Tag Archives: stakeholder

Where Are We Now? Social Equity in the US Cannabis Industry

By Dede Perkins
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As state legalization measures begin to legitimatize the US cannabis industry, stakeholders, both those currently in the industry and those who plan to join in the not-too-distant future, grapple with the best ways to right the wrongs from the decades-old War on Drugs. While some stakeholders support residency requirements and setting aside a percentage of a state’s cannabis licenses for social equity and economic empowerment applicants, others contend that these solutions are discriminatory. Reuters reports that lawsuits against social equity programs have been filed in Michigan, Illinois, Missouri and Maine, and some have received decisions that rule against existing social equity programs. While there is disagreement on the best way to create an equitable cannabis industry, few dispute that we’re dealing with an oppressive legacy against low-income individuals and people of color and the cannabis industry is in a unique position to shape a socially responsible industry that focuses not just on profits, but also on the greater good.

Challenges for Social Equity Applicants and Licensees 

Currently, Black Americans make up 13% of the US national population, but own less than two percent of cannabis businesses owners, according to Leafly’s Jobs Report 2021. Why? There are five primary factors.

  1. In most states, cannabis licenses are expensive and difficult to get. The application process requires a team of experienced individuals to work on everything from finding and negotiating real estate contracts; to vetting and hiring architects, safety, and security consultants; to working with community stakeholders to gain local approval.
  2. After the pieces are in place, applicants have to write it all down, which is a challenge in itself. It is not uncommon for one state cannabis application to be over one hundred pages.
  3. Since cannabis is still federally illegal and listed as a Schedule 1 drug, it’s nearly impossible to get a business loan to fund the application process or, if an individual is lucky enough to get a provisional license, to renovate or build out cannabis cultivation, processing and/or retail facilities.
  4. Because of the low-income status of many social equity applicants, few have access to accredited investors or low interest loans.
  5. Finally, if an individual or organization makes it through the application process and receives both a license and funding to operate, they face ongoing operational challenges including ever-changing laws, rules and regulations. Maintaining compliance is a process in and of itself.

If cannabis industry stakeholders don’t make honest efforts to provide real solutions to these challenges in the near future, inequalities will proliferate.

Current State of Social Equity in the US Cannabis Industry

To help mend the harms of the War on Drugs and reduce the institutional challenges faced by marginalized individuals, some states have instituted social equity programs that prioritize cannabis business licenses to those previously incarcerated on cannabis-related convictions and/or those who live in zip codes with high incarceration rates for drug crimes. Some states broaden the social equity lens and include women- and veteran-owned businesses in social equity programs.

The National Association of Cannabis Businesses explains:

The goal of social equity laws is to ensure that people from communities disproportionately harmed by marijuana prohibition and discriminatory law enforcement are included in the new legal marijuana industry. Policymakers are working to address criticisms that outsiders are setting up legal cannabis businesses and profiting by doing the same things their less fortunate neighbors were arrested and given jail time for just a few years ago.

By prioritizing social equity applicants, our industry is starting to bridge the access gap and improve the odds that previously marginalized individuals will make it into the C-suite and other influential positions. But is it enough? Many argue that social equity programs won’t make a real difference until more programs include low-interest loans and/or provide access to capital sources and ongoing support after licensure.

Although social equity programs vary, many require applicants to live in a zip code with a high incarceration rate for drug crimes or have a state residency requirement, meaning that social equity applicants must have lived in the state for an established number of years before they can qualify for social equity status. In some states, municipalities are tasked with creating these programs as is the case in Los Angeles and Oakland, California.

While some states offer social equity applicants priority consideration for their licensing applications, others offer reduced application and licensing fees, technical assistance, entry into an incubator program specifically designed for social equity applicants and/or apprenticeship opportunities.

Although social equity programs focus on developing business leaders with marginalized racial and socioeconomic backgrounds, other components of these programs often include criminal justice reform, such as revising resentencing guidelines and expungement requirements for those with cannabis-related convictions. The MORE Act, for example, not only calls for federal legalization, but also for reassessing the legal status of cannabis-related convictions, arrests, and prison sentences.

US States with Cannabis Social Equity Programs

When Colorado and Washington voted in favor of adult-use cannabis legalization nearly a decade ago, lawmakers were tasked with drafting regulations for what a legal marketplace would look like in their respective states. Although legalization efforts focused on the inequities of prohibition, the War on Drugs, and the legal cannabis industry, social justice initiatives were not initially included.

