Tag Archives: safety

The 3-Legged Stool of Successful Grow Operations: Climate, Cultivation & Genetics – Part 4

By Phil Gibson
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This is Part 4 in The 3-Legged Stool of Successful Grow Operations series. Click here to see Part 1, here to see Part 2, and here to see Part 3. Stay tuned for Part 5, coming next week.

Integrated Pest Management (IPM)

Aeroponic & hydroponic systems can operate with little to no soil or media. This eliminates the pest vectors that coco-coir, peat moss/perlite and organic media can harbor as part of their healthy biome approach. Liquid nutrient systems come at the nutrient approach from a different direction. Pure nutrient salts (nitrogen, potassium, magnesium and trace metals) are provided to the plant roots in a liquid carrier form. This sounds ideal for integrated pest management programs, but cultivators have to be aware of water and airborne pathogens that can disrupt operations. I will summarize some aspects to consider in today’s summary.

The elimination of soil media intrinsically helps a pest management program as it reduces the labor required to maintain a grow and the number of times the grow room doors are opened. Join that with effective automation with sensors and software, and you have immediate improvements in pest access. Sounds perfect, but we still have staff to maintain a facility and people become the number one source of contamination in a grow operation.

Figure 1: Example of Pythium Infected & Healthy Roots

Insects do damage directly to plants as they grow and procreate in a grow room. They also carry other pathogens that infect your plants. For example, root aphids, a very common problem, are a known carrier of the root pathogen, Pythium.

Procedures

One of the most common ways for pests to access your sealed, sterile, perfectly managed facilities are in the root stock of outsourced clones. If you must start your grow cycles with externally sourced clones, it is strongly recommended that you quarantine those clones to make sure that they do not import pest production facilities into your operation. Your operation management procedures must be complete. If you take cuttings from an internal nursery of mother plants, any pathogens present in your mother room will migrate through cuttings into your clones, supply lines, and subsequently, flower rooms.

Figure 2: Healthy Mothers & Clones, Onyx Agronomics

Start your gating process with questioning your employees and visitors. Do they grow at home or have they been to another grow operation in the last week? In the last day? You may be surprised by how many people that gain access to your grow will answer these questions in the affirmative.

Developing standard operating procedures (SOPs) that are followed by every employee and every visitor will significantly reduce your pest access and infection rates, and hence, increase your healthy harvests and increase your profitability. Procedures should include clothing, quarantining new genetics and cleaning procedures, such as baking or irradiating rooms to guarantee you begin with a sterile facility. This is covered more in the complete white paper.

Engineering Controls

Figure 3: Access Control: Air Shower, FarmaGrowers

Technology is a wonderful thing but no replacement for regimented procedures. Considered a best practice, professional air showers, that bar access to internal facilities, provide an aggressive barrier for physical pests. These high velocity fan systems and exhaust methods blow off insects, pollen and debris before they proceed into your facility. From that access port into your grow space, positive air flow pressure should increase from the grow rooms, to the hallways, to the outside of your grow spaces. This positive airflow will always be pushing insects and airborne material out of your grow space and away from your plants.

Maintaining Oxidation Reduction Potential (ORP)

ORP is a relative measurement of water health. Perfect water is clear of all material, both inert and with life. Reverse osmosis (RO) is a standard way to clear water but it is not sufficient in removing microscopic biological organisms. UV and chemical methods are needed in addition to RO to clear water completely.

ORP is an electronic measurement in millivolts (mV) that represents the ability of a chemical substance to oxidize another substance. ORP meters are a developing area and when using a meter, it is important to track the change in ORP values rather than the absolute number. This is due to various methods that the different meters use to calculate the ORP values. More on this in the white paper.

Oxidizers

Figure 4: AEssenseGrows Aeroponic Nozzles

There are two significant ways to adjust the ORP of a fertilizer/irrigation (fertigation) solution. The first is by adding oxidizers. Examples are chemical oxidizers like hydrogen peroxide (H2O2), hypochlorous acid (HOCl), ozone (O3) and chlorine dioxide (ClO2). Adding these to a fertigation solution increases the ORP of the fertigation solution by oxidizing materials and organic matter. The key is to kill off the bad things and not affect the growth of plants. Again here, the absolute ORP metric is not the deciding factor in the health of a solution and the methods by which each chemical reaction occurs for each of these chemicals are different. This is compounded by the fact that different ORP meters will show different readings for the same solution.

Another wonderful thing about automation and aeroponic and hydroponic dosing systems is that they can automatically maintain oxidizing rates and our white papers explain the methods executed by today’s automation systems.

Water Chilling

Another way to adjust ORP is to reduce the water temperature of the reservoirs. Maintaining water temperature below the overall temperature of your grow rooms is imperative for minimal biological deposition and nutrient system health. Water chillers use a heat exchanger process to export heat from liquid nutrient dosing reservoirs and maintain desired temperatures.

The benefit of managing ORP in aeroponic and hydroponic grow systems is highly accelerated growth. This is enhanced in aeroponics due to the effectively infinite oxygen exchanging gases at the surface of the plant roots. Nutrient droplets are sprayed or vaporized in parallel and provided to these root surfaces. Maximizing the timing and the best mineral nutrients to the root combustion is the art of grow recipe development. Great recipes drive superior yields and when combined with superior genetics and solid environmental controls, these plants will deliver spectacular profits to a grow operation.

Another Hero Award

Before closing this chapter, we have many cultivators that are producing stellar results with their operational and IPM procedures, so it is hard to choose just one leader. That said, our hats are off to RAIR Systems again and their director of cultivation, Ashley Hubbard. She and her team are determined to be successful and drive pests out of their operations with positive “little critters” and the best water treatment and management that we have seen. You are welcome to view the 7-episode walkthrough of the RAIR facility and their procedures here.

