Tag Archives: Oregon

Marijuana Matters

Education & Experience: Understanding the Operations

By David C. Kotler, Esq.
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I often write about the legal side of and opinions about the cannabis industry. Much of what I write about is culled from anecdotal experiences within either my personal practice or observations in regard to the industry. I recently had a trip to Portland, Oregon to spend time learning and understanding a little bit about a particular client’s operations so that I could provide counsel to that particular client, where permissible. For me, it was an important part of the education, which I stress and serve as the basis for this article.

With education comes understanding. What I see in the cannabis industry is often those who are critical of the use of cannabis, either recreationally or medically, seem to demonstrate some lack of understanding. In Florida, as the “No on Amendment 2″ commercials and videos roll out, I see much information that clearly comes from a lack of understanding or potentially a willful desire to distort the truth.

I share the following, less as a means to correct those distortions, but more as an opportunity to educate one who may be reading this and who may not have the same experience, which I just had the opportunity to receive. My time in Oregon was spent predominately in Portland and Salem as this is where the particular client has locations that I was able to view and experience.

My observation from a zoning perspective was that there was not a dispensary on every corner and that at times I had to be patient before seeing a dispensary during our drive. Of note in regard to the dispensaries that I did see was often the use of “cannabis” or “marijuana” in the name or associated with signage at the dispensaries, in addition to a green cross. However, there were many that did not take as visible an approach. I recall seeing, pursuant to the rules of the Oregon Program, windows covered so that one cannot see in. From time to time there were billboards advertising dispensaries. What I noticed most was in part, the clean presentation of the particular client I was seeing versus what was presented on the outside of many dispensaries we passed. This may be highlighted in part based on viewing dispensaries through what one might consider an East Coast lens. There are others that might argue that this perspective, particularly in emerging markets, is much different than that which has been developed over time in the West Coast markets, many of which have now gone recreational.

Overall, like anything, what I saw ranged the gamut from unprofessional and a little unsightly to professional and clean looking, which generally fit into the surrounding neighborhood. In particular, my client’s dispensary in Salem was in a retail shopping center along with a Little Caesars, Aaron’s Rentals, a nail salon, and other normal and expected retailers. Unless you poked your head inside the door, it would not be readily apparent that it was a dispensary.

My experience with the types and looks of the dispensaries running the gamut was mirrored by a particularly unique experience I had in viewing customers/patients. What was clear from a very limited time of viewing who it is that goes into a dispensary in Oregon was that it was impossible to pigeonhole the types of patients and ailments or, in the recreational setting, who the end user might be. On the Saturday morning of my visit, while viewing operations in Salem, I was approached and began to speak with an older gentleman with a long straggly gray beard who appeared to be in his late 60’s to early 70’s. During the course of our conversation he let me know that he is looking forward to taking it easy, and that he was a veteran. He had two friends with him and it looked like they were going to enjoy some time relaxing together, but he was also able to tell me that it was assistive to him at times when his anxiety got the best of him. His purchases were economical, and it was apparent that he and his friends were of limited socio-economic means; however, his purchases were notably and significantly cheaper for use than potentially alcohol if, in fact, he was not medicating and using with his friends recreationally.

Within minutes after the gentleman left, the exact opposite walked in the store. Candidly, I was mildly surprised by whom I held the door for to walk in as I was leaving. For a moment I was transported from Salem, Oregon to any town in central New Jersey or main street USA. Decked out in what could have been Lily Pulitzer or other preppy outfit were two soccer moms. They had stepped out of the newest model of a particular German automobile manufacturer. Unfortunately, I did not have the opportunity to engage with the soccer moms in discussion, but it was clear through their knowledge of the layout and interaction with the employee behind the counter that this was not their first trip to this particular location.

So what does the foregoing illustrate? For me it illustrates the development of perspective through education. It is that perspective that I hope to bring to the advice and counsel of clients. Perhaps I can use the knowledge to be assistive in making recommendations on regulatory issues, if consulted on them, helping to explain to politicians and bureaucrats or zoning and planning officials what might or might not be important in their considerations when dealing with a client. My observations should ultimately help me assist in educating others as to what the business and operation of cannabis related businesses might actually entail and look like. It is absolutely necessary, irrespective of one’s role in the cannabis industry, whether it be on the real estate side, insurance brokerage, providing legal or consulting advice (especially as individuals transition from those areas of practice in non-cannabis related spaces) that one take the time to understand the industry and its practice from the inside out. Only then can one be an effective resource to a cannabis related business wherein once the layers of the onion are peeled back, there is actually substance and information.

