Tag Archives: standards

lauradavis
Soapbox

Compliance: It’s Just Good Business

By Laura Davis
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The numbers are in and Colorado’s retail sales increased 42 percent in 2015. This increase in sales reflects a very vibrant industry in Colorado, the state that is leading the way in legal cannabis through sensible rules and regulations.

While the federal government has yet to consider cannabis’ legal status, savvy cannabis companies are striving to be exceptional business leaders and meet those federal regulations that pertain to product, environmental protection, and employee health and safety. Colorado’s cannabis business owners, including Good Chemistry, strive to lead the industry by developing best business practices, processes and guidelines that provide the foundation for the industry’s continued success and sustainability.

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A view of the interior of Good Chemistry’s retail dispensary.

The cannabis industry in Colorado and other states is heavily regulated at many levels from cultivation to sale. As the industry grows and matures, companies are looking to federal standards and practices that may not immediately apply to their state’s industry, but that have been in place for years to provide for public safety. As the cannabis industry continues to grow, it is critical that industry leaders demonstrate that, through their practices and adherence to public safety standards, their products are safe for the consumer.

This vision has led cannabis companies to seek out compliance experts and build compliance departments. Hiring compliance experts is a major trend in this fledging industry, and more than that, it is a critical element to maintaining employee morale and providing for public safety. Compliance provides a roadmap for employees, offering guidance and resources to assist them with job performance. It is a basic building block for employee retention.

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The exterior of a Good Chemistry dispensary

Internally, employees must be aware of what regulations can affect their specific position and job responsibilities. It is crucial that all staff employed by a cannabis business are aware of current and pending regulations. If the employees are well versed on the regulations that impact their duties in the company, there is less of a chance for error.

Externally, cannabis companies should strive for the highest level of compliance, and much can be gleaned from other, more established industries. Standard Operating Procedures (SOPs) should be developed to detail critical work flow areas of the business, including cultivation practices, sales protocols, and more.

Compliance can help to create a more sustainable business. In an industry that has grabbed headlines for energy, water and resource usage, compliance is at the core of a sustainable business model.

Overall, compliance is about working towards creating a sound, respected and sustainable industry. It is essential that the company places a high value on education and regulatory compliance from the chief executive officer to the budtender. Industry leaders must continue to advocate for sensible and practicable regulations for the industry. Cannabis business leaders play a critical role in building an entirely new industry from the ground up, which includes understanding, utilizing and anticipating regulations for the cannabis industry.

Ask the Expert: Straight Talk on Safety, Defense and Security, Part II

By Aaron G. Biros, Bruce E. Lesniak, Lezli Engelking
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In this week’s Straight Talk on Safety, Defense and Security, we answer a reader’s question about traceability in quality processes and offer some practical advice for building a safety and security strategy. Travis Lodolinsky from Gleason Technology submitted this week’s question. For a response, we sit down with Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), to help answer your questions. If you have questions about safety, defense and security in cannabis, please ask them in the comments section below and we will address them in the next edition of Straight Talk on Safety, Defense and Security.

T. Lodolinsky: How are safety processes being tracked in the industry to ensure regulations and quality assurance are being uniformly enforced throughout?

Lezli Engelking: In related industries, such as herbal products or pharmaceuticals, the FDA has created guidelines, or current good manufacturing processes (CGMP) that control for the quality, consistency and safety of the products being produced. Businesses must be certified by independent third parties to demonstrate they are following CGMP to protect public health and consumer safety. CGMP is a proactive approach to quality assurance. A basic tenant of CGMP is that quality cannot be tested into a product after it is made; quality must be built into the product during all stages of the manufacturing process. One common misconception is that CGMP only covers the process of manufacturing itself. CGMP actually covers all aspects of the production process including materials, premises, equipment, storage, staff training and hygiene, how complaints are handled and record keeping.

Because cannabis is federally illegal in the US, the FDA has not developed cannabis-specific CGMP guidelines, so lawmakers do not have the benefit of having those guidelines available to base regulations on. So to answer your question, state cannabis regulations do not track processes and procedures used by cannabis businesses to control for safety or quality because they do not have the federal guidelines. Instead, most state cannabis regulations currently take a reactive approach to safety, mandating only for testing of the final product. While testing is an extremely important and valuable part of any quality management program, just analytics is not enough.

