Due to quick progressions in legalization, today’s cannabis industry bears little resemblance to the industry of five years ago. As the cannabis space gains mainstream acceptance, it resembles more “traditional” industries closely. In turn, how we consume cannabis has changed dramatically within this novel legal framework.
A brief visit to a cannabis dispensary quickly illuminates just how much the industry has changed in the past few years.
Within the dynamic of modern cannabis, perhaps no vertical has seen the same advancements as cannabis extracts. It’s precisely the growth of the concentrate category that has given rise to the many branded products that define the legal market.
To give a clear picture of how advancements in extraction have stimulated the concentrate category’s growth, we put together this brief exploration.
Standards & Technology
Before legalization, the production of cannabis extracts was a shady affair done in clandestine and often dangerous ways. Especially concerning BHO (Butane Hash Oil), home-based laboratories have long since been notorious fire hazards. Even more, with a total lack of regulation, black-market extracts are infamous for containing harmful impurities.
In the few short years that cannabis has been legal in Nevada, Washington and other states, extract producers have adopted standards and technology from more professional arenas. By borrowing from the food and pharmaceutical industries, concentrate companies have achieved excellence undreamed of a decade ago.
Good Manufacturing Practices
One of the essential elements in the extracts vertical advancements is the adoption of good manufacturing practices. According to the World Health Organization website, “Good Manufacturing Practice (GMP) is that part of quality assurance which ensures that products are consistently produced and controlled to the quality standards appropriate to their intended use.”
When adult-use cannabis was legalized in markets such as Colorado, cannabis companies were able to come out of the shadows and discuss GMPs with legit businesses. In doing so, they implemented professional controls on extract manufacturing in accordance with “quality standards” of state regulatory agencies.
Supercritical CO2 Extraction
As cannabis businesses adopted GMP from other industries, extract producers also embraced more sophisticated technology. Of these, supercritical CO2 has pushed the cannabis concentrates vertical into the future.
According to the equipment manufacturer Apeks Supercritical, “CO2 is considered to be a safer method of extraction because the solvent is non-volatile. The extract is purer because no trace of the solvent is left behind. It is also versatile and helps protect sensitive terpenes, by allowing cold separation.” By deriving methods from food production, supercritical equipment manufacturers have given cannabis companies a viable option for the commercial production of extracts.
Supercritical technology has helped push the concentrates vertical forward by providing a clean and efficient way to produce cannabis extracts. Nonetheless, supercritical CO2 equipment is highly sophisticated and carries a hefty price tag. Producers can expect to pay well over $100,000 for commercial supercritical CO2 extraction setup.
Products
Just as standards and technology have evolved in the cannabis extracts vertical, we have also seen products rapidly mature. Notably, the legal environment has allowed manufacturers to exchange ideas and methods for the first time. In turn, this dialogue has led to the development of new products, like isolates and live resin.
Isolates
Just as the name implies, isolates are concentrates made from a singular, pure cannabinoid. In today’s market, CBD isolates have grown increasingly popular because people can consume pure CBD without ingesting other cannabinoids or plant materials, including the legal 0.3% THC found in hemp.
Isolates are made by further purifying cannabis extracts in the process of purification, filtration and crystallization. As seen with other concentrates, isolates are used as the base for many cannabis products, such as gummies.
There is also growing interest in CBG isolate, which is another non-psychoactive cannabinoid when consumed orally.
Live Resin
The cannabis concentrate live resin has taken the industry by storm over the past few years. Live resin is a form of extract that is originally sourced from freshly harvested and frozen cannabis plants. The primary selling point behind this extract is the fact that fresh flowers produce much more vibrant aromas and flavors than dried cannabis. Interestingly, this pungency is tied to the preservation of terpenes in live resin.
Just a few of the dozens of various products types on the market today.
To make live resin, producers “flash freeze” fresh cannabis plants immediately after harvest. Valuable cannabinoids and terpenes are then extracted from the fresh, frozen plant material using hydrocarbon solvents. This whole process is done at extremely cold temperatures, ensuring no thermal degradation to the precious and volatile terpenes.
In lieu of these intricate steps to preserve the flower and extracts, live resin has continuously gained popularity. Namely because vaping with live resin is the best way to sample fresh cannabis terpene profiles in its most authentic fashion
It is amazing to see how much cannabis extracts have grown and progressed with legalization. Due to such amazing advancements in standards, technology, and products, the concentrates category has exploded on the dispensary scene. In today’s market, flowers have been largely sidelined in favor of concentrate-based products like gummies. These products now adorn dispensary shelves in beautiful packaging replete with purity and testing specifications.
It’s an often-overlooked fact that the purity standards of the legal extracts have made reliable cannabis brands possible in the first place. You cannot develop a cannabis brand without consistent products that customers can rely on; all things considered, it can be said that advancements in extraction have not only stimulated the concentrate category but the entire industry as we know it today.
In a press release published in December of 2020, CSQ announced they have added a new licensed certification body to the program: QIMA/WQS, which is a provider of independent third-party certification, inspection, and training services for the food industry.
The CSQ program is marketed as the world’s first cannabis certification to meet GFSI criteria, which is expected to get benchmarked in 2022.
The CSQ scheme is built on four standards:
Growing and Cultivation of Cannabis Plants
Manufacturing and Extraction of Cannabis
Manufacturing and Infusion of Cannabis into Food & Beverage Products
Manufacturing of Cannabis Dietary Supplements
The first CSQ certifications are expected to be awarded this month. Being a licensed certification body for the CSQ program means QIMA/WQS will conduct document evaluations as well as on-site inspections to ensure companies are meeting the CSQ standards prior to certification.
“At QIMA WQS, we see an enormous potential to support and provide quality certification to the entire cannabis supply chain. Joining CSQ and its innovative approach is an exciting step into the diversification of our services and growth,” says Mario Berard, CEO of QIMA/WQS.
Heat-not-burn is a non-combustion technology consisting of a heating source and either an oven that the user packs cannabis into or a stick pre-filled with cannabis. The cannabis is heated to a lower temperature than a combusted joint or bowl to create an aerosol that the user inhales. Heat-not-burn in this way is distinct from traditional vaping where a liquid or oil is heated to become a vapor and inhaled.
Omura is a design company that has developed a platform product for the heat-not-burn market.
We spoke with Mike Simpson, CEO and co-founder of Omura. Mike co-founded Omura in 2018 after an international design career where he spent much of his time in Japan working with consumer products.
Aaron Green: Mike, what trends are you following in the market?
Mike Simpson: I’m always tracking trends in the heat-not-burn space. Because of my background, I know that the tobacco industry inspires a lot of the technology in the cannabis space. If you look at all the vape pens, that technology was initially developed for big tobacco, which then later was adopted by cannabis. I’m always looking to stay educated on what’s happening in the tobacco industry, as I know it’s directly tied to my work in cannabis.
I’m also looking at what’s happening all over the world with legislation. I’ve been studying it for years, but this past year has been phenomenal. Seeing five new states go to some level of legalization, the federal law and new states legalizing cannabis in the 2020 Election. I believe the Biden/Harris victory will have a major impact on the industry, however we still have to see what happens with the Senate. These next couple of years are going to be very interesting to see how things shape out for cannabis.