NCIA and BDS Analytics Partnership: Analyzing the Market Data Tool

By Aaron G. Biros
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In May, the National Cannabis Industry Association (NCIA) announced a partnership with BDS Analytics, a cannabis market intelligence and data firm, according to a press release. Beginning in June of this year, NCIA members received access to market and sales data via BDS Analytics’ GreenEdge sales tracking software.NCIA.Logo

BDS_Logo_-_with_analytics_purple_text_copyAccording to Aaron Smith, executive director of NCIA, market intelligence was previously very scarce in the emerging cannabis industry. “We hear from our members all the time that one of their biggest challenges is the scarcity of reliable market intelligence and data in the industry,” says Smith. “Being able to offer this kind of data as an included benefit of NCIA membership is incredibly valuable. We’re proud to partner with BDS and grateful for their support of NCIA’s mission.”

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Roy Bingham, CEO of BDS Analytics

The GreenEdge reports span numerous product categories as well as high-level market reporting. According to Roy Bingham, chief executive officer of BDS Analytics, NCIA member-businesses can take part in a tutorial to familiarize them with the interface. Bingham says they have extraordinarily comprehensive data on Colorado and Washington; they will have Oregon’s data ready in less than three months and roll out nationally to all major markets during the rest of 2016 and 2017.

Through using the interactive GreenEdge reports, we were able to identify key market figures and growth percentages, such as percent of the market share held by dry flower, average infused chocolate bar prices and much more. We found that Colorado’s recreational and medical markets totaled $996.5 million in 2015, just shy of a billion dollars. 28% of that market was held by infused products and concentrates, which grew by 111% over the previous twelve months. The average infused chocolate bar sold at retail in Colorado was priced at $14.47 last year. Overall, Colorado’s cannabis marketplace grew by over 41% between 2014 and 2015.

ScreenShotGreenEdge1According to Bingham, for most mature industries, a ten percent transaction value of the market is sufficient to scale data so that it speaks to the entire market. “However, this is not a stable, mature industry so we are more comfortable with a sample size of around twenty percent of the total market,” says Bingham. “We are well over those numbers in Colorado and Washington.” In order to get the data, BDS Analytics makes direct arrangements with dispensaries on their panel to get access to their point-of-sale data, which can be done in almost real time or in a download at the end of each month. “It is then standardized with a learning software system, assisted by personnel, that gets better over time at categorizing data points,” says Bingham. “We use algorithms to scale the data to the total industry size, and there are a number of adjustments made to those algorithms to make sure the data is normalized.” The program has recorded more than 20 million transactions to date.

ScreenShotGreenEdge2Dispensaries provide their data because they get the full service that comes with being a member of the panel, including details down to the brand level, according to Bingham. “This enables dispensaries to offer consumers what they are purchasing on average in their market,” says Bingham. “You get to see a breakdown of the most popular brands and items if you join the panel and submit data.” They have categorized more than 20,000 unique products, such as a number of different types of concentrates, different types of infused products and more.

The interactive data tool holds tremendous value for NCIA members and business owners in the cannabis space, giving them access to market data previously unavailable or difficult to find.

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New Cannabis Lab Rules In Oregon Aim to Curb Fraud

By Aaron G. Biros
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The Oregon Health Authority (OHA) recently implemented a set of temporary rules effective through June 28th of this year with the goal to establish a set of regulations for cannabis testing by October 1st. An investigation by The Oregonian highlighted some of the previous problems with cannabis testing in the state.

The most impactful rule changes include The NELAC Institute (TNI) mandatory standards for laboratories that the Oregon Environmental Laboratory Accreditation Program (ORELAP) will use to accredit labs. Initial rules in the Oregon medical cannabis program, HB 3460 from 2013, did not specify accreditation rules for cannabis testing.

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The OG Analytical laboratory in Eugene, Oregon is working to comply with new regulations, including new sample collection rules

ORELAP currently performs accreditation for lab testing under the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act and the Safe Drinking Water Act. The new cannabis testing rules will give ORELAP the authority to accredit and regulate cannabis labs in the state of Oregon.

Rodger Voelker, Ph.D., laboratory director of OG Analytical in Eugene, OR, believes these rules are monumental in establishing legitimacy in cannabis testing. “These new rules have major repercussions mainly because they require not only getting accreditation, but maintaining it with very strict requirements,” says Voelker. “That also includes procedural guidelines that very carefully outline the quality of laboratory practices and establishes a set of criteria for method validation.”

