaves cannabis-legal states vulnerable to black market activity. These pockets of legal recreational cannabis that are popping up around the country loosen the constraints of the cannabis movement while the legality of this movement remains problematic. The results are an environment that’s extremely hospitable to black market activity.

Supply and Demand

The reality is that – due to supply and demand – cannabis costs about half as much in cannabis-legal states as it does in states in which it’s illegal. Black market growers in legal states destabilize the market. Those legit companies which remain above board, pay their taxes and jump through every legal hoop, cannot compete with black market interlopers who eschew such niceties.

The point made by detractors of legal cannabis isn’t lost on the rest of us – the black market is burgeoning.States that have legalized production have inadvertently made it easier for illegal producers to hide in plain sight, and the line between legal and illegal operations can become blurred. This creates new frustrations for law enforcement and naturally cuts into the legal cannabis trade. The situation has left some opponents to legalization demanding new crackdowns – others characterize such suggestions as amounting to a new war on drugs.

No Going Back

Detractors of legalized cannabis claim the somewhat chaotic effects related to the current patchwork approach to legalization are a result of opening the gates to legalization in the first place. However, putting the genie of legalized recreational cannabis back in the bottle simply isn’t feasible for operational, financial and political reasons. With the proliferation of attendant illegal operations, however, it is becoming more and more clear that leveling the playing field – via some form of federal legalization – is inevitable. The current state-by-state solution leaves too much wiggle room for the illegal transport of cannabis from those states with looser restrictions to those states with tighter protocols. If politics is choosing between the disastrous and the unpalatable, the billion-dollar cannabis conundrum is a great example. The question may no longer be should we legalize cannabis but, instead, how do we legalize cannabis.In other words, we need to find a path forward, and focusing only on the pitfalls that we’ve experienced so far isn’t going to get us where we need to be.

A Tale of Two Choices

The point made by detractors of legal cannabis isn’t lost on the rest of us – the black market is burgeoning. As such, we have an important decision to make. A blanket prohibition of cannabis may no longer be practicable, so we’re left to choose between legal and overt practices across the board or a hodgepodge of semilegal practices with covert ops in tow. Fostering illegal activity is rarely in our nation’s best interests, which leaves legalizing cannabis at the federal level as possibly the most practicable solution.

Protecting Public Health

As more states embrace the legalization of recreational cannabis, public health concerns remain an issue. Many of these illegal cultivators use chemicals that are banned in the United States and do not properly dispose of chemicals or waste products that destroy the environment, contaminate drinking water and have the potential to harm or even kill residents and domestic animals. Not only is this activity harmful, growers often steal electricity and water from surrounding residents.

Cobbling together a pastiche of laws, however, inevitably bolsters black market activity and does nothing to help protect public health. Even the staunchest proponents of legalizing cannabis don’t want minors involved in the equation. Additionally, few debate that unchecked usage is a healthy option. Quasi-legislation at the state level (and on a state-by-state basis), however, provides neither a check nor a balance.

Onward and Upward

The most likely next step for safeguarding public health, for stemming black-market activity, and for generating maximum revenues is toward thoughtful and comprehensive national legalization that comes sooner rather than later. In the meantime, law enforcement should protect the public, legal operations, investors, and the environment from the black market.


The opinions expressed are those of the author and do not necessarily reflect the views of Guidepost Solutions or its clients.

Flooring Tips for Cannabis Growing Facilities

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

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

Challenges in Cannabis Grow Facility Construction

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

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

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

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

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

Bare Concrete Floors in Grow Rooms

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

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

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

Optimal Grow Room Flooring Performance

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

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

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

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

Resinous Flooring Value for Cannabis Facilities

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

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

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

Very High Gloss Finish

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

Virtually Seamless Surface

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

Outstanding Moisture Tolerance

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

Chemical, Acid and Alkali Resistance

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

Added Safety

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

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

Support from the Ground Up

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

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

german flag

Where Is The German Cultivation Bid?

By Marguerite Arnold
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german flag

For those following the German cultivation bid drama, there appears to be a real light at the end of a now two year tunnel– driven by a domestic demand that essentially requires that there be no more delays.