To download the complete guide and get to the beef quickly, please request the complete white paper Top Quality Cultivation Facilities here.

Stay tuned for Part 5 coming next week where we’ll discuss Genetics.

Cannabis Labs Virtual Conference

The Cannabis Labs Virtual Conference is back! For seven years now, we have been hosting this complimentary collection of webinar presentations, designed to help attendees better understand some of the more technical aspects of starting and operating a laboratory. We will take a deep dive into cannabis testing, potency testing, fraud, regulations, sample preparation, management and much more. Take a look at the presentations and speakers below for more information.

Attendees registering for this complimentary series of webinars will get access to seven veterans of the cannabis lab testing industry, who are all available for Q&A after each presentation. In addition to getting the opportunity to chat with these subject matter experts on December 20, a recording of the presentations will be made available to all who register.

Practical and educational information from experts in the cannabis lab testing industry, all on the same day and all from the comfort of your lab, home or office. Want real inside knowledge on the cannabis testing industry? Sign up today!

Challenges Abound for Cannabis Industry Growth in 2023

By Jay Virdi
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With an adverse regulatory environment, labor shortages, supply chain disruptions and the always-present threat of property damage and product recalls, cannabis operators are fighting an uphill battle to stay viable in today’s environment.

According to Politico, more than 20 of the largest publicly-traded cannabis companies lost about $550 million on revenues of nearly $4.5 billion in the first half of 2022. High taxes and barriers to interstate commerce continue to challenge the industry as well, while lenders and investors are demanding more detailed proof of future profitability. Those pursuing new capital must show how they will grow financially and present their risk management strategy for insuring themselves against losses.

Higher costs for fertilizer, building materials, packaging and more, along with rising inflation are hurting the industry’s bottom line as well, but the industry is hesitant to raise prices.

These challenges are expected to continue in 2023. However, the industry’s fast pace of growth, myriad opportunities for product development and increased access to insurance capacity offers the cannabis industry every reason for optimism.

Prioritize risk strategies

Cannabis facilities face hazards from the very components and systems required to cultivate plants, including high intensity discharge lighting, chemical exposures and butane in oil extractions. As a condition of insuring a property, underwriters are inspecting the equipment used in production and fire suppression systems.

Property policies typically don’t cover out-buildings for cannabis growers located near a hurricane or wildfire zone, and more carriers are limiting or excluding coverage for losses from large-scale natural disasters. Even coverage for crop losses from catastrophic events is limited and often prohibitively expensive.

Cannabis companies are shoring up their risk strategies and analyzing policies to ensure they’re aware of any gaps in coverage and planning how to address them. This includes adding cyber insurance, as cyber also remains a significant loss-driver in the industry.

Beware of new risks

The cannabis industry is introducing products to the market at a breakneck pace, causing new challenges to emerge. New products — such as THC-infused beverages, sugar-free cannabis tarts and cannabinoid-containing baking staples— require additional research and development for extraction, packaging, storage and distribution. And many products require refrigeration and bottling, adding complexity to distribution.

The continued growth of the cannabis edibles and beverages market is also driving companies to create new formulas, products, and strengths. But this innovation does add risk. States issued dozens of recalls in 2022 for marijuana edibles, including mislabeling and mold and salmonella contamination. These incidents have attracted the attention of plaintiffs’ attorneys, who have filed suits on behalf of consumers claiming injury from these mislabeled or contaminated products.

Invest in your staff

Although the number of jobs in the cannabis industry grew 33% between 2021 and 2022, and the need for new workers shows no signs of slowing, cannabis companies are experiencing high turnover rates and a skilled labor shortage. This is forcing operators to spend additional time and money to attract and retain employees.

Personalized benefits programs offer a partial answer. Personalizing benefits to meet individual employee needs results in positive employee experiences, helping build a workplace that attracts and retains workers. Many companies are adding health insurance and offering 401(k) plans, raising wages and adopting other worker-friendly practices to attract and retain workers.

control the room environment

Cannabis companies with solid risk management plans and advisors to help ensure their insurance policies cover exposures, will be well-positioned to overcome industry challenges, grow, and succeed in 2023. Here are four considerations to help develop a tailored strategy that will protect your bottom line, support your workforce, and build resiliency next year.

  1. Be transparent with your broker. Let your broker know what changes you’ve made to the business, so there are no surprises during renewal. Review exposures and insurance needs at least 90 days prior to policy renewal, so your broker can identify the best options.
  2. Prepare for a product recall. The odds of experiencing a product recall are high. Your first line of defense is your internal policies and procedures, and that includes thoroughly vetting your vendors and partners. Be thoughtful about the general liability and product liability coverage you purchase and ask your broker to clearly explain the differences in coverage.  
  3. Build resiliency within your company. With more carriers offering specialty coverages for the cannabis industry, now is the time to look at how best to protect your executives and build resiliency by insuring against director and officer liability claims, business interruptions and cyberattacks. Your broker can help identify the best policies for your company.
  4. Establish solid employee benefits. The cannabis industry can have access to the same benefits as other industries, including 401(k) plans. Talk to your broker about taking your benefits program to the next level with highly personalized options that won’t break your budget.

Even amidst the challenges, there is every reason for optimism in the new year because of the industry’s fast pace of growth, myriad opportunities for product development and increased access to insurance capacity.

soslticefarms_feb

Addressing Cannabis Price Compression With Science

By Mark Doherty
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soslticefarms_feb

Cannabis cultivators across the U.S. are confronting plummeting wholesale prices and tighter profit margins. Operators in Pennsylvania say flower prices have fallen from around $4,000 a pound to around $3,000, on average, and prices in the more mature markets of California, Oregon and Colorado have experienced extreme volatility. Prices in those states are averaging around $700 per pound but of course, that’s an average. There are whispers that prices are as low as $150, revealing how bad the situation really is.