This is precisely why FOCUS was created and how they assist business owners and regulators, while fulfilling the mission of protecting public health, consumer safety and safeguarding the environment. The FOCUS standards are a cannabis-specific system of guidelines (cannabis-specific current good manufacturing practices) to ensure products are consistently produced according to quality standards. FOCUS provides detailed guidance and independent, third party auditing services for all key aspects of the cannabis industry including cultivation, extraction, infusion, retail, laboratory, security, packaging, labeling and sustainability.

CannabisIndustryJournal: What advice can you offer to cannabis businesses for product safety, defense and security prior to standardization?

Bruce E. Lesniak: Businesses that make products infused with cannabis (I call these businesses “plus one” companies because they produce products that include one more ingredient than traditional food products), require a carefully written master plan that specifically addresses the unique qualities, sensitivities and critical areas of the business. When building a comprehensive plan I address three questions:

  • Why (identify the why, this is your preventative, overarching strategy)?
  • How (addresses the “why question” with products, services and training)?
  • What (what is your reactive strategy that addresses actions and activities to be performed in the event of a breech)?

First and foremost, consumer-facing businesses must safeguard their products to the public. One product recall or illness related incident could spell disaster. Build your plan correctly the first time. Contact an industry expert to review your facility and help build and implement your plan. This will save you money by quickly exposing vulnerabilities and providing corrective measures specific to your business needs and requirements. Even though product safety and defense are closely related to security and should share a complementary strategy, product safety and defense are unique (due to standards and regulations), and should be treated as such.

Banks not accepting industry money complicates normal business operations and security planning, causing retail operations to handle and store large sums of cash. I asked industry expert and security professional, Tony Gallo of Sapphire Protection LLC, what is the single most important piece of security equipment you are currently providing for the retail and dispensary owner? “Design an air tight policy of handling money,” says Gallo. “Remove money often from cash registers and place it into the best safe for your application!”

Spend time familiarizing yourself with all things product safety and defense (there are volumes written on food safety and food defense, thus the “plus one” reference). This a great starting point and protecting the consumer protects your business. When it comes to designing your security application, consult an expert! Take into account that the cannabis industry is unique due to its “plus one” ingredient. Therefore you need to build your security systems, applications and policies to systematically protect your employees, facility, suppliers, transportation, manufacturing, distribution, warehousing, supply chain and brand.

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Quality From Canada

The Great Green North: Canada vs. US in Cannabis Regulations

By Tegan Adams
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A lot has been changing quickly in the world of cannabis across North America. While international drug treaties sit back and watch in horror, cannabis and cannabis-infused products have been popping up in households across Canada, on retail shelves and in private delivery services across the US. How each jurisdiction in North America accepts and regulates (or draws a blind eye) to the sale of cannabis is different depending on where you are located. Here are a few key distinctions between the current Canadian and US regulatory approaches to marijuana.

In Canada, cannabis is regulated at the federal level by Health Canada through the Marihuana for Medical Purposes Regulations, (MMPR). The MMPR allows persons to obtain dried cannabis for their own personal medical purposes or for another person for whom they are responsible. To obtain dried cannabis, a person must obtain a medical document from a physician, or nurse practitioner to register as a client with a licensed producer of their choosing. After registering as a client, they are able to order dried cannabis and possess up to a maximum of 150 grams at any one time, depending on the recommendation of their physician. More recently, in 2015, regulations allow the distribution of not only the dried form of cannabis but also their extracted forms.

In the US, at the federal level, cannabis is still 100% illegal. Public statements from the federal administration dictate that they steadfastly oppose legalization of cannabis and other drugs. They are concerned that legalization would increase the availability and use of illicit drugs, and pose significant health and safety risks to all Americans, particularly young people. At the state level, legalization laws are rapidly changing. The office of National Drug Control Policy lists 23 states (a rising number) and Washington DC that have passed laws allowing cannabis to be smoked for a variety of medical conditions. The state laws do not change federal regulation. Many local governments are creating zoning and other restrictions that prohibit dispensaries from operating in their communities. That being said, voters in Alaska, Colorado, Oregon and Washington state support legalizing the sale and distribution of cannabis to adults over 21. There are many differences in the regulation of marijuana within each state, municipality and within the country itself.