Today, there are 37 states and municipalities, including Washington D.C., that have legalized medical cannabis. Nineteen of those states have also legalized adult-use cannabis. Recent data shows that one in four Americans consumes cannabis, suggesting that legalization efforts have started to normalize cannabis use among the US population.

Out of the 19 states with adult-use cannabis, 13 have developed social equity programs to help marginalized people become cannabis leaders in their markets. States that incorporated social equity programs into initial adult-use cannabis legislation include Massachusetts, California, New Jersey, New York, New Mexico, Michigan, Vermont, Illinois, Connecticut, Arizona and Virginia. Although Colorado and Washington’s laws initially did not include social equity programs, both states are now in the process of implementing them.

It’s important to note that not all US states with legal cannabis programs take the social equity approach. States with legal adult-use programs but without social equity programs include Montana, South Dakota, Maine, Nevada, Oregon and Alaska.

After Social Equity Licensure

For those social equity applicants who receive operational licensure, there is the ongoing issue of compliance. As if there were not enough pressure on social equity applicants and license holders, maintaining state-compliant businesses and developing internal policies and procedures that drive brand awareness and loyalty can be a challenge. The hard reality is that admission into a social equity program and even obtaining licensure does not ensure a business leader’s success. Besides increased access to capital, expanding social equity programs to include post-licensure support, at least for the first year or two, would improve the odds of long-term success.

All in all, social equity programs in the US cannabis industry have begun to make a difference and right some of the wrongs of the War on Drugs, but there is still work to be done. To build an industry that improves lives not only with cannabis products but also with financial opportunity, we must continue to prioritize and expand current social equity programs and fight for new social equity programs in all legal cannabis states.

Best Practices for Training New Hires and Documenting Operations

By Dede Perkins
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Let’s just say it. There is an undeniable chaos in the cannabis industry. It doesn’t matter if you’re a big or small operator, it’s likely that you don’t have a documented system for creating and managing ever-changing SOPs or for consistently training all employees on the most current versions of those SOPs. This chaos is often the result of rapid growth, mergers and acquisitions, and the ever-present turnover in our industry. When department leadership changes, and it often does, established policies and procedures are often left behind. In some cases, this is a positive sign of growth. As a company outgrows SOPs and as it develops more sophisticated ways to cultivate, extract, process, manufacture, package and sell cannabis and cannabis products, inevitably, the old ways of doing business need to be replaced. For those operators who have prioritized operational excellence, whether they want to position their company for new investment, merger or acquisition, or just want to create a consistent and standardized, branded product, it’s critical to get control of SOPs, training and documentation.

Food processing and sanitation
By standardizing and documenting safety procedures, manufacturers mitigate the risk of cannabis-specific concerns

As with most big goals, to obtain operational excellence, you need to break the goal into manageable steps. Assuming you have accessible quality policies and procedures in place, properly training employees when they first start work and on an ongoing basis as policies and procedures change is the number one key to successful operations. When employees know how to do their job and understand what is expected of them, they are positioned for success. When employees are successful, it follows that the company will also be successful. Documenting operations is a second important step in obtaining operational excellence. While training and documentation appear to be different, in best-practice organizations, they are inextricably linked.

One Set of SOPs

Those of us who have been in the cannabis industry for a while have experienced firsthand or heard stories of facility staff working off of two sets of SOPs. There’s the set of SOPs that are printed or digitally available for the regulators, let’s call them the “ideal” set, and then there are the SOPs that actually get implemented on a day-to-day basis. While this is common, it’s risky and undermines the foundation of operational excellence. Employees often know there are two sets of SOPs. Whether they express it or not, many are uncomfortable with the intentional or unintentional deception. When regulators arrive, will they have to bend the truth or even lie about daily operations? Taking the time to establish and implement one set of approved SOPs that is compliant with both external regulations and internal standards is good for employee morale, productivity and ultimately, profits.