Then again, given developments so far, who knows really what will happen in April. It could be a whole new “fresh start” for a much-beleaguered process or it could just go down as yet another “train” on the basis of a “technical fault.”

One thing is for sure: BfArM again appears to be cautiously optimistic. Yet they have been there before, too. Yes, there is a rising patient count. But there are also now many other import options and cheaper prices coming into the EU. As a result, there is still the likelihood, however implausible, that the German government will want to kick this can a bit further down the road.

German Parliament Building

What is the newest development? In late January, BfArM, the German equivalent to the FDA and the agency in charge of oversight and regulation of all medicines and medical devices, issued a press release about the status of the cannabis cultivation bid they are tasked with overseeing.

If things are not taken off track by the next still pending lawsuit (due to be heard by the high court in Dusseldorf on 10 April of this year), the agency will award the bid. Not before, as the press release also states categorically.

The Highlights

There is no award date yet of course. However, if the court case is decided in favour of BfArM this time (namely defending their exclusion of a bidder even though the deadline was delayed again for seven weeks last fall), there is reason to believe the public airing of that final list of license holders will be released soon after. That means the bid decision could come as soon as the next day and certainly by the end of April.

There were over 200 questions asked of the agency this time by around 79 bidders who submitted a total of 817 bids for a total of 13 cultivation lots. No more than five lots can go to any one bidder or consortium.

The amount to be cultivated under this first bid is 10,400 kg over four years (up from the first amount). Even this is expected to be too low to meet a clear and increasing domestic demand. That said, there is clear expectation that the remainder between what is cultivated domestically and consumed will be taken up by imports (although from where was not explicitly discussed).

The agency also stressed that they are responsible only for the administration of the tender itself. They will not receive, store or redistribute the cannabis or cannabis products. Further, BfArM also stressed that they are not responsible for the regulation of the final retail price at pharmacies.

Finally, the target date for the delivery of the first crops is a conservative estimate which says two things. One, BfArM are not tipping their hand in favour of Wayland (who at present has the largest licensed GMP facility in the country), and second, they are leaving themselves and bid respondents a little more wiggle room. Just in case. For whatever reason.

As the bid states, successful respondents do not need to have suitable real estate under contract until the finalists are announced, but if they are awarded the bid, they will have to not only move fast to secure a facility, but also set up a grow facility that can be certified in the next interim period.

By way of contrast, Wayland announced its purchase of the Ebersbach facility in the summer of 2017. They have just received, 18 months later, their GMP certification. Anyone starting from scratch, in other words, would have to move at least as fast as Wayland has. If not a bit faster, considering that Wayland is already up and running, and at this point certified.

Between The Lines

The entire cannabis legalization discussion has been caught up in the cultivation bid since the beginning. Patients in fact, lost their temporary right to grow if they could not afford the expensive cannabis being sold in pharmacies before 2017. After the law changed, only licensed and regulated operators were allowed to distribute the imported variety and then only from Holland and Canada.

Since then, the first cultivation bid went down in a legal challenge, the price of cannabis at the retail end has effectively increased at least 1,000 euros a month and there are as many as 80,000 German patients taking some kind of cannabinoid, mostly for chronic pain.

It is insurers, in other words, at least as much and now more than patients who are now on the sharp and expensive end of the stick.

Then again, until the actual announcement from the Dusseldorf high court if not BfArM itself, expect late breaking developments and drama until the very end.However, the interim frustrating period auf Deutschland plus the continuing needle of political reform just about everywhere (certainly in Europe) has changed the scenery dramatically in just two years. There are cultivation operations in Spain and Portugal with crops ready to be exported to the German consumer. Eastern Europe and Italy are also cultivating. Greece is preparing to. And Israel finally allowed its producers to jump into the medical game globally.

Prices will inevitably come down. The German government and insurance industry beyond that are two powerful drivers to insure the same. And a big part in bringing that price down is setting a bid reference price to begin with.

The situation, in other words, is being staged to move into the next “four-year plan” where Germany begins to understand how widely effective cannabinoids can be, for what conditions and what kind of delivery mechanisms work best for different patients.