Oversaturation of legal cannabis affects commercial growers everywhere. For example, when Oklahoma opened its free-wheeling medical cannabis program with unlimited business licenses, the pipeline of cannabis from legacy markets in California was disrupted and a glut of flower from the gray market began to influence pricing within the state’s legal market. Although cannabis is not federally legal and interstate commerce is banned, what happens in one state definitely affects what happens in another.

Competition in legal markets has also increased dramatically in recent years as multistate operators expand their footprint and consolidation proliferates. Vertically integrated cultivation, manufacturing and retail is becoming unsustainable for many mom-and-pop businesses, while MSOs can leverage their cash and resources to weather the current storm.

Economic Viability Meets High Quality Production

All of this news is not necessarily negative, but it’s a definite cautionary tale: Being complacent opens opportunities for others. Growing cannabis is complex. It is working with a living and breathing machine. Some businesses fail because operators are not able to find the perfect blend of horticulture, plant science and manufacturing efficiency necessary for success. Some see it simply as a manufacturing concern, others a scientific endeavor, and still others as an artform. An understanding of growing cannabis as a blend of all three is paramount.

Just like the LED evolution, other new cultivation technology is here to stay and should not be brushed off as just experimental

Squeezing more high-quality product out of existing facilities is essential. Costs for labor and electricity are relatively fixed, so operators must turn to technology to improve yield, quality, consistency and plant health without increasing operating expenses.

Over the years, growers have often resisted change surrounding what they view as “the way” or “the best,” but with the industry in such distress, the time is now to address facility inefficiencies.

Much like the evolution of LED use, there might be an initial skepticism at the cost and real value of new cultivation technology, but the economics are too compelling to ignore. The majority of all indoor grows now use LED. The progression from single-ended bulbs, to double-ended HPS, to LED is analogous to plants on the floor of a grow facility, to rolltop benches, and now to vertical farming using racks.

Vertical Cultivation Science

Crop steering applies plant science directly to commercial production. The methodology is based on the idea that plants can be manipulated to grow and perform a certain way. For cannabis plants, the science really comes into play with inter-canopy airflow.

When airflow occurs under the surface of the leaf of the plant, the stomata opens and gas exchange increases as water vapor and oxygen are released and carbon dioxide is absorbed. The micro-barrier of air trapped against the leaves is broken and the exchange of gasses and energy in the cultivation environment is improved, enabling the entire grow to increase its yield. And while CO2 supplementation is widely used and has been for years with positive effect, the under-canopy airflow provides greater efficiency relative to the operating expense of pumping CO2 into the grow room. Money can be saved by applying science to encourage the plant to uptake the extra CO2 that has been naturally released.

Proper Drainage Is Also Key

Controlling the space with proper drainage will keep a host of problems at bay

Drainage issues like the puddling of water in vertical farming are detrimental to the efficiency of a cultivation facility. Even when growers use precision irrigation techniques to give the plants pinpointed irrigation volumes over different time periods, rack systems can still suffer from drainage issues. That means that affected plants are not receiving the precision irrigation strategy and the entire purpose of the scientific application is defeated.

Precise drainage is critical because standing water opens the door to root born disease, pests, and microbial issues. Spray regimes can address this problem, but they cost money. The key is to reduce dependency on mitigation efforts by better controlling the agricultural space and improving outcomes with a scientifically approached plan.

Greenhouses, warehouses and vertical farming facilities all have potential environmental issues that reduce their economic viability, but with proper vertical air movement, drainage equipment and an understanding of microclimates and how to address them scientifically, efficiency and product quality are enhanced.

Time to Embrace Change

As with any industry, there is resistance to adopting new technology in cannabis cultivation. The original and legacy players will always claim they know how to best grow their plants, but the reality is that the business needs must be addressed.

As canopies increase within a facility, advancements like robotics, LEDs and advanced airflow technology define how the industry operates and continues to improve. Efficiency keeps business alive—cannabis growers must continually assess their operations and make the capital investments that will pay off as wholesale prices continue to decline.

The 3-Legged Stool of Successful Grow Operations: Climate, Cultivation & Genetics – Part 3

By Phil Gibson
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This is Part 3 in The 3-Legged Stool of Successful Grow Operations series. Click here to see Part 1 and here to see Part 2. Stay tuned for Part 4, coming next week.

The Right Build Out

Aeroponic & hydroponic systems grow plants at a highly accelerated rate. A “clean room” type of construction approach is the best way to manage this type of grow operation. Starting with a facility that is completely void of any kind of wood or materials that are porous is a good start. Cellulose materials collect moisture and encourage mold and mildew formation no matter how good the sealant.

We have seen cultivation spaces built out of dry wall over wooden post construction and studs that look sealed and solid on the outside of walls but when repaired for plumbing or other expansion work, they are black inside and covered with nasty mold that no one wants near their grow space.

Panel construction over steel frames or steel studs with skins is a safer, more sterile approach than retrofitting a wooden structure. Panel construction offers the added benefit of rapid assembly and minimal labor costs. We have seen 300 light rooms assembled in a few days so it is both very cost effective and safely sealed for protected growth.

Room Sizes & Count

How do you best fill this space if you have a clean slate?

