According to a press release published last week, Medicinal Genomics has hired Sherman Hom, Ph.D. to be their first director of regulatory affairs. Dr. Hom is coming from a position at New Jersey’s Division of Public Health and Environmental Laboratories (PHEL) where he was the leading research scientist for the state’s cannabis testing lab as well as coordinating their pre-analytical activities for SARS-CoV-2 testing.
Sherman Hom, Director of Regulatory Affairs at Medicinal Genomics
As project manager for the state’s cannabis testing lab, he was responsible for validating microbial testing in cannabis. He has also been a professor of microbiology, a lab manager, a senior research scientist, a writer and an inventor, according to the press release.
“My passion is regulatory affairs,” says Dr. Hom. “For the last 4 years, we’ve been building a facts and comparison database of required state medical cannabis testing. It’s formidable. Of course, the states will all have the same regulations eventually. In the meantime, it’s my job to help them craft the safest, most efficient and effective set of regulations possible. I’m here because I know Medicinal Genomics shares that passion.”
Delta 8 THC (delta-8-tetrahydrocannabinol) sprung onto the scene late last year in a big way. While similar to the much more widely-known delta-9-tetrahydrocannabinol that produces a lot of the psychoactive effects associated with ingesting cannabis, delta 8 THC can be derived from hemp with less than 0.3% delta 9 THC. Given the legality of hemp-derived products following the 2018 Farm Bill, delta 8 THC can be produced in some states where delta 9 THC still remains illegal.
While delta 8 is considerably different in its psychoactive effects from its cousin, it does overlap in some ways. It can still produce some more manageable, less “heady” versions of delta 9’s effects like euphoria and relief found in the many medical applications of cannabis. DeltaVera, a company that launched less than six months ago, aims to share that more manageable THC experience with the masses.
The sharp rise of the delta 8 market means that DeltaVera is poised for growth. With distribution contracts inked, exciting partnerships in the works and a large surge in consumer demand, the founders of DeltaVera are at the ready to capitalize on this lesser-known molecule and bring it to the forefront of the nascent hemp industry. Starting out as a small family business, Sam and Craig Andrus launched DeltaVera with their third founder, PK Isacs.
We sat down with Sam Andrus and PK Isacs, two of the founders of DeltaVera, an award-winning brand, to ask them about their plans for expanding, how they became entrepreneurs and why they think delta 8 is the next big thing in cannabis.
Cannabis Industry Journal: Tell me about your company. How did you get started in the cannabis space?
Sam Andrus, cofounder of DeltaVera
Sam Andrus: I had an early start in the Delta 8 THC industry on the sales side. We knew we wanted to get into the market, but observed a number of aspects in the space that needed to be addressed: the most important being quality control, transparency and brand trust. With this as a backdrop we launched DeltaVera. Highly curated, approachable, transparent and value-oriented with a strong focus on reliability and trust. The DeltaVera family is made up of three operating managers and the sales team. We are three founders with complementary skill sets: Craig, who has domain expertise in finance, governance and startups, PK who has experience in business and marketing and my sales experience round out the management team.
We have yet to solicit outside capital and have funded ourselves internally as we create our brand and refine our product offering. That said, we are seeing numerous opportunities in strategic partnerships and expansion, which will require additional capital. And we are excited to start this expansion process.
CIJ: What makes the Delta 8 space so remarkable? Why are your SKUs primarily formulated with Delta 8?
Sam Andrus & PK Isacs: Delta 8 THC is an alternative/complement to delta 9 THC, CBD and other cannabinoids. Its status as non-federally scheduled and its less potent psychoactive effects make it appealing in its own right. Delta 8 THC can help with healthier sleep patterns and with pain management in a way that CBD can’t, without a strong “head high” that many of our customers like to avoid. Additionally, it’s shorter lived and doesn’t give you any negative residual effects, which makes it beneficial for people on tighter schedules. These factors make it easier for us to approach markets that are inaccessible to both delta 9 THC and CBD, such as older demographics. In a world where delta 9 is legal, there will still be a place for delta 8.
PK Isacs, cofounder of DeltaVera
While we are very proud of our suite of smokable products, we are currently focusing our efforts on edibles: our Delta Discs are our mainstay, though we are expanding our product line to include nano-emulsion products such as liquid shots and nano gummies. They strongly appeal to our target demographics; additionally, the edible market is growing very quickly in states that allow the sale of hemp-derived consumables.
CIJ: Continuing on the delta 8 front – right now it is considered a cannabinoid legal for interstate commerce, much like CBD, correct? Do you think that will change?
Sam & PK: That is currently the case. Delta 8 THC is newer, and as such, it has even more ambiguity in regards to its legal future. But what’s most exciting (and our most challenging task right now), is informing consumers about the benefits of delta 8. We are one of a few companies solely focused on the consumption of delta 8, because of its similar benefits to delta 9 and CBD – our products are the perfect happy medium: a high with less psychoactive effects and all the health benefits of both, making it a desirable alternative to all consumers.
In addition, we are looking at some combinations of delta 8/CBDA, delta 8/CBN, delta 8/THCV and are very excited to begin test marketing these combinations. These proprietary blends of minor/major cannabinoids can cater to a niche target demographic as they can be curated to have very specific and unique effects when combined in the right quantities with the right delivery system. They will also be able to serve a larger customer base as these cannabinoids can all be derived from hemp.
CIJ: How do you think the FDA would regulate your product? Do you welcome federal oversight?
DeltaVera gummy products
Sam & PK: Regardless of whether or not we are regulated we are committed to a high level of transparency and trust. As noted in unregulated markets, like the supplement market, you don’t always know what you are getting in terms of purity and potency. We are changing that paradigm by adding unique QR codes to our sustainable containers which reference COAs [certificates of analyses] specific to the contents of the case. A lot of the space is naturally trying to avoid that kind of regulatory interference, but we are currently doing our best to self-regulate and make sure that our consumers are fully informed about what they’re receiving.
We will be the first to say that there aren’t as many laws governing delta 8 THC as there could be, and that’s why we’ve spent so much time and money on self-regulation. All of our products have very clear nutritional information in addition to test results down to one hundredth of one percent. As for what category these products should fall under: we have a wide range of products, and each one has its place under a different umbrella of regulation. We hope that the federal government will take advantage of the vast array of studies that have been conducted on delta 8 THC since it was first extracted in 1942 to step up to this product that is, in our experience, helping so many people.
CIJ: Tell me about how your business has grown so far.
Sam & PK: When we sell to a retailer, we try to provide them with as much material as possible on what delta 8 THC is and what differentiates DeltaVera’s products. Still, we’ve had some difficulty in places with limited delta 8 THC exposure. That being said, when someone tries our product, there is a high likelihood that they become a repeat customer (and they tell their friends). Given our newness to the market (Our brand launched in January 2021) initial indications are – we have a good rate of repeat orders, and we’ve heard the same from our brick-and-mortar partners.