What’s the best way to get control of a facility’s SOPs? Again, break it into manageable steps:

  • First, task someone with reviewing all SOPs that are floating around. Determine if any are non-compliant, which ones need to be tossed and which ones need to be revised so they work for the company as well as outside regulatory authorities.
  • At a minimum, establish a two-person team to draft, review, publish and distribute the final SOPs. Ensure that at least one member of the team has management level authority. Assign that employee the responsibility of reviewing the SOPs before “publication” and distribution.
  • Archive, delete, or actually throw away outdated or non-compliant SOPs
  • Revise or create new best-practice SOPs that are in compliance with external regulations and internal standards
  • Establish a system to update SOPs when external regulations and internal standards change
  • Use a naming convention that distinguishes draft SOPs from final SOPs, for example, “Post-Harvest Procedure, FINAL”
  • Inform employees that they will be retrained on the new SOPs and that approved SOPs will always have the word “Final” in the title
  • Store the final SOPs in an easily accessible location and give employees access, not only during training, but on an ongoing basis

Centralized Repository for Final SOPs

Storing final, approved SOPs in one easily accessible, centralized location and giving employees access sounds simple, but again, this is the cannabis industry, so this often doesn’t happen. Many of us have or are currently working for an organization that stores SOPs in multiple places. Each department may have its own way of updating, disseminating and storing SOPs. Some SOPs are stored in a printed binder stuffed in a drawer or left on a bottom shelf. Others are stored digitally. Some use both systems, which creates confusion. Who knows if the digital versions or the printed versions are the most current? Surely someone knows, but often the front-line staff do not.“Once you’ve established a single set of compliant SOPs and have stored them in one accessible location, it’s time to train your employees.”

Establishing a centralized repository for final, approved SOPs is the foundation of operational excellence. It lets employees know that operations are organized and controlled, and it reassures regulatory authorities and external stakeholders—think insurers, bankers, investors—that the company prioritizes compliance and organization. And external stakeholders who believe that an organization is proactive and well-run tend to be more forgiving when the inevitable missteps occur. Companies that are organized, have effective training systems, regularly conduct internal audits to identify potential issues and take identifiable action steps when necessary to remediate issues, receive fewer deficiency notices, violations and fines than their less organized competitors.

Train Employees

Many states require cannabis operators to provide a specific number of training hours prior to an employee beginning work, and a specific number of continuing and refresher training hours annually. Once you’ve established a single set of compliant SOPs and have stored them in one accessible location, it’s time to train your employees. To do so, set clear expectations and decide who is responsible for what. Is the HR manager responsible for initial onboarding and training? Are department managers responsible for ongoing and annual training? Create a training responsibility chart that works best for your company; write it down and share with all stakeholders.

Documenting all key areas of operation on a recurring basis will help you keep track of a large facility and workforce

The next step is to figure out how to train your employees. Individuals have different learning styles, so ideally, you’ll offer multiple ways for them to master the requirements of their position. Assign written materials and if possible, attach short videos showing the best way to complete a task. Follow up with a quiz to determine comprehension and a conversation with a department lead or manager to answer questions and review the key take-aways. Ideally, the department manager or lead employee will work with the employee until they are competent and comfortable taking on new assigned tasks and responsibilities.

Sum It Up 

Operational excellence begins with:

  • Knowledge of and access to current external rules and regulations and internal standards
  • One set of approved and easily accessible policies and SOPs that comply with both external and internal standards
  • An initial training system with clearly assigned roles, responsibilities, and goals
  • An ongoing training system with clearly assigned roles, responsibilities, and goals
  • Systems to:
    • Test knowledge before employees begin unsupervised work
    • Stay up-to-date with all changes to external rules and regulations and internal standards
    • Control policy and SOP revision process
    • Inform all stakeholders when policies and SOPs change
    • Test that employees understand new standards
    • Document all key areas of operation on a recurring basis
    • Address deficiencies and evaluate whether SOP revisions are warranted
    • Document and implement necessary remediation when necessary

For those of you rolling your eyes and thinking you don’t have time for this, ask yourself, “Can you afford not to?”

For those of you committed to operational excellence and doing what it takes to get there, congratulations on being a visionary leader. Your efforts will pay dividends for your own company and will help the cannabis industry grow into a well-respected, profitable industry that improves lives.

Integrating a Culture of Quality Into the Cannabis Industry

By David Vaillencourt
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The culture of the cannabis industry is filled with passion that many envy, and for valid reasons. The roots of the cannabis plant go back thousands of years. As of this writing, there are no documented human deaths that were caused by a phytocannabinoid overdose. However, it is not all rainbows and unicorns.

