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Cannabis Industry Journal

Cannabis Property Coverage: Understanding Risk Management & Communication

By Bradley Rutt
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Cannabis Industry Journal

For cannabis companies, property coverage can cost as much as seven to 10 times what traditional manufacturing and retail outlets pay. That is, of course, because of the inherent hazards involved in manufacturing and selling cannabis, in a difficult insurance market.

For landlords and building owners, taking in a cannabis tenant can be tricky as well. Because of the higher theft and manufacturing risks, many underwriters are unwilling to offer coverage. And, failure by a landlord to disclose a cannabis tenant is likely to result in a denied claim. Keeping property coverage in check by implementing risk management best practices and working to expand coverage and reduce premium costs can propel a cannabis business even further.  

Moreover, some landlords and building owners will require businesses to maintain occurrence-based liability coverage, which is harder to secure when running a cannabis operation. An occurrence-based liability policy is one that covers the renter for an accident occurring during the policy period, regardless of when a claim is made.

Instead, some insurance companies will only cover cannabis business’ high risks with a claims-made policy, or one in which claims must be made during the policy period only. Landlords will often stipulate their requirement for an occurrence-based policy in their lease. That means that cannabis businesses with a claims-made policy could unknowingly be in violation of their lease.

These issues and others have allowed landlords to command premium rent from cannabis business owners who find obtaining the right property coverage difficult.

To calm the rising tide of rent and property coverage costs, cannabis business owners and operators can engage in the following risk management considerations.

 Risk Management Considerations for Facilities with a Cannabis Operation 

Carriers are more likely to provide a policy to cannabis businesses that are doing what they can to minimize their risk. Here are six ways cannabis businesses can reduce their costs, minimize exclusions and obtain broader property coverage.

  1. If you are a retailer, have a plan to prevent or respond in the event of a robbery.
  2. Install and know how to use vaults and safes properly.
  3. Install central station alarms, cameras and other safeguards. Have them tied to your phone for easy access.
  4. Depending on the nature of the operations, install and regularly test fire sprinklers on site to make sure they are in working order.
  5. Consider hiring a third party, properly-insured, armed guard to safeguard your storefront on a regular basis.
  6. Institute industry-known best practices for high-risk manufacturing processes, like oil extraction.

Insurance Considerations for Facilities with a Cannabis Operation 

Risk management is critical to controlling risk, and insurance considerations can help your cannabis business obtain broader coverage and reduce premium costs.

  1. Communicate with your insurance broker.If you’re a landlord and you want to rent to a cannabis tenant, have a conversation with your insurance carrier at least 30 days before the lease begins. Even if you do, there’s a good chance that your carrier will issue a notice of cancellation (NOC) because they don’t want to engage with cannabis risk. On the other hand, if you don’t disclose the new tenant risk, should a claim be filed, it will could be denied, and the non-disclosure could cost you your policy.
  2. Engage a broker/carrier that specializes in cannabis.In such a volatile market, it is important to work with a broker and carrier that specialize in cannabis. This will enable hidden exclusions to be removed and help you procure the best policy and pricing possible for your organization.
  3. Tell your insurance “story.”Let the carrier understand your business and its risks by telling them your “story.” Tell them what your business does well, including current risk management practices and how you’ve been able to reduce claims. This will go a long way toward potentially minimizing premium costs and exclusions and obtaining broader coverage.
  4. Get another set of eyes. Most carriers will require a lengthy application from cannabis businesses in which the carrier may require the business to comply with certain requirements like having an approved safe or vault room. Your business will be held to the requirements stipulated in the application should you sign and submit it. Ask your broker or a reliable attorney to review the contract for anything you may have missed. Some carriers will incorporate the submitted application into the policy. Any changes between policy inception and a claim could cause coverage issues.

The fast-growing nature of the cannabis industry has ushered in a new set of challenges for business owners and operators. Keeping property coverage in check by implementing risk management best practices and working to expand coverage and reduce premium costs can propel a cannabis business even further.