The DeltaVera Delta Discs
Our distribution network has grown tremendously; we’ve taken a three-pronged approach to distribution: partnerships with like-minded companies in compatible spaces, an e-commerce market on our website, and a commission-based sales structure to reach brick-and-mortar establishments. To date, most of our distribution takes place in the latter two spaces, due to the added time and commitment involved in forming partnerships. As a company we are taking a more creative approach on how we present our product and alternative ways to consume it. We have some exciting collaborations in the works; follow us on social media to stay up to date with everything on the horizon. We are very enthusiastic about our partnerships however, with our first collaboration with WaxNax, a Denver-based company revolutionizing the cannabis dabbing experience, hitting the shelves this week.
CIJ: What is your marketing plan?
Sam & PK: We are working on building a social media presence. Natalie, who is leading the charge on social media, recommended we take an organic approach to build our base. We want to avoid falling into the “paid ad”, “spam” vibe as long as we can. We are currently focused on building a community through delta 8. Our mission is making DeltaVera a brand for all lifestyles, athletes, creatives, travelers or business professionals. We’re confident in our product, and have faith that it can speak for itself.
CIJ: How do you ensure quality in your products?
Sam & PK: Our products are of guaranteed quality with our licensed growers and manufacturers. We provide COAs, informing the retailer & consumer about each product, displaying full panel tests on cannabinoids and heavy metals. These preliminary and secondary lab tests ensure our product is below 0.3% delta 9 THC in all our products. Through third-party labs, we run full panel tests which pick up a variety of cannabinoids; for most of our products we focus on the level/purity of delta 8. Our products are screened for both contaminants and heavy metals.
All this information is housed conveniently on our website that can be reached through our QR codes.
CIJ: What are your plans to grow the business in the future?
Sam & PK: We feel very confident in our three methods of distribution: partnerships, e-commerce and a commission-based sales structure. We’ve made tremendous ground on partnerships, and are very excited about numerous partnerships we have in the pipeline. We’ve reached out to some incredible groups in the CBD space, the THC space and a few groups that you wouldn’t normally associate with cannabinoids, but with whom we’ve workshopped some really creative ideas that we’re really looking forward to bringing to market.
Readers can use promo code “CIJ” to get 15% off their first order here.
Things are about to change for cannabis and cannabis-related businesses, as landmark legislation to reform federal cannabis banking and insurance laws is just around the corner with the SAFE and CLAIM Acts now making their way through Congress.
The Secure and Fair Enforcement (SAFE) Banking Act, which already passed in the House, would allow financial institutions to do business with cannabis companies without facing federal penalties. There are high expectations the proposal will make its way through the Senate and onto President Biden’s desk.
The Clarifying Law Around Insurance of Marijuana (CLAIM) Act was introduced in Congress in March and is in the first stage of the legislative process. If it passed, it would allow insurance companies to service cannabis businesses without the threat of federal penalties.
For years, fear of sanctions kept banks and credit unions from working with the cannabis industry, forcing cannabis businesses to operate on a cash basis which made them targets of crime and created complications for financial regulators. This is a significant first step for cannabis businesses toward conducting more legitimate and safe operations.
The SAFE Banking Act: Providing a Legitimate Avenue to Banking and Loans
With 37 states and D.C. having taken action to legalize cannabis in some way, it is clear the federal cannabis regulatory model has shifted and the path forward for the SAFE Banking Act shows promise.
The bill creates a safe harbor for banks and credit unions to the extent they would not be liable or subject to federal forfeiture action for providing financial services to a cannabis-related business.More competition means greater capacity and lower premiums for all.
The bill would prohibit a federal banking regulator from:
Recommending, incentivizing or encouraging a depository institution not to offer financial services to an account holder affiliated with a cannabis-related business or prohibit or otherwise discouraging a depository institution from offering services to such a business
Terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides services to a cannabis-related business
Taking any adverse or corrective supervisory action on a loan made to a person solely because the person either owns such a business or owns real estate or equipment leased to such a business.
The CLAIM Act: Backing Cannabis Businesses with the Right Insurance Coverage
Should the CLAIM Act pass, it will protect insurance companies that provide coverage to a state-sanctioned and regulated cannabis business. It would also prohibit the federal government from terminating an insurance policy issued to a cannabis business and protect employees of an insurer from liability due to backing a cannabis-related business.
The CLAIM Act will be a boost for the insurance market and drive more underwriters to write cannabis policies. More competition means greater capacity and lower premiums for all. The act would also have a notable impact on currently hard-to-source policies like Cyber coverage, Directors & Officers (D&O) insurance, Errors & Omissions (E&O) and other management liability policies that have been extremely limited to cannabis businesses.
Cannabis Sales Still Growing Strong Globally
The cannabis market is not slowing down in the United States or globally. Recent forecasts have U.S. sales reaching $28 billion in 2022.
As was the case in Canada where cannabis was made federally legal in 2018, there’s going to be a steep learning curve industry-wide for financial services and insurance vendors who don’t yet understand the risks and liabilities of cannabis operations, even if the SAFE and CLAIM Acts pass this year. And yet this is one giant step in the right direction toward the safe and equitable sales of cannabis country-wide.
In Part 1 of this series we answered the question: What is “hemp”; and addressed some of the consequences of defining “hemp” as a thing. In Part 2, I will explore this topic in more detail and provide some commonsense definitions for several traditional hemp products based on a classification approach rather than separating “cannabis” from “hemp”.
Classifications, Specifications, and Test Methods – Establishing Market Protections for Hemp Products Through Standardization
Does making a distinction between “hemp” and “cannabis” make it easier to protect the interests of the seed and fiber markets?
On the face of it, this question seems obvious. Yes, it does.
Up to this point in history, the bifurcation of the cannabis plant into resin types and non-resin types has served to provide protections for the seed and fiber markets by making it easier for producers to operate, since the resins (the scary cannabinoids, namely d9-THC) were not involved. Today, however, the line in the sand, has been washed away, and “hemp” no longer only refers to non-resin producing varieties of the cannabis plant.
The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.
As more and more hemp marketplaces come online with varying limits for d9-THC the need for standardization becomes even more pressing. Without standardization, each marketplace will have its own requirements, forcing businesses looking to sell their products in multiple jurisdictions to comply with each region’s mandates and adds a significant level of burden to their operations.
Providing an internationally harmonized definition for hemp is an important first step but allowing the d9-THC limit to vary from jurisdiction to jurisdiction has some unintended (or intended) consequences (#NewReeferMadness). These discrepancies between legal marketplaces will inevitably lead to the establishment of global trade regions; where, if your product cannot meet the definition of “hemp” in that region, then you could effectively be barred from participating in it.