If you have unlimited space, temperature and humidity management should determine the room sizes in your facility. Room sizes that are square in dimensions tend to be easier to maintain from an environmental standpoint. Long narrow rooms are good for fan airflow but tend to be more expensive from a cooling and dehumidification point of view. The larger the room, the more likely that you will get “microclimates” within the room which can challenge yield optimization.

Now, of course, many grows are retrofits of existing structures so compromises can be necessary. We have found that cultivators that have both very large and mid-size rooms in the same facility (200 lights versus 70 lights) are consistently more successful in the 70 light rooms. These “smaller rooms (~1,500 ft2) out-yielded and out-performed the larger rooms using the same genetics and grow plans. Compartmentalization also minimizes the risk in the case that a calamity (i.e. pest infestation) strikes the room. In a large room scenario, the losses can damage your operation. For this reason, we recommend 70-100 light/tub rooms as a standard.

Rooms should also follow your nursery economics. Structuring your nursery to produce just enough clones/veg plants for your next flower room avoids wasted plant material and resources. Breaking a larger space down into individual rooms means that you need fewer veg plants to fill your flower room that week. The best way to optimize this is to have a number of rooms that are symmetrical with the number 8 (typical 8-week cycle genetics).

With 8 rooms running flower, you are able to plant one room per week for 8 weeks. In the 9th week, you start over on room 1. This continuous harvest process is highly efficient from a labor standpoint and it minimizes the size of your mothers room (cost center). Additional space can be applied to your flower rooms. If you do not have infinite space, even divisors work just as well; 2 or 4 rooms can be planted in sequence for the same optimization (for 2-room structures, harvest and replant 1 room every 4 weeks for example). The optimal structure (8, 16, 24, or more rooms) enables you to optimize your profitability. If any of this needs further explanation, please just ask.

Not photoshopped: An “ideal” 70-tub flower room in a CEA greenhouse (courtesy of FarmaGrowers, South Africa)

Within your room choice, movable rows or columns of tubs/lights also provides optimal yields.  Tubs/plants can be moved together for light usage efficiency and one 3-foot aisle can be opened for plant maintenance. Racking systems or movable trays/tubs make this convenient nowadays.

Floors

Concrete floors offer pockets for bacteria to collect and smolder.  As such, they have to be sealed.  Proper application of your sealant choice is required so that it does not peal up or crack after sealing. There are many benefits to sealed floors that is discussed in the white paper. Floor drains are the equivalent of a portal to Hell for a sterile grow operation. Avoid them at all costs.

Phased Construction

Tuning or optimizing you grow rooms for ideal flowering operation depends on your location. Our advice is that you build and optimize your facility in phases with the expectation that nothing is perfect and you will learn improvements in every phase of expansion. The immediate benefit is production that you can promote to your sales channels and revenue that starts as soon as possible to improve your profitability. This is also an excellent learning curve to apply to subsequent rooms. Our happiest customers are those that learned construction improvements in early rooms that were able to be applied to following rooms without headache. The ability to focus on one or two rooms also allows you to get the recipe correct rather than just relying on “winging it”.

Don’t Be In A Rush To Go Green

A 70-tub flower room (courtesy of FarmaGrowers, South Africa)

Validate your water supplies and their stability. Verify that the water in your aeroponic or hydroponic feeds that get to your plants are clean and sterile. This is much easier in a step-by-step fashion than in a crisis debug mode once production is in progress. Be very cautious about incoming clone supplies. We will talk about this more in the next chapter on Integrated Pest Management but incoming clones are a top pest vector that can contaminate your entire facility.

Warehouse Versus Greenhouse Cultivation Spaces

As we started out, controlling your environment is your most important concern. We have seen success in both indoor rooms and greenhouses. The defining success factor is controlling humidity and temperature. Modern sealed controlled environment (CEA) greenhouses do this well and CEA is somewhat of a given for indoor grows. More details on this in the white paper.

Packaging these recommendations gets you to the perfect body for your Formula 1 race car. Now, you are ready to look at some of the mechanics of protecting your operation from pesky little critters and biologicals that can derail your operation and weaken your engine.

Before we sign off this week, I wanted to highlight the ultimate build-out that we have seen so far.  Of course, there are many challengers that have done this well but at this point, FarmaGrowers in South Africa has the best thought out facility we have seen. They acquired Good Manufacturing Practice (GMP) & Good Agricultural & Collection Practice (GACP) certification early in their operations due to very well-thought-out designs. They are exporting to global markets without irradiation today. Certainly, many successful customers have beautifully thought-out operations and there are several upcoming facilities that offer amazing planning that will challenge for this crown, but for now. FarmaGrowers leads the pack in this aspect. See here for a walkthrough.

To download the complete guide and get to the beef quickly, please request the complete white paper Top Quality Cultivation Facilities here.

Stay tuned for Part 4 coming next week where we’ll discuss Integrated Pest Management.

cannabis close up

Benefits To Growing Cannabis In A Cleanroom Environment

By Steve Gonzales
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cannabis close up

For commercial cannabis growers, consistent crop yields are vital to maintaining product profitability, as well as durable profitability. Since cannabis thrives under certain conditions, the more control a cultivator has over those conditions, the easier consistent harvests become.

While factors like humidity, light exposure and water may be easy enough to control in any indoor environment, other influential factors can be more difficult to control, such as mold or other contaminants. Growing in a controlled cleanroom environment ensures healthy, high-quality cannabis by mitigating some harder-to-control threats. For these reasons, growing cannabis in a cleanroom environment is rapidly becoming the gold standard in the industry.

A Closer Look at the Cleanroom Environment

A cleanroom facility is a specially designed room or modular addition designed to support a tightly controlled grow environment for crops. The design of the cleanroom relies on several design features to deter issues with pollutants, such as insects, mold, airborne microbes and dust. Even though cleanroom environments are often affiliated with cultivating certain types of crops, these facilities are also valuable in other industries, such as medicine, biology and pharmaceuticals.

