Tag Archives: study

August 2, 2023

Is the Cannabis Industry Sitting On An Untouched Gold Mine Of Innovation?

By Pam Chmiel

Universities across the country are working in all areas of research and development to advance cannabis cultivation, medicine, drug delivery and technology. But these innovations are collecting dust because the universities are not in the business of commercializing products in the marketplace.

In 1980, the federal government passed a law that said universities that receive federal funding, which most of them do, will have the option to own whatever intellectual property or invention they develop from that federal funding. Initially, universities resisted the idea feeling they were selling their souls to the private sector and corporate America. But opinions have changed, and the marriage between universities and industries is a common and rewarding business strategy for both sides.

I interviewed Lance Anderson, a partner at the law firm Dickinson Wright who is uniquely positioned to play matchmaker to research universities, entrepreneurs and VCs to help them uncover cannabis innovations and create partnerships. Lance is also educated in life sciences, including proprietary plants, genetics and plant-derived products, and served as in-house counsel and lead IP attorney for a large public research university system and an early-stage venture capital company.

Pam Chmiel: What led you to play matchmaker to universities and cannabis businesses?

Lance Anderson: I learned that universities are interested in commercially benefiting from some of their innovations when I worked in the technology commercialization office at Texas Tech University right out of law school.

The concept of “technology transfer for commercialization” already exists in universities and presents a vast opportunity for cannabis businesses to commercialize their innovations.

Lance Anderson, an attorney at Dickinson Wright

“Technology Transfer” agreements refer to moving technology, knowledge or innovations from one organization, such as a research university, to another entity, such as a cannabis company, through licensing agreements that grant permission to use intellectual property (IP), patents or proprietary technology for commercial purposes.

Even though legalization is sweeping the country, I’m finding that academic institutions and their administrators are concerned they will lose all federal funding and are hesitant to take the chance on a cannabis research project. They are still getting comfortable with the opportunities to work with the industry, and the farm bill act of 2018 gave them the push to do so.

And why not tap into these universities, which receive millions and millions of dollars in funding? You’re not out a lot if you properly structure your relationship with them. You do not have to pay them millions and millions of dollars to get this technology. Knowing what the university wants and how to structure that relationship is key.

Pam: What are some of the benefits a business can gain by forging a partnership with a university?

Lance:

Cannabis companies benefit by gaining access to cutting-edge research, expertise and resources that can accelerate and elevate their product development and market entry.
The association with academic institutions can help build trust among consumers, investors, and lawmakers.
Working with university research students may create a pipeline of qualified employees who may want to work for the company.
Submitting a joint proposal with a university seeking government grants may lead to additional funding for the research project.

Pam: What types of partnerships do you currently see in development?

Lance: Pharmaceutical companies have collaborated with research universities for years on drug development and undoubtedly have their eye on the cannabis industry. Federal agencies like the USDA lean on academic partnerships to develop unique plant traits to improve crop production. You’ve got institutions developing new mind-blowing genetics, like polyploid species, that allow you to fine-tune the plant traits you’re interested in. There are always advances going on.

Clemson and Cornell Universities are leading the charge in cultivation by partnering with farms to develop techniques to grow better crops and increase profitability. And interestingly, many of the land grant institutions that receive federal grants, like Mississippi State, Michigan State and Texas A&M, are now diving into plant trait development. And it’s not unrealistic to think they will transition into plant-touching technologies ripe for the cannabis industry to come in and run with it from there.

“Researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be”

But the research desperately needed to move the industry forward is medical research because lawmakers want proof that cannabis has medicinal benefits before they are confident in pushing for legalization. Unfortunately, the US government has been part of the problem in making it hard to conduct research, whether clinical trials, clinical research or simple preclinical studies on cannabis. Until recently, the University of Mississippi was the only university allowed to cultivate for research. So the researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be. Not even close.

Academic partnerships are not a new concept, but the cannabis industry has yet to embrace it fully. Opportunities are beginning to develop where government agencies will participate and or fund the work in cannabis from the university standpoint. The National Institute of Health has a program that’s getting kicked off for cannabis research. And they all understand and recognize that the fact we don’t have enough clinical data available is a major hindrance to the advancement of this industry.