A process which has already started. Harmonizing around 0.3% is great for the US, Canada, and European Union, but what about other stakeholders outside of these markets?
And, at what point does the conflict of hemp from one region with a d9-THC content of 0.3% and hemp from another region with a d9-THC content of 1% being sold into the same market become a problem?
Perhaps a better long-term solution for protecting the market interests of “hemp product” stakeholders would be to establish specifications, such as identity metrics, total cannabinoid content, especially d9-THC, and other quality attributes which have to be verified using test methods for a product to be classified as “hemp”. This system of standards (classifications, specifications, and test methods) would allow for more innovation and make it significantly easier for cannabis raw materials that meet these specifications to find a use rather than being sent to the landfill. Bolstering advancements and opening the door for more market acceptance of the cannabis plant, its parts, and products.
An Alternative Approach to Defining Hemp
Below are some proposed definitions related to common terminology used in the hemp marketplace based on the concept that there are no hemp plants, there are only cannabis plants that can be classified as hemp, and hemp products are simply cannabis products that meet certain specifications to allow them to be classified and represented as hemp.
Hemp, n—commercial name given to a cannabis plant, its parts, and products derived therefrom with a total d9-THC content no more than the maximum allowable limit for the item in question. (Maybe not the best definition, but it makes it clear that not only does the limit for d9-THC vary from jurisdiction to jurisdiction it varies from product type to product type as well.)
Hemp flower, n—commercial name for the inflorescence of a cannabis plant that can be classified as hemp.
Hemp seed, n—commercial name for the seeds of a cannabis plant which are intended to be used to grow another cannabis plant that can be classified as hemp.
Hempseed, n—commercial name for the seeds of a cannabis plant which are intended to be used as food or as an ingredient in food.
Hemp seed oil, n—commercial name for the oils expressed from the seeds of a cannabis plant.
Hemp seed cake, n—commercial name for the solid material byproduct generated during the expression of the oil from the seeds of a cannabis plant.
Hemp flour/meal/dietary-fiber, n—commercial name for the powdered seed cake of a cannabis plant intended to be used as a food or as an ingredient in food with a protein content no more than 35% by weight.
Hemp protein powder, n—commercial name for the powdered seed cake of a cannabis plant intended to be used as a food or as an ingredient in food with a protein content between 35% and 80% by weight.
Hemp protein isolate, n—commercial name for the powdered seed cake of a cannabis plant intended to be used as a food or as an ingredient in food with a protein content above 80% by weight.
Hemp fiber, n—commercial name for the cellulosic-based natural fibers of a cannabis plant.
Hemp shives, n—commercial name for the hurd of a cannabis plant which have been processed to defined specifications.
Hempcrete, n—commercial name for a solid amalgamation of various aggregates and binders, typically comprised of the hurd (shives) of a cannabis plant and lime.
The d9-THC limits for each product were purposefully omitted because these specifications still need to be defined for each product type. Leaving the d9-THC limit up to each authority having jurisdiction, however, is not the answer. It is fine if you comply with a lower d9-THC limit and want to sell into a market with a higher d9-THC limit, but what do you do if you are above the limit for the market you want to sell into? For now, you lose out on potential revenue.
Hemp-derived CBD extract
I am not advocating that everyone starts selling “hemp” as “cannabis,” or vice versa, far from it. I am advocating for a more commonsense and inclusive approach to the marketplace though. One that would allow for the commercialization of materials that would normally be going to waste.
To me it is simply logical. There are no hemp plants, there are only cannabis plants that can be classified as hemp. There are no hemp products, there are only cannabis products that can be classified as hemp. In order for a cannabis product to be marketed, labeled, and sold as a hemp product, i.e. to be classified as a hemp, it would need to meet a set of specifications and be verified using a set of test methods first. But fundamentally the product would be a cannabis product being certified as “hemp”. And that is the shift in thinking that I am trying to get across.
The cannabis plant is an amazing plant and to fully capitalize on the potential of this crop we have to start allowing for the commercialization of cannabis raw materials that are not controlled by the UN Single Conventions, i.e. the seeds, stalks, roots, and leaves when not accompanied by the fruiting tops or the resin glands. Not to do so disenfranchises a significant number of stakeholders from participating in established legal avenues of trade for these goods. A concept proposed and endorsed the ASTM D37 in the published standard D8245-19: Guide for Disposal of Resin-Containing Cannabis Raw Materials and Downstream Products.
If you are stakeholder in the hemp marketplace, you may feel threatened by the idea of the market getting flooded with material, but how are the demands of the so called “green economy” going to be met without access to more supply? Organic hemp seed for food production is scarce but there is plenty of conventional hemp seed for the current demand, but what happens when hempmilk is positioned to displace soymilk in every major grocery store? To feed the growth of the human population and allow for a transition to a truly “green economy,” we need to ensure that the policies that we are putting in place are not excluding those looking to participate in the industry and disenfranchising stakeholders from burgeoning marketplaces, nor alienating a segment of the marketplace simply because their plant cannot be classified as “hemp”.
Cannabis, we have a problem. Legalizing adult use cannabis in California caused the demand for high-potency cannabis to increase dramatically over the last several years. Today, many dispensary buyers enforce THC minimums for the products that they sell. If smokeable flower products don’t have COAs proving the THC levels are above 20% or more, there is a good chance many dispensaries won’t carry them on their shelves. Unfortunately, these kinds of demands only put undue pressure on the industry and mislead the consumer.
Lab Shopping: Where the Problems Lie
Lab shopping for potency analysis isn’t new, but it has become more prevalent with the increasing demand for high-potency flower over the last couple of years. Sadly, many producers submit valid, certified COAs to the California Bureau of Cannabis Control (BCC), which show two to three times the actual potency value.
At InfiniteCAL, we’ve purchased products from dispensary shelves and found significant discrepancies between the analysis we perform and the report submitted to the BCC by the producer. So, how can this happen? Several factors are creating the perfect storm in cannabis testing.
Problems with Potency
Many consumers still don’t understand that THC potency is not the only factor in determining quality cannabis, and they are unwittingly contributing to the demand for testing and analysis fraud. It is alarming for cultivation pioneers and ethical labs to see producers and profit-hungry testing facilities falsifying data to make it more appealing to the unaware consumer.
Basically, what’s happening is growers are contacting labs and asking, “I get 30% THC at this lab; what can you do?” When they see our COA reporting their flower tested lower than anticipated, they will go to another lab to get higher test results. Unfortunately, there are all too many labs that are willing to comply.
I recently saw a compliant COA that claimed that this particular flower was testing at 54% THC. Understanding cannabis genetics, we know this isn’t possible. Another product I reviewed claimed that after diluting an 88% THC distillate with 10-15% terpenes, the final potency test was 92% THC. You cannot cut a product and expect the potency to increase. Finally, a third product we reviewed claimed 98% total cannabinoids (while only looking at seven cannabinoids) with 10% terpenes for a total of 108% of the product.