Cleanrooms can be conservatively sized or massive. They can be configured to accommodate different processes, and they can be built to suit a specific grower’s preferences. However, several features are key, such as:

  • Cleanroom-rated HEPA (high-efficiency particulate arrestor) filtration
  • Contamination control mats
  • Positive-pressure airflow systems
  • Double-door air chambers at entry points
  • Moisture-resistant wall panels
control the room environment
Preventing contamination can save a business from extremely costly recalls.

One fundamental requirement of a cleanroom is to control the introduction of contaminants into the space. Contaminants can be carried in on the people who visit the space. Therefore, cleanroom implementation must come along with strict protocols when it comes to employee entry into the room. For example, air showers, special gowns, masks and other measures may be required. 

The Benefits of Cleanroom Environments for Cultivators

On the surface level, cleanrooms make it possible to achieve a well-controlled environment for cannabis cultivation. However, while this is undeniably important in terms of consistent crop yields and profitability, cleanrooms pose a number of broader advantages for cultivators and end customers.

Meet Laboratory Testing Guidelines and Protocols

For now, states create product testing regulations for cannabis. Most states that have legalized medical or adult use cannabis have created protocols for lab-testing products for pesticides and microbes. When batches of cannabis product do not meet state lab-testing standards, the product can be recalled or destroyed. In 2016, Steep Hill published an alarming study that showed they detected pesticides in roughly 70% of the samples they received and up to one third of all samples would have failed to meet regulatory standards. Cleanrooms reduce a grower’s reliance on pesticides.

Negate the Risk of Fungal Contamination

Cleanrooms negate the risk of fungal contamination through proper ventilation, particulate control and positive pressure.

Cannabis is prone to certain types of fungal spores that can cause severe illness in end customers. For example, Aspergillus mold spores are common in cannabis and can lead to cases of chronic pulmonary aspergillosis. In large doses, Aspergillus mold spores may even cause liver failure due to the carcinogenic mycotoxins the spores produce in the body. Cleanrooms negate the risk of fungal contamination through proper ventilation, particulate control and positive pressure. 

Create a Safer Work Environment for Employees

Employees who work in cultivation facilities in the cannabis industry face various occupational hazards. Many of these hazards are related to being in contact with fungicides, mold spores and chemical fertilizers. The exposure can result in issues such as allergic reactions, respiratory irritation and other physical threats. Cleanrooms and how they function can deter many of these risks. For example, the lack of need for fungicide use automatically lowers the risks due to lacking exposure. Further, because protective gear is required to maintain the integrity of the cleanroom, there is less of a chance an employee’s skin or respiratory system is exposed to irritants.

Cleanrooms: The Potential Future of Cannabis Cultivation

As cannabis becomes a more robust industry and regulations become more clearly defined, growing standards are bound to change. As speculations of national regulations veer closer to reality, growing cannabis industrially may even mean required cultivation facility upgrades. Cleanroom environments give growers firm control over the health of their crops while ensuring clean products for customers. Therefore, these innovative and health-forward implementations could easily become the norm in the cannabis industry in the future.

Sundie Seefried, President & CEO of Safe Harbor Financial

A Q&A with Sundie Seefried, President & CEO of Safe Harbor Financial

By Cannabis Industry Journal Staff
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Sundie Seefried, President & CEO of Safe Harbor Financial

As the former CEO of Partner Colorado Credit Union (PCCU), Sundie Seefried has been in the credit union space for 39 years. Established in 2015, Safe Harbor Financial is now a leading provider for banking and financial services in the cannabis industry.

Seefried founded Safe Harbor as a cannabis banking program for PCCU, and since then it has withstood scrutiny of 16 separate federal and state exams. Entering its ninth year as a cannabis banking program, they have almost 600 accounts in 20 states and have processed over $14 billion in transactions for the cannabis market. In September, Safe Harbor began trading on Nasdaq under the symbol SHFS. The company has also announced a definitive agreement to acquire Abaca, an industry-leading cannabis financial technology platform.

Seefried has seen it all in the cannabis banking world. We wanted to get her thoughts on some current events, the future of cannabis banking and lending, and what the next few years might hold in store for an industry ready to grow.

Cannabis Industry Journal: Tell us a bit about yourself. What is your background and how did you find yourself in the cannabis industry? How did you get to become president and CEO of SHF?

Sundie Seefried, President & CEO of Safe Harbor Financial

Sundie Seefried: I’ve been in banking in the credit union space since 1983. I became CEO of Partner Colorado Credit Union in 2001 and stayed there for 21 years. Everything I do, I have a very conservative nature just from being in the banking world and doing things methodically and building good foundations that endure long term. In 2014 when FinCen issued guidance, I was supposed to retire, and I had dinner with some old friends that were attorneys who couldn’t get bank accounts for their clients in the cannabis industry. They asked me to help and I looked into it for them. I assumed the regulator would shut me down but he didn’t; he actually encouraged me to move forward and look further into things. As I educated the board, we saw just how unsafe Colorado was and the serious need for the community to figure things out with respect to banking and cannabis. Coming from that credit union perspective, I said I think we can do this, let’s try and I’ll go through the third parties necessary. And that’s how we got into this, just looking to try and help solve Colorado’s problems and get banking access for cannabis companies. 

CIJ: Tell me about your company’s mission. What is your financing strategy in cannabis and of the companies you do business with, what do you look for most?