Pam: What is legally involved in a technology transfer partnership?

Lance: Collaboration between cannabis companies and research universities can take various forms, such as research partnerships, sponsored research agreements, joint ventures, or licensing arrangements. The specific model depends on the goals, resources, and intellectual property involved in the collaboration. An attorney can structure an agreement in a manner that lets everyone slowly advance into the relationship and get satisfied with the milestones they want and at which point this thing begins to take shape.

Cannabis businesses are no strangers to utilizing multiple entities in their corporate structuring. They may have a holding company that owns the real estate, a staffing company that manages the HR for the flower-touching operations, and another that holds the intellectual property. You’re seeing an entire industry familiar with IP licensing for the first time in a long time, and universities want in by licensing their intellectual property.

The university may require a licensee to have a product in the marketplace and a first sale within two years. So that introduces the concept of perishable intellectual property rights where you can default or don’t meet the licensing requirements. That perishable concept sometimes makes it hard to raise money because the investors prefer a guarantee that you have the license and will not default.

The takeaway is universities are thirsty for partnering and looking for strategic initiatives. Universities have access to patient populations, and the cannabis industry has the business know-how to take their innovations to market. It will take some culturing of both sides to understand the opportunities. But once everyone’s on the same page, the deals will look like the licenses and joint venture deals we see now with multi-state operators.

Pam: Lance, do you have any closing thoughts for our audience?

Lance: I’ve thought about this potential synergy for years as I’ve watched these two areas I practice in often. Academic partnerships are the catalyst to move the cannabis industry forward and are right in front of us. The time is now, and I’d love to be there.

December 9, 2022

First Pharma vs Cannabis Clinical Trial Moves Forward

By Christina DiArcangelo

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Affinity Bio Partners on Working with Zelira Therapeutics to Complete Enrolment for Diabetic Nerve Pain Drug Trial

It’s an exciting time in the medical cannabis community as Zelira, a global leader in the research, development and commercialization of clinically validated cannabinoid medicines, and Affinity Bio Partners, a leading, global clinical research organization, have completed enrollment for a diabetic nerve pain drug trial. The Institutional Review Board (IRB)-approved head-to-head trial read out is expected in Q1 of 2023. Two years in the making, the study’s clinical management, clinical trial site monitoring, subject recruitment, regulatory submissions and review and query of data have brought us to a pivotal point that could pave the way for how future clinical studies are conducted in the medical cannabis community. As someone who comes from traditional pharma and biotechnology industries, heading up a clinical study in the medical cannabis realm has been a significantly different, eye-opening and informative experience that reinforces the dire need for mainstream, medical cannabis education.

Difficulties of Enrolling Subjects in a Cannabinoid-Based Clinical Study

There are a number of reasons that enrolling a cannabinoid study is very challenging. One of the biggest challenges to overcome is creating educational clinical study material that will be approved by the Institutional Review Board while educating potential subjects who are interested in enrolling. In other words, one must fully understand the regulatory landscape that they’re operating in, and we all know cannabis is a tricky one, while still educating potential subjects.

When screening subjects, it is important to be able to thoroughly share facts regarding cannabinoids, terpenes and other ingredients utilized in the study material. Also, sharing information on the endocannabinoid system is important, and a must for subjects to understand. In addition, it is integral to share and contrast between the traditional pharmaceutical products versus the cannabinoid study drug. Meaning, most subjects understand and are familiar with pills and other treatments approved in the traditional FDA regulated pharmaceutical space. Therefore, you must ensure that you create a bridge between a study’s educational materials and the lack of mainstream education about cannabinoid-based therapies.

The Impact This Will Have on Future Cannabinoid-Based Clinical Studies

There is a lot of hope that by working on a study of this magnitude, that we will pave the way for many more companies to bravely enter the clinical trial space as it pertains to medical cannabis. Everything that is being performed in this Zelira clinical study is in accordance with all applicable laws and regulations. The team is utilizing an electronic patient reported outcomes and electronic data capture system to receive data directly from the clinical trial sites as they are seeing the patients. As more patients, groups, communities and organizations learn about this, we hope that other large players in the cannabis industry invest their money wisely and perform clinical studies on their formulated products. Companies are unable to make claims of product safety and efficacy legally without these clinical studies. As we approach 2023, it is time for us as an industry to begin forecasting future clinical studies that will help power the therapeutic benefits this plant has to offer in responsible, controlled settings.

