Voters legalized cannabis in 8 states on Election Day. Photo: Nicole Klauss, Flickr
Election Day brought a renewed sense of vigor to the market with voters in eight states legalizing forms of cannabis. California, Nevada, Maine and Massachusetts passed recreational cannabis measures, making legalization’s momentum seem exponential.
But November 8th also gave Donald Trump the presidency, and his cabinet appointments, namely Sen. Jeff Sessions as Attorney General, gave many a feeling of uncertainty for the future of federal legalization. Adding insult to injury, the DEA repeatedly stood by their antiquated and ludicrous judgment for cannabis to remain a Schedule 1 narcotic.
Trump nominated Sen. Jeff Sessions (R) for Attorney General Photo: Gage Skidmore, Flickr
A lot of the fervor surrounding public safety could be described as overdramatic or somewhat unwarranted. 2016 was the year of misinformation. Fake news spread like wildfire with people sharing stories like this or this that turned out to be very misleading or just downright false.
States with legal cannabis came under heavy public scrutiny and addressed problems like consumer education, public safety and lab testing. Pesticides became a highly publicized and persistent issue in a number of areas, with some states regulating it heavily and addressing public health concerns. Plenty of new rules were formed surrounding labeling and testing, with Oregon, Colorado and Washington experiencing some regulatory growing pains.
Those growing pains shed light on the need for regulators to craft rules that allow for changes, adding rules where necessary and getting rid of cumbersome rules that might thwart market growth. Rules need to be able to adapt as the industry grows, much like businesses need to adapt to a changing market climate to stay afloat. This is all the more reason why cannabis businesses need to make their voices heard and work with regulators to move things forward.
Pesticide use was a major issue in 2016 Photo: Michelle Tribe, Flickr
With so much uncertainty surrounding the future of legal cannabis in America, the word of the year for 2017 should be resiliency. In a social-ecological context, resiliency is “the capacity of a system to absorb or withstand perturbations and other stressors such that the system remains within the same regime, essentially maintaining its structure and functions. It describes the degree to which the system is capable of self-organization, learning and adaptation.”
A warning label for cannabis in Oregon after the October 1st compliance deadline
Self-organization, learning and adaptation are three very important attributes of a resilient system. Without knowing what will happen when Trump’s cabinet takes the reigns of federal agencies, it is important to prepare for the unexpected. Adhering to standards like FOCUS allows cannabis businesses to prepare for unexpected events like recalls or product safety failures.
Those standards could also become the law down the road, as government officials often look to an industry’s voluntary consensus-based standards when deciding how to regulate it. In 2017, a number of state governments will embark on the heavy undertaking of writing the regulatory framework for legal cannabis.
2017 will bring opportunities and challenges to the cannabis industry. The industry’s rapid growth juxtaposed with political, economic and regulatory uncertainties create a climate that requires resilience to be built into the system at all levels. It is critical, now more than ever, that cannabis businesses build strong relationships with industry groups, advocacy groups and regulators to craft the institutional capacity and mutual trust needed to weather the uncertainty ahead.
PA Secretary of Health Dr. Karen Murphy last week announced applications for growers and processors, while dispensary license applications will be available January 17, 2017. License applications will be accepted from February 20 through March 20, 2017. Governor Wolf signed the medical cannabis bill into law back in April of this year.
Philadelphia City Hall Photo: Michael Righi, Flickr
“We’ve reached an important milestone in the program with the release of permit applications on January 17, 2017,” says Secretary Murphy. The PA Department of Health will issue 12 licenses for growers and processors and 27 dispensary licenses, according to Secretary Murphy’s statement. “The decision for which counties will be issued permits in this first phase was determined by using the department’s medical data, as well as comments from more than 5,000 patients and nearly 900 potential grower/processors and dispensary applicants.”
State Capitol building in Harrisburg Photo: Harvey Barrison, Flickr
According to the Philly Voice, the highly populated Southeast region of Pennsylvania will get ten dispensary permits, including three in Philadelphia, two in Montgomery County and one in Bucks, Chester, Berks, Delaware and Lancaster counties each. The state will fully implement its medical cannabis program by 2018, but a temporary program with ‘Safe Harbor guidelines’ was effective in May of 2016, essentially allowing access for patients in the mean time, while establishing preliminary regulatory compliance guidelines.