Seefried: Our mission remains the same, and that is to normalize banking in the cannabis industry as much as possible. Because the black market still exists, the issue becomes sorting the legal entities out from the illicit actors in the industry. We know that the illicit market is trying to hide amongst the legal environment, which really makes things difficult for upstanding cannabis businesses. We can normalize banking by making sure we help legitimize the compliant entities and sort out the bad actors. We really only want to work with legitimate players with licenses, who are fulfilling expectations on the regulatory level and have no problems with compliance. We have been able to do that on the depository side.

We have always been a low-cost provider and our clients count on that. As we move into the lending part of the industry, we’re looking to do the same thing. There are lenders who charge one-to-three percent per month, 18 to 36 percent per year. We, on the other hand, are targeting more of an eight to thirteen percent annual rate. More of a conservative approach. Real debt underwriting. No extremely high interest rates. We look for the collateral, we look for well-organized businesses and solid documentation. Those are the businesses we are trying to bring into the fold and offer them normal loans. Cannabis will always have a premium on it simply because it is illegal at the federal level and there are additional hoops we have to jump through. Because of the potential forfeiture and seizure, if there are bad actors, etc., it really behooves any clients coming to us to also place their depositary services with us so we can prove their legitimacy and provide loans to them.

CIJ: Let’s talk about the Canopy Growth news. They announced they are pulling the trigger on acquiring Wana Brands, Acreage Holdings and Jetty Extracts, under the Canopy USA holding company and ahead of federal legalization. On the surface, it looks like they are bypassing a lot of the hurdles American cannabis companies currently face with financial red tape. As a foreign company trading on the NASDAQ dealing with a schedule 1 substance, do you expect Canopy to have a significant, some would say unfair, competitive advantage with their early entry? Or is this perhaps more of a rising tide lifting all boats scenario? What effect will this have on the current market landscape?

Seefried: I find it a very interesting move on their part. Certainly, they have a big advantage in comparison to other companies. The consolidation in the industry is moving so quickly. Other players will keep up with this just as fast as Canopy is moving in. That’s my opinion in terms of what I see in the consolidation area of the market. I think what it really hurts is small businesses. My heart goes out to them. So many of them worked so many years to build excellent small companies with boutique shops, and this whole move will really change that part of the industry.

I see a lot of these small players, non-vertically integrated companies, being impacted in a negative way due to such mass consolidation and the entry of foreign businesses. We need to get more competitive on a global level in order for our companies to grow and thrive. This happened back in 2018, when so many companies started doing those reverse takeovers onto the Canadian Securities Exchange and suddenly, they were putting tens of millions of dollars into the U.S. market. People didn’t see that as a competitive disadvantage for American companies, but now this move by Canopy may really show that we have to look at things more globally.

CIJ: Biden’s announcement regarding the scheduling review for cannabis has a lot of industry folks very hopeful that federal legalization is closer to a reality than before. Do you share their optimism?

Seefried: Closer than before, yes. But how close? I am not convinced it will happen quickly. If they are really going to consider rescheduling or descheduling, everything happens in Washington very incrementally. Eight years and seven attempts at the SAFE Banking legislation and still no movement on that front. Tomorrow, we’re going straight to legalization? I have a hard time swallowing that one. I just don’t see that big of a jump all at once. I think it is interesting coming just before the midterms and votes are really needed now more than ever.

What Biden did was a great start. Especially for those people in prison for possession. The interesting part of it is, we are very serious about people who have used it, but the people who have sold it and are in prison might be in the same situation. Given how the laws worked for so long, just based on the amount of cannabis you had could get you automatically labeled as a dealer, which isn’t the case for a lot of incarcerated folks.

The fact is, the social equity and justice issue, who do you free or who do you not free from prison, is a very difficult issue to get through. I think it is a great step forward and it will help some people who were treated unjustly, but there is still a lot of work to be done.

“I believe we’ll start seeing pressure from the global market on the United States to move things along a little faster in our own country.”As far as rescheduling, if they go from a Schedule I drug to a Schedule II drug, that will do no good, but it certainly is a bone to throw to the industry if you want to look like you are making some progress. Schedule II is still subject to 280E tax code so it will only do so much. If they want to make things more equitable and actually level the playing field, they have to do something about the 280E issue hindering every cannabis business in the country.

As far as full legalization, I am not optimistic because of all the players that need to be involved. Full legalization will require a change to the IRS tax code 280E as well as other tax issues. I think there are too many players: The DOJ, FinCen, the DEA, the FDA, the IRS. All of these agencies will have to agree on full legalization and moving forward in unison. The DEA is trying to fight illicit actors and illicit drugs. FinCen is trying to follow the money to find illicit actors. As long as there is an illicit market it will make their job tough, and on top of all of that, we have politics in play. That is just my take on legalization. It is going to be a much more complex problem than just legalizing the plant and moving on. Rescheduling seems like lower hanging fruit, but they will have to move it higher than a Schedule II.

CIJ: With the midterm elections here, there are a number of legalization measures in a handful of states, along with political control of Congress on the ballot. How do you think a Republican or Democrat controlled Congress will affect cannabis legalization progress?

Seefried: I just finished doing some lobbying in September in DC and spoke to some Senator offices in person, and I heard a lot of interesting topics being discussed. One of the things that keeps popping up is that social equity and justice is a huge issue. If we can’t solve this injustice in our system that has been going on for decades and decades, maybe they’ll hold banking legislation hostage. You can’t correct 50-60 years with one piece of legislation. Everything has to be incremental, unfortunately, so there will be some give and take there. I think that was a primary focus, especially with the Democrats and I do think it is a worthy cause.