August 29, 2022

Cannabis Industry Sales Tax Utility Exemptions

By Dennis Anding, CPA, Renee Sorrels, CPA

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A utility study can help cannabis growers, cultivators and processors identify opportunities for sales and use tax savings by exposing potential refunds. Thirty-five states currently allow a sales tax exemption for utilities used in manufacturing or processing activities. Thirty-four states have published guidance that provides for a formal utility study process while one state, Mississippi, does not have formal guidance. For Mississippi, the process is to work with the state contacts to secure the exemption.

Generally, the exemption includes the purchase of electricity, natural gas and water and typically applies to the percentage of electricity, natural gas and water used or consumed within the manufacturing process as defined by state statutes and regulations. However, in some states purchased electricity, natural gas and water might be 100% exempt if certain usage percentages are met or exceeded. Facilities that grow, cultivate and process cannabis generally use significant kilowatt hours of electricity in the manufacturing process, and this exemption can result in sizeable tax savings. Without the proper analysis, unwary taxpayers might unknowingly leave significant utility savings on the table.

How to qualify

To qualify for the exemption, states require eligible taxpayers to perform a utility study to analyze the usage of utilities within the manufacturing process versus the taxable use of utilities (such as in general and administrative and office areas). Some states have a predominant use provision under which if 51% or more of an electric or gas meter is used in manufacturing then 100% of the meter’s tax is exempt, while many other states will exempt only the exact percentage of qualified usage as calculated by the utility study.

Some states require the study to be conducted by a third-party provider. Texas requires that the utility study be performed by a certified professional engineer. Taxpayers that engage a third party to conduct a utility study would be wise to consider completing a cost segregation analysis on their facility at the same time, as the two analyses together could bring extra value and savings.

Study process

An energy analysis and comparison should help establish the qualified utility usage percentage used in claiming the sales tax exemption. Once the usage percentage has been calculated in the respective state, it makes sense to review invoices from utility vendors to quantify any sales and use tax overpayment amount.

Refunds for sales and use taxes previously paid can then be requested directly from the state taxing authorities or any vendors retroactively back to the state’s open statute of limitations (typically three to four years). Taxpayers should also establish the exemption prospectively to obtain the benefit of not paying sales and use tax on the amount of manufacturing usage on future invoices. An updated exemption analysis might be needed every three to four years, depending upon the applicable state rules, or when the processing area undergoes a significant update, such as adding new machinery and equipment to the facility or removing machinery and equipment from the facility.

Other sales and use tax refund opportunities

In addition to the exemption on qualified utilities, many states extend the manufacturing exemption to qualified machinery, equipment, and consumables. Generally, to qualify the equipment must cause a physical or chemical change upon the product and be predominantly or directly and exclusively used in the manufacturing process. The exemption may apply to supplies and consumables that are used or consumed in the process as well. Agricultural exemptions are also available for cannabis growers, cultivators, and processors to potentially qualify for.

Qualified organizations only. Independence and regulatory restrictions may apply. Some firm services may not be available to all clients. Given the continued evolution and inconsistency of various state and federal cannabis-related laws, any company should seek competent legal advice relating to its involvement in the cannabis industry, including when considering a potential public offering as a cannabis-related company.

June 15, 2022

Study Finds Only 7% of CBD Brands Conduct Proper Lab Testing

By Cannabis Industry Journal Staff

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Leafreport released the findings from their expansive CBD testing study that revealed some pretty alarming results. According to their study, only 7% of CBD brands they sampled actually conduct legitimate contamination testing for pesticides, heavy metals and microbial contamination.

Leafreport is an Israeli company founded in 2019 that does product reviews, independent testing and provides educational resources for consumers. The company produces studies on CBD products in the market and reports their results on its website. Back in 2020, the watchdog company conducted independent lab testing on 22 different CBD-infused beverages and found a lot of inconsistencies with the actual amount of CBD found in the beverage and what the product’s label claimed.