Aaron: What are you personally interested in learning more about?
Mike Simpson, CEO and co-founder of Omura
Mike: I am interested in learning how the world is going to behave next year with this new life that’s been thrusted upon us. How effective is the new vaccine going to be? How are people going to retrospectively look at this year, and the lifestyle that they used to have before going into COVID? How much of it’s going to become permanent? How much of this Zoom life will we continue to enjoy? In the future, will office spaces become obsolete? How much will we still be using home deliveries? Do we actually want to go to restaurants again? That’s what I’m very interested in learning about is how human behavior and the world will change because of what’s happening right now.
Aaron Green: How did you get started at Omura?
Mike Simpson: Great question. I moved to Japan as a designer working for Lego and set up their design office for Lego toys. After Lego, I started working instead with Nike and Adidas designing performance sneakers and apparel for a couple of years until I found Big Tobacco — which is where my Omura story begins. I rapidly found myself in a position where I was creating new technologies, for the consumption of nicotine and tobacco. While working on an early project, I was asked if I knew any science fiction writers. Thanks to Lego, I just so happened to know Syd Mead, the designer for popular sci-fi films including BladeRunner, Tron and Aliens. So, I called him and we worked on a project which was aimed at setting the future of the smoking industry. Obviously, this was a brilliant project for someone like myself to get involved in. We came up with several scenarios that depicted the future of what tobacco consumption would look like, and each of them essentially included vaporization. This was before the vaporization days which made it kind of a difficult sell. I spent many years working on where we could use existing technologies in order to execute some of these scenarios. Ten years later, I moved to California, and I started studying the cannabis space for Big Tobacco which ultimately led me to Omura.
Aaron: Can you give me a reference point on the date when you were back in California?
Mike: I came here eight years ago, and I was in Japan pretty much 10 years prior to that.
Essentially what I realized when I got to California was that cannabis was perfect for heat-not-burn because of all the cannabinoids and the terpenes. You heat it up, and you get all of the good properties out of it without the need for combustion. There were already hundreds of products in the market, which validated that people love doing it.
However, there was a ritual: you needed to buy the flower, grind it, pack the device, select the temperature and then use the same mouthpiece repeatedly. And it doesn’t stop there. When the session is finished, you dig out the used flower with a metal spatula or brush. After every 10 or 15 times you have to clean it with rubbing alcohol to get rid of any existing residue from those sessions. This is just a big messy job with a massive amount of inconsistency and variability. For me, it was mind blowing that people would even go through this procedure. With Omura, I knew we needed to simplify that process. Our product comes with a pre-filled flower stick with an exact dose, that you place in the device very simply. You then use the stick as the mouthpiece and when you’re finished, throw the flower stick in the trash. It’s compostable and biodegradable. So we eliminated all of those pain points.
Aaron: Great! Where are you guys based out of?
Mike: Venice, California.
Aaron: So, what makes the Omura vaporizer different from other heat-not-burn products? You mentioned you have the disposable cartridge. Is there a design philosophy around it that you can talk more about?
Mike: Omura comes with 12 flower sticks in child-proof packaging. What makes us different is that we have our proprietary flower stick and device that work together. With our heat-not-burn technology, you get all the terpenes, but when you set fire to it, as you would with other products, you mask that with smoke. Our product is different from anything else in the market, because it has simplified the user experience through efficiency, user interaction and also through design as well.
The other founders come from deep design and technology backgrounds, designing technologies for Apple and Philips Electronics, so it was an important focus for us with Omura. Our newest device, the Series X was designed by Michael Young, a world-renowned industrial designer who has built an impressive portfolio of innovative products.
The Omura Series X
With Omura, we’re bringing sophistication of the design world into the cannabis world. It’s not just about simplifying the experience and making a great kind of efficient method of consumption, it’s also about creating something for everyday use that is beautifully designed and easy to use.
Aaron: The Series X is Omura’s latest device. Can you tell me what changes you’ve implemented to make it better than the first version?
There are a few differences between the Series 1 and Series X: First, the new design fits in the palm of your hands so it’s discreet. It comes with a USB-C charging base that automatically connects with magnets. We’ve also improved the efficiency of the oven. The first device boiled 94% of the cannabinoids, this one now boils 99%. We’ve increased user-efficiency, by removing the button from the Series 1 making it so all you have to do is put the flower stick in and the device starts automatically. Additionally, we wanted to give users an option between a hotter or cooler experience so we added an extra heat curve, as we recognize that some of our CBD users prefer more of a terpene experience.
Aaron: Can the user modify that with an app?
Mike: It is a very simple switch on the bottom of the device that allows you to toggle between the higher and lower temperature curves
Aaron: Okay, cool. Can we talk about your supply chain a little bit here? Do you manufacture everything in Los Angeles? Or do you have partners?
Mike: Everything is designed in the US and manufactured in China. Which is fairly common throughout the industry. Shenzhen is well known for making products for the vaping industry. We create empty tubes filled in a batch production process. All the flower is grown here in the US. To clarify, we aren’t a plant-touching company. We don’t have a cannabis license. When it comes to THC, we have partnership deals. We work with select cannabis brands which is how we are able to sell in dispensaries. On the other hand, our CBD model is split. We have two brands of our own. Libertine, which is more of a male-focused Gen Z brand. Then we have Oriel, which is more of a wellness brand, catered to women.
Aaron: So how would an aspiring brand get on your platform?
Mike: Good question. Any brand or company who is interested in partnering with Omura can contact us through our website, www.omura.com,on Instagram @Omura or via email: hello@omura.com. We would then assess them to see if they’re a good fit. Currently we’re looking to span quite a large kind of demographic as far as appeal. So, if these prospective partners are in a territory, whether it be California or another state, have good market share and high-quality flower, then we would be very open to having a conversation.
Aaron: That’s the end of the interview — thanks Mike!
Anyone owning and operating a cannabis business should know the value of proactive compliance management to operate successfully. For consumers, the view into the world “behind the budtending counter” is limited to the cool looking packaging, test results and the overall “vibe” of products they may want to try.
In our experience, as the oldest cannabis compliance firm, we’ve audited and visited hundreds of facilities and have seen the proverbial “Wizard behind the curtain”. We know “how the sausage is made.” And, as one can expect, it’s not always as glamorous in the back of the house as it appears on the shelf.
As markets expand and people buy into existing or new cannabis businesses, amid a world of thousands of competing companies and products, consumers need to ask themselves: “What do I know about the companies and products I consume?”
More and more, the question of consistent quality keeps coming up in the cannabis industry. Recalls are still ongoing in the news as products continually fail testing for potency and contamination.
Colorado, for example, is considered the shining jewel of the US industry in terms of experience, quality and integrity. However, consumers may be shocked to learn that a majority of dispensaries in the state do not operate by stringent SOPs, nor do they verify packaging and labeling for compliance, or review test results of products coming in and going out of their shops.