Internationally, Canada has a platinum reputation for delivering and regulating quality consumer products. Within the Canadian cannabis industry, many feel Health Canada’s regulatory regime is inaccessible, restricts production to large corporations and limits distribution channels. The average start up cost of even a small licensed facility is around $4-5M CAD. On top of the financial costs, production companies have to compete with the other 2000 or so applicants who have been waiting, in some cases up to two years, to hear back from Health Canada if they will succeed in the licencing application process. In response, Canada has seen many tolerances made to allow dispensaries to distribute marijuana at the municipal level, even though not allowed as per regulation.

Many Canadian dispensaries operate with professional policies and procedures including providing customers with access ID cards and offering physician consults. Vancouver became the first city in Canada to license and regulate marijuana dispensaries. The number of licenses within the city exceeds both Tim Hortons and Starbucks Franchises combined. Many dispensaries provide bar and café settings for people to enjoy a “bong shot” or café au lait infused with cannabis. Licensing dispensaries has become a great financial resource for the city, charging $30,000 CAD per licence. Vancouver’s dispensaries have been a topic of debate across all levels of government. The Health Minister asked Vancouver to shut the dispensaries down, while other municipalities have started to expand the same concept. The Royal Canadian Mounted Police (RCMP), Canada’s federal police force, has started raiding various dispensary locations. Part of the new Prime Minister, Justin Trudeau’s, political platform and claim to fame is to legalize cannabis recreationally across Canada. How the framework will unfold is still in the works and subject not only to local jurisdictional reform but also to international negotiations.


 

Editor’s Note: Eurofins-Experchem has helped submit over 150 MMPR applications to Health Canada and continues to work with 10 of the 27 licensed MMPR producers in Canada. Their regulatory affairs division has started working with companies applying to produce and distribute cannabis in those states, which are new to its sale and distribution. They offer services include writing SOPs, training staff and performing mock inspection audits.

Ask the Expert Series: Straight Talk on Safety, Defense and Security with Bruce Lesniak

By Aaron G. Biros, Bruce E. Lesniak
3 Comments

This is the first part of a series dedicated to understanding more about defense, security and safety as they relate to the cannabis industry, the importance of having standards and some tips for cannabis business plans. Over the next few weeks, we will hear from multiple industry pioneers discussing those topics and offering practical solutions for problems that many cannabis businesses face daily.

Inconsistent laws across multiple states created a fragmented network of regulations for cannabis. Some third parties are filling the gaps between the industry standards and state regulations. The Colorado Marijuana Enforcement Division (MED) and the Washington Liquor and Cannabis Board’s i-502 rule provide guidance on regulations surrounding packaging and labeling, advertising, pesticide use, retail and other areas.

Still there are many opportunities to fill the gaps. The Foundation of Cannabis Unified Standards (FOCUS), is an independent non-profit founded to develop some consistency in standards governing public health, consumer safety and the environment. In cultivation, the third party certification, Clean Green Certified, works to provide some guidance for growing cannabis organically based on USDA organic standards. For laboratories, Washington’s regulations provide some guidance, but organizations like FOCUS, the American Association for Laboratory Accreditation (A2LA) and the Cannabis Safety Institute seek to fill the gaps in laboratory standards along with the ISO 17025 requirements.

Security and defense is one particular area of the cannabis industry that still needs a benchmark for businesses to follow. In this series, we sit down to discuss security, defense and safety with Bruce Lesniak, president of the Food Safety and Defense Institute and member of the oversight committee for the establishment of standards in the cannabis industry in conjunction with FOCUS.

Cannabis Industry Journal: What changes do you see coming to the cannabis industry related to product safety, defense and security? 