In this latest study, finalized in late May of 2022, the consumer advocacy group found a lot of inconsistencies throughout the CBD market. For their study, they reviewed 4,384 products from 188 brands, with the goal of looking at overall transparency in the CBD products market. Judging by the results they share, the CBD market is unsurprisingly not very transparent.

Here are some highlights from this most recent study:

20% of the brands reviewed didn’t carry out any purity tests to check for the presence of microbes, pesticides, or heavy metals. In 2021, 25% of the brands Leafreport reviewed didn’t carry out any purity tests.
42% of brands test almost all of their products for potency (90%-100% accurate) and share their third-party lab results with consumers — the same as in 2021.
Only 12% of brands had all their products fall within acceptable potency variance limits.
88% of brands that tested their products for potency had at least one product test beyond the 10% variance for potency, in comparison to 84% in 2021.
28% of brands didn’t carry out any testing at all for pesticides (such as glyphosate), 26% didn’t test for the presence of any heavy metals (such as arsenic), and 24% didn’t test for microbes (like bacteria).
Two brands carried out no lab testing at all for either purity or potency, compared to 3 brands in 2021.

January 25, 2022

Research Suggests Cannabis Could Help Treat Covid-19

By Cannabis Industry Journal Staff

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One study published in the Journal of Natural Products two weeks ago proposes using the cannabinoid CBDA in conjunction with vaccines to prevent SARS-CoV-2 (Covid-19) infection. The study was conducted in a lab and says that cannabinoid acids (CBGA, THCA-A, CBDA, etc.) can bind to the SARS-CoV-2 spike protein, blocking cell entry and effectively prevent infection.

Another study published in Science Advances claims cannabidiol (CBD) inhibits SARS-CoV-2 replication and helps prevent infection by inducing endoplasmic reticulum stress response and innate immune responses. The study was conducted in cells and mice, but also had groups of human patients that tested positive for Covid-19 less after taking CBD. “In matched groups of human patients from the National COVID Cohort Collaborative, CBD (100 mg/ml oral solution per medical records) had a significant negative association with positive SARS-CoV-2 tests,” reads the abstract.

Two studies in Israel, one proof-of-concept study and one early-stage clinical trial, have just launched examining the effects of CBD on patients already infected with Covid-19.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

All of this research already underway does not mean that cannabis prevents Covid-19. In fact, one clinical trial in Brazil that has finished, found no evidence that CBD helped patients with mild Covid-19. Published in the Cannabis and Cannabinoid Research Journal, patients with mild Covid-19 received 300 mg of CBD for 14 days or a placebo. The study suggests that clinical trials should be conducted for the effects of CBD on patients with severe Covid-19, not just mild symptoms.

The clinical trial in Israel that is trying to study the effects of CBD on patients with severe Covid-19 is having trouble finding participants because the newer Omicron variant mainly produces only mild to moderate symptoms.

It is far too early to tell if any of these studies will show evidence of cannabis treating Covid-19, let alone if they mean cannabis products can be used as a treatment or preventative for Covid-19. However, the research is significant and we should keep an eye on any developments that come from those studies.

Statnews.com said it best:

“The latest hubbub is an example of both the promise of cannabinoids — components of cannabis — as potential therapies, but also the hype around them, which can far outpace the evidence that they work. It’s left researchers and consumer advocates scrambling to warn people that patients shouldn’t be turning to over-the-counter products or recreational marijuana in hopes that it might protect them from Covid-19.”

October 25, 2021

Soapbox

Is There a Place for Perpetual Tele-Monitoring and Clinical Research in the Medical Cannabis Industry?

By Christina DiArcangelo

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As we continue to witness and experience the medical cannabis industry grow and mature, many of us are wondering where the head-to-head clinical studies are, and why aren’t there more clinical research studies taking place?

Cannabis products created with the intention for medicinal use often state that their formulations and products stack up against traditional pharmaceutical treatments. However, without a substantial number of clinical studies being performed, it’s difficult to truthfully make such a claim. It’s one thing to share testimonials from people who use particular products and report what their experiences were like. However, to go head-to-head in a controlled environment where factors such as underlying conditions, height, weight, medication, lifestyle and nutrition habits are taken into account to accurately compare the efficacy of a traditional pharmaceutical product versus a cannabis-derived product are two completely different things.