Before breaking ground, fundraising, proper facility design, competitive application and permitting requirements are just the start. Once operating, businesses struggle to stay current with regulations that continue to evolve. Cannabis cultivators struggle to scale while mitigating pest infestations, which is a part of life in the conventional agricultural industry. A lack of consistent products frustrates consumers, while regulators and policy makers continue to struggle on the best way to regulate a commodity that has seemingly endless demand. The reality is dizzying!

However, amidst all of the challenges and opportunities, a continually overlooked tool stands out: a Quality Management System (QMS). Merriam-Webster defines a system as “an organized set of doctrines, ideas, or principles usually intended to explain the arrangement or working of a systematic whole.”

A QMS documents processes, procedures and responsibilities that ultimately direct an organization’s activities to meet customer and regulatory requirements as well as continually improve its effectiveness and efficiency. In other words – it steers innovation through the collection of data while ensuring products are safe for the consumer. For further reading, the American Society for Quality (ASQ), now over 70 years old, is an excellent resource and provider of resources and formal training programs that are recognized and revered around the world.

Step 1: Define your stakeholder requirements

This all starts with knowing your stakeholder (e.g., customer, regulatory body) requirements. For simplicity’s sake, let’s start with your customer; at a fundamental level, they expect safe, consistent and reliable products that impart a certain experience.

How does that translate into specifications? Let’s look at them one at a time.

What does “safe” mean? For an edible, safe means the product is free of physical, chemical and microbial hazards. Knowing what potential impurities could be in your product requires understanding your raw materials (inputs) and the manufacturing process. To take a deeper dive, some of the aspects of safety and quality, product specifications and testing considerations are discussed in this recent Cannabis Industry Journal article by Dr. Roggen and Mr. Skrinskas here.

An example of a compliant label in Oregon

What does “consistent” mean? This builds off and complements the safety profile. It could mean a consistent fill level, an acceptable range of cannabinoid concentration, and so on. For example, in the US Pharmacopeia’s peer-reviewed article about quality attributes of cannabis inflorescence (commonly known as flower or bud), they recommend 20% as the acceptable variance in cannabinoid content. For a product labeled as having 25% THC, the product will actually test to between 20% and 30%. This may be surprising, and discomforting for some, but the reality is that products on the market consistently fail to meet label claims.

What does “reliable” mean? That could mean that you always have inventory of certain products on the shelves at your dispensary. Defining “always” as a SMART goal – perhaps it means that you will have your top 3 products in stock at least 90% of the time. Customers need to feel like they can rely on your business to provide them with the products they want. Take the time to capture the data on what your customers want and work to satisfy their needs and you’ll watch your business really accelerate.

Step 2: Build your processes to meet these expectations

This is where your written standard operating procedures (SOPs), forms and records come into play. Your SOPs serve to memorialize your operations for consistency. Most SOPs in the cannabis industry are not written by the actual operators of a process. Rather, they are written by the legal and compliance team without review by the operators to confirm that what they are stating reflects operational reality. The audience needs to be the operators. Without effective SOPs that are utilized by your employees, your business will struggle to meet the established specifications. Cannabis businesses in Colorado, the oldest regulated adult-use cannabis market in the United States, continue to see 1 in 8 of their products fail final product testing! Cannabis businesses that understand their processes, document them in SOPs and have records to prove they follow their SOPs (see Step 3) are able to reduce errors that ultimately lead to costly rework and product failures.

Consistency in quality standards requires meticulous SOPs

Step 3: Monitor and improve

You have your requirements, you have your process, but how do you know that they are being adhered to? By the time you have results from a third-party lab, it’s too late. Look internally. Records and logs that show preventive maintenance was performed, room and canopy temperature and humidity checks, inventory reports, production records, extraction equipment report and employee training records shouldn’t be filled out only to be filed away. These records are data, which is your most valuable tool. Unfortunately, records are one of the most overlooked assets in today’s cannabis business. A team independent from operations (typically a Quality Unit) should be regularly reviewing these for inconsistencies and trends that can alert you to catastrophic failures before they occur.

Initially, the additional expenditure and learning curve may make this seem like an added burden, but keep in mind that succeeding in today’s cannabis industry requires long-term customer retention. By biting off one piece at a time, you can slowly implement a QMS that will improve your business, increase customer satisfaction, and ensure your brand is a staple for years to come. Remember, quality and compliance is a journey, not a “set it and forget it” situation.