These labs only make themselves look foolish to professionals, mislead laymen consumers and skirt under the radar of the BCC with basic mathematical errors.
The Pesticide Predicament
Frighteningly, inflating potency numbers isn’t the most nefarious testing fraud happening in the cannabis industry. If a manufacturer has 1000 liters of cannabis oil fail pesticide testing, they could lose millions of dollars – or have it retested by a less scrupulous lab.
Photo: Michelle Tribe, Flickr
As the industry continues to expand and new labs pop up left and right, cultivators and manufacturers have learned which labs are “easy graders” and which ones aren’t. Certain labs can miss up to ten times the action level of a pesticide and still report it as non-detectable. So, if the producer fails for a pesticide at one lab, they know four others won’t see it.
In fact, I’ve had labs send my clients promotional materials guaranteeing compliant lab results without ever receiving a sample for testing. So now, these companies aren’t just tricking the consumer; they are potentially harming them.
An Easy Fix
Cannabis testing is missing just one critical factor that could quickly fix these problems – checks and balances. The BCC only needs to do one of two things:
Verifying Lab Accuracy
InfiniteCAL also operates in Michigan, where the Marijuana Regulatory Agency (MRA) has already implemented a system to ensure labs are maintaining the highest testing standards. The MRA will automatically flag all COAs which test above a certain percentage and require the product to be retested by multiple labs.
Labs are required to keep a back stock of material. So, when test results come back abnormally high from Lab A, then Labs B, C and D are commissioned to retest the material to compare data. If Lab A reports 40% THC, but the other labs all report 18%, then it’s easy to see Lab A has made an error.
Secret Shopping
By simply buying products off the shelves and having them blind-tested by other labs, it would be simple for the BCC to determine if the existing COA is correct. They already have all the data in Metrc, so this would be a quick and easy fix that could potentially solve the problem overnight.
For example, at InfiniteCAL, we once purchased 30 samples of Blue Dream flower from different cultivators ranging in certified COA potencies from 16% to 38%. Genetically, we know the Blue Dream cultivar doesn’t produce high levels of THC. When we tested the samples we purchased, nearly every sample came back in the mid-teens to low 20% range.
Labs Aren’t Supposed to Be Profit Centers
At InfiniteCAL, we’ve contacted labs in California where we’ve uncovered discrepancies to help find and flush out the errors in testing. All too often, we hear the excuses:
“If I fix my problem, I’ll lose my clients.”
“I’m just a businessman who owns a lab; I don’t know chemistry.”
“My chemist messed up; it’s their fault!”
If you own a lab, you are responsible for quality control. We are not here to get rich; we are here to act as public safety agents who ensure these products are safe for the consumer and provide detailed information about what they choose to put in their bodies. Be professional, and remember you’re testing for the consumer, not the producer.
The cannabis industry’s advancement towards legalization continues to dominate national headlines, from the stance of incoming Attorney General Merrick Garland to deprioritize enforcement of low-level cannabis crimes, Senate Majority Leader Chuck Schumer’s continued advocacy, to the recent passing of legislation in New York, New Mexico and Virginia (the first in the South) to authorize adult-use cannabis. While these updates are likely to intrigue customers and investors alike, they are also sure to draw the attention of cyber criminals who could look at the relative youth of the industry, as well as its rapid growth, as a prime target of opportunity for nefarious acts.
In order to understand risk mitigation best practices across a wide spectrum of private sector industries, this article will first identify the current security environment in order to understand the threats, briefly highlight specific case studies and assess the risks and identify methods that individual organizations, as well as the cannabis industry as a whole, can take action to enhance security and preparedness and to develop resiliency against future attacks.
Understanding the Threats
For an industry that has operated in a largely cash-based system for much of its existence, the idea of security is not foreign. Typically, these concerns focused on physical security implementation. The topic has received plenty of coverage, including a recent article in this journal articulating Important Security Considerations When Designing Cannabis Facilities. While an audit of physical security measures is a valuable part to any all-hazards threat assessment, securing a growing online network – from email to online finances to connected devices within cannabis facilities – can pose more unfamiliar challenges. When consulted for this article, Patten Wood, a former VP of marketing for a prominent west-coast cannabis retail brand noted: “While the topic of cybersecurity is critically important to customers, businesses, and the industry at large, it isn’t top of mind for many of the cannabis companies that I’ve experienced.” Understanding what risks are present is the first step to mitigating them, so we must first discuss several common cyber threats for the cannabis industry.
Phishing: Phishing happens when cybercriminals impersonate a trusted individual or entity, typically through email. The goal in this instance is to get the target to share confidential information or download software that can allow unauthorized access into an organization’s network. Phishing is one of the most common types of cyberattacks as it is relatively easy to conduct and surprisingly effective.
Ransomware Attacks: Ransomware attacks are used to gain access to a computer network and then lock and encrypt either the entire system or certain sets of high-value files, which can compromise important business information, and impact client and vendor privacy. A ransom is then demanded for restoring access, but paying the ransom comes with its own risk as it doesn’t guarantee the files will be restored.
Cyber Extortion: Similar to ransomware attacks in their design, cyber extortion typically deals with a threat of leaking personal information and will generally demand payment in cryptocurrency in order to maintain their anonymity.
Lumu: 2020 Ransomware Flashcard
Remote Access Threats: As 2020 has forced organizations to rethink how they conduct business and shift to more remote operations than they had in the past, it can open up several new threats. According to a survey by IT social network SpiceWorks.com, six out of every ten organizations allow their employees to connect their company-issued devices to public Wi-Fi networks. Utilizing unsecured Wi-Fi networks opens the user up to man-in-the-middle attacks, allowing hackers to intercept company data. Unsecure Wi-Fi also brings the threat of malware distribution. An additional consideration with remote workers is the uptick in cyber attacks against remote access software referred to as remote desktop protocol (RDP) attacks. According to Atlas VPN, RDP attacks skyrocketed 241% in 2020 and we’ve seen numerous RDP attacks against critical infrastructure throughout the pandemic and across all industries.
Internet of Things (IoT) Leaks: With IoT devices running everything from security systems to automated growing operations, the convenience has been a huge boost for the industry. Unfortunately, many IoT devices don’t have sophisticated built-in security. Another common problem is the tendency of users to keep default passwords upon installation, which can make devices easy for cyber criminals to access. Once they are inside the system, malware can easily be installed, and the actors can move laterally throughout the network.