Iridium Consulting & Ionization Labs Launch New Partnership

By Cannabis Industry Journal Staff
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According to a press release published today, Iridium Consulting and Ionization Labs announced the launch of their new partnership for in-house R&D testing. The partnership will launch a new series of in-house potency testing solutions, aimed at increasing accuracy and speed for cannabis companies looking to improve their product quality, while also simplifying the testing process.

Ionization Labs, based in Austin, Texas, has a “Cann-ID Potency Testing Solution” that uses an integrated, proprietary software for cannabinoid analysis. That testing solution allows growers and producers to measure potency in-house. Iridium is providing the service as part of their consulting offering for the cannabis and hemp industry, starting with clients based in California.

“We are delighted to add the Ionization Labs service to our list of offerings for cannabis and hemp clients” says Aaron Green, partner and co-founder at Iridium Consulting. “We have seen a lot of technologies on the market for cannabis R&D potency testing and no other solution provides comparable accuracy, efficiency and ease of use.”

Soapbox

Cannabis Is the Answer to Declining State Revenues

By Carl Silverberg, Seana Chambers
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As states grapple with flagging tax revenues and soaring unemployment as a result of the pandemic, governors and state legislators are facing a quandary. Either cut back on programs that voters like, or increase taxes to keep them funded. According to a recent assessment by iUNU, many legislatures will look to the booming business of legal cannabis as a revenue source.

“For those states that have only made incremental steps towards legalization within their jurisdiction… there’s going to be pressure to initiate, whether it’s through medical marijuana programs or the expansion into recreational,” says Martin Glass, a partner at Jenner & Block who specializes in mergers & acquisitions and securities transactions.

Martin Glass, a partner at Jenner & Block

In recent months, the average per-store retail sale of cannabis increased in legalized states – a telling change given the current state of the economy. Other facts – a loyal consumer base, proven health benefits and strong external investment – all point to a dependable industry. Mr. Glass saw this as a sign that cannabis is more stable than most believe: “The industry has proven to be quite resilient… it has absorbed the COVID-19 shock very well.”

Not only is cannabis a dependable industry, it’s also an expanding one. In 2019, global revenue rose to $15 billion, a 48% increase from the prior year. By 2020, economists expect that number to reach $20 billion. Kristin Baldwin, executive director of the Cannabis Alliance, added some perspective: “Right now, we’re at about 240,000 people employed according to the latest numbers I have. Maybe even 250,000. In King County, which is the largest county in Washington and where Seattle is, we had a 22% increase in sales in March alone.”

In the United States, the revenue from annual sales increased by nearly 40% from 2018 to 2019, rising 3.3 billion over the course of the year. This growth is expected to continue at a similar rate in the coming years, forecasted to hit $29.7 billion in revenue by 2025. These growth statistics are impressive and especially attractive as state legislatures and governors search for options to balance their budgets.

Kristin Baldwin, executive director of the Cannabis Alliance

The industry also is logging similarly impressive growth on the employment side. The cannabis industry was recently dubbed “the fastest growing job market in the country” by CNBC, leaping an estimated 110% from 2017 to 2019 and hitting six figures in real numbers during that three-year period. The industry turned in those impressive numbers while constrained to 33 states (11, if evaluated from a recreational standpoint), leaving plenty of room for growth.

Baldwin agreed. “I think employment will grow along with the sales just because you are going to need budtenders, delivery drivers, and farmers,” says Baldwin. “For example, in California, Oregon, and Washington – highly regulated systems – there’s still going to be a significant amount of growth because there’s a significant amount of demand.”

Heading into budget negotiations in 2021, states are facing huge revenue gaps. Right now, those dismissing cannabis are, as Glass says, “leaving a lot of money on the table” by failing to take advantage of a major economic resource. Not only does the industry produce tax revenue to expedite states’ recoveries, as legalization expands, the cannabis industry has the ability to provide thousands of jobs.