Starting January 1, 2021, these retailers finally have to develop and implement recall procedures in the event of contaminated products or cannabis that is causing adverse side effects. Later this year, vape pens will finally have their vapor tested instead of just the concentrate therein.
These liabilities or lack of compliance infrastructure may very well be a ticking time bomb no consumer in their right mind would want to deal with.
Bad Product/Brand Experience
Non-compliance and inconsistency on the part of operators translates directly into negative experiences for consumers. Whether its consuming a product that tastes like chlorophyll or enjoying a product the first time only to find a completely different experience the next time around, consumers experience the cost of non-compliance the most.
Beyond products, most consumers recognize their brand experience when shopping for products. Since the invention of Weedmaps, customers have always expressed their like or dislike for particular dispensaries and delivery services. Operators know these reviews from a customer’s experience can make or break their business and brand.
We always tell cannabis operators that a brand is a double-edged sword. As easily as it can strike through competitors, it can just as easily damage one’s own business.
Examples include SweetLeaf and Kushy Punch whose brands, once well-known and popular, are now synonymous with the worst of the worst given their histories of non-compliance and shut downs.
For consumers, finding consistent, quality products at a fair price is often the most important consideration to avoid the cost of a bad experience with cannabis. For visitors or first-time consumers, this could mean the difference between trying cannabis again or deciding it’s simply not for them.
Contamination & Illness
Preventing contamination can save a business from extremely costly recalls.
The worst-case scenario for consumers, especially patients, is the cost of consuming contaminated products or otherwise having adverse effects from the use of cannabis. While cannabis itself is one of the least harmful substances known to man, contaminated cannabis can be dangerous or deadly.
In the early days of the industry and in many emerging markets with poor to no oversight, these lessons are learned most severely. From the use of non-commercial washing machines being used for water-based extracts that tested positive for E. coli to recalled products ladened with Eagle 20 (which contains the harmful pesticide known as Myclobutanil), the industry has been reactive to safety measures and complying with best practices.
Still, some states persist with limited to no testing and simply label products with a warning to consumers that they are using cannabis at their own risk without testing for safety or efficacy.
Most consumers may be shocked to know that most cannabis companies do not adhere to good agricultural practices or good manufacturing practices (GAP/GMP) to ensure consistent quality and safety standards in similar industries such as nutraceuticals and food manufacturing.
Patients already weakened by disease states – including auto-immune disorders – are most at risk and understand all too well the costs of hospitalization, medical bills and loss of quality of life. For the average adult user, these risks are the same and there is often little to no recourse with the dispensary or product manufacturers if the product slips through contamination testing because of the non-compliance of product validation on flower or infused products.
For companies, outdated and inaccurate SOPs as well as production batches are the only line of defense to protect the company from product liability lawsuits filed by consumers in the event of contamination and illness. Most cannabis companies do not manage this aspect of their business effectively and simply assume they are sufficiently compliant without proactively measuring such compliance and adjusting operations as necessary.
Long-Term Consequences
Consumers would do well to remember that the modern industry is infantile in its development compared to other heavily regulated industries. Cannabis companies are babies learning to crawl while major food and beverage, pharmaceutical and nutraceutical, and alcohol and tobacco industries are far ahead of the game. The US industry, is arguably, already behind the compliance curve comparative to other nations already placing stricter regulations and standards on licensees.
For customers, this can be a confusing experience given that no two batches of flowers will taste the same let alone give a consumer exactly the same effect.
Already, customers are learning Sativa and Indica are imaginary cultural terms to describe generalized characteristics of major and minor cannabinoids and terpenes in each strain which produces a variety of effects – despite state limitations on labeling these active ingredients.
Vape pens are under increasing scrutiny as regulators discover long-term effects of vape use from the tobacco industry causing EVALI in consumers and being deemed as dangerous. As with anything new, the data and science simply aren’t there to truly tell customers what the effects may be over the long run. It has taken decades for tobacco, as an example, to go from doctor-recommended to carcinogenic.
Consistency in quality standards requires meticulous SOPs
Similarly, Big Cannabis of the future may be facing similar concerns that aren’t being warned about currently on their products and consumers could face unknown long-term consequences. In no way is this a condemnation of cannabis and early research shows cannabis is much safer than either alcohol or tobacco.
The point is to emphasize that over the long run, compliance is key to tracking the consistency and safety of products to avoid long-term liability and costs on consumers. Consumers would be wise to gravitate towards compliant brands and companies that focus on consistent quality and safety to minimize potential long-term negative impacts and costs.
Accountability & Transparency
Customers must first understand where the buck stops and who is responsible for what as it applies to cannabis and the cannabis products they consume. This can vary between states from vertically integrated models to horizontal models which allow for independent businesses to buy and sell cannabis between each other.
In the case of cannabis, the restrictions on METRC and other state “seed to sale” tracking systems make it nearly impossible for customers to return products and unclear on how to file complaints.
METRC and other seed to sale systems dictate that dispensaries must be able to track originating sources of cannabis back to another licensed facility. As such, once the consumer buys a faulty vape pen, for example, it’s gone from the dispensary inventory. Bringing it back in physically creates non-compliance issues for the dispensary as they cannot virtually account for the physical addition back into inventory.
No one ever said making sausage was a pretty or easy process. That’s why most consumers don’t want to think about how it’s done.
This example is a simple one to showcase the importance of compliance in the cannabis business and the complexities businesses must go through to operate. What is more applicable and important for consumers to understand is how non-compliance and inconsistency can affect them negatively – beyond messy fingers from leaky vape carts.
Consumers should ask cannabis companies about their product quality standards
These types of unexpected issues represent significant costs for cannabis operators in recalls, fines, lawsuits and fees which is what most people think the “costs of non-compliance” mean.
However, and in addition to the literal cost mandated by regulation, there are the costs owners don’t think about: in the time and fees charged by the professionals to solve these issues, the time and stress spent on production, the increase or decrease in supply, mitigating product liability, and brand recognition and damage due to poor quality or recalls.
All of these factors simply drive up the costs of products for consumers and decrease the reliability of finding consistent, quality products and brands that customers can count on.
As we always say at iComply:
“It is always more cost-effective to be proactive, rather than reactive, when it comes to operational cannabis compliance management.”
Consumers would be wise to recognize which companies are proactive in managing their compliance. And companies would be wise to get ahead of these customer costs by being the proactively compliant companies that consumers want and need.
To say 2020 was a historic year is an understatement.
Arizona landed in a solid eighth place among the top ten most successful cannabis states thanks to its expansive medical cannabis program. To close out the year, voters approved Proposition 207, also known as the Smart and Safe Arizona Act (SSAA), making Arizona one of 15 states, plus Washington D.C., to legalize the adult use of cannabis, which is expected to rocket the state’s overall cannabis sales to new heights.
It’s essential to this conversation that we clarify the two sides of this rapidly growing industry. Medical cannabis is a form of treatment, the adult use and consumption of cannabis is a choice. During the pandemic, in many medical cannabis states, the medical cannabis industry was deemed an essential service and allowed to continue providing valuable medicine to patients and caregivers. As medical cannabis programs continue to provide safer therapeutic options which are complementary to or serve as an alternative to many traditional treatments and narcotics, especially opioids, patients can be confident the need for medical programs will continue. Arizona’s adult use cannabis program imposes greater limitations on quantity and potency, while also requiring higher standards for packaging. We saw a trend during the pandemic as again, many states prioritized and allowed their medical programs to continue, while limiting adult use facilities, in the same manner as other non-essential businesses.
It’s also worth noting that we have seen many inevitable changes in patient behaviors during the pandemic, including an increased need for medical cannabis. There was a patient demand for convenience, safety and no-contact services, increased online ordering, scheduling and curbside pick-up or delivery. Many of these services were already on the rise in popularity throughout the various legal states. While Arizona’s recreational program prohibits delivery until at least 2023, retail adult use consumers will expect some of these services to extend to the new market. As life after the COVID-19 pandemic continues on and the need for some of these safer more convenient options also continues, we hope to see them more permanently implemented from a legal and regulatory perspective. For now, here are the highlights we’ll see come into play in the first few months of 2021 as Arizona adopts its new adult use cannabis program.
Smart and Safe Arizona Act (Prop 207):
Legalizes the sale, possession (one ounce) and consumption of adult use cannabis for adults at least 21 years old.
Adds a 16 percent excise tax on adult use cannabis sales, in addition to the state’s 5.6 percent, totaling a 21.6 percent tax.
Allocates an estimated $300 million in Arizona revenue to be divided between community college districts, municipal police, sheriff and fire departments, fire districts, highway funds, public health programs, infrastructure, and a new Justice Reinvestment Fund.
Allocates more than $30 million annually for addiction prevention, substance treatment, teen suicide prevention, mental health programs, and justice reinvestment projects.
Provides opportunities for expungement of certain lesser cannabis-related crimes such as possession, consumption, cultivation or transportation.
But of course, state law is just one part of the equation. Adult use cannabis facilities must be licensed separately from state to local levels, including counties to cities to local municipalities, all of which may also adopt rules and requirements through zoning and land use ordinances. Swift and certain timelines established by the Smart & Safe Act dictate the speedy launch of this new program, first utilizing the existing medical cannabis infrastructure.
Many Arizona consumers are under the impression that they’ll be able to walk into a dispensary on January 1, 2021 and buy cannabis. But that is not the case. They’ll have to wait until the Arizona Department of Health Services (AZDHS) completes the early applicant licensing process, which begins in January 2021. Currently, local and multistate operators are waiting for AZDHS to complete the rules and regulations for the adult use cannabis program. Here are two of the most significant steps to be navigated in the upcoming weeks:
Smart and Safe Arizona Act (Prop 207) – Step 1: The Rulemaking Process
AZDHS has been tasked with developing the rulemaking process for the Smart & Safe Act. The first draft of the adult use cannabis program rules has already been released, primarily consisting of the application requirements for the early applicant process. AZDHS collected its first round of public comments for consideration on Thursday, December 17, 2020. The exact details and parameters of the adult use cannabis program will not be finalized or known for certain until AZDHS completes the rulemaking process. We anticipate the next draft of adult use cannabis rules to be released sometime in early January.
Smart and Safe Arizona Act (Prop 207) – Step 2: The Application Process
AZDHS will begin accepting early applicants under the Smart & Safe Act on January 19, 2021, closing the process on March 9, 2021. Current medical cannabis license holders who apply for and acquire an adult use license in the early applicant process will be authorized to a dual-licensed dispensary (both medical and adult use license), as well as one offsite manufacturing facility (which may later be amended to include both medical and adult use manufacturing license), and offsite cultivation.
Early adult use license applicants are reserved for those that currently hold in good standing at least one Medical Marijuana Registration Certificate (“Medical Marijuana License”) and applicants applying to counties with no current operating dispensaries. Any county with a single operating dispensary (a medical cannabis dispensary) will be allocated an adult use license (dual license) as long as the medical license holder is in good standing for the application. All adult use licenses allocated to those counties without a current operating dispensary must keep that dispensary within that county.
AZDHS will have 60 days to process each application. Adult use licenses for counties without a current operating dispensary will be allocated through a random selection process, if more than two applications are received for that county. Additionally, upon the conclusion of the early applicant process, any adult use license that has not yet been awarded through that process, will be available to the general public and allocated through a random selection process.
This brings us to later phases of implementation of the Smart & Safe Act: within approximately six months of the adoption of the initial recreational program rules, AZDHS must develop and adopt the rules and regulations for the Social Equity Ownership Program (SEOP). The primary goal of the SEOP is to allocate 26 adult use licenses to “communities disproportionately impacted by the enforcement of previous cannabis laws.” In other words, communities disproportionately and negatively impacted by cannabis criminalization. Smart & Safe is light on the exact manner and process at this point, so Arizona voters and cannabis companies will look to AZDHS for the development and implementation of this important part of the adult use program. Stay tuned.
Plant genetics are an important consideration for cultivators planning to grow cannabis crops. Genetics can affect how well a plant grows in a particular environment under various conditions and have a major impact on the production of cannabinoids, terpenes as well as other molecules and traits expressed by the plant.
Front Range Biosciences is a hemp and cannabis genetics platform company, leveraging proprietary next generation breeding and Clean Stock® tissue culture nursery technologies to develop new varieties for a broad range of product applications in the hemp and cannabis industries. FRB has global reach through facilities in Colorado, California and Wisconsin, and a partnership with the Center for Research in Agricultural Genomics in Barcelona, Spain. FRB is headquartered in Lafayette, Colorado.
We spoke with Jonathan Vaught, Ph.D., CEO and co-founder of Front Range Biosciences. Jonathan co-founded Front Range in 2015 after a successful career in the diagnostics and food testing industries.
Hemp tissue culture samples like these sat in an incubator aboard the ISS
Jonathan Vaught: This was a collaborative project between the BioServe group at the University of Colorado Boulder, which is a part of their aerospace engineering program. They do research on the International Space Station, and they have for quite some time. We partnered with them and another company, Space Technology Holdings, a group that’s working on applications of space travel and space research. We teamed up to send tissue culture samples to the space station and let them sit in zero gravity at the space station for about a month, and then go through the reentry process and come back to Earth. We brought them back in the lab to perform some genomic analyses and try to understand if there’s any underlying genetic changes in terms of the plants being in that environment. We wanted to know if there was anything interesting that we could learn by putting these plant stem cells and tissue cultures in an extreme environment to look for stress response, and some other possible changes that might occur to the plants by going through those conditions.
Aaron: That’s an interesting project! Are there any trends that you’re following in the industry?
Jon: We’re excited to see ongoing legalization efforts around the world. We’ve seen continued progress here in the United States. We still have a long way to go, but we’re excited to see the additional markets coming onboard and regulations moving in the right direction. Also, we’re excited to see some of the restorative justice programs that have come out.
Aaron: How did you get involved at Front Range Biosciences?
Jon: It really starts with my background and what I was doing before Front Range Biosciences. I’ve spent more than 15 years developing commercializing technologies in human diagnostics, food safety and now agriculture.
Jonathan Vaught, Ph.D., CEO and co-founder of Front Range Biosciences
I started my career during graduate school in biotech at the University of Colorado at Boulder, where I helped develop some of the core technology for a human diagnostic startup company called Somalogic here in Colorado. I went to work for them after finishing my dissertation work and spent about six years there helping them grow that company. We ended up building the world’s largest protein biomarker discovery platform primarily serving pharmaceutical companies, hospitals and doctors, with personalized medicine and lab tests for things like early detection of chronic illness, cancer, heart disease and inflammation.
I then went to another startup company called Beacon Biotech, that was interested in food safety. There I helped develop some similar technologies for detecting food-borne illness — things like salmonella, listeria and E. coli. That was my introduction to big food and big agriculture. From there, I went to help start another company called Velocity Science that was also in the human diagnostic space.
Along the way, I started a 501(c)3 nonprofit called Mountain Flower Goat Dairy, a dairy and educational non-profit that had a community milk-share, which included summer camps and workshops for people to learn about local and sustainable agriculture. I became more and more interested in agriculture and decided to take my career in that path and that’s really what set me up to start Front Range Biosciences.
Aaron: Do you have any co-founders?
Jon: I have two other co-founders. They both played various roles over the last four years. One was another scientist, Chris Zalewski, PhD. He currently works in the R&D department and helps oversee several different parts of the company including pathology and product development. My other co-founder, Nick Hofmeister served as chief strategic officer for the last few years, and has helped raise the majority of our funding. We’ve raised over $45 million dollars, and he played a big role in that.
Aaron: What makes you different from other cannabis seed companies?
John: We’ve built the first true cannabis genetics platform. What I mean by that is we built a platform that allows us to develop and produce new plant varieties that support both the hemp and the cannabis markets. To us, it’s all cannabis. Hemp and cannabis are scientifically the same plant. They just have different regulatory environments, different products and different markets, but we stay focused on the plant. Our platform is built on several different pillars. Genetics are one of the core pieces, and by genetics I mean, everything from molecular based breeding to marker assisted breeding to large germplasm collections. We collect different varieties of germplasm, or seed, from all over the world and use those to mix and match and breed for specific traits. We also have large nursery programs. Another one of our pillars of the platform includes greenhouse nursery production — everything from flowering cannabis plants to producing cannabis seeds to cloning and producing mother plants and rooted cuttings or clones.
Then tissue culture is another part of the platform, it’s basically the laboratory version of a greenhouse nursery. It’s housed in a sterile environment and allows us to produce plants that are clean and healthy. It’s a much more effective, modern way to manage the nursery. It’s part of our clean stock program, where we start clean, stay clean, and you can finish clean. It’s really built on all of those different pieces.
We also have capabilities in analytical chemistry and pathology, that allow us to better understand what drives performance and the plants, and both different regions as well as different cannabinoid products or terpene products. All of the science and capabilities of the platform are what allow us to create new varieties faster, better, stronger.
Aaron: It sounds like you’re vertically integrated on the front-end of cannabis cultivation.
Jon: Absolutely, that’s a great way to think about it.
The last piece I’d say is that we have areas of research and development that cover the full span of multiple product lines. We think about it from an ingredient perspective. Cannabinoids and terpenes are certainly what drive a large part of the cannabis market in terms of edibles, smokable flower, vapes and extracts and the different effects and flavors that you get. We also are looking at other ingredients, like plant-based protein and hemp as a viable protein source and the ability for hemp to produce valuable fiber for textiles, as well as industrial building materials and applications.
Lastly, there are additional small molecules that we’re working on as well from a food ingredients perspective. There are all kinds of interesting compounds. Everybody talks about the cannabinoids and terpenes, but there are also things like flavonoids, and some other very interesting chemistries that we’re working on as well.
Aaron: What geographies are you currently in?
Jon: Colorado and California primarily and we have a small R&D partnership in Barcelona.
Hemp clones and seeds is a big part of the Front Range Biosciences business
Aaron: Do you have plans for expansion beyond that?
Jon: Our current headquarters are out of Colorado, and most of our Colorado operations right now are all hemp. Our hemp business is national and international.
We work with a licensed cannabis nursery partner in California which is our primary focus for that market, but we will be expanding the cannabis genetics and nursery program into Colorado next year. From a regulated cannabis perspective, that’s the first move. Beyond that, we’re in conversations with some of the multi-state operators and cannabis brands that are emerging to talk about how to leverage our technology and our genetics platform across some of the other markets.
Aaron: How do you think about genetics in your products?
Jon: Genetics means a lot of things to different folks depending on your vantage point and where you sit in the supply chain. Our business model is based on selling plants and seeds. At the end of the day, we don’t develop oils, extracts and products specifically, but we develop the genetics behind those products.
For us, it’s not only about developing genetics that have the unique qualities or ingredients that a product company might want like CBD, or other minor cannabinoids like THCV for example, but also about making sure that those plants can be produced efficiently and effectively. The first step is to introduce the ingredient to the product. Then the second step is to make sure that growers can grow and produce the plant. That way they can stabilize their supply chain for their product line. Whether it’s for a smokable flower product, or a vape product, or an edible product, it’s really important to make sure that they can reproduce it. That’s really how we think about genetics.
Aaron: What is a smart plant? That’s something I saw on your website.
Jon: It’s really about plants that perform under specific growing regions, or growing conditions. For example, in hemp, it’s one thing to produce CBD or CBG. It’s another thing to be able to produce it efficiently in five different microclimates around the U.S. Growing hemp in Florida or Alabama down on the Gulf Coast versus growing on the Pacific Northwest coast of Washington, or Oregon are two very different growing conditions that require smart plants. Meaning they can grow and thrive in each of those conditions and still produce the intended product. Generally, the different regions don’t overlap. The genetics that you would grow in Pacific Northwest are not going to do as well as some better selected varieties for the South East.
It’s not only different outdoor growing regions, but it’s different production styles too. When you think about regulated cannabis the difference between outdoor and indoor greenhouse is mixed light production. Even with hydroponic type growing methods, there are lots of different ways to grow and produce this plant and it’s not a one size fits all. It’s really about plants that perform well, whether it’s different regions in the United States in outdoor production or different indoor greenhouses with mixed lights and production methods.
Aaron: You market CBG hemp as a product line. What made you start with CBG? Is that a pull from the market or something you guys see trending?
Jon: So I think it’s a little bit of both. We offer CBD dominant varieties and CBG dominant varieties of hemp. We also now have other cannabinoids in the pipeline that we’ll be putting out in different varieties next year. Things like CBC as well as varins, or propyl cannabinoids. Also things like CBDV, CBCV, or CBGV, which are the propylcannabinoid versions of the more familiar compounds.
Their nursery services include breeding, propagation and production of cannabis
There was a lot of market demand for CBG. It was a fairly easy cannabinoid to produce as a single dominant cannabinoid similar to CBD or THC. There’s a lot of up-and-coming demand for some of the other minor cannabinoids. Up until a few years ago, CBD was considered a minor cannabinoid. It wasn’t until Charlotte’s Web in the Sanjay Gupta story that it became a major cannabinoid. So I think we see some level of market pull across the category.
On the flip side of that, we have one of the world’s largest R&D teams and consolidated expertise in terms of cannabis. We see the potential for minor cannabinoids, and even terpenes and other compounds like flavonoids to have wide ranging implications in human health. Everything from wellness products, to active pharmaceutical ingredients, to recreational products. From our perspective, that’s the reason why we’re pushing these ingredients. We believe that there are a lot of good products that come out of this work and the genetics that produce these minor cannabinoids.
Aaron: Okay, great. And then last question, is there anything you’re interested in learning more about?
Jon: I think the most exciting thing for me, given my background in clinical diagnostics and human health, is to see more data around how all of these different compounds of the plant can support improved wellness, health and nutrition. I think we’ve only scratched the tip of the iceberg. This type of research and data collection takes years, even decades, especially to see outcomes over time of people using these products. I’m really excited to see more of that and also hopefully be able to make stronger conclusions about some of the benefits that can be had from this plant.
Aaron: That’s the end of the interview, thanks Jon!
The cannabis industry is growing so quickly that even COVID-19 can’t slow it down. Before the pandemic, the industry amassed $13.6 billion in U.S. legal cannabis sales in 2019 – a figure that is expected to more than double to $30 billion in the next five years, according to New Frontier Data. In states where cannabis is legal for medical or recreational use, dispensaries have been deemed necessary, essential businesses – especially when it comes to calming stress and anxiety in our ever-changing times.
Cannabis legalization and newly budding dispensaries have expanded across the U.S., which may come with an unfortunate counterpart – a higher incidence of crime. Despite lower prices in states that have legalized cannabis, as compared to states where it is still illegal, theft has run rampant across grow operations, warehouses and, most often, dispensaries.
Heavy-duty security doors at the front of the dispensary block sight access and provide a visual deterrent.
Dispensaries can be targeted more frequently. Robbers may perceive them as an easy target, because they are businesses that have larger amounts of cash on hand. Many dispensaries only accept cash because payment processors and financial institutions aren’t willing to work with them. This is primarily because cannabis is still deemed an illegal substance under federal law, and the actions of financial institutions are governed by federal, not state, laws. Once the Secure And Fair Enforcement (SAFE) Banking Act is approved, cannabis businesses will be able to work more easily with banks, in turn reducing the amount of cash on site and erasing the dollar signs in opportunistic thieves’ eyes.
However, cash isn’t the only high thieves seek when they break into dispensaries. There’s also the product itself. Protecting it – and providing peace of mind to the facilities’ owners and occupants – is a concern for dispensaries, grow operations and warehouses. Robbers are motivated by the opportunity to make even more fast cash through reselling the product found onsite.
To eliminate such easy targets, security requirements for the cannabis industry are a necessity. They are also involved, complicated, and vary from state to state. A number of security specifications apply between state laws and local ordinances. Inventory must be properly surveilled and managed at all stages of transportation and storage. Any discrepancies in inventory can result in large fines and other penalties. To aid in understanding security compliances, the National Cannabis Industry Association (NCIA), a national trade association, recommends that start-ups obtain attorneys to guide businesses through their state’s laws and regulations.
This is why, especially for new business owners, it is critical to consider the best, most advanced security solutions – especially when it comes to doors and points of egress – that are easily integrated into buildings during the design phase. These solutions protect the products, properties, and people throughout the cannabis supply chain.
Understanding State Security Regulations While there are no federally recognized security requirements for the cannabis industry, there are similar requirements across all states that have legalized cannabis, including:
Maintaining strict access control throughout the facility – this is especially important for grow operations and warehouses
Functional alarm systems
Documented standard operating procedures
Video surveillance systems – many states mandate very precise requirements, such as length of storage time and even video resolution specifications
Notifying appropriate regulatory agencies immediately or within a strict timeframe after a security incident or theft
Securing all records and record storage
While these are common, state-mandated security requirements, it is critically important to know and understand all rules, regulations, and laws concerning the industry within the business’s specific state. Making sure the business is compliant with all aspects of state laws for security and preventing violations, including the hefty financial penalties that can accompany them, is key.
States require cannabis facilities to implement sophisticated security features for several reasons. One of the most obvious is the fact that the industry supplies a high-value product and is a cash-intensive business. Integrating security features into the building can be a challenging task for architects and designers. To help tackle these challenges, manufacturers have introduced products to the cannabis industry, creating easier, more effective and aesthetically pleasing security solutions.
Integrated Designs For High Level Security Security shouldn’t be a constraint when considering design aesthetics. Certain elements can be discretely tucked away, including cameras and security doors by way of specifying a concealed rolling door, conveniently disguised in the ceiling during operating hours. These doors can even close under alarm eliminating the need for manual intervention. Other security measures, such as bullet resistant glass, are hidden in plain sight.
Rolling doors like this one can be conveniently disguised in the ceiling during operating hours.
Untrustworthy employees, smash-and-grab thefts or meticulously planned heists mean secure building design is of the utmost importance. In order to have the most effective security, there needs to be design vision – a clear intent for incorporating advanced security into the facility, whether visible or not.
Suggested security measures include video surveillance around the outdoor perimeter of the property as well as inside the facility. Physical barriers, such as specialized entrance locking systems – including fingerprint-scanning biometric technology – and security doors that may also include intrusion detection and automatic closure systems are recommended. All systems may be paired with 24/7 visual monitoring by security personnel.
Many state regulations also require restricted access to specific areas within dispensaries, grow operations and warehouses, with employee names and activities logged for reference. These necessary measures aid in inventory monitoring and control, further reducing the likelihood of internal theft.
When specifying building security, it’s important for architects to consider what type of building they are designing. There are differences in providing security for dispensaries versus warehouses and grow operations. Dispensaries and storefronts are frequently out in the open and in locations that are well-known to consumers. Warehouses and grow operations are usually tucked out of the way, rarely publicized, and less noticeable.
Rolling Grilles And Doors Deter Dispensary Theft With a high-value product and cash on hand, dispensaries in particular have unique security challenges. And because they are retail businesses, egress and fire codes must be strictly adhered to, in addition to special security regulations.
Rolling grilles can be an effective deterrent against dispensary theft
In light of this, security doors require special consideration. They are necessary to provide secure protection against theft but shouldn’t distract from the architectural vision of the building or interior design.
Rolling security grilles are the ideal solution to protect the counter inside the dispensary and may also be ideal for the front of the store. They fit in small headspaces where there is limited ceiling room and can be easily concealed when not in use.
Even heavy-duty rolling doors used to protect the glass storefront of the dispensary and prevent intruders from entering the building’s dock area can be hidden when not in use. If building code allows, architects may specify a rolling door that coils up into the door’s header, residing behind an exterior soffit. These robust security doors’ lift-resistant bottom bars also can be obscured from sight.
Heavy-duty security doors at the front of the dispensary block sight access and provide a visual deterrent. They give the building a secured look when in use, but heavy-duty rolling doors don’t need to be imposing to customers during the dispensary’s operating hours.
Robust Visible Protection For Grow Operations And Warehouses
Grow operations and warehouses usually opt for more visible security doors to deter criminal activity. They also have different design considerations because of building layout and production needs. For instance, larger grow operations house plants and supplies which require heavy equipment to move throughout the facilities.
A heavy duty steel rolling grille
Heavy duty rolling security doors can be made with up to 12-gauge steel with interlocking slats and tamper resistant fasteners – making them stronger than standard garage doors. They provide high-end security at loading docks and limit access to restricted areas inside.
Rolling doors can also be used to block employee access to off-limits areas common in grow operations and warehouses. Because they are heavily reliant on utilities and infrastructure, such as water mains and humidity and temperature controls, warehouses and grow operations are ideal applications for rolling doors. If unauthorized personnel with ill intentions access these utility areas, it could spell disaster with ruined crops and damaged or unsafe products – turning into substantial financial losses. From a design standpoint, these doors do not need to be concealed. In fact, their visibility signals restricted access areas and hints at the security measures taken to protect these facilities.
Enhanced Security Features
Whether designing a dispensary, a grow operation facility, or a warehouse, rolling doors may be paired with automatic protection features to enhance the building’s security and help workers feel safe. These automatic closing systems allow the security doors to be immediately activated by a building alarm or the push of a panic button in emergency situations. The doors also feature advanced locking systems – some of which are hidden in non-traditional locations – providing further tamper resistance.
Some rolling door manufacturers offer in-house architectural design groups to guide architects and designers in choosing the ideal security doors. These groups can address and solve any design dilemmas that arise during the project. Every rolling door is built to a specific opening, making each product unique to that area of the project. Because of this customization, manufacturers can meet virtually any specification.
Meeting Insurance Requirements
Selecting the correct rolling door along with other advanced security features aids in meeting insurance requirements. Each insurance company has individual minimum-security conditions in its policy. Many insurance companies will not provide theft insurance if cannabis businesses do not have adequate security or cannot demonstrate they have it.
Planning Leads To Integrated Protection The technical and legal aspects of securing dispensaries, grow operations, and warehouses can be overwhelming and, at times, confusing. Legal counsel, state agencies, industry associations, and manufacturers encourage new cannabis businesses to use them as resources as they unravel the nuances of the industry’s security regulations.
By combining robust security features such as video surveillance, proper access controls, rolling doors or grilles and automatic closure systems, cannabis facilities can meet state and insurance requirements and deter theft. With thoughtful design consideration and planning, these security features also have the capabilities to seamlessly blend with interior and exterior design aesthetics.
Worth an estimated $54 to $67 billion, the bourgeoning U.S cannabis industry continues to grow at record pace despite conflicting state and federal laws that cause obstacles at every turn.
This conflict remains a source of uncertainty for retailers, cultivators and the general public. And, unfortunately, the palpable tug of war between the states and the federal government will only increase when legalization is introduced at the federal level, putting tax dollars up for grabs.
A tug-of-war between the states and the federal government makes it difficult for cannabis businesses to obtain bank accounts, insurance and investors. It also means additional security and compliance challenges. It is the reason that the cannabis industry is an unsupportive environment for start-ups and employees who face primitive or even dangerous R&D conditions in order to advance the extraction process.
As cannabis companies fight to grow their market share, many lag behind when instituting a proper risk management structure from R&D to daily operations. Cannabis businesses that haven’t incorporated risk management will need to in 2021, especially when seeking to secure funding from PE firms.
As the 8th fastest growing industry in the U.S., maturing at more than 25% annually, adult use and medical cannabis sales are unlikely to decrease anytime soon. Rather, experts predict continued growing pains – and gains – to shape the U.S. cannabis industry in 2021.
The COVID-19 pandemic will continue to increase the growth of the cannabis industry— with a few roadblocks
Deemed “essential businesses,” many retail outlets and dispensaries stayed open throughout the pandemic and adopted new ways of serving customers, from curbside pick-up to drive-through windows and deliveries. At the same time, the pandemic hindered growth for some cannabis operations on the cusp of obtaining a license, as many applications were put on hold when state offices closed their doors for months. In some cases that meant raised capital was pulled and funding ceased. For start-ups who are seeking to apply again in 2021, it’ll be an uphill climb.
As a result of routine COVID-19 inspections in 2020, state officials uncovered a host of other issues at cannabis operations, including improper labeling, poor health and safety practices, lack of PPE compliance by staff and customers, incorrect counting of cash and more. In extreme cases, these visits resulted in regulatory fines and shutdowns. This led to the need to use seed money for something other than the organization’s original mission. In 2021, these scenarios are likely to turn into lawsuits from shareholders and activate directors & officers (D&O) and employment practices liability (EPL) claims from laid-off workers. These accusations dovetail with another major charge often levied against cannabis businesses —lightning speed growth without the business operations and risk management protocols necessary to support it.
Many cannabis businesses have not procured the necessary liability insurance coverage for the great risk that come with rapid growth. Whether it’s D&O and EPL policies as in the case above, or cyber, property or general liability (GL) policies, it’s critical to think more holistically about insurance coverage. Cannabis operations need to work with an insurance broker who specializes in the cannabis industry and understands different operations and business location, as exposures vary greatly.
R&D extraction dangers lead to unique risks
In 2021, extraction will be a major focus for cannabis organizations. Operations will continue searching for a competitive advantage to increase yield and develop superior products. Cannabis extractors will experiment with new ways to apply existing laboratory methods utilizing ethanol and CO2 as well as innovative cultivation methods adopted from the agriculture industry, using water and light exposure and different nutrients. R&D becomes a potential liability when cannabis extractors modify the use of existing equipment for a different type of extraction. Flammable products are often required, and explosions can occur.
If you are considering experimenting with R&D, engage your insurance broker to ensure the risk is covered within your existing policies and to explore best practices for experimentation and varying equipment use.
Desire for more security both inside and outside the operation
A cannabis operation’s security risk is two-fold. In light of the looting and civil unrest across the U.S. this year, heightened security measures were necessary for cannabis businesses to secure their goods. Additionally, a common risk— employee theft —increased as well.
Cannabis retail operations maintain a large supply of cash and product. As looting occurred, it was impossible to relocate cannabis product away from retail storefronts as a majority of state regulations prohibit cannabis to be removed from retail facilities. Owners and operators who did so risked being fined for non-compliance or losing their license.
The majority of cannabis theft — as high as 90% by some estimates — is employee related. In many cases, employees in cannabis grow facilities and retail storefronts scheme to cheat employers. Part of the challenge is that state regulations require plant and production facility blueprints to be publicly available. Thieves are using these layouts to plot their infiltration. In other scenarios, cannabis operators are recording walk-throughs of their facilities and publishing online documentaries. These also leave operators vulnerable.
Employers can increase security by restricting access exclusively to employee areas, while also investing in better internal access controls. Conduct an audit of your work areas with your cannabis insurance broker who can provide you with a list of best practices and do’s and don’ts for reducing theft.
Complications continue in compliance, banking and financial services
Even though cannabis is legal for medicinal or recreational use in 43 states, businesses still struggle to secure bank accounts, business loans and insurance coverage. Small local banks and savings and loan businesses may be more willing to engage with cannabis businesses in 2021, while large institutions will keep shying away.
At every stop of the supply chain, cannabis business operators need to be proactive when developing strategies to manage risk. That means implementing risk management protocols to protect their business, their workforce as well as securing the proper insurance coverage.
This also includes growing the cannabis business’ safety net by engaging necessary insurance policies, appropriate to the business’ size and exposure, including cyber, environmental liability and crime policies, or applying for emerging loan programs in an effort to secure additional capital.
Evolution of the industry into 2021 and beyond
While the cannabis industry is evolving and changing, much will ultimately remain the same in 2021. Even if the U.S. government takes steps to federally legalize cannabis, a bill would not go into effect until later in the year at best, more likely in 2022 or beyond. Until a bill is passed, cannabis businesses will look to remain viable beyond the state level. For all cannabis businesses, 2021 will be about building on what they’re already doing and preparing for what will hopefully come next.
In a press release sent out earlier this month, the Washington State Liquor and Cannabis Board (WSLCB) announced they have shut down Praxis Laboratory for falsifying test results. The WSLCB, the state regulatory agency overseeing Washington’s cannabis industry, said that Praxis inflated data for potency test results on more than 1200 samples, giving samples higher THC levels than the state actually found.
A google search revealed the laboratory has since shut down their website. A message appears when you go to their website: “This site is currently undergoing maintenance. Please check back later.”
Praxis Laboratory, located in Centralia, Washington, is also accused of interfering with the investigation. “During the investigation the lab owner attempted to destroy evidence of falsified data in an effort to obstruct LCB’s ability to conduct a complete investigation,” reads the press release. “Labeling cannabis with falsely high THC potency levels is a form of consumer deception and is prohibited under Washington law.”
The WSLCB has state authority to take actions like license suspensions when licensees operate illegally. The suspension lasts for six months, during which time the WSLCB will “seek permanent revocation” of the lab’s license to operate, due to fraud and obstruction during the investigation.
As a strange year heads to a final, painful finish, there have been some major (and some less so) changes afoot in the global world of cannabis regulation. These developments have also undoubtedly been influenced by recent events, such as the recent elections in the United States, state votes for adult use reform in the U.S. and the overall global temperature towards reform. And while all are broadly positive, they have not actually accomplished very much altogether.
Here is a brief overview of the same.
The UN Vote On Cannabis Despite a wide celebration in the cannabis press, along with proclamations of an unprecedented victory by large Canadian companies who are more interested in keeping their stock prices high than anything else, the December 2 vote on cannabis was actually fairly indecisive.
Following the WHO recommendations to reschedule cannabis, the UN voted in favor of the symbolic move. Despite removing cannabinoids from Schedule IV globally, a regulatory label designed for highly addictive, prescription drugs (like Valium), the actual results on the ground for the average company and patient will be inconclusive.
The first issue is that the UN did not remove cannabinoids themselves, or the plant, from Schedule I designation. This essentially means that countries and regions will be on the front lines to create more local, sovereign policies. This is not likely to change for at least the next several years (more likely decade) as the globe comes to terms with not just a reality post-COVID-19, but one which is very much pro-cannabis.
In the meantime, however, the ruling will make it easier for research to be conducted, for patient access (for the long term), and more difficult for insurers to turn down in jurisdictions where the supposed “danger” of cannabis has been used as an excuse to deny coverage. See Germany as a perfect example of the same.
It is also a boon for the CBD business, no matter where it is. Between this decision and the recent victory in Europe about whether CBD is a narcotic or not (see below), this is another nail in the coffin for those who want to use semantic excuses to restrain the obvious global desire for cannabinoids, with or without THC.
That said, the vote is significant in that it is a test of the current trends and views towards big issues within the overall discussion, beginning with decriminalization and a reform of current criminal and social justice issues inherent in the same. The Biden Administration, while plagued with a multitude of issues, beginning with the pandemic and its immediate aftershocks, will not be able to push both off the radar. Given the intersection of minority rights’ issues, the growing legality of the drug and acceptance thereof, as well as the growing non-partisan position on cannabis use of both the medical and adult use kind, and the economy, expect issues like banking to also have a hope of reform in the next several years.
Cannabis may be taking a back seat to COVID, in other words, but as the legalization of the industry is bound up, inextricably, in economic issues now front and center for every economy, it will be in the headlines a great deal. This makes it an unavoidable issue for the majority of the next four years and on a federal level.
Prognosis in other words? It’s a good next federal step that is safe, but far from enough.
The European Commission (EC) Has Finally Seen The Light On CBD
This combined with the UN rescheduling, will actually be the huge boost the CBD industry has been waiting for here, with one big and still major overhanging caveat – namely whether the plant is a “novel” one or not. It is unlikely as the situation continues to cook, that Cannabis Sativa L, when it hits a court of law, will ever be actually found as such. It has inhabited the region and been used by its residents for thousands of years.
However, beyond this, important regulatory guidance will need to fall somewhere on the matter of processing and extraction. It is in fact in the processing and extraction part of the debate that this discussion about Novel Food actually means something, beyond the political jockeying and hay made so far.
Beyond this of course, the marketing of CBD now allowed by this decision, will absolutely move the topic of cannabinoids front and center in the overall public sphere. That linked with sovereign experiments on adult use markets of the THC kind (see Holland, Luxembourg and Denmark as well as Portugal and Spain right after that), is far from a null sum game.
Legal Challenges Of Note
The European Court of Human Rights
Against this changing regulatory schemata, court cases and legal decisions remain very important as they also add flavor to how regulations are interpreted and followed. The most important court case in Europe right now is the one now waiting to be decided in the Court of Human Rights at Strasbourg regarding the human rights implications of accessing the plant.
Beyond that, in Germany, recent case law at a regional social benefits court (LSG) has begun to establish that the cannabis discussion is ultimately between doctors and their patients. While this still does not solve the problem of doctor reluctance to prescribe the drug, barriers are indeed coming down thanks to legal challenges.
Bottom line, the industry has been handed a nice whiff of confidence, but there is a still high and thorny bramble remaining to get through – and it will not happen overnight, or indeed even over the next several years.
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Before legalization, the production of cannabis extracts was a shady affair done in clandestine and often dangerous ways. Especially concerning BHO (Butane Hash Oil), home-based laboratories have long since been notorious fire hazards. Even more, with a total lack of regulation, black-market extracts are infamous for containing harmful impurities.
According to the equipment manufacturer Apeks Supercritical, “CO2 is considered to be a safer method of extraction because the solvent is non-volatile. The extract is purer because no trace of the solvent is left behind. It is also versatile and helps protect sensitive terpenes, by allowing cold separation.” By deriving methods from food production, supercritical equipment manufacturers have given cannabis companies a viable option for the commercial production of extracts.