The definition of a Quality Management System includes ‘continuous improvement’. Look forward to a future article which will discuss the importance of tools like a CAPA Program – Corrective Action Preventive Action (which all cannabis license holders in Colorado are required to have in place as of January 1, 2021) and how they complete your QMS, keeping you compliant and mitigating your business risks!

The Brand Marketing Byte

Introducing The Brand Marketing Byte

By Cannabis Industry Journal Staff
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Cannabis Industry Journal is pleased to announce our partnership with Pioneer Intelligence on this new series of articles. This is the first installment of The Brand Marketing Byte.

Pioneer Intelligence uses data to benchmark marketing performance of consumer-facing cannabis brands across three areas: social media, earned media and web-related activities. At present, Pioneer takes in over 60,000 data points each week. The company’s team of marketers and data scientists share findings through weekly generated Performance Scorecard reports as well as Brand Marketing Snapshots. Pioneer Intelligence offers reports on more than 500 U.S. cannabis brands. Ben Walters, founder of Pioneer Intelligence, says their mission is “to help cannabis industry stakeholders better understand how marketing strategies & tactics resonate with audiences.”

The Brand Marketing Byte will showcase highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies. We hope this column can serve as a resource for readers interested in branding and marketing.

In terms of scoring methodology, Pioneer Intelligence’s reporting favors “heat” over “strength” as the company prioritizes “relative change” above “absolute position.” This means that, for example when talking about social media audience size, they don’t just score brands based on the number of followers, but they also score audience growth. In fact, Pioneer’s algorithms put more value in growth figures than actual number of followers. For more insight on their methodology, along with a weekly updated index of the hottest brands, visit their website here.

Without further ado, here is a data-led, shallow dive on the California brand, Legion of Bloom:

Legion of Bloom – Content Strategy

Legion of Bloom (LOB) was founded in Northern California in 2015 when five independent growers joined forces. As one of the more widely recognizable brands in the region, they produce craft, high-quality cannabis products and are well known for their vape cartridges. The company has superior genetics and sustainable practices, which they capitalize on in their marketing efforts.

LOB has invested heavily in generating content, which appears to be fruitful. Their website has an in-depth introduction to terpenes for consumers and they utilize their blog section well with a high volume of quality content throughout the second half of 2019. It’s worth mentioning their website features full laboratory test results for all of their products, highlighting their commitment to transparency, consumer trust and brand recognition. Through looking at a few key metrics like indexed keywords, site strength and visit duration, it is apparent that LOB has increased their audience engagement significantly.

All of those factors combined, LOB has used a variety of content tools to grow their website consistently and sustainably, earning them #38 spot on last week’s Pioneer Index, a ranking of the hottest U.S. cannabis brands.

Arizona To Implement Mandatory Lab Testing

By Aaron G. Biros
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Good news came to patients using medical cannabis in Arizona earlier this week: Lawmakers in Arizona unanimously passed SB1494 through the state’s House and Senate, the bill requiring mandatory lab testing for medical cannabis products. Arizona Governor Doug Ducey is expected to sign the bill and has ten days to do so.

Arizona Governor Doug Ducey

When Governor Ducey signs the bill into law it will mark the first time since the state legalized medical cannabis in 2011 that a measure to protect patient safety via lab testing will be implemented. According to the bill, beginning November 1, 2020, all cannabis products shall be tested prior to sales “to determine unsafe levels of microbial contamination, heavy metals, pesticides, herbicides, fungicides, growth regulators and residual solvents and confirm the potency of the marijuana to be dispensed,” (Page 6, Section 36-2803).

The bill requires dispensaries to provide test results to patients immediately upon request. Dispensaries need to display a sign notifying patients of their right to see “certified independent third-party laboratory test results for marijuana and marijuana products for medical use,” according to the text of the bill (Page 7, Section 36-2803.01).“There will have to be some serious planning, but other states have achieved this and we can too.”

Under the new bill, the Arizona Department of Health Services will adopt rules to certify and regulate labs, establishing requirements like health and safety protocols, mandatory quality assurance program and standards, chain of custody and sampling policies, adequate records, accreditation, proficiency testing, among other requirements (Page 6-7, Section 36-2803).