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Rodger Voelker, lab director at OG Analytical laboratory

Voelker notes that two of the biggest changes are in quality control and data management. “The documentation they require is very thorough and strict with the idea that any aspect of an analysis can be replicated,” adds Voelker. “This is a real win for us in my opinion because now we have an agency that can issue the appropriate credentials as well as have the authority to make punitive measures.”

The timeline for implementation with temporary rules allows state regulators to work with laboratories to perform accreditation and bring laboratories up to speed. According to Shannon Swantek, ORELAP compliance specialist, products that dispensaries sell in medical and recreational markets are required to be tested under the new rules and in the analyte lists by an ORELAP accredited laboratory, starting on October 1st.

Swantek’s job is to accredit cannabis labs to the TNI standards, which is essentially very similar to ISO 17025, just with more prescriptive measures and the ability to pair with state agencies to enforce rules after accreditation. “The timeline for accreditation is dependent on how ready the lab is and how compliant they are to the TNI standard already,” says Swantek. “The culture had gotten so fraudulent that the legislature felt Oregon needed some serious, more strict rules in place.”

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Labs need very expensive instruments to perform all of the testing required by OHA

One of the biggest changes coming to Oregon cannabis testing is the new sampling requirement. “An accredited laboratory employee must take the sample because sampling is where a lack of training or outright fraud is skewing results, which occurs when a grower brings in a sample not representative of the batch,” adds Swantek. Sample preparation methods will also be required to be more robust to meet the action limits of pesticide testing in particular, helping to identify lower levels like parts-per-billion, according to Swantek.

Reports were also lacking key information in the past. The new rules will require more information such as the procedure used, the analyst carrying it out, dilution factors and any other information you need to theoretically reproduce the result. This will result in more accurate labels on products.

Many are concerned that the new lab testing requirements will raise the price of testing too much. In reality, those current prices are not realistic for accurate data, which points to the rampant fraud that ORELAP is trying to eradicate. “The old rules were written in such an ambiguous way that the prices were set by laboratories without a proper quality program or even without proper instrumentation,” says Swantek.

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OG Analytical had to close its doors briefly to meet accreditation

The accreditation process will require particularly robust quality control systems in labs. “Accreditation to the TNI Standard means that lab quality systems will require a documentation system, training procedures, record keeping, personnel requirements, organization details, proof of no conflicts of interest and corrective actions if noncompliant,” adds Swantek. “We single out each method or procedure, look at their raw data and proficiency testing and determine if they are meeting the technical requirements.”

According to Voelker, other industries have learned to adjust their costs with stringent lab testing rules. “I get that no one wants to pay more for lab testing, but the reality is that joining the world of commodities comes with additional costs to ensure consumer safety,” says Voelker. These rule changes will undoubtedly bring more consistency to Oregon’s cannabis industry with accurate lab testing and help the OHA shed more light on issues surrounding consumer safety.

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Adam Jacques: Award-Winning Grower, Pioneer and Medical Cannabis Provider

By Aaron G. Biros
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Walking into one of the grow rooms on Adam Jacques’ farm outside of Eugene, Oregon, you will find dozens of cannabis plants and a whiteboard on the wall with the note “Do it for Frank” across the top. This is a reminder of why Jacques and his team are growing medical marijuana: To help people.

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Above some notes is their daily inspiration: “Do it for Frank”

Frank Leeds, one of Jacques’ cannabis patients, lost his battle with cancer in early January.

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A view of the grow room where they have 48 plants in flowering..

Jacques was working with Frank for the past five years to develop “Frank’s Gift,” a high-cannabidiol (CBD) strain with a slew of potential medical benefits. Deeply saddened by the loss of his patient and close friend, Jacques continues to run his grow operation, Grower’s Guild Gardens, where he and his wife, Debra, work to get high-quality, safe medicine to their patients.

His patients and other publications have repeatedly referred to Jacques as a “legend.” Jacques previously won Canna Magazine’s award for Most Influential Grower in the Northwest.

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Adam Jacques looking over his plants in their vegetative stage.

On their farm, strain testing is currently underway for the upcoming changes in the recreational program in Oregon. “With the way the medical laws are now, I have 48 plants for my patients, including multiple high-CBD genetics, and any excess flower will be sold to recreational dispensaries to cover our overhead costs,” says Jacques. When the Oregon Liquor Control Commission (OLCC) grants them their recreational grow license, he will take some of those trial strains to an outdoor crop estimated to be in the thousands of plants on his 42-acre farm.

Presenting at the Dispensary Next Conference a few weeks ago, Jacques said to a crowded room of industry professionals: “The biggest reward is helping people.” Jacques and his team’s work exemplifies the good that smaller grow operations can do for the industry.