Still dubious? Baldwin shared this fascinating piece of information: “It’s a generational shift that’s occurring as we speak. The fastest growing consumer group in cannabis right now is women over the age of 40.”

Sponsored by Agilent

Agilent Introduces New eMethods & Consumables Kits

By Cannabis Industry Journal Staff
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Sponsored by Agilent

Agilent Technologies just announced a new line of products for cannabis testing labs. Their newest tool, Agilent eMethods, are downloadable, plug-and-play instrument methods that “establish reliable efficient protocols with an end-to-end workflow that addresses the different testing needs, and offers guidance on sample preparation, consumables, and supplies.”

Those eMethods give labs a complete analytical system configuration for automating testing, sample prep, separation and detection, along with data processing and reporting abilities. The tool is designed with startup labs in mind, given how tedious developing new testing methodology can be.

According to Monty Benefiel, vice president at Agilent and general manager of the Mass Spectrometry Division, the new tool should give some labs a head start when it comes to method development. “The fledgling market of cannabis and hemp testing has an urgent need for solutions that help ensure efficiency as well as regulatory compliance,” says Benefiel. “Our new tool—Agilent eMethods—along with the Cannabis and Hemp Potency Kit and Cannabis Pesticide and Mycotoxin Kit gives labs a head start in establishing testing procedures, increasing productivity and profitability, and greatly reducing risk.”

In addition to the new eMethods, the company is also rolling out their newest consumables kits: The Cannabis and Hemp Potency Kit and the Cannabis Pesticide and Mycotoxin Kit. These are designed to help labs set up and simplify analyses for complex matrices. They include all the consumables necessary to perform each test and come with step-by-step instructions.

ANAB Accredits ABKO Labs

By Cannabis Industry Journal Staff
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The ANSI National Accreditation Board (ANAB) accredited ABKO Labs, LLC, to ISO/IEC 17025. ABKO Labs is a cannabis and hemp testing laboratory based in Warren, Michigan.

According to the press release, ABKO Labs is the first startup cannabis testing lab to achieve ISO/IEC 17025 accreditation in Michigan. The state earned the accreditation in general requirements for the competence of testing labs, demonstrating competence in chemistry in microbiology.

“We are very proud of our accomplishments in the cannabis lab space in Michigan and we look forward to continuing to offer accurate and prompt results,” says Amy Brown, CEO of ABKO Labs, LLC.

Cannify Adds 1,500+ Products to Database

By Cannabis Industry Journal Staff
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According to a press release sent out this week, Cannify has added a new feature to their website, which allows users to check out more than 1,500 cannabis products available in the United States and save the ones that interest them.

Cannify’s mission is to “bring relevant cannabis science closer to the users, and vice versa, by extracting relevant data from hundreds of studies and making them easy to understand.” Dr. Linda Klumpers, one of the few clinical cannabinoid pharmacologists in the world, founded Cannify back in 2016. Cannify developed a science-based algorithm that helps patients learn which cannabis products are best suited for their personal needs. When patients take the Cannify quiz, it asks them in-depth questions and shows them relevant scientific literature in a personalized report. After that, they are given an overview showing which products match their reports best.

“Making your product database available is nothing new,” says Klumpers. “Making sure that it is actually useful, is a different story. The product list is easy to navigate, even for cannabis novices. Users can filter products by location, administration method, or compound: are they interested in THC, CBD, or both? It might sound so simple, but it turned out to be a rare feature on the market.”

This new addition to the Cannify platform aims to help enhance the overall utility and versatility of the system.

Cannify wants to collect, analyze and publish its data, which they hope will contribute to the advancement of cannabis research. In addition to the Cannify quiz and the product database features, the company also has plenty of educational materials, educational quizzes and customized cannabis courses available on their website.

Accelerate Your Business Growth with Great Product Packaging

By Ashlee Brayfield
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The cannabis industry is booming. Just the medical segment of the industry is expected to generate $22 billion in the next four years.