Ryan Treacy, co-founder of the Arizona Cannabis Laboratory Association (ACLA) and CEO/Founder of C4 Laboratories, says this is a major turning point for Arizona’s cannabis industry. “We have been devoid of regulations with regard to testing the entirety of the program since it was legalized; This will be a significant change,” says Treacy. “Now patients can make sure they are getting a safe and clean product and getting exactly what they paid for.”

For those in the know when it comes to cannabis testing in the United States, the new requirements will look very similar to other states with testing requirements. One particularly unique aspect of the new program, however, is the establishment of a “Medical Marijuana Testing Advisory Council,” made up of stakeholders representing different interests in Arizona’s cannabis industry. Members of the council will include representatives from dispensaries, labs, cultivators, concentrate producers, edibles producers, as well as registered patients, caregivers, a representative from the Arizona Department of Public Safety, a licensed health care provider and “any other members deemed necessary by the director,” reads the text of the bill (page 16, Section 36-2821).

Ryan Tracy, co-founder of the ACLA and founder/CEO at C4 Labs.

“Other states like California have complained about detection limits, while Arizona is taking a unique approach with an advisory council with stakeholders in the cannabis industry,” says Treacy. “So that when the Department of Health Services promulgates rules, they are taking into account the challenges in the cannabis industry specifically. We have a chance to do this right and avoid pitfalls we’ve seen in other states.”

One problem worth mentioning for Arizona’s cannabis industry: Dispensaries have not been required to test products for patients since medical cannabis was legalized back in 2011. That means many producers could be very used to operating procedures that don’t account for lab testing. With mandatory lab testing, some producers may be behind the curve when it comes to mitigating contamination.

According to Treacy, this could disrupt the supply chain a little bit. “When testing becomes mandatory in November 2020, dispensaries will need a full panel of tests performed on their samples,” says Treacy. “With the entire market now required to complete a full panel in depth analysis on each product, product testing will become a more time-consuming stop in the supply chain. So companies will need to work that into their plan to meet regulation requirements to prevent a bottleneck and maintain patients’ access to their cannabis medicine.”

Arizona has a chance to prevent that type of bottleneck seen in states that implemented testing requirements, like California for example. “When you have a habitual history of not testing products, it can be very hard to change, which adds to Arizona’s challenges,” says Treacy. “We need to make sure this does not affect access for patients and the ability of the industry to continue to flourish and grow.”

While Treacy thinks the transition will be difficult for some, it’s absolutely necessary for Arizona’s patients to access clean and safe medicine. “There will have to be some serious planning, but other states have achieved this and we can too.”

Organic Cannabis Association & Ethical Cannabis Alliance Announce Merger

By Aaron G. Biros
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The Organic Cannabis Association and Ethical Cannabis Alliance announced today they are merging into one organization, the Cannabis Certification Council (CCC), according to a press release. The new third-party certifications include “Organically Grown” and “Fairly Produced”, granting producers a seal for marketing if they achieve the certifications.

Ashley Preece, executive director of the Cannabis Certification Council

According to Ashley Preece of the Ethical Cannabis Alliance, now executive director at CCC, they plan on starting with the “Organically Grown” certification as first certification to market. “We are launching with Organically which will include robust labor standards as well as standards that go beyond [USDA] Organic,” says Preece. “The USDA Organic standard is watered down and we want to expand on proper horticulture practices so it relates directly to cannabis producers.” The process of designing that certification involves using that USDA Organic certification as a building block to draw from but not directly adopt.

“We will start by pulling from Organic and Fair Trade standards, then we will have a technical advisory committee (TAC), made up of multi-stakeholder agricultural industry and cannabis industry professionals to give input and adjust the standard accordingly,” says Preece. “From there we will have a pilot program, engaging with producers abiding by the standards’ requirements. After the pilot phase, we make final adjustments before bringing it to market.” In order to make sure their certification works across the board, Preece says they are engaging with stakeholders around the country and eventually globally. “We need to engage each different community to make sure this is applicable on a national level.” Preece also says they plan staying abreast of other standards, such as ASTM International’s, but those are geared more towards production safety. “We are looking towards more robust Organic and Fair Trade standards, and ‘cannabinizing’ them,” says Preece.