The Need for More Capital

Wouldn’t you agree that if a company is having tremendous success with a particular product, that they’d reinvest capital into a true clinical study to have data to support their marketing efforts? Investing into proper studies would not only benefit a company working hard to earn market share, it would benefit those who are relying on a particular product to regain a quality life. As we’ve learned over the years from numerous scientists and researchers digging into the cannabis plant at a more granular level, there’s much more to the medicinal benefits than meets the eye. Discovering new information about how cannabinoids such as CBG and CBN combined with CBD and certain terpenes can create specific effects has helped make a greater impact on the medical cannabis community. Bringing these powerful blends of anti-inflammatory, cannabis-derived compounds and other immune boosting nutraceuticals to head-to-head clinical studies could be a huge step forward towards further legitimizing the healing effects that cannabis has to offer.

Measuring Efficacy Goes Beyond COAs & Product Reviews

Determining the efficacy of medical cannabis products should be viewed in the same light as traditional pharmaceutical products. Traditional clinical studies are designed with an Institutional Review Board (IRB) approval, subject recruitment, electronic data capture as well as electronic patient reported outcomes. Some companies within the cannabis space have made attempts to conduct surveys with measuring efficacy in mind, but using outdated survey technology that hasn’t been validated only leads to insufficient data collection.

Discovering new information about how cannabinoids can create specific effects has helped make a greater impact on the medical cannabis community.
Image: Peggy Greb, USDA

There is nothing wrong with adult-use cannabis. However, for the medical cannabis space to be taken more seriously, it is time for organizations to step up their efforts and take note of certain practices from traditional biotech organizations when it comes to clinical research and collecting data to correctly quantify efficacy of certain products. Well-thought-out studies designed with clinical endpoints and validated questionnaires is a strategic way for the industry to take big steps towards doing what is right for patients.

Patients Are Asking For More Research

After speaking with patients who are interested in pursuing a treatment that includes the responsible use of medicinal cannabis, the one thing they all have in common is the desire for more information that they can rely on to make better decisions. Is it time for patients to push the envelope and not purchase products from companies that are not willing to perform the clinical studies? If companies suffered a loss in sales as a result, would they reconsider their stance on reinvesting capital into clinical trials with their products?

Equally as important as proper research is perpetual tele-monitoring. The value in perpetual tele-monitoring is the data. We can showcase miraculous, life-changing stories of how medical cannabis has helped people turn their lives around. However, when seeking greater buy-in from groups like the FDA, data is key. Qualitative data can go only go so far. It’s the quantitative data that will help move the medical cannabis community forward. The ability to be able to review data on an ongoing basis would enable medical cannabis companies to evaluate how products are working based on the electronic data capture, along with questions that a company may develop to ascertain individualized product feedback.

Imagine having the ability to see patients’ data based on real-time, daily, through something as convenient as a wearable device. Understanding test results and correspondence with doctors for patients would significantly improve.

June 2, 2021

CU Boulder, Charlotte’s Web Begin Sleep & Anxiety Studies

By Cannabis Industry Journal Staff

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Charlotte’s Web Holdings announced a new collaboration with the University of Colorado-Boulder and their Research and Education Addressing Cannabis and Health (REACH) Center. The University’s REACH Center will conduct a preclinical study on how hemp oil can influence sleep quality and anxiety.

The study will use Charlotte’s Web hemp products, including their full spectrum hemp formulations containing CBN, CBD and less than 0.3% THC. Monika Fleshner, PhD, Professor of Integrative Physiology and member of the Center for Neuroscience at the University of Colorado, will be the project lead and will conduct the study in her Stress Physiology Laboratory. “There is a great need for properly controlled experimental studies that are designed to test the potential neural and physiological impacts of hemp derived phytocannabinoids,” says Dr. Fleshner. “With support from CU REACH and Charlotte’s Web, our research will explore both the efficacy and mechanisms of how these substances can affect complex brain-mediated behavior, such as disturbed sleep.”