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This plant is roughly four weeks from harvest, currently in the flowering stage.

Jacques’ recent work has taken him to help Leni Young, a four-year-old girl originally from Alabama who suffers from debilitating seizures. Her parents became medical refugees when she was not selected for an Alabama study involving cannabis oil. As a result, the Young’s took their daughter to Eugene, where with the help of Jacques and his team, they could get her customized cannabis oil with high doses of CBD and tetrahydrocannabinolic acid (THC-A) that could help treat her seizures.

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Left to right: Wayne Young with his daughter, Leni Young, and son, Thomas Young, alongside Debra Jacques.

The cannabis oil that Jacques created has brought Young’s seizures down from multiple occurring every day to just one every six weeks. “One-strain solutions like ‘Charlotte’s Web’ are no longer the answer for treating medical conditions,” says Jacques. “We create something custom designed for individual patients, and it is working.” CBD and THC-A, the main active ingredients in Leni’s medicine, are two of the non-psychoactive compounds in cannabis believed to have extraordinary medical benefits.

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Jacques inspecting some of the different strains they are testing for the recreational program.

Less than three weeks ago, a bill was introduced to the Alabama legislature that would decriminalize the possession of and allow patients to get high-CBD oil. The bill is called “Leni’s Law.”

Jacques’ goal in the long term is to get clinical trials with peer-reviewed studies to connect the dots between his patients, cannabis and evidence-based medicine. “I am working with a laboratory in Arizona and a doctor from Israel to perform a peer-reviewed study,” he adds. “Getting peer-reviewed will allow me to provide legitimate scientific evidence for my claims and get the knowledge into the hands of my patients.”

Looking into the immediate future, Jacques is wary of different regulations coming to Oregon. “Once you go recreational with your business, you lose the ability to provide any sort of a medical recommendation,” says Jacques. “I do not want to see the recreational program and the desire for profits push out our ability to help patients.”

Jacques and his team represent the idea that embodies the cannabis legalization movement, which is to help people get the medicine they need. “The money is not really important any more,” says Jacques.

puregreen lobby

Consumer Trends: Analyzing Oregon’s Dynamic Markets

By Aaron G. Biros
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puregreen lobby

Oregon was the second state to legalize medical marijuana in 1998 behind California that introduced legislation measures two years earlier in 1996. In the past two decades, Oregon has grown its medical market, treating more patients and producing exponentially more cannabis. Since October 1st of 2015, Oregon’s recreational sales have been made legal, creating potential opportunities for dispensaries to target this emerging market.

In that first week of recreational sales alone, dispensaries in Oregon made over $11 million in revenue. That figure is more than double what Colorado made in its first week and significantly larger than Washington’s figures posted.

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The exterior storefront of PureGreen in Northeast Portland, Oregon

Matt Walstatter, president and founder of PureGreen, a dispensary located in Northeast Portland, Oregon, says that while recreational customers are limited to seven grams of flower per day (no concentrates or edibles yet), they have noticed an uptick in sales of certain strains.

“Up until October 1st of this year, our sales percentages have been very consistent with about 66% to 72% flower sales since we opened and around 20% concentrates and 10% edibles, with the remainder consisting of topicals and non-medicated products,” says Walstatter. “Now we have an influx of a new type of customer so we do around 80% of sales in flower since the introduction of recreational sales on October 1st.”

When analyzing the top-selling strains, Walstatter’s figures show an inclination of customers and patients to prefer high-THC strains when buying flower. Girl Scout Cookies, a very high THC, low CBD strain, consistently sells the most at over 2000 grams per month. “People that smoke flower generally want high-THC strains, while people that seek CBD overwhelmingly do not smoke as much and prefer ingesting edibles, tinctures, capsules or other products with low THC content,” adds Walstatter.

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The lobby at PureGreen

PureGreen keeps a select few high-CBD strains on their shelves, including Cannatonic, which is known for its approximate 1:1 ratio of THC to CBD. “Out of twenty five strains on my shelves, I usually keep two or three high-CBD strains because they have their niche, even if they are less sought after, it is certainly worthwhile to carry them,” says Walstatter.

“Because Oregon has such a well established cannabis culture with less novice customers than other markets, our more popular strains are consistent over multiple months so we built a brand around knowledge and education,” Walstatter says. “Our budtenders usually come from a background involving the plant whether they were involved in cultivation, trimming or processing, and then they go through extensive training to be able to recommend certain strains for different ailments or preferences.”