In last week’s statement, Secretary Murphy also stressed the importance of their Physician Workgroup in developing the regulations. “We cannot underestimate the role of physicians in making sure that patients can access medical marijuana,” says Secretary Murphy. “That’s why the involvement of physicians and health care professionals through our Physician Workgroup is vital to the successful development and implementation of Pennsylvania’s Medical Marijuana Program.” The Workgroup’s recommendations include establishing quality monitoring, training for dosage recommendations while addressing rural and urban access, education and delivery.
President-elect Donald Trump nominated Sen. Jeff Sessions from Alabama for Attorney General and Rep. Tom Price from Georgia as the new Health Secretary. Those appointments still require Senate approval before they are officially members of the cabinet. Neither of the picks to head the Department of Justice (DoJ) and the Department of Health & Human Services (HHS) is friendly to cannabis.
What’s the bad news?
Both of those agencies are at the center of any federal regulation of cannabis, including access for research. As Attorney General, Jeff Sessions would essentially have the ability to block any rescheduling efforts, as outlined in the Controlled Substances Act.
Sen. Jeff Sessions, (R), 69. Photo: Gage Skidmore, Flickr
Sessions has made inflammatory, racist remarks and showed his disdain for cannabis users on multiple occasions. He disgracefully said at a Senate hearing in April, “Good people don’t smoke marijuana.” When he was a federal prosecutor, Sessions was a prominent advocate for the War on Drugs, and perhaps even still is.
Rep. Tom Price (R-GA) Photo: Gage Skidmore, Flickr
Tom Price, a Republican Congressman from Georgia, has voted repeatedly against pro-cannabis legalization bills, including twice against the Veterans Equal Access Amendment as well as the Rohrabacher/Farr Amendment, which “prohibits the use of funds in the bill to supersede State law in those States that have legalized the use of medical marijuana.” NORML’s Georgia Scorecard gave Tom Price a D grade for his previously voting against pro-cannabis bills.
What’s the good news?
While Sen. Jeff Sessions is certainly no friend to legal cannabis, I believe he is not a serious danger to the cannabis industry. This op-ed on CNN does a terrific job at summing up Sessions’ potential threat to the cannabis industry, but also why it may not be cause for a total panic. The author mentions a laundry list of DoJ priorities over cannabis, but I think the larger issue at hand is states’ rights.
Republicans are historically passionate when it comes to keeping states’ rights sovereign. With cannabis’ big wins on Election Day, a majority of the country’s population now lives in states where cannabis is legal.
Aaron Smith, executive director of NCIA
There is too much momentum behind legal cannabis for a new administration to waste precious resources and time on trying to disrupt it. States are getting too much tax revenue from regulating cannabis to just let the DoJ interfere with their economies. “Voters in 28 states have chosen programs that shift cannabis from the criminal market to highly regulated, tax-paying businesses,” says Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “Senator Sessions has long advocated for state sovereignty, and we look forward to working with him to ensure that states’ rights and voter choices on cannabis are respected.” Smith’s words in the NCIA statement are pointed and clear: this is a states’ rights issue at heart and they must respect that.
By forcing the states’ rights issue to the front, it is possible to put legal cannabis in a bipartisan lens, thus eliminating the possibility of a few old drug war stalwarts disrupting the industry. While rescheduling efforts could be thwarted for the coming years, I have faith that the federal government will not interfere with states that legalize cannabis.
Lezli Engelking founded the Foundation of Cannabis Unified Standards (FOCUS) in 2014 to protect public health, consumer safety, and safeguard the environment by promoting integrity in the cannabis industry through the use of standards. Standards are an agreed upon way of doing things and specify guidelines or requirements for producing goods or providing services, according to FOCUS.
Peter Maguire, committee chair of the FOCUS Cultivation Standard
Standards can take the form of a “reference document, which may include specifications, guidelines, conditions or requirements for products, operations, services, methods, personnel and systems on how to design, operate, manufacture or manage something.” Peter Maguire, VP of System Applications for Lighthouse Worldwide Solutions and committee chair of the FOCUS Cultivation standard, joined the organization wanting to make a positive impact on the industry that is in line with protecting people and medical patients. He sees so much variability in the industry and the need to homogenize standard operating procedures (SOPs). “I have worked with multiple cultivation facilities and a few of them have operating procedures in place but having them in place is only half the solution- it’s critical to have the right ones in place,” says Maguire. He has twenty years of experience in contamination control in manufacturing, before entering the cannabis industry.