Bruce Lesniak: As in every industry that provides a public consumable product, the primary objective is to protect the consumer by providing products that are consistently safe. The largest change coming to the cannabis industry will be the implementation of enforceable, nationally uniform standards across all states and all product lines. I believe that the standards and regulations developed for the cannabis industry will mirror those of the food industry. Companies are already busy working to develop this uniform standard, one such group is FOCUS. Founded by Lezli Engelking, FOCUS works with diverse professionals from regulatory, quality assurance, medical, law enforcement, business, research, and the government officials, medical and research professionals along with subject matter experts from numerous business disciplines across the industry to develop impartial, comprehensive, cannabis specific standards that will be presented for adoption by state and federal governing bodies. Lezli summarizes the FOCUS Mission as “ To protect public health, consumer safety, and safeguard the environment by promoting integrity within the cannabis industry.” Look for more on this in our next Ask the Expert update, on CannabisIndustryJournal.com or you can contact Lezli Engelking at FOCUS here: 866-359-3557 x101.


This series will highlight important issues involving security, defense and safety in the cannabis industry. Next week, Bruce, along with cannabis security professional, Tony Gallo of Sapphire Protection, will provide some advice on what companies can do to improve their master business plan. Stay tuned for next week’s Part II of Ask the Expert: Straight Talk on Safety, Defense and Security with Bruce Lesniak.

Analyzing National Trends for Marijuana Policy: Q&A with Matt Karnes

By Aaron G. Biros, Matthew A. Karnes, CPA
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According to Matthew Karnes, founder and managing partner of GreenWave Advisors, LLC, looking toward the growth of the cannabis industry requires analysis of the changes in state and federal laws. “Eventual rescheduling or de-listing of marijuana as a federally prohibited drug, will hopefully lead to consistent and uniform national regulation and taxing authorizations that will ultimately change the structural and economic landscape of the industry,” says Karnes in an article here.COLOR-PIC-200x300

Looking at the sales trends in current legal states is a viable option to make financial projections, but much of that relies on the changing legal and political landscape of our country. According to Karnes, because it is impossible to accurately predict federal rescheduling or full legalization, investors must look at short, medium and long term trends to guide their decision making process. Cannabis Industry Journal sat down with Matthew Karnes to discuss some of the foreseeable trends.


 

Cannabis Industry Journal: What are some of the trends happening presently, that you can expect to continue?

Matthew Karnes: Just as states continue to pass legislation in some form of legalization measure, there is talk at the federal level of minimizing interference with state policies and removing prohibition statutes. We can see this national progression continuing until rescheduling cannabis eliminates the current obstructions that have limited industry growth.

Where states continue to roll out legislation to legalize cannabis, the rate of retail and cultivation license granting will have a large effect on the growth rates for each given state. Free market approaches as seen in Colorado and California will allow for faster growth rates than more restrictive states.

Recreational and adult use measures being introduced are notable disruptions in the medical sector that once fueled legalization. Medical research and development of strains for specific ailments is still in its early stages due to the impact of federal policy on research.

With an eye forward to eventual federal rescheduling or possible de-listing it is reasonable to assume that uniform national testing and operational standardization protocols will eventually be implemented at least as a baseline binding thread that will steadfastly assure consumers of an expectant consistency of product.

CIJ: Where do you see medium term trends taking the industry?

Matt: With more and more states legalizing cannabis in some form, we can expect the federal government to make a policy change. This will be accomplished via a DEA policy change or through congressional avenues in conjunction with federal agencies like the FDA, USDA and Department of Agriculture administering regulations.

With FDA or Department of Agriculture implementing cannabis policies, we can expect increased interest from outside the industry in research and development of cannabis-based drugs. This will lead to a medical market with more targeted medicine with precise dosing. We can expect more physicians to gain comfort in treating ailments with cannabis as well.

The recreational market will expand greatly with normalized commerce, enabling larger cultivation operations and infused products brands could grow to the national scale with interstate commerce.

CIJ: Where do you see the industry going long term?

Matt: When the cannabis industry matures down the road, we can expect multiple offshoots occurring. The recreational industry will involve local, regional and national policy much like the alcohol industry, and will likely resemble a liquor store model with individual “mom and pop” type businesses.

We anticipate that the medical market will recalibrate as more targeted products with precise dosing and efficacy are developed. At that point it will experience increased competition and consolidation. Without medical research and clinical trials, we cannot accurately project the growth of the medical sector.

Regulations involving tax revenue will most likely use a similar mechanism that states use for alcohol and tobacco taxation. Entities like state liquor control boards will oversee cannabis regulations. When that time comes, the cannabis industry will no longer be a novel idea and will become another conventional ‘consumer staple.’