Today, 36 of the 50 states allow patients to use medical cannabis with a prescription. But there’s a lot of competition in the cannabis industry. To succeed, you must stand out from the rest with custom branded packaging for your cannabis and CBD offerings.

In fact, some of the most successful companies in the industry have built multi-billion dollar businesses based on a strong brand identity, including compelling packaging design for their cannabis and CBD products.

Here’s what you should keep in mind when designing packaging for your cannabis or CBD products:

Cannabis packaging should attract your target customers

Compelling and high-quality product packaging plays a big role in a customer choosing one cannabis or CBD product over another.

But, before you can create packaging solutions for your cannabis and CBD products, you must understand your target market, your prospective customers and the experience you want to promote.

Here are a few customer profiles for you to consider:

Luxury cannabis and CBD customers

A product is considered a luxury when the brand status is elevated in the eyes of the customer.

Luxury clients expect top quality products and packaging. And, as far as most customers are concerned, if a product is perceived as better than others – it is.

To aid in this perception, packaging options for premium products should be high quality, clean and minimal or luxe, and over-the-top.

Just some of the many CBD products on the market today.

And, the packaging should always deliver on the implied promises defined by the manufacturer or dispensary. In fact, if you want to start a cannabis dispensary, you should be thinking about the overall experience for your customers and how the products and packaging offered in your dispensary will stand out from others.

When designing packaging options for customers looking for luxury cannabis and CBD products, be sure to consider:

  1. Quality: Luxury consumers expect high-value, designer packaging that functions impeccably.
  2. Sense: Luxury product packaging should provide a heightened, tactile user-experience.
  3. Taste: Luxury product packaging should forgo the typical stereotypes associated with cannabis.

Millennial cannabis and CBD customers

Millennials are drawn to authenticity. They’re burnt out on traditional advertising, coercive marketing and carefully cultivated facades.

But they’re open to trendy design, and unique product uses and experiences. And, they’re generally receptive to following celebrity and influencer endorsements from people they perceive to have values that align with their own.

When designing packaging for Millennials, be sure to consider:

  1. Simplicity: Minimal, unadorned custom branded packaging appears authentic and trustworthy. This type of packaging represents the product within, without frills or facades.
  2. Sustainability: Millennials tend to value environmental consciousness. They value sustainable packaging that offers alternatives to plastics. You’ll get extra points if the packaging is made from renewable or plant-based materials.
  3. Limited Edition: Millennials want something not everyone can have. This is why scarcity marketing via special edition products is wildly popular.

Customers looking for relief

All medical cannabis customers have a medical need for cannabis and CBD products. A recent study found that approximately two-thirds of medical cannabis patients define chronic pain as their chief reason for treatment.

Patients looking for pain relief for medical issues will be drawn to custom branded packaging that promises what they desire, without making unsubstantiated health claims. So, an emphasis on the efficacy of your product and the relief they will enjoy will be very persuasive for that audience.

When designing packaging for customers looking for relief, be sure to consider:

  1. Medical symbols: Packaging design should make it clear that your product delivers health benefits. Some brands choose to do this through logos pairing cannabis leaves with medical symbols. But, with so many medical cannabis brands hitting the market, that concept will be quickly played out and overdone; making it hard for your brand to stand out. So, think of other ways you can convey your product’s medical value to set your brand apart.
  2. Text: Use clear, concise copy describing your product and its benefits. Pain relief should be a focal point of the package messaging.
  3. Simple design: Clean package graphics and labels with ample white space will ensure that consumers can read the product packaging and find the necessary information with ease.

Cannabis packaging should inform

The best custom branded packaging design successfully balances design and information. Custom packaging for any product must include basic product information on a custom printed label – preferably in a design that makes your product look appealing.

Effective packaging design can be simple

The overall design is an important element in the success of your products. As we emphasized in our guide on how to start a business, a strong brand identity is more important today than it has ever been.

But, medical cannabis packaging carries a heavier informational burden. Guidelines, which vary state by state, require that your packaging must include dosing information and instructions for safe use, as well as batch numbers and expiration details.