The FOCUS cultivation standard was created by experts who have years of experience in both cannabis cultivation, good agricultural practices and in the tightly regulated pharmaceutical industry. “FOCUS created these guidelines as a sort of roadmap for success in business; You need to keep your employees healthy and your products safe to survive in the long term,” says Maguire. We sit down with Lezli Engelking to find out how the standards are created, what makes them significant and what businesses can gain by working with them.
CannabisIndustryJournal: Why are standards important?
Lezli: Standards are the international language for trade – they exist in every industry. “The U.S. Department of Commerce estimates that standards and conformity assessment impact more than 80% of global commodity trade.” FOCUS is not reinventing the wheel with what we are doing. We are simply adapting a business model the federal government already uses. In the 80s, when the heroin epidemic swept across the US, methadone clinics popped up in every state in the country within two years. The clinics were all operating under different state, city and county regulations – much like the cannabis industry is today. The federal government took a look at the situation and decided they needed a way to regulate these clinics in order to protect public health and safety. They released a Request For Proposal (RFP) looking for an organization to create voluntary-consensus standards and a third-party certification system for the methadone clinics. Commission on Accreditation of Rehabilitation Facilities (CARF) is the organization that answered and won that RFP. CARF continues to work with Health and Human Services to maintain the standards and provide third-party certification to the clinics today. FOCUS develops international, voluntary consensus standards and a third party certification program for the global cannabis industry based on the CARF model. This is extremely important, because of the National Technology Transfer and Advancement Act, (Public Law 104-115), signed into law March 7, 1996 by President Clinton. The act requires that all federal agencies use standards developed by voluntary-consensus standards bodies, instead of government-unique standards wherever possible. Perhaps even more importantly, the Act includes provisions that encourage federal agencies to partner with the private sector in the development of standards that not only help improve the efficiency and effectiveness of government, but also strengthen the U.S. position in the global marketplace.
CIJ: What exactly goes into developing a voluntary-consensus standard?
Lezli: Voluntary-Consensus refers to the type of standard and how it is developed. Everyone who participates in the development of voluntary-consensus standards does so on a voluntary basis. Committee members must come to a consensus on every point within the standard- down to every comma or semicolon. Once the development process is complete, the standards must undergo a 30-day public review period. The process for developing voluntary-consensus standards is designated by International Organization for Standardization (ISO). ISO has member agencies in 163 countries that participate in the development of standards. The American National Standards Institute (ANSI) is the American body for ISO. FOCUS follows all ISO/ANSI guidelines in the standards development process. This is extremely important because it means FOCUS standards are suitable for accreditation and adoption into regulations according to the National Technology Transfer and Advancement Act. All voluntary-consensus standards are developed under the principles of:
Openness| Participation in the standard development process is open to individuals with a stake in the standard who bring useful expertise along with the spirit and willingness to participate.
Balance| Focus stakeholder groups involve all stakeholder groups: industry, regulatory, quality assurance, medical, law enforcement, business, research, consumers, patients and the general public.
Voluntary-Consensus| Individual subcommittees of volunteers develop each area of the standard, offering their unique expertise to form a consensus. They are not paid for their participation.
Lack of Dominance| No party has dominant representation, or influence to the exclusion of fair and equitable consideration of other viewpoints.
CIJ: More specifically, how are the FOCUS standards developed?
Lezli: To create a baseline standard, FOCUS utilized World Health Organization (WHO) guidelines for Good Manufacturing Practices (GMP), Good Agricultural Practices (GAP), Good Laboratory Practices (GLP), Code of Federal Regulations (CFR) for pharmaceutical GMPs, nutraceutical GMPs, food safety standards, OSHA and HACCP. From there, applicable cannabis regulations from around the world were added. All of this information was compiled into auditor-style checklists. Each committee member was provided time to go edit, remove or add to items in the checklist on their own. Over the next two years, each of the eight committees had monthly meetings, going through and coming to a consensus on each line item of the standard. Once the committees completed development, the standards were open for a 30-day Public Review to collect comments and feedback. The first eight FOCUS standards, completed and ready for use, cover Cultivation, Retail, Extraction, Infused Products, Laboratory, Security, Sustainability and Packaging & Labeling.