On the Republican side, economically improving our competitive advantage as a country. They are starting to see the jobs being created and the tax revenue coming in and the growth of the industry. They will have to make that decision at some point in time whether they are going to leave the American cannabis industry behind or allow them to compete on a global level. I really think everything will move slowly and continue as it has happened in the past.

I believe we’ll start seeing pressure from the global market on the United States to move things along a little faster in our own country.

CIJ: As we inch closer to 2023, what do you expect the next year to offer for the cannabis financing market?

Seefried: I would say, with or without legislation, they’re finding greater access to banking. And the reason they are getting better access to banking is because none of us have been prosecuted for simply engaging in cannabis banking. I think we have set a precedent over the past eight years, not only us but other service providers in the industry and that we are not being prosecuted.

I see more financial institutions entering the market slowly. The second reason access to capital and banking will increase is because every financial institution in the country wants that lending relationship. In order to get there, they want to start with the depository relationship, and they don’t want smaller players presently doing it and getting all of those relationships before they enter the market. I think the competitive nature of the financial industry to land that lending relationship is going to force them into the game sooner than later.

The 3-Legged Stool of Successful Grow Operations: Climate, Cultivation & Genetics – Part 2

By Phil Gibson
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This is Part 2 in The 3-Legged Stool of Successful Grow Operations series. Click here to read Part 1 and stay tuned for Part 3 coming next week.

Aeroponic and hydroponic systems use zero-soil, so water is effectively our media and our transport mechanism for nutrition. Ideally, you start with clean, fresh water with “nothing” in it. Nothing in this case means no heavy metals, pesticides, bacteria or pathogens. There are some scary words in there so let’s talk through the best ways to get to “nothing.”

The first place to start is by testing your source water, whether it is surface, well or municipal water. This will give you an initial idea of how “empty” your water is. Water supplies shift over time, so it is also a very important input to monitor over time with annual or bi-annual testing. Clean water is the essence of success for aeroponics and a great way to lower your cost of production. With proper design and management, you can recycle and reuse 95%+ of the water you draw into your facility.

Reverse Osmosis (RO)

Mothers to clones: Happy clones, it’s all about the water

RO is the most common way to clear your incoming water. The process uses pressure filtration by forcing your water through a series of filters or meshes that block or extract large particles, organics and metals. Normally this is 98%-99% efficient. These systems do require attention and maintenance as they do have filters that are required to be changed regularly depending on the clarity of your original water source and the type of material filtered. This accomplishes a lot of your water clearing process to empty the balloon, but it does not clear the pesky biologicals or pathogens. RO is covered in detail in our “You are what you drink” webinar so look that over for a deeper explanation. There are a wide range of relatively low-cost suppliers based on capacity and filtration efficiency. From an operations standpoint, the key is to understand the filter replacement cycle and cost of replacement.

Ultraviolet Light (UV)

UV light can be used to clear organics and pathogens from water. The primary use is to clear origin water but it is also especially important for recovered water that you save from the humidity in your grow rooms. More on this below. One has to be cautious about the use of UV light. It will cause sunburn and eye damage with exposure so handle this resource with care. After RO & UV treatment, input water should be an empty balloon ready for the addition of your perfect nutrient salt recipe. There are a wide range of low-cost UV lighting solution suppliers from which to choose and they are easy to find.

Dehumidification & Recovery (DEHU)

Early root follicles: Reaching for first nutrients

The number one way to conserve water in an accelerated growth aeroponic grow room is to recapture the humidity that is transpired into the air as the plants grow. While DEHU water is effectively distilled water (or clear of particulates), it can be full of healthy little bacteria or pathogens than may be transported through air or residing in the equipment filters. Clearing these with UV light normally makes this water directly reusable in your fertigation systems. Not all dehumidifiers are perfect. Some metals used in their construction can leach into the recovered water, so this is worth a deeper look as you create your complete water system. Air treatment suppliers are covered in Part 1 of this series.

Used Fertigation Water, or “Flush”

At the start of the flower cycle, take your clean water (the empty balloon) and add your perfect nutrient salt flower recipe and deliver it to your plants. Over the grow cycle from flower to harvest, your plants will use portions of your nutrients and your balloon contents will drift from your target recipe you’re your desired cycle, clear or flush your reservoirs and reset your recipe by refilling your balloon to your exact targets. The exiting nutrient-rich “flush” water can also be recycled into your source water feed since the salts and metals present can be cleared from the mixture through the same RO process that your source water goes through. The end result is perfectly good recycled water savings.

Oxygen Reduction Potential (ORP)

Healthy roots reach for water: Early veg when plants get rolling

ORP is a measurement of an oxidizing agent. Oxidizing solutions are a common and inexpensive method of disinfecting water before and during use in hydroponic systems. Oxidizers can be used to monitor and deal with the “cleanliness” of a nutrient water solution while it is in use. Several oxidizing agents exist with the most common being: hydrogen peroxide, chlorine, ozone and chlorine dioxide. The characteristics of each of these agents and how they interact with the organic matter in solutions is different. The ideal concentrations to use in each situation to kill or control pathogens is unique and one of the topics covered by our “Letters from the AEssenseGrows plant science team” on our website. That deep dive is the subject of another paper.

When you take all of these subjects together and they are done right, you should be able to recycle 95% of your source water with a professional water treatment & recycling system.

Here, I would like highlight the ultimate water hero: Ashley Hubbard, director of cultivation at RAIR Cannabis. For a quick tour of her water treatment and recovery room, see here. No one that I know manages water better than RAIR Cannabis and Ashley leads the team there.

To download the complete guide and get to the beef quickly, please request the complete white paper Top Quality Cultivation Facilities here.

Stay tuned for Part 3 coming next week where we’ll discuss The Right Build Out.