It also aligns the country’s medical program perfectly with Luxembourg’s own four-year medical trial and now stated timeline of ensuring there is recreational reform by 2022.

All of which, in other words, also spells victory and potentially the end game to the first part of the German medical cannabis cultivation question and a larger first step for the EU beyond that to finally end medical cannabis prohibition.

Then again, until the actual announcement from the Dusseldorf high court if not BfArM itself, expect late breaking developments and drama until the very end.

Stay tuned.

Cannabis Facility Construction Retrofitting Buildings for Processing, Growing

By Aaron G. Biros
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Cannabis Facility Construction (CFC), based in Northbrook, Illinois, has taken a rather unique approach to facility design and building in the cannabis market. According to a press release published today, the company takes unused buildings and remodels them into facilities designed specifically for the cannabis industry.

A 5,200 square foot CFC-built dispensary in Morris, Illinois.

CFC, which is a division of Mosaic Construction, retrofits unused, abandoned buildings, turning them into cannabis cultivation and processing facilities, as well as dispensaries. According to that press release, they have developed buildings on 28 different facilities to date, covering over 328,970 square feet.

The Litchfield, Illinois cultivation facility, remodeled by CFC

According to Ira Singer, Principal at CFC, they provide a turnkey service for licensed operations to retrofit old buildings, including staying compliant with state cannabis regulations. “Since the cannabis industry is emerging as a growth market, investors need to appreciate there is an art and a science to converting raw materials of cannabis and finished products,” says Singer. “CFC’s medicinal processing centers are outfitted to master the product in all its forms and uses, and to meet all state regulations and local fire and safety codes. Its three-stage approach encompasses its Design-Build expertise for processing facilities; construction management; security infrastructure and planning; and permitting and compliance support.”

For example, they helped investors from Highland Park, Illinois take an unused building in Garden City, Michigan and convert it into a 48,000 square foot cultivation, processing and dispensary facility. CFC also does business with Greenhouse, a medical cannabis company with facilities throughout Illinois.

For more information and to see some of their work, check out their portfolio here.

Product Release: Illumitex Launches HarvestEdge XO Light Fixtures

By Aaron G. Biros
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According to a press release yesterday, Illumitex, an industry-leading LED lighting manufacturer and digital horticulture company, announced the release of their newest lighting technology, the Illumitex HarvestEdge Extra Output (XO) LED Horticultural Fixture. This light fixture is the latest advancement of their LED technology, which they claim can help growers maximize their yield considerably.

The HarvestEdge Extra Output (XO) LED Horticultural Fixture

The fixture comes with a 0-10 dimming capability and proven Wet Rating, meaning it is designed and proven to operate normally in a high-humidity environment. Debuted during the NCIA Seed to Sale Show in Boston, MA on February 12th, the company says the XO LED is the first true 1:1 replacement for high pressure sodium (HPS) lights, consuming about 36% less energy.

We caught up with a few members of the Illumitex team at the conference to find out more about the technology and its applications. According to John Spencer, CCO/EVP of Sales & Marketing at Illumitex, their technology has been used by hundreds of grow operations over the past 8 years. “This light was designed with a higher light output for greenhouses, particularly in Canada where the mounting heights are upwards of 7 meters,” says Spencer. “We are minimizing shadowing in the greenhouse, giving growers the opportunity to supplement their sunlight appropriately.” He says they are specifically designed with commercial scale use in mind.

According to Yan Ren-Butcher, Ph.D., Director of Horticulture Science at Illumitex, the light has the highest efficacy on the market right now. “We designed the specific wavelengths and best red, blue and green ratios optimal for photosynthesis,” says Ren-Butcher. “This product launch is based on years and years of experience in horticultural applications, our knowledge in the field of cannabis cultivation and the latest in LED technology, with the highest efficacy in the industry to date.”

Deibel Cannabis Laboratories Launches Cannabis-Specific HACCP Program

By Dr. Laurie Post
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Manufacturers of cannabis products need a program tailored to the cannabis industry that helps assure the safety of cannabis products with respect to known hazards such as pesticides, residual solvents, microbial impurities, heavy metals and mycotoxins. Deibel Cannabis Laboratories has developed a course that that will teach those manufacturing cannabis products how to manage known product safety hazards using a Hazard Analysis and Critical Control Point (HACCP) system.