FOCUS is currently recruiting committee members to begin development of five new cannabis standards later this year: Advertising/Marketing, Insurance, Banking/Finance, Patient Care and Research. Committees will receive a list of proposed suggestions for what should be considered in developing the standards. Each committee member will develop a list to select criteria they think should be included into the standard. FOCUS will compile the lists, then committees will go through the monthly standards development/vetting process for each line item in the standard.
CIJ: So what does a business have to gain by adopting a FOCUS standard?
Lezli: Compliance becomes easily manageable with the FOCUS software platform, integrating standards, training and SOPs into the everyday operations of the business. FOCUS certified clients could expect to reduce costs, reduce risk and reduce liability by assuring they are producing safe, quality and consistent products. FOCUS certification allows a business to differentiate themselves from their competitors, and prove to their patients and customers they can trust their products. Certification also allows businesses to access reasonable insurance rates and drives interest from investors.
FOCUS is here to partner with cannabis businesses. We are there to hold their hand, by providing guidance and assistance along every step of the way. Unlike state mandated audits that delineate what a business is doing right or wrong, FOCUS is an on-going compliance management system. We are here to make sure a business runs as efficiently as possible and take the guesswork out of compliance. Under FOCUS certification, a business receives ongoing consulting, customized SOPs, employee training and a documentation management software system to track and prove compliance.
CIJ: Can you give us an update on FOCUS’ progress in 2016?
Lezli: A large milestone for FOCUS this year, aside from completing version one of the standards, is choosing an appropriate software platform, (Power DMS) to house the standards and provide an ongoing compliance management system for our clients. Power DMS also houses regulatory standards for law enforcement; health care, federal aviation and fire departments, so most agencies in public health are already familiar with it. The familiarity and access to this platform is a huge benefit on the regulatory side. It allows first responders to access the schematics of a FOCUS certified client in the event of an emergency. This is crucial in the event of an explosion from extraction equipment, or a fire in a cultivation facility, as without first identifying where the hazards are, they will not access the facility. The FOCUS software platform allows first responders access to all pertinent information through computers in police cars, ambulances, or fire trucks.
For the industry, the FOCUS software platform is equally as impressive. Not only does the platform house the standards and all SOPs, it is also complete compliance management system. FOCUS certified clients have a simple management tool that houses all training and documentation, assuring all required compliance documentation can be easily accessed at any time. The platform also allows FOCUS certified clients to provide access to governing bodies in advance of state audits –streamlining the process and minimizing time and interruption caused by state audits. The FOCUS platform tracks all changes to required documents, provides real time updates on employee training, creates appropriate traceability logs, and provides updates on regulatory changes, including which SOPs need to be changed to maintain compliance. The platform allows FOCUS to be way more than an auditing company. FOCUS is a partnership in compliance for cannabis companies wanting to maintain good business practices and stay compliant with regulations.
We have about 140 new committee members that will assist existing committees with standards updates and participate in the development of the next set of FOCUS standards for advertising/marketing, banking/finance, research, patient care and insurance. All committees will convene before 2017.
Oregon cannabis regulators began enforcing new rules over the weekend when the October 1st compliance deadline passed. Compared to the relatively cut-and-dried new Colorado regulations, the Oregon cannabis market faces more complex and changing regulatory compliance issues.
The new rules in Oregon address changes to testing, packaging and labeling regulations along with concentration and serving size limits, according to a bulletin published by the Oregon Health Authority (OHA) and the Oregon Medical Marijuana Program (OMMP) earlier this week. Most of the new rules are meant to add safeguards for public health and consumer safety, while putting an emphasis on keeping cannabis away from children.