Personal and Medical Record Security: Many cyberattacks expose some level of personal data, whether that be customer, employee or vendor information. An extra consideration for retail operations that either treat medical patients, or medical and adult-use customers, is the additional information they must store about their clients. Medical facilities will maintain protected health information (PHI), which are much more valuable on the dark web than personally identifiable information (PII). But even adult use facilities may keep government-issued ID or other additional information above that of a typical retailer, which makes the potential value of their information much more intriguing for a cybercriminal.
Assessing the Risks
Depending on where your organization lies in the seed to sale chain, you will have different levels of risk for various types of attacks. We briefly discussed ransomware attacks earlier. Ransoms can range widely depending on the size of the organization that is attacked, but the ransom alone isn’t the only risk consideration. Businesses must also factor in the cost of downtime (an average of 18 days in 2020) caused by the ransomware when evaluating the impact to business operations, as well as reputation. While small – medium businesses are absolutely at risk, especially given their relative lack of cybersecurity resources and sophistication, a recent trend involves “Big Game Hunting” where cybercriminals are targeting larger organizations with the potential for bigger paydays. Criminals understand that big business can rarely afford major delays, and may be more able and willing to pay, and pay big, for a return to normal operations.
Group-IB: Ransomware Uncovered
Below are several examples of attacks which have either directly impacted the cannabis industry, or have valuable lessons the industry can learn from.
GrowDiaries: In October 2020 researcher Bob Diachenko discovered that 3.4 million records including passwords, posts, emails and IP addresses were exposed after two open-source application Kibana apps were left exposed online. As a platform for cannabis growers around the world (who are not all growing legally), this type of exposure puts the community at great risk, and can lower user confidence in the product, as well as putting them at personal risk of harm or legal ramifications. The applications being left open is a prime example of either a lack of good cybersecurity policies, or not following through on those policies.
Aurora Cannabis: On December 25th, 2020 Canadian company Aurora Cannabis suffered a data breach when SharePoint and OneDrive were illegally accessed. Included in the data that was compromised was credit card information, government identification, home addresses and banking details. The access point coming through Microsoft cloud software is a prime example of some of the challenges facing businesses who have an increasingly remote workforce yet still need that workforce to access critical (and usually highly sensitive) information.
THSuite: A database owned by seed to sale Point-Of-Sale (POS) software provider THSuite was discovered by researchers in December 2019. The database contained PHI/PII for 30,000 people, with over 85,000 files being exposed. The information that was left accessible included scanned government IDs, personal contact information and medical ID numbers. Clearly this gets into HIPAA territory, which can result in fines of up to $50,000 for every exposed record.
Door Dash: As cannabis delivery apps become more prevalent, it’s good to reference how similar businesses in other industries have been targeted. In May of 2019 nearly 5 million user records were accessed by an unauthorized third party, exposing PII and partial payment card information.
Taking Action
On an organizational level, employee training, password hygiene and malware protection are some of the basic and most important steps that should be taken by all organizations. But, if “knowledge is power,” the best defense for any organization against cyber threats is a well-informed organization- including leadership down to the front-line employees. Excellent tools to assist in this are Information Sharing & Analysis Centers/Organizations (ISACs/ISAOs). ISACs were established under a presidential directive in 1998 to enable critical infrastructure owners and operators to share cyber threat information and best practices. The National Council of ISACs currently has over 20 member ISACs including Real Estate, Water, Automotive and Energy. ISAOs were created by a 2015 executive order to encourage cyber threat information sharing within private industry sectors that fall outside of those listed as “critical infrastructure”. Christy Coffey, vice president of operations at the Maritime and Port Security ISAO (MPS-ISAO) says information sharing enabled by the executive order is critical. “We need to accelerate private sector information sharing, and I believe that the ISAO is the vehicle.”
According to Michael Echols, CEO of the International Association of Certified ISAO’s (IACI) at the Kennedy Space Center, security experts have long understood that threat information sharing can allow for better situational awareness and help organizations better identify common threats and ways to address them. “On the other side, hackers in a very documented way are already teaming up and sharing information on new approaches and opportunities to bring more value (to their efforts).” The ongoing crisis surrounding the Microsoft Exchange Server Vulnerability demonstrates that different cybercriminal groups will work simultaneously to abuse system flaws. As of March 5th it was reported that at least 30,000 organizations in the U.S. – and hundreds of thousands worldwide – have backdoors installed which makes them vulnerable to future attacks, including ransomware.
Below are several links to recent products that have been shared by various ISACs/ISAOs, which are provided as an example of the type of information that is commonly shared via these organizations.
If organizations are interested in learning more about enhancing their cybersecurity resiliency through private-sector led information sharing, please reach out to the newly formed Cannabis ISAO at ben@cannabisisao.org
What is the role of the Quality Control (QC) Laboratory?
The Quality Control (QC) laboratory serves as one of the most critical functions in consumer product manufacturing. The QC laboratory has the final say on product release based on adherence to established product specifications. Specifications establish a set of criteria to which a product should conform to be considered acceptable for its intended use. Specifications are proposed, justified and approved as part of an overall strategy to ensure the quality, safety, and consistency of consumer products. Subsequently, the quality of consumer products is determined by design, development, Good Manufacturing Practice (GMP) controls, product and process validations, and the specifications applied throughout product development and manufacturing. These specifications are specifically the validated test methods and procedures and the established acceptance criteria for product release and throughout shelf life/stability studies.
The Code of Federal Regulations, 21 CFR Part 211, Good Manufacturing Practice for Finished Pharmaceuticals, provides the minimum requirements for the manufacture of safe products that are consumed by humans or animals. More specifically, 21 CFR Part 211: Subpart I-Laboratory Controls, outlines the requirements and expectations for the quality control laboratory and drug product testing. Additionally, 21 CFR Part 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food: Subpart B-Processes and Controls states that appropriate QC operations must be implemented to ensure food products are safe for consumption and food packing materials and components are safe and fit for purpose. Both food and drug products must be tested against established specifications to verify quality and safety, and laboratory operations must have the appropriate processes and procedures to support and defend testing results.
ISO/IEC 17025, General Requirements for the Competence of Testing and Calibration Laboratories is used to develop and implement laboratory management systems. Originally known as ISO/IEC Guide 25, first released in 1978, ISO/IEC 17025 was created with the belief that “third party certification systems [for laboratories] should, to the extent possible, be based on internationally agreed standards and procedures”7. National accreditation bodies are responsible for accrediting laboratories to ISO/IEC 17025. Accreditation bodies are responsible for assessing the quality system and technical aspects of a laboratory’s Quality Management System (QMS) to determine compliance to the requirements of ISO/IEC 17025. ISO/IEC 17025 accreditation is pursued by many laboratories as a way to set them apart from competitors. In some cannabis markets accreditation to the standard is mandatory.