Advancing Knowledge and Expertise in the Cannabis Testing Industry

By Greg Kozadjian, MBA ,BSc.
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The cannabis laboratory testing market has undergone a lot of changes in the past ten years. With those growing pains so common in such a new industry, come plenty of challenges driven by market dynamics, new regulations and scientific advancements.

Julie Kowalski, a cannabis testing consultant at JA Kowalski Science Support, has seen these changes firsthand. For twelve years, she worked at Restek as a senior chemist, helping to provide expertise and develop analytical solutions for their cannabis testing partners. She also worked as chief scientific officer for Trace Analytics, a cannabis testing lab in Spokane, Washington. Between being an advisor, consultant, trainer and accreditation assessor, she wears many different hats in the space. We sat down with Kowalski to learn more about the evolution of the marketplace, the importance of product safety and some of the common challenges that labs face.

Greg Kozadjian: Tell us a little about yourself and how you came to be working as a consultant in the cannabis and hemp testing industry?

Julie Kowalski, Owner of JA Kowalski Science Support

Julie Kowalski: I began working on gas chromatographs when I was about 20 years old, added liquid chromatography to my repertoire in my early 20’s, and have been in the lab nearly every day since then.

My consulting business launched in early 2020 after I received numerous requests from my network for help and advice regarding cannabis testing. I am passionate about helping people, talking science, and promoting growth and innovation in the cannabis industry.

Speaking with individuals and businesses who potentially received conflicting advice or felt somewhat overwhelmed by the complex and rapidly evolving cannabis industry, I realized I could help. So, I decided to utilize my experience and knowledge to promote trust and expertise within the cannabis industry and champion science over profit.


Kozadjian: Why do you think it’s crucial to test cannabis and hemp-based products in today’s market?

Kowalski: The way I look at it is that cannabis and hemp-based products are like any other product in that the consumer has the right to have some assurance that these products are safe, and that the labeling information is accurate.

Then, there are the increasing number of people seeking to use cannabis for medicinal reasons. Again, the industry should be able to assure them that the products they are using are safe to help them with their health issue.

Kozadjian: How has the market evolved over the last five years to meet the current testing regulations, and which of those regulations focus more on the safety of cannabis and hemp-based products?

Kowalski: In the past five years, more states have been coming online domestically. So, we are dealing with a regulatory environment where different states may have different regulations, a situation that will continue to exist for the foreseeable future. There have been efforts on the regulatory side, if not to coordinate efforts directly, to at least connect and communicate, and hopefully, out of those communications comes increased coordination.

I am hopeful that scientists, myself included, can do our part and provide additional data and information about testing that works, testing that doesn’t work, and that the regulators will consider and incorporate much of that information into changes in current and future regulations.

It is important to note that many state agencies were put in the position of creating a regulatory system that they were perhaps not familiar with, or accustomed to doing, particularly from the testing standpoint. There are no federal programs to model against, so programs are being developed from scratch and need to address all aspects of the market. It is a complicated task. It made sense to borrow from similar existing markets, but there is now the opportunity to use what we have learned to improve regulations.

For example, adopting certain criteria and practices from environmental, food, and agricultural testing was a great place to start. Now, we better understand some of the unique challenges associated with cannabis testing, it is time to set our fit-for-purpose best practices.

I hope that we, as an industry, can increasingly provide more data to help guide the regulators so that their goals are achieved and based on a growing body of data. I am optimistic that there will be much more interaction and coordination between regulators and scientists. This would greatly help with some of the struggles some cannabis labs are feeling in the current market.

Kozadjian: What are some of the challenges that testing labs face?

Kowalski: The cannabis and hemp-based products market is competitive with multiple sources of pressure. A definite challenge has been the gold rush mentality. Folks want to enter the cannabis business, and establishing a testing lab is attractive and perhaps perceived as more comfortable because it is not directly growing or producing a product.

There is a burden to set up a lab and open as quickly as possible because while the lab is being set up no money is being made. It can be stressful, and sometimes shortcuts are taken while developing technical programs. These shortcuts can ultimately cause disruption, stress, and risk. I saw this ten years ago, I saw this five years ago, and I am still seeing it now. I am still waiting for people to come into the industry with more realistic expectations of what it takes to establish functional technical programs and laboratories.“There are fundamental knowledge gaps that this market as a whole needs to address.”

Inadequate technical programs resulting from poorly vetted and insufficiently validated methods do not function well in the real world, changing regulations, as well as changing matrices, can result in chaos in the lab. A lab will fight fires daily if it does not plan for and build well-vetted, robust methods. Unfortunately, I have seen many new testing labs rush through development, and then when they open their doors for business, they realize their methods do not function properly.

Daily, they may be faced with deciding whether they should pass a sample batch because technically, it did not meet the criteria, but the client is waiting. Or labs constantly needing to retest may lose confidence in their ability. This is a high-stress situation, and quite a few labs are probably operating in this mode in the market right now. Substandard testing is becoming riskier as we see scrutiny, mainly due to test lab shopping increasing. I do want to make it clear and be fair to point out that the economics of cannabis testing is challenging. Pricing in most markets is too low to allow high-quality testing.

Kozadjian: How do you think this testing era will evolve in the next five years?

Kowalski: I think we will start to see more involvement and recognition of standards organizations like the AOAC, USP, ASTM. They have existed and have been working for at least a few years, and now are publishing methods, guidance documents, and providing education. That will be very helpful, and I invite testing labs to join in and participate in these efforts. Your voice is critical. We need more knowledge in the market, whether it is knowledgeable people entering the market, or people currently in the market who are willing to invest the time to learn analytical chemistry, for example. There are fundamental knowledge gaps that this market as a whole needs to address.