Around the same time, the Oregon Liquor Control Commission (OLCC) published a bulletin with a new temporary rule that is meant to prevent marketing to children. The OLCC’s temporary rule clarifies “restrictions on product wording commonly associated with products marketed by or to children.” The OLCC reviewed around 500 strain names and found roughly 20 of them that could appeal to children. The OLCC will not approve labels that include strain names like Girl Scout Cookies, Candyland and Charlotte’s Web, among others. This means that breeders and growers have to change strain names on labels like Death Star, Skywalker and Jedi Kush because they contain a reference to the Star Wars franchise, which is marketed to children.
Oregon Marijuana Universal Symbol for Printing
The new testing regulations establish requirements for testing cannabis products for THC and CBD concentrations, water activity, moisture content, pesticides and solvents in concentrates. They also stipulate that ORELAP-accredited laboratories must perform the testing. In the time leading up to the compliance deadline, many lacked confidence that ORELAP would accredit enough laboratories to meet the demand for testing. “We have heard from existing accredited labs that they can meet demand for cannabis product testing,” says Jonathan Modie, spokesman for the OHA. “We don’t yet know how much product requires testing, so we can’t speculate on whether labs will indeed be able to meet demand.” It is still unclear at this time if there are enough laboratories to perform all of the testing for cannabis products in the state.
The universal symbol on a label of a cannabis product purchased after Oct. 1
At this time, 16 laboratories have been accredited for some form of testing, but only four labs have been accredited for pesticide testing. A list of the labs that ORELAP has accredited can be found here. Notably, only one lab is accredited for testing microbiological contaminants, such as E. coli. Testing for microbiological contaminants is not required for all cannabis products sold, rather it is only required upon written request by the OHA or OLCC.
The new labeling and packaging requirements concern testing, consumer education, childproofing and preventing marketing to minors. All cannabis products must contain a label that has been pre-approved by the OLCC. “Cannabis products have to be clearly labeled, showing that is has been tested, or if it has not been tested then it must display ‘does not meet new testing requirements’,” says Modie. “It [the label] must be clear, legible and readable, so they [the consumer] know exactly what it contains, including what cannabis product is inside the package, how much of it, how much THC, and where the product came from.”
According to Modie, it is particularly important that the packaging is not attractive to minors. Cartoons, designs and names that resemble non-cannabis products intended for, or marketed to children, should not be on the packaging or label. “Part of our education to the public and recreational cannabis users focuses on keeping these products out of reach of children in the first place, like storing cannabis in a locked area or an area where a child cannot reach or see,” says Modie. “Our goal is always to protect public health.”
Cannabis processors and dispensaries in Colorado were hit with new rule changes over the weekend, going into effect on October 1st. The rule changes affect those producing edibles and dispensaries that sell retail and medical cannabis products.
The universal symbol required on all cannabis products in Colorado
As of October 1st, all cannabis edibles must be marked with the universal THC symbol, according to a bulletin posted by the Colorado Department of Revenue’s Marijuana Enforcement Division (MED). Both medical and retail cannabis products require labeling that includes a potency statement and a contaminant testing statement.
The rules also set “sales equivalency requirements” which essentially means a resident or non-resident at least 21 years of age can purchase up to one ounce of cannabis flower or up to 80 ten-milligram servings of THC or 8 grams of concentrate, according to the MED. The packaging must also include: “Contains Marijuana. Keep out of the reach of children.”
The universal symbol printed on products from Love’s Oven.
It seems that cannabis edible manufacturers have two clear choices for complying with the new rule requiring the THC symbol: They can use a mold to imprint the symbol on their product or they can use edible ink. Peggy Moore, board chair of the Cannabis Business Alliance and owner of Love’s Oven, a Denver-based manufacturer of cannabis baked goods, uses edible ink to mark each individual serving. The printer uses similar technology and ink used to print on m&m’s, according to Moore. “Baked goods are difficult to find a solution for marking them because they are a porous product, not smooth.” Complying with the new rules almost certainly means added costs for processors and edibles producers.
Moore said she updated all of their labels to include the appropriate information in compliance with the rules. “In terms of regulatory compliance, there have been some disparities for labeling and testing requirements between medical and retail cannabis products, however they are coming into alignment now,” says Moore. “The testing statement rule has been in place for some time on the retail side, but now we are seeing this aligned with both medical and retail markets.” This new rule change could be seen as a baby step in making the different markets’ regulations more consistent.