Tim Orr, senior vice president of Charlotte’s Web and president of its CW Labs division, is currently working on more than twelve scientific research studies with the company. “Charlotte’s Web is committed to advancing science on the benefits and safety of CBD and other hemp phytocannabinoids through rigorous scientific investigations such as this sleep and anxiety study,” says Orr. “We’re honored to team up with CU’s REACH Center to explore the potential impacts of full-spectrum hemp extract with CBD and CBN on anxiety and sleep quality.”

Long term, Charlotte’s Web expects this study will help build the foundation for future clinical studies to “better understand how specific ratios of cannabinoids and different delivery formats are effective at supporting improved sleep quality and instilling healthier sleep architecture in humans,” reads the press release.

May 26, 2021

Bio-Rad Aspergillus PCR Test Gets AOAC Approval

By Cannabis Industry Journal Staff

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According to a press release published earlier this month, the Bio-Rad iQ-Check Aspergilllus Real-Time PCR Detection Kit has received AOAC International approval. The test covers detection for four different Aspergillus species: A. flavus, A. fumigatus, A. niger, and A. terreus.

The detection kit covers those Aspergillus species for testing in cannabis flower and cannabis concentrates, produced with our without solvents. The PCR detection kit was validated through the AOAC Research Institute’s Performance Tested Method Program. They conducted a study that resulted in “no significant difference” between the PCR detection kit and the reference method.

The kit was evaluated on “robustness, product consistency, stability, inclusivity and exclusivity, and matrix studies,” the press release says. Bio-Rad also received approval and validation on the iQ-Check Free DNA Removal Solution, part of the workflow for testing cannabis flower.

The test kit uses gene amplification and real-time PCR detection. Following enrichment and DNA extraction, the test runs their PCR technology, then runs the CFX Manager IDE software to automatically generate and analyze results.

Bio’Rad has also recently received AOAC approval for other microbial testing methods in cannabis, including their iQ-Check Salmonella II, iQ-Check STEC VirX, and iQ-Check STEC SerO II PCR Detection Kits.

May 3, 2021

Designing Precision Cannabis Facilities: A Case Study

By Phil Gibson

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With data forecasting expert BDSA predicting that the global cannabis market will reach $56B by 2026, there is no time to waste. Whether it’s Oklahoma, New York or even Macedonia, the frenzy is on. Investment decisions are immediate, and you have to be correct out of the box. This is where an expert like Andrew Lange and his company, Ascendant Management, come in. Andrew has designed more than 1.5 million square feet of cannabis facilities and moved them into profitable production in North America and Europe. One of his active customers is Onyx Agronomics in Washington. Bailee Syrek is the director of operations at Onyx and this is the story of the key points in designing a precision cannabis facility with state-of-the-art efficiency.

Background

Andrew Lange, a navy veteran, runs a global cannabis consulting business based in Washington. With a “prove it to me” approach, he regularly tests the best new technologies in the facilities he designs. He integrates his knowledge of what works in practice into his subsequent facilities. One of his previous projects, Onyx Agronomics in Washington, started in 2014 and moved quickly into production in a retrofitted warehouse. Many of his best ideas started with Onyx, including some new innovations in the latest expansion there this month. Onyx is a tier 3 cannabis cultivator.

Bailee Syrek’s operation at Onyx currently produces 9,000 lbs. of dry trim bud per year in 8,000 square feet of canopy. She operates the state-of-the-art, clean room style, indoor grow facility around the clock, delivering 2.7 grams/watt from every square foot of canopy in her building. She runs a highly efficient facility.

Onyx has had an ongoing relationship with Ascendant Management and chose to leverage them again with their current expansion to increase their capacity further. Onyx uses a range of advanced technologies including aeroponic cultivation equipment and control software from AEssenseGrows to hit their metrics.

Precision, Quality & Consistency

“I look for ways that my clients can differentiate themselves,” says Lange. Maybe it’s his military background, but Andrew demands precision, quality and consistency in the operations he designs. “Cannabis is a just a plant really so we look for the highest performance grow methodology. I find that to be AEssenseGrows aeroponics,” says Lange. “The AEtrium Systems provides a good foundation to