The approach to ISO/IEC 17025 accreditation is typically summarizing the standard requirements through the use of a checklist. Documentation is requested and reviewed to determine if what is provided satisfies the item listed on the checklist, which correlate directly to the requirements of the standard. ISO/IEC 17025 covers the requirements for both testing and calibration laboratories. Due to the wide range of testing laboratories, the standard cannot and should not be overly specific on how a laboratory would meet defined requirements. The objective of any laboratory seeking accreditation is to demonstrate they have an established QMS. Equally as critical, for product testing laboratories in particular, is the objective to establish GxP, “good practices”, to ensure test methods and laboratory operations verify product safety and quality. ISO/IEC 17025 provides the baseline, but compliance to Good Laboratory Practice (GLP), Good Manufacturing Practice (GMP) and even Good Safety Practices (GSP) are essential for cannabis testing laboratories to be successful and demonstrate testing data is reliable and accurate.
Where ISO/IEC 17025 accreditation falls short
Adherence to ISO/IEC 17025, and subsequently receiving accreditation, is an excellent way to ensure laboratories have put forth the effort to establish a QMS. However, for product testing laboratories specifically there are a number of “gaps” within the standard and the accreditation process. Below are my “Top Five” that I believe have the greatest impact on a cannabis testing laboratory’s ability to maintain compliance and consistency, verify data integrity and robust testing methods, and ensure the safety of laboratory personnel.
Standard Operating Procedures (SOPs)
The understanding of what qualifies as a Standard Operating Procedure (SOP) is often misunderstood by cannabis operators. An SOP is a stand-alone set of step-by-step instructions which allow workers to consistently carry out routine operations, and documented training on SOPs confirms an employee’s comprehension of their job tasks. Although not required per the current version of the standard, many laboratories develop a Quality Manual (QM). A QM defines an organization’s Quality Policy, Quality Objectives, QMS, and the procedures which support the QMS. It is not an uncommon practice for cannabis laboratories to use the QM as the repository for their “procedures”. The intent of a QM is to be a high-level operations policy document. The QM is NOT a step-by-step procedure, or at least it shouldn’t be.
Test Method Transfer (TMT)
Some cannabis laboratories develop their own test methods, but a common practice in many cannabis laboratories is to purchase equipment from vendors that provide “validated” test methods. Laboratories purchase equipment, install equipment with pre-loaded methods and jump in to testing products. There is no formal verification (what is known as a Test Method Transfer (TMT)) by the laboratory to demonstrate the method validated by the vendor on the vendor’s equipment, with the vendor’s technicians, using the vendor’s standards and reagents, performs the same and generates “valid” results when the method is run on their own equipment, with their own technician(s), and using their own standards and reagents. When discrepancies or variances in results are identified (most likely the result of an inadequate TMT), changes to test methods may be made with no justification or data to support the change, and the subsequent method becomes the “validated” method used for final release testing. The standard requires the laboratory to utilize “validated” methods. Most laboratories can easily provide documentation to meet that requirement. However, there is no verification that the process of either validating in house methods or transferring methods from a vendor were developed using any standard guidance on test method validation to confirm the methods are accurate, precise, robust and repeatable. Subsequently, there is no requirement to define, document, and justify changes to test methods. These requirements are mentioned in ISO/IEC 17025, Step 7.2.2, Validation of Methods, but they are written as “Notes” and not as actual necessities for accreditation acceptance.
Change Control
The standard speaks to identifying “changes” in documents and authorizing changes made to software but the standard, and subsequently the accreditation criteria, is loose on the requirement of a Change Control process and procedure as part of the QMS. The laboratory is not offered any clear instruction of how to manage change control, including specific requirements for making changes to procedures and/or test methods, documented justification of those changes, and the identification of individuals authorized to approve those changes.
Out of Specification (OOS) results
The documentation and management of Out of Specification (OOS) testing results is perhaps one of the most critical liabilities witnessed for cannabis testing laboratories. The standard requires a procedure for “Nonconforming Work”. There is no mention of requiring a root cause investigation, no requirement to document actions, and most importantly there is no requirement to document a retesting plan, including justification for retesting. “Testing into compliance”, as this practice is commonly referred to, was ruled unacceptable by the FDA in the highly publicized 1993 court case United States vs. Barr Laboratories.
Laboratory Safety
Safe laboratory practices are not addressed at all in ISO/IEC 17025. A “Culture of Safety” (as defined by the Occupational Safety and Health Administration (OSHA)) is lacking in most cannabis laboratories. Policies and procedures should be established to define required Personal Protective Equipment (PPE), the safe handling of hazardous materials and spills, and a posted evacuation plan in the event of an emergency. Gas chromatography (GC) is a common test method utilized in an analytical testing laboratory. GC instrumentation requires the use of compressed gas which is commonly supplied in gas cylinders. Proper handling, operation and storage of gas cylinders must be defined. A Preventative Maintenance (PM) schedule should be established for eye wash stations, safety showers and fire extinguishers. Finally, Safety Data Sheets (SDSs) should be printed and maintained as reference for laboratory personnel.
ISO/IEC 17025 accreditation provides an added level of trust, respect and confidence in the eyes of regulators and consumers. However, the current process of accreditation misses the mark on the establishment of GxP, “good practices” into laboratory operations. Based on my experience, there has been some leniency given to cannabis testing laboratories seeking accreditation as they are “new” to standards implementation. In my opinion, this is doing cannabis testing laboratories a disservice and setting them up for failure on future accreditations and potential regulatory inspections. It is essential to provide cannabis testing laboratory owners and operators the proper guidance from the beginning and hold them up to the same rigor and scrutiny as other consumer product testing laboratories. Setting the precedence up front drives uniformity, compliance and standardization into an industry that desperately needs it.
References:
21 Code of Federal Regulations (CFR) Part 211- Good Manufacturing Practice for Finished Pharmaceuticals.
21 Code of Federal Regulations (CFR) Part 117;Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food: Subpart B-Processes and Controls.
ICH Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients; Laboratory Controls.
World Health Organization (WHO).
International Building Code (IBC).
International Fire Code (IFC).
National Fire Protection Association (NFPA).
Occupational Safety and Health Administration; Laboratories.
ASTM D8244-21; Standard Guide for Analytical Operations Supporting the Cannabis/Hemp Industry.
The word “hemp” has many meanings. Historically the term has been used as the common name for the Cannabis sativa L. plant. Just like other plants, the cannabis plant has two names, a common name, hemp, and a scientific name, Cannabis sativa L. After the ratification of the UN Single Conventions on Narcotic Drugs and Psychotropic Substances, in 1961 and 1972 respectively, the term started to be used to distinguish between resin producing varieties of the cannabis plant and non-resin producing varieties of the cannabis plant. Nowadays the term is generally used to refer to cannabis plants with a delta-9-tetrahydrocannabinol (d9-THC), a controlled substance, content equal to or less than the maximum allowable limit defined by each marketplace.