Update: On September 21, 2016, Governor Rick Snyder signed the bills into law, regulating the market officially.
The Michigan House of Representatives voted in concurrence with last week’s Senate vote, approving a series of bills that would establish a regulatory framework for the state’s medical cannabis industry, according to a Michigan Live article. Governor Rick Snyder is expected to sign the bills into law very soon.
The package of bills approved today includes provisions for a 3% tax on retail income, a licensing system for growers, dispensaries and patients as well as establishing a traceability system. The bills, if signed into law, would institute a regulatory framework akin to other states that have legalized cannabis recently. Packaging, labeling and testing requirements for THC, other cannabinoids and contaminants are included in the overhaul.
In 2008, voters approved the legalization of medical cannabis, since then however there has been little action from the state on regulating the safety, sale or distribution of cannabis. The bills are meant to eliminate the previous ambiguity in the laws surrounding the state’s patients, caregivers and dispensaries and establish a legitimate system for patients to access medical cannabis.
Stephen Goldner, Esq, founder of Pinnacle Laboratory and Regulatory Affairs Associates
According to Stephen Goldner, founder of Pinnacle Laboratories in Michigan, the market will get regulated into five discrete categories for licensing: growers, dispensaries, testing labs, processors, and transporters. “The basic legislation that will become law is very sensible and almost completely mirrors what has already been passed by the Michigan House, thus rapid conformance is nearly guarantied,” says Goldner. “There is a clear intent to require all products to be tested before sale, and setting up an integrated reporting system by product batch code from production, through transport and to final sale.” Goldner believes this comes with an overriding intent to establish standardization across the board, and points to the Foundation of Cannabis Unified Standards (FOCUS) for ready-to-implement, vetted standards.
“Michigan requiring method validation and other requirements, such as adverse event reporting, thereby builds in greater assurance of product safety and compliance,” says Goldner. Pinnacle Labs has been preparing for this day for quite some time. “We have invested the past 18 months preparing for exactly this legislation,” says Goldner. “We look forward to helping the medical cannabis patients in Michigan get cost-effective, desirable products delivered legally and easily.”
If passed, this kind of legislation will present a litany of challenges for the state and all stakeholders involved. Growers dealing with contamination issues previously will now have to navigate legally mandated testing requirements. According to Goldner, the greatest challenges are those that other states already deal with. “The greatest challenge for dispensaries and other business in the chain of distribution is the lack of adequate banking services,” says Goldner. The state will have to hire inspectors, establish robust oversight and review applications while maintaining a smooth transition to a regulated market.
Until Gov. Snyder signs them into law, the state’s cannabis industry and the 203,000 patients remain in a state of uncertainty.
Last week, news of problems facing Oregon’s cannabis laboratory accreditation program surfaced, leading some to speculate about possible delays for the recreational cannabis market. According to The Register-Guard, ORELAP administrator Gary Ward believed the program was “on the precipice of collapse.”
According to Jonathan Modie, spokesman for the Oregon Health Authority (OHA), the Oregon Environmental Laboratory Accreditation Program (ORELAP) was anticipating over 30 cannabis laboratories applying for accreditation and they doubled their staff from two to four to prepare for the uptick in applications.
In June, the agency had zero labs applying for accreditation but within two months, 37 labs applied. However, the Oregon Department of Environmental Quality (DEQ) just provided three additional staff members on Monday to help with the application process, says Modie.
Some believe the issues could mean the state may not have enough accredited labs by October 1st, when the recreational cannabis market is expected to go into full swing. “It is difficult to say exactly how many labs we can accredit by October 1,” says Modie. “We have seven labs today which would bring it to nine labs waiting for assessment, but our goal is to get as many labs assessed and hopefully accredited as soon as possible.”
With the additional staff members, Modie is hopeful this will jumpstart the program. “We really appreciate our collaboration with the DEQ and look forward to boosting our capacity a bit to help us get through this busy time,” says Modie.
Part of the reason some laboratories might have trouble meeting prerequisites is simply because the requirements are very strict. “The process involves submitting a quality manual, standard operating procedures, method validation, submitting proficiency testing data and finally undergoing an ORELAP assessment by our staff, so it is a very rigorous process,” says Modie. “This speaks to our concern for making sure they have the right systems in place so public health is protected.” Modie said there were at least three labs that did not pass the assessment.