Walstatter offered some tips for dispensary owners and employees at the Las Vegas Marijuana Business Conference in November where he sat on a panel with other industry experts called What Patients and Consumers Want: Strain Trends, Product Mix & CBD vs. THC. “Understanding your customer’s needs and their buying habits plus properly managing your inventory is the key to success,” says Walstatter. “We have a couple of exclusive growers that went through an extensive review process, they tend to rotate through different strains while we have some grower-specialists that grow only one strain very consistently.”

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Exterior view of PureGreen dispensary in Portland, Oregon

Walstatter prides himself in his team’s exceptional customer service. “People do business with people they know, like and trust, so authenticity is very important to us,” he adds. “Over delivering on value in the form of knowledge, expertise and service is crucial to growing your brand and business.” Having a high quality product mix, knowledgeable staff and inviting atmosphere are a few of the ingredients to running a successful dispensary.

“It can take up to six months or longer to bring a new strain from seed to sale, so if it is a popular strain, it is very important to have a backup grower,” Walstatter adds. He likens his dispensary to a farm-to-table restaurant where the menu is constantly changing: “This time of year, there are some greenhouse and outdoor crops that do well on the shelves but strains can go in and out of season.”

While edibles and concentrates are not yet available for recreational sales, state regulators are closely monitoring other state’s rules and progress to map out a timeline for their introduction. This would effectively create another new emerging market, opening up potential opportunities for dispensaries in Oregon to diversify.

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Pesticide Recalls an Ongoing Issue for Colorado

By Aaron G. Biros
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In the wake of investigations this summer in Oregon and Colorado, which found that numerous marijuana products contain levels of illegal pesticides, state regulators, laboratories, manufacturers, and cultivators alike are acting fast to minimize risks to consumers and patients. The largest recall ever to occur in the cannabis industry happened on October 30, when two companies in Denver found potential pesticide contamination in tens of thousands of packages of edible cannabis products.

As of now, it is difficult to find information available on pesticide use and flowering, its effect on the body through combustion and inhalation, and its effect on medical patients with already weakened immune systems. Research suggests up to 69.5% of pesticide residues can stay in marijuana smoke. Of course, there is a need for more research, but it is safe to accept that pesticides already banned for use on foods by the USDA or state departments should not be allowed in cannabis production.

In Colorado, “Nearly six months after the city of Denver began a crackdown on unapproved pesticides in marijuana products, a spot-check by The Denver Post found that the chemicals were still being sold to consumers.” This presents a major problem to an industry still trying to change public opinion for wider legalization efforts.

The Oregonian and OregonLive investigation found pesticides in most of the 10 marijuana concentrates that were screened. “Many of the pesticides detected aren’t regulated by Oregon’s medical marijuana rules, which means products that contain these chemicals still can be sold.”

While state regulations on pesticide use continue to get hammered out, the U.S. Department of Agriculture along with the U.S. Environmental Protection Agency is currently working on identifying pesticides that might be safe to use on cannabis. That guidance is crucial for any industry in order to establish safe levels of pesticides allowed, as well as which pesticides are more dangerous to the consumer than others.

Just last week, two of the largest recalls in the cannabis industry occurred in Colorado due to potential pesticide contamination. According to The Denver Post, as many as 30,000 packages of edibles produced by two companies were recalled by the Denver Department of Health.

Alex Garton, a cultivator in Michigan, agrees with many proponents of organic methods, citing the need for close management of the plants without pesticides. “The best way to avoid pests is to keep the grow room clean,” he says. “Mites will come and go, as will temperature and humidity issues, but without using pesticides, there are some safe, natural products that are very effective.”

“I treat my plants with natural compounds that are permitted under the federal government’s guidance for use in vegetable applications for human consumption,” Garton adds. “Never use anything remotely resembling a pesticide on flowers particularly when maturing and in the flowering process.”

Adam Jacques, master cultivator and owner of The Growers Guild in Eugene, Oregon, agrees with the sentiment of caution shared by many in the industry. “I would say, nationwide, there needs to be a more in depth look at pesticides, even organic strawberries can have [the pesticide] Eagle 20 on them,” he says. “With cannabis, we can’t scrub and wash pesticides off like fruit that you take off the vine, and there is a real lack of research on residues and combustion.”

Jacques tests all of his cannabis products for pesticides, molds, microbials and pathogens along with potency profiles, most of which is not required by the state. Growers should take lessons from Garton and Jacques by forgoing any application of pesticides until there is more confident state-level guidance on the dangers associated with pesticides on cannabis.