Tetrahydrocannabinol (THC), just one of hundreds of cannabinoids found in cannabis.
In the United States and Canada, the limit is defined as 0.3% on a dry weight bases, and until November 2020, in the European Union, the limit was defined as 0.2%. After years of effort the “hemp” industry in Europe was successfully able to get the limit raised to 0.3% to be in line with the United States and Canada – creating the largest global trade region for hemp products. But there exist several marketplaces around the world where, either through the consequences of geographic location or more progressive regulations, the d9-THC content in the plant can be substantially higher than 0.3% and still considered “hemp” by the local authority.
To address these variances, ASTM International’s Technical Committee D37 on Cannabis has been working on a harmonized definition of hemp, or industrial hemp, depending on the authority having jurisdiction, through the efforts of its Subcommittee D37.07 on Industrial Hemp. The following is a proposed working definition:
hemp, n—a Cannabis sativa L. plant, or any part of that plant, in which the concentration of total delta-9 THC in the fruiting tops is equal to or less than the regulated maximum level as established by an authority having jurisdiction.
Discussion: The term “Industrial Hemp” is synonymous with “Hemp”.
Note: Total delta-9 THC is calculated as Δ⁹-tetrahydrocannabinol (delta-9 THC) + (0.877 x Δ⁹-tetrahydrocannabinolic acid).
This definition goes a long way to harmonize the various definitions of hemp from around the world, but it also defines “hemp” as a thing rather than as a classification for a type of cannabis plant or cannabis product. This is a concept rooted in the regulatory consequences of the UN Single Conventions, and one I strongly disagree with.
The definition also leaves the total d9-THC limit open-ended rather than establishing a specified limit. An issue I will address further in this series.
Can “hemp products” only come from “hemp plants”?
If you are an invested stakeholder in the traditional “hemp” marketplace, you would say, yes.
But are there such things as “hemp plants” or are there only cannabis plants that can be classified as “hemp”? (The definition for hemp clearly states that it is a cannabis plant…)
A field of hemp plants, (Cannabis sativa L.)
There is no distinction between the cannabinoids, seeds, and fibers derived from a cannabis plant that can be classified as “hemp” and those derived from a cannabis plant that cannot. The only difference is the word: “cannabis,” and the slew of negative connotations that come along with it. (Negative connotations that continue to be propagated subconsciously, or consciously, whenever someone says the “hemp plant” has 50,000+ uses, and counting, and will save the world because it’s so green and awesome, but not the “cannabis plant”, no that’s evil and bad, stay away! #NewReeferMadness)
The declaration that “hemp products” only come from “hemp plants” has some major implications. “Hemp seeds” can only come from “hemp plants”. “Hemp seed oils” can only come from “hemp seeds”. “Hemp fibers” can only come from “hemp plants”. Etc.
What does that really mean? What are the real-world impacts of this line of thinking?
Flat out it means that if you are growing a cannabis plant with a d9-THC content above the limit for that plant or its parts to be classified as “hemp”, then the entire crop is subjected to the same rules as d9-THC itself and considered a controlled substance. This means that literal tons of usable material with no resin content whatsoever are destroyed annually rather than being utilized in a commercial application simply because a part or parts of the plant they came from did not meet the d9-THC limit.
Some of the many products on the market today derived from hemp
It is well known that d9-THC content is concentrated in the glandular trichomes (resin glands) which are themselves concentrated to the fruiting tops of the plant. Once the leaves, seeds, stalks, stems, roots, etc. have been separated from the fruiting tops and/or the resin glands, then as long as these materials meet the authority having jurisdiction’s specifications for “hemp” there should be no reason why these materials could not be marketed and sold as “hemp”.
There are several reasons why a classification approach to “hemp plants” and “hemp products” makes more long-term sense than a bifurcation of the “cannabis” and “hemp” marketplaces, namely from a sustainability aspect, but also to aid in eliminating the frankly unwarranted stigma associated with the cannabis plant. #NewReeferMadness
That said, say you are a producer making shives from the stalks of cannabis plants that can be classified as “hemp” and then all of a sudden, the market opens up and tons of material from cannabis plants that cannot be classified as “hemp,” that was being sent to the landfill, become available for making shives. Would you be happy about this development? Or would you fight tooth and nail to prevent it from happening?
In this segment, we looked at the history of the term “hemp” and some of the consequences from drawing a line in the sand between “cannabis” and “hemp”. I dive deeper into this topic and provide some commonsense definitions for several traditional hemp products in Part 2 of Defining Hemp: Classifications, Policies & Markets.
Despite President Biden’s reticence in tackling cannabis reform, Senate Democrats led by Chuck Schumer of New York have insisted that they intend to move forward with descheduling and decriminalizing cannabis with or without the President. This begs the question, what could brands across the legal cannabis industry look like as the federal regulatory environment evolves? As part of this, will interstate restrictions come down and allow for efficient regional and even national brands or will the structure continue to require a state-by-state strategy and rollout?
Currently, state borders set boundaries that dictate supply, distribution and sale, setting strict regulations on cannabis industry operations. As of today, many companies throughout the U.S. cannabis industry are structured as multi-state operators (MSOs), in which the companies own products or dispensary brands that are available in multiple legal state markets but operate in virtual silos from one another. This poses an interesting challenge that may need to evolve with federal legislative changes that could determine redrawing of these supply chains both on a regional and national level.
Brands like Korova, a popular edibles and flower brand based in California, with operations in Oregon and licensees in Oklahoma and Arizona, must keep its operations entirely separate, even if it operates under the same name in different states. Moreover, cannabis flower and extract sourced from California cannot legally be shipped to Oregon or other states. Thus, the MSO often creates vertical operations in each state in which it operates. It creates an entirely distinct process from cultivation to extraction to retail facilities. This difference in operation, even slight, can affect brand quality and consistency across markets if not managed carefully.
When federal cannabis legislation changes, these types of decisions will most likely be left to the states. I view it as similar to how the alcohol industry operates. In this case, states want to work to protect tax revenue and jobs. Whatever new federal legislation materializes, it is likely that states will retain considerable control over their borders and will have little to no immediate change in terms of vertical operations or the supply chain. The industry is still very nascent, and today’s companies have already developed competitive moats.
On the other hand, if federal barriers are abruptly lifted, we head into a massive free for all. In this scenario, massive consolidation and disruption will occur across the industry, and companies with larger footprints, either in large, important states or across states, will likely be merged together or acquired outright, by either larger MSOs or consumer packaged goods companies that enter the cannabis industry. Along the way, smaller, private companies would go out of business. This would have a massive impact on the industry, with considerable local or state-level disruption to tax revenues and employment. No politician wants to be responsible for something like this, especially during this time of economic turmoil.