Roger Voelker, lab director at OG Analytical
Bethany Sherman, chief executive officer of OG Analytical, believes the hardest part of the process involves getting accredited for testing pesticides. OG Analytical, based in Eugene, Oregon, has already received their accreditation, one of the first to do so. “The pesticide testing requires our most expensive instrumentation and the sample preparation for testing pesticides is the most time consuming,” says Sherman. “Not only does it require very specific instrumentation, it also requires a real know-how and expertise to ensure we are cleaning samples appropriately, minimizing background noise and looking at the pesticides in trace quantities.” According to Sherman, laboratories are also left to their own devices to develop methodologies specifically for the cannabis matrix, adding to the difficulties.
Rodger Voelker, Ph.D., lab director at OG Analytical, seems confident that the state will be able to handle it. “It is a relief they were able to get some resources from the DEQ and I think the state will not allow a program with this kind of importance to fall apart,” says Voelker. He believes after this initial phase of putting the program in place, the workload will go down. “It is easier to maintain a program than it is to implement,“ adds Voelker. In his eyes, it is crucial for the program to require rigorous science. “People are forced to reconcile that there is a tremendous amount of controls to be considered to produce legally defensible data and I think it is great that the requirements are so strict.”
The OHA’s job is to essentially safeguard public health and they do not want to leave any stone unturned when it comes to potential contamination, says Modie. “This is not just about getting as many labs accredited as possible, this is about protecting public health.”
Derek Peterson, chief executive officer of Terra Tech
Terra Tech, with the recent acquisition of Blum, a dispensary in Oakland, and the line of concentrates, IVXX, is sweeping the cannabis industry by setting standards for safety and quality. Terra Tech, publicly traded in theOver-The-Counter market, is well known as an agricultural company, with the subsidiary brand, Edible Garden, selling produce to Whole Foods, Wal-Mart and Kroger’s. In December of last year, we covered Terra Tech’s entrance into the cannabis marketplace and their experience with large-scale, sustainable agriculture. We sit down with Derek Peterson, chief executive officer of Terra Tech, to get an update on their progress and quality controls.
CannabisIndustryJournal: In January, Terra Tech announced revenue guidance of $20-22 million for 2016. Can you share some of your strategy going forward to meet your goals?
Terra Tech is taking organic and GFSI-certified agricultural practices to growing cannabis
Derek Peterson: We have always played both a long game as well as a short game, meaning while we are building our longer term business, like in Nevada, we are also focusing on short term accretive acquisitions, like we did with Blum in Oakland. We want to make sure we capture short-term revenue growth while we plan our future revenue production. We feel confident about achieving those results.
CIJ: How big of a role does the acquisition of Blum and IVXX brand expansion play in meeting those goals?
The Oakland location of Blum dispensary
Derek: Blum is a significant factor even though we are only capturing three quarters of revenue considering we closed the deal on March 31st of this year. So for the full year of 2017 we will have growth from this level considering we will be able to report a full year of Blum revenue. IVXX presents us with the best opportunity for growth in the coming years. As the market in California and Nevada grows we can continue to expand our IVXX footprint throughout the state. Being able to wholesale to thousands of other retail facilities affords us a significant opportunity to grow our sales.
CIJ: How do you think the brand of Edible Garden positions you well for expansion in the cannabis industry?
Produce ready for distribution at Edible Garden facility in Belvidere, New Jersey
Derek: One of the reasons we were so successful in the Nevada market was because regulators and legislators felt a high degree of confidence in our abilities considering we are USDA organic, Kosher and GFSI-certified. Our traditional agricultural experience has been very synergistic with our cannabis division from both an optics and operational perspective.
CIJ: Could you give us an update on progress in Medifarm LLC in Nevada? And on your distribution plan for IVXX in California?
IVXX concentrates
Derek: We are continuing to expand our IVXX line throughout the state and increasing our sales force. In addition we will continue to develop new products to distribute into our existing supply chain, like we just did with our new pre filled cartridge line.