For reference, here is our handy content checklist for cannabis packaging. It is also important to be sure your packaging solutions meet state laws. If you already have packaging for your cannabis and CBD products but are struggling to increase sales, perhaps it’s time to consider rebranding your company and your packaging.

Cannabis packaging should protect the product

When choosing cannabis packaging materials, consider both appearance and function.

The best marketing and package graphics in the world won’t hold much value if the product inside isn’t properly protected.

Child-resistant packaging can look aesthetically pleasing with the right design

Keep the following protection guidelines in mind when developing your custom packaging:

  1. Proper seal: Packaging for products that are not single-use must be resealable and generally should be smell proof. Containers with lids, adhesive closures, ziplock packaging and boxes with interlocking closures are all options – which is right for your product?
  2. Child safety: Packaging must be difficult for children to open – it must be child-resistant (such as pop-top bottles that require some dexterity to open). Packages must adhere to the Poison Prevention Packaging Act.
  3. Tamper evident: Much like over-the-counter drugs, medical cannabis packaging must be designed in such a way that it is evident if the package has been tampered with.
  4. Sturdy materials: Select packaging that is sturdy enough to protect the product inside. Different products will present differing packaging requirements based on the level of protection they require.
  5. Edibles and beverages: States laws involving medical cannabis and consumable products are not created equal. In the states that do allow edibles and infused beverages, the packaging must be opaque.

With all products, it’s important to remember that the package is the first thing people will see. Great packaging design elevates your product and tells a story about who you are as a company.

But medical cannabis packaging must also work to build trust and confidence in the efficacy of your product. Use these strategies to create the best packaging for your product and cannabis customers will buy over and over again.

2020 Cannabis Quality Virtual Conference Series Agenda Announced

By Cannabis Industry Journal Staff
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The agenda for the 2020 Cannabis Quality Virtual Conference Series has been released. The announcement about the annual Cannabis Quality Conference being converted to a virtual series due to the COVID-19 pandemic was made last month. Due to a demand to provide attendees with even more content, the event has been extended a full month and is running through December. Cannabis Industry Journal is the media sponsor.

The event will begin every Thursday at 12 pm ET, beginning on September 8 and continue through December 22. Each week will feature three educational presentations, two Tech Talks, and a panel discussion. Weekly episodes include cannabinoid research & discovery, cannabis labs, licensing applications, post-election analysis, the Canadian market, hemp quality, HACCP & GMPs, facility design, cultivation technology, safety & compliance, COVID-19’s impact and supply chain quality.

Roy Bingham, Co-Founder & CEO of BDSA, and Nic Easley, Founder and CEO of 3C Consulting , will serve as the keynote speakers on Tuesday, September 8, discussing cannabis market trends and COVID-19’s impact on the cannabis industry.

“Human connection is so important for events, and we know we’re not the only game in town. That’s why we’ve invested in a Conference Virtual Platform that can facilitate discussions, discovery, and connection that can continue whether our event is offline or online—and not end with the live streaming,” says Rick Biros, president of Innovative Publishing. “Simply, the experience other conferences are offering is not conducive to learning, staying engaged or take into consideration that you have a job to do during that week. This is why we have designed the Conference’s program with short, manageable episodes that are highly educational.”

Registration for the 2020 Cannabis Quality Virtual Conference Series is open. Keeping in mind that registrants may not be able to attend every week due to scheduling conflicts, there is an option to watch each session on demand.

Tech Talk Sponsorship

Cannabis Industry JournalCompanies that are interested in sponsoring a 10-minute technical presentation during the series can also submit their abstract through the portal. For pricing information, contact IPC Sales Director RJ Palermo.

Innovative Publishing has also converted the Food Safety Consortium to a virtual event. More information is available at Food Safety Tech.