HACCP has a long history of use in the food industry based on preventing potential hazards from occurring rather than reacting to issues when they arise. This program was started in the US but is globally recognized, used by food companies around the world to help produce safe products for consumers. Deibel Cannabis Laboratories applies the same prevention based system of HACCP to the creation of safe and wholesome cannabis goods whether they be edible, medicinal or topical. They also explore ways cultivators can use HACCP principles in their operation.12

Deibel Labs was founded by Dr. Robert Deibel in the 1970’s. Dr. Deibel is one of the original pioneers of HACCP, expanding the program from its original three HACCP principles to the seven principles we recognize today. Dr. Deibel developed the first “HACCP Short Course,” teaching this prevention-based program to food industry leaders in the 1970s.

According to Charles Deibel, president of Deibel Labs, this is an important step for the cannabis space. “Deibel Labs is proud to continue in our historic role as leaders in HACCP training by providing the cannabis industry with a training course developed by Deibel Labs associates who are International HACCP Alliance accredited lead instructors with years of experience in crafting and implementing HACCP plans for the food industry.”

They are launching a pilot two-day Cannabis HACCP Class to select clients at the end of January in Santa Cruz, CA. The full Cannabis HACCP course schedule for 2019 is currently in development. Accreditation by the HACCP Alliance is expected by early January, assuring that a standardized and internationally recognized training curriculum is provided by accredited instructors.

The course is forward-thinking, anticipating that sometime in the near future cannabis manufacturers will be required to control and document the safe production, handling and preparation of products according to state or even federal regulatory standards. Participants will be able to develop their own model HACCP program in an interactive group learning environment.

Attendees will:

  • Understand how Prerequisite Programs provide the foundation on which HACCP programs are built including GMPs, Sanitation and Pest Control Programs
  • Be able to identify where and how product safety problems can occur using a Hazard Analysis that considers Biological, Chemical and Physical Hazards
  • Gain the skills, knowledge, and tools necessary to develop effective Critical Controls, formulate corrective actions, conduct program verification and validation activities
  • Learn how to document activities and maintain records

Stay tuned for more information on when the 2019 course schedule is announced and how to register.

Refining Techniques for Growing Cannabis

By Cannabis Industry Journal Staff
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As the cannabis industry in the United States and throughout the world develops, the market is getting more competitive. Markets in a number of states are experiencing disruptions that will have lasting effects for cultivators, including oversupply and supply chain bottlenecks. Now more than ever, growers need to look for ways to differentiate their product or gain a bigger market share. Looking at yield efficiency, quality improvements and analyzing the cost of inputs versus value of the crop can help growers make the right choices in technology for lighting, irrigation and pest control among other technologies.

adamplants
Adam Jacques, co-founder of Growers’ Guild Gardens and Sproutly

A series of free webinars in two weeks can help growers learn about some of the more advanced techniques in improving yield and quality. The Cannabis Cultivation Virtual Conference on May 23rd will explore a variety of tips and tricks for taking their cultivation operation to the next level. This event is free to attendees, made possible by sponsors VividGro and CannaGrow Expo.

Dr. Allison Justice
Dr. Allison Justice, vice president of cultivation at Outco

Attendees will hear from experts in cannabis cultivation on a range of topics, including breeding, drying, curing, environmental monitoring and micropropagation. Adam Jacques, co-founder of Growers’ Guild Gardens and Sproutly, will discuss some of his experience with breeding high-CBD strains in Oregon. His talk will delve into some of the proper breeding procedures, along with how to hunt for particular phenotypes and developing specific cannabinoids and terpenes.

Dr. Allison Justice, vice president of cultivation at Outco, is going to present some of her findings in drying and curing at the company. She plans on sharing her research on how the post-harvest stages can affect and control the chemical makeup of flower. She’ll also discuss some new protocols to monitor the dry and cure of cannabis flowers so we are able to modulate the terpene and cannabinoid profiles.

More information on the other speakers at this event and how to register for free can be found here.