If the federal government goes all in on legalization and offers interstate commerce and travel across state lines, companies will no longer have to operate within their own states, nor will MSOs need to create separate vertical operations in different states with hopes that brands maintain consistency. If this occurs, it will ease major strains that presently exist for corporations throughout the industry. Large operators will certainly have an advantage if movement is freed for brands. However, challenges will most likely persist for smaller operators looking to make a splash in the market and the likelihood of this happening for the reasons stated above is low.
Interstate cannabis commerce will be the game changer. While it remains unlikely, in my view, that there will be interstate commerce allowed in any legislation we see out of this Congress, it will happen eventually, just as interstate alcohol laws have also evolved overtime. Having ownership of good assets and brands in important markets and building a strong revenue base is key to both short and long-term success as the industry continues it consolidation, a measure which will only be accelerated with more federal legislation. For Terra Tech, which is acquiring Korova and other brands, it is a fundamental part of our strategy.
So how does a company identify the strongest brands and best operations to work with in our incredibly fragmented industry with no national brands? While there are companies trying to move in that direction, none of them have national brand stature at this point, providing an opening. The brands most likely to succeed are the ones that are more likely to resonate with consumers across various markets. These brands tend to have higher quality and potency at a good perceived value, and which have history in the community of delivering consistent products.
When it comes to choosing markets to get involved in, some choose to do it regionally and others seek out available markets regardless of geography or marketing segments. Unlike many leaders of multi-state operations, I don’t prefer to buy smaller operations in a bunch of states. In my experience, organizing our operations by region increases our efficiency and profitability. I’m very firmly in support of creating one larger brand than smaller regional brands. It’s easier to develop with marketing and advertising.
As the cannabis industry — now estimated to be worth more than USD 200 billion — continues to erupt around the world, Europe is about to take off.
This draws a parallel with the watershed legislative events of November 2012, when Colorado Amendment 64 and Washington Initiative 502 were implemented. These two bills kicked off a wave of medical and adult use acceptance in the United States. Europe’s medical referendums which started in 2017-2018 and the recent December 2020 United Nations acceptance of medical attributes of cannabis will do the same in that continental marketplace. Europe is following science and studying popular opinion about cannabis, just like the United States nearly a decade ago.
In many ways, the American “medical” market has been a political ploy, while the European market is truly medical in every way. Distribution through pharmacies and mainstream channels is the wave of the future. This method of distribution will both increase access and taxable bases quicker than the U.S. “medical” dispensary model. People who truly need cannabis should not be hindered by any rules or regulations to get the medicine, and the U.N. has paved the way for access while the U.S. still awaits rescheduling.
Markets in Europe require EU-GMP manufacturing for a variety of different products
The road to medical cannabis in Europe is more stringent than that of the U.S. and Canada. This is because most European markets have strict medical standards and medicines must be produced in European Union Good Manufacturing Practices (EU GMP) certified pharmaceutical manufacturing facilities. This is the same standard that all medical Active Pharmaceutical Ingredient (API) producers are held to.
Both Canadian companies, who have just launched extraction with Canada’s “Cannabis 2.0”, and American manufacturers alike are unfamiliar with pharmaceutical API production. Some argue that food-grade GMP standards are the most similar to already-existing systems in the U.S. and Canada. However, the meaning of “medical” is clear in Europe — it means medical. Improving access for patients to products will be the central challenge for Europe over the next few years as patient growth increases.
Europe is also embracing its potential adult use markets. First came Denmark, then Luxembourg, and now the Netherlands are all beginning to engage with the question of adult use cannabis legalization. We expect Portugal will soon join this list. After all, in a post-coronavirus world, every country will be looking for a means to grapple with a devastated economy and to boost employment to widen its taxable base.
The United States was supposedly founded by Puritans escaping gregarious Europeans. Now it’s likely America will legalize cannabis within the year and Europeans will be left asking, “Why them and not us?” And it will become harder to explain why such potential for growth in employment and increased tax revenue isn’t being taken advantage of as Europe begins to emerge from lockdown. It would be shrewd to expect a wave of European adult use kick-offs in 2022.
It’s anyone’s guess what retail will look like for the cannabis market in Europe as it evolves
It is clear that 2021 is setting a blistering economic pace: from mergers and acquisitions to monster capital raises, to increased debt raises to the hot special purpose acquisition companies (SPACs) London Stock Exchange (LSE) up listings and initial public offering (IPO) fever. This year will be a cannabis-fueled explosion that Europe will not be able to ignore. With Canada, the U.S. and Mexico all likely to legalize cannabis in the near future, how long will it be before South and Central America follows suit? And then, how long for this wave to reach Europe?
The real answer is, it’s already here. Early adopters of cannabis overbuilt as the Canadians were given more money than they deserved, while the U.S. market was largely fueled by private equity and proved that it could be the biggest and best-run model. Europe will follow its own path by acknowledging the failures and successes of these markets, blending them to form its own unique European model.
The American dispensary will eventually pop up in Europe in a form similar to the current social clubs of Barcelona and coffee shops of Amsterdam. Possibly specialized pharmacies will carry more cannabis products, but it’s too early to call — countries are only just beginning to figure out how cannabis rules might be shaped to fit their needs and values.
2021 could be a decisive year for the European cannabis market
There are greater issues people are dealing with in the age of COVID-19, but that will change. Economic recovery, the need to provide medicine more quickly and affordably, social reform, green projects and many more pressing issues will become thematic of a post-COVID world; a set of themes for which a cannabis-shaped solution checks many of the necessary boxes.
There is a certain misrepresentation of cannabis as a panacea, able to cure every medical ailment and remedy every social problem if only it were legalized more broadly. While cannabis certainly is not a cure-all, it can fix many issues facing governments today. People were grateful for cannabis during these troubled times with cannabis stockpiling and usage through the roof in the early stages of the pandemic. As a result, 2021 has the potential to shatter old establishment perceptions as more consumers speak out.
Now, it is only a question of how the individual and collective European nations choose to regulate expansion across the continent. And the power to create a truly world-beating cannabis model is in their hands; without the international market differences and troubles that plague the North American sector, there will be virtually no limits to cannabis expansion throughout Europe if those in charge believe it to be so.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
We use tracking pixels that set your arrival time at our website, this is used as part of our anti-spam and security measures. Disabling this tracking pixel would disable some of our security measures, and is therefore considered necessary for the safe operation of the website. This tracking pixel is cleared from your system when you delete files in your history.
We also use cookies to store your preferences regarding the setting of 3rd Party Cookies.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
According to a press release published last week, Medicinal Genomics has hired Sherman Hom, Ph.D. to be their first director of regulatory affairs. Dr. Hom is coming from a position at New Jersey’s Division of Public Health and Environmental Laboratories (PHEL) where he was the leading research scientist for the state’s cannabis testing lab as well as coordinating their pre-analytical activities for SARS-CoV-2 testing.