Photo courtesy of L’Eagle Services

David Bronner, a prominent advocate of drug policy reform and CEO of Dr. Bronner’s, a top-selling soap brand in the US market place, will be providing seed funding and a matching grant to the CCC. “We are committed to making socially and environmentally responsible products of the highest value, and we are excited for the CCC to begin driving that ethos in the cannabis industry,” says Bronner. “The Cannabis Certification Council (CCC), with its unique mission, is a perfect vessel for us to support our values in the cannabis space.”

Preece says the “Fairly Produced” labor certification is going to be based off of Fair Trade practices. “That will include living wages per community and taking options of ownership into consideration, including different business models where employees might have shares or partial ownership,” says Preece. “As we know, this industry has come from the illicit market, where we saw a lot of inappropriate working environments, gender relations and pay schedules. So we want to ensure that workers have contracts in place, they are treated fairly just as any other industry and we want to mitigate any strange encounters that might have seeped into this regulated market.” Founding board members include Laura Rivero of Yerba Buena Farms; Amy Andrle of L’Eagle Services Denver; Nick Richards of Dill and Dill and Vicente Sederberg; and Ben Gelt of Par, with Ashley Preece as executive director. “This is a huge step for the cannabis industry,” says Preece. “Our collaboration reflects the priority of the mission ingrained in both parties, and together we will immediately be greater than the sum of our parts.”

Washington Selects Franwell’s METRC for Traceability Program

By Aaron G. Biros
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The Washington State Liquor and Cannabis Board (WSLCB) announced today they plan to choose Franwell as their technology partner for the state’s cannabis seed-to-sale traceability system. While the release states they have not yet officially awarded them the contract, it says Franwell is the apparent successful vendor (ASV) to replace their current system. “An ASV is the procurement term used for the highest scoring, responsive vendor,” says the press release.

Rick Garza, director of the WSLCB, says they plan on making a number of changes that they couldn’t under their current contract. “Over the last four years we have learned a lot about this industry, including aspects to the industry that were unknown when the current traceability system was implemented,” says Garza. “We need a system that will grow and flex with Washington’s maturing marijuana system.”

Seven companies submitted bids for the new contract and the agency narrowed that down to three finalists, each of which gave presentations and demonstrations on their software products to WSLCB staff last week. They also worked with folks in the cannabis industry, selected by trade organizations, that provided input on the requests for proposal. Those industry stakeholders that participated with input will get a demonstration of the new software system in early June.

They plan on transitioning to the new system no later than October 31, 2017. Franwell’s METRC product is currently used in Colorado, Oregon and Alaska.

Regulatory Overreach: Are California’s Lab Rules Too Strict?

By Aaron G. Biros
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With California moving into a more regulated market, some are concerned the state may be overregulating the market with strict, unnecessary rules. The Bureau of Marijuana Control, California’s agency in charge of regulatory oversight for the cannabis industry, released a set of proposed draft regulations for lab testing recently.

Jeffrey Raber, Ph.D, Chief Executive Officer of The Werc Shop

Those rules cover everything from sampling standard operating procedures to detection limits for pesticide analytes, which some say are absurdly strict as is. According to Jeffrey Raber, Ph.D, chief executive officer of The Werc Shop, a cannabis consulting firm located in Monrovia, CA, these rules will immediately raise prices. “The regulations are quite extensive and will undoubtedly drive the costs of patient medicine upward,” says Raber. “Regulations are not intended to be so detailed in these fashions, but are supposed to provide the floor and specific framework upon which operators can build best practices and differentiate themselves from others in a competitive market that drives prices downward.”

“Comparable guidance from other states operating today, and even federal regulations, are not nearly as specific in certain aspects,” says Raber. “While there are some very good parts to the current draft, and the bureau has certainly aimed to provide strong consumer protections, as they should, the idea of benzene even being mentioned or possibly permitted, or a completely cold transportation chain being required, and pesticide levels so low it pushes the limits of the most sophisticated and modern analytical equipment while going far past sensible EPA limits, strongly suggests there is work to be done to dial back the current position and make for far more workable and fully balanced regulations before they are fully finalized.”

Dave Egerton, vice president of technical operations at CW Analytical

It is important to note that nothing is set in stone yet. The bureau will hold four public hearings throughout the month of June for the lab testing rules. In addition to that, concerned stakeholders can send written comments through June 20th.