About Cannabis Industry Journal

Cannabis Industry Journal publishes news, technology, trends, regulations, and expert opinions on cannabis safety, quality, business and cannabis sustainability. We also offer educational, career advancement and networking opportunities to the global cannabis industry. This information exchange is facilitated through ePublishing, digital and live events.

Cannabis Testing Laboratories (CTL) Becomes First ISO-Accredited Hemp Lab in Nebraska

By Cannabis Industry Journal Staff
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In a press release published last week, Cannabis Testing Laboratories (CTL) announced they have achieved ISO 17025 accreditation as part of the Nebraska Department of Agriculture requirements for cannabis labs operating in the state. CTL is a wholly-owned subsidiary of Doane University, a liberal arts college in Crete, Nebraska.

Dr. Arin Sutlief (in back) and Dr. Andrea Holmes preparing samples for cannabinoid analysis by HPLC.

According to the press release, CTL will be renting space on Doane University’s campus for its primary laboratory. Doane University is working on an effort to foster innovation where they create spaces on campus for entrepreneurial startups. Dr. Andrea Holmes, Director of Cannabis Studies and Professor of Chemistry at Doane University, is the founder of CTL.  Dr. Arin Sutlief is the director of the laboratory as well, which means CTL is led by an all-female management team.

Dr. Holmes says hemp testing should be a priority for the state’s new industry. “Being the first ISO-accredited and state approved cannabis testing laboratory in Nebraska will allow farmers, processors, vendors, and even consumers of CBD and hemp products to have local access to high-quality and reliable testing,” says Dr. Holmes. “For farmers, continuous testing is of utmost importance so they don’t grow hemp over 0.3% total THC levels, at which point hemp is categorized as marijuana, which is currently illegal in Nebraska. Consumers of CBD products will also benefit from private testing as oftentimes CBD-infused products don’t actually contain what the label says.”

Hemp weighed for sample preparation for cannabinoid analysis by HPLC.

CTL will operate independently of the university, but the lab will be a resource for faculty and students. There will be internship and experiential learning opportunities available at the lab for students. In addition to that, the lab will also help faculty that teach cannabis-related courses.

Last year, Doane University announced the launch of their Professional Cannabis Certificate Program. In June of this year, the university expanded their course offerings in cannabis, with seven courses available this fall. The addition of CTL to the Crete, Nebraska campus will benefit those new courses and provide more resources to those in the certificate program.

“I am proud to be one of the creators of a fully accredited cannabis testing lab that provides our farmers and processors reliable and quick local testing of hemp,” says Dr. Sutlief. “CTL is among the first ISO-certified cannabis testing labs in the U.S. that is a subsidiary of a university. Innovation, research, entrepreneurship and education will be the central pillars of CTL as we set ourselves apart to become leaders in cannabis testing not only in Nebraska and the Midwest but also nationally.”

KCA Laboratories Awarded Hemp Testing Contracts for Massachusetts, North Dakota

By Cannabis Industry Journal Staff
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In a press release sent out last week, KCA Laboratories announced they have been awarded hemp testing contracts for Massachusetts and North Dakota. They received the notices through the North Dakota Department of Agriculture and through the Massachusetts Department of Agricultural Resources’ Hemp Program that they were awarded the contract.

KCA Laboratories is an independent, third-party testing laboratory based in Nicholasville, Kentucky that specializes in hemp testing.

According to Ryan Bellone, Commercial Director for KCA Labs, they started the company to focus strictly on hemp testing. “The team here at KCA Labs is grateful for the opportunity to analyze North Dakota’s and Massachusetts’ hemp samples for Total THC content,” says Bellone. “We started KCA Labs to elevate the quality of testing in the hemp industry. It has been our goal from inception to service regulators, farmers, processors, and retailers with trusted results. KCA is excited to work with North Dakota and Massachusetts as well as the farmers and processors they serve.”

Bellone says they have started seeing a backlog of samples in a number of states for hemp regulatory compliance testing. “For years, a lack of laboratory testing was a bottleneck for the industry and now that the market has more options, testing turnaround time should not be a barrier.”