We are opening our Decatur location in Las Vegas in early July and Reno and Desert Inn towards the end of August. Our cultivation and extraction facilities should be complete no later than January 2017. We will have our entire infrastructure in place if the recreational bill passes in Nevada this November.
Blum Las Vegas location will open in July
CIJ: Tell us about the role of laboratory testing in your business.
Derek: Laboratories play a significant role, as they are becoming a mandated step in most new legislation around the company. Independent lab testing is extremely important to maintain safe access for consumers and patients. We work primarily with Steep Hill Labs and CW analytics.
CIJ: Can you expand on your integrated pest management and your growing practices?
Platinum Cookies ready for packaging and labelling
Derek: Well we cannot say organic, however we do cultivate all naturally. We also cultivate traditional produce that we sell to major retailers. We are USDA organic-certified and we implement similar processes in our cannabis cultivation. Pest control is extremely challenging for any farmer but we rely primarily on bio control, meaning the good bugs eat the bad bugs. This has been very effective for us in the cultivation of all our products.
CIJ: How is your business different from the slew of other dispensaries and growers in California?
Consistency in quality standards requires meticulous SOPs
Derek: Service and consistency; we have over 42,000 registered patients and our operations team has over 19 years of experience in California. One of the reasons we have become one of the largest dispensaries in the state is because of that experience. In addition, consistency is extremely important. Consumers expect the same product in every other business and ours is no different. If they come in for our Platinum Cookies one month and the next month it has different characteristics you are going to lose patient confidence. So in the front of the house, we are focused on pairing patients’ needs with the correct product and in the back of the house we are focused on providing a meticulously cultivated product, produced at the highest standards.
CIJ: Can you delve into some of the processing for concentrates? How do you meet such rigorous quality standards?
Extraction equipment in one of the processing facilities for IVXX
Derek: Through research and development, we have engineered a proprietary process in which our solvent profiles used under our proprietary conditions ensures solvent residual levels which are not detected by instrumentation at 3rd party testing agencies such as Steep Hill Labs. In addition, any good scientific method requires repetition and corroboration of results. In order to accomplish this we also rely on random routine testing in which we send out extracts out to other 3rd party testing labs. Proprietary conditions include, but are not limited to, heat, vacuum, agitation, etc. By utilizing the correct amalgamation of solvent profiles, extraction conditions, purging conditions, as well as rigorous quality control standards, we are able to ensure a product that is void of any residual solvents, without sacrificing potency or identity of the cannabinoids and terpenes. Cannabinoids and terpenes are of chief interest when extracting cannabis for patients so that they have access to these essential oils without any of the actual leaf and bud.
All solvents used are the highest grade available to us, which ensures a truly medical product for the patient. In addition, all of our extraction equipment is routinely cleaned and sterilized using medical grade cleaning agents.
SACRAMENTO, CA- Lawmakers in California voted to pass Assembly Bill 21 this morning, a bill aimed at slowing local municipalities from placing bans on cultivating cannabis. Earlier this week, the California Senate passed the bill in an overwhelming 35 to 5 vote, sending it to the Assembly.
The bill, AB 21, won unanimously in a 65 to 0 vote this morning, according to a lobbyist on behalf of CalCann Holdings. The bill now heads to Governor Brown’s desk to sign it before it becomes a law. The governor has twelve days to sign it into law because of an urgency clause.
“Over the past several months, local governments throughout the state have been banning marijuana cultivation and dispensaries right and left,” says Aaron Herzberg, attorney and partner at CalCann Holdings. CalCann Holdings is a California-based medical marijuana holding company building a portfolio of licensed MMJ businesses and properties.
“Assuming Governor Brown chooses to sign this bill into law, cities will have the time to take a more reasonable approach to this issue and, ideally, allow licensed marijuana to be cultivated and distributed throughout the state,” adds Herzberg. “This is a vitally important piece of legislation that fixes a serious drafting error, and the sooner it can be signed into law, the better.”
The bill fixes an important mistake in the regulations that previously allowed the state to license growers operating in municipalities without written laws in place yet by March. Because of that deadline, cities were rushing to ban growers and dispensaries before they lost autonomy to regulate them. Governor Brown is expected to sign the bill into law, which would curb municipalities from shutting down cannabis businesses.
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