Dave Egerton, vice president of technical operations at CW Analytical, a cannabis-testing lab based in Oakland, is pleased they are finally regulating the market, but definitely plans on providing some feedback to change the rules a bit. “CW Analytical applauds the state’s efforts to regulate laboratories and the cannabis industry in general,” says Egerton. “…Many aspects of the proposed regulations for labs will make for a marked shift in the way our businesses operate, but the motivation behind them is well-intended.” His sentiment is consistent with many who operate cannabis laboratories and other stakeholders who see these proposed rules as overreach.

“Unfortunately, some of the regulations as written will create undo burden upon the industry and carry a strong probability of limiting supply to medical patients,” says Egerton. “During the current review period, CA laboratories will be providing feedback on some of the details within the law in order to streamline their quality assurance goals into a more tenable document that still protects patients.” That public comment period is a crucial part of the rulemaking process, as the rules will most likely change after cannabis laboratories’ voices are heard.

ASTM International Launches Cannabis Committee

By Aaron G. Biros
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According to a press release published March 1st, ASTM International formed a committee focusing on “creating technical standards and guidance materials for cannabis and its products and processes.” ASTM, founded in 1898, as the American Section of the International Association for Testing Materials, predates other standards organizations such as IEC (1906), ANSI (1918) and ISO (1947). ASTM International is a non-profit organization devoted to the development of international standards. For more than a century, ASTM has served as a leading venue for consumers, industry and regulators to work collaboratively under a balanced and consensus–based process to craft voluntary consensus standards.

Logo_of_ASTM_International,_Oct_2015ASTM International meets the World Trade Organization (WTO) principles for developing international standards, and maintains the attributes outlined in the National Technology Transfer and Advancement Act (NTTAA) for a voluntary consensus standards development organization. ASTM International is known throughout a variety of industries for creating voluntary consensus standards for products, systems, services and materials. ASTM standards are used globally in research and development, product testing, quality systems, commercial transactions, and more.

Lezli Engelking
Lezli Engelking, founder of FOCUS

On January 18th, 2017, the American Public Health Association hosted thirteen industry stakeholders representing state laboratories, standards developers, research institution, academia, cultivation centers, auditors and software compliance providers, according to Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), who is involved and familiar with the process. The planning meeting discussions included a summary of where the request was initiated, why a standards activity was necessary and the results of ASTM’s exploratory efforts. At the conclusion of the planning meeting, it was decided by vote, that ASTM should move forward with the activity.

On February 28th, 2017, roughly 60 stakeholders and cannabis industry representatives met at ASTM International’s headquarters in Conshohocken, Pennsylvania. The volunteer committee on cannabis, designated D37 by ASTM, is a result of inquiries flooding the company regarding cannabis since 2015, states the press release.

The committee will focus on six technical areas, forming subcommittees:

  • Indoor and outdoor horticulture and agriculture,
  • Quality management systems,
  • Laboratory,
  • Processing and handling,
  • Security and transportation, and
  • Personnel training, assessment, and credentialing.

Dr. Ralph Paroli, immediate past chairman of the board and director of R&D in measurement science and standards at the National Research Council of Canada, was voted to serve as the committee’s first chairman. “With its decades of experience in industries such as pharmaceuticals, medical devices, packaging, agriculture, pesticides, and more, ASTM International is the perfect place for standards development for the cannabis industry,” says Paroli.

Pending ASTM International board of directors’ approval (anticipated late April 2017), a shift of standards development efforts has been made from FOCUS to the ASTM International technical committee D37 on cannabis and its products and processes.FOCUSlogo

“FOCUS could not be more pleased by ASTM’s decision to further the development of internationally harmonized cannabis standards,” says Engelking. “This is desperately needed, and an enormous step in the right direction of legitimizing the cannabis industry. We are thrilled FOCUS standards will be included, and honored to be a part of this exciting process.” During this transition period, interested stakeholders can get directly involved through the FOCUS website and then follow directions provided by FOCUS.

According to Engelking, third-party, cannabis-specific certifications for cultivation, retail, extraction, infused products and laboratories are provided by FOCUS for cannabis businesses committed to providing safe, consistent and quality products. FOCUS certification helps businesses decrease liability and risks, maximize efficiency, reduce costs and differentiate their brands.

“FOCUS encourage all stakeholders to participate in this important process,” says Engelking. “ASTM has an incredible standards development system in place that allows for many different levels of participation.” During 2017, ASTM is offering free temporary memberships. After 2017, stakeholders will need to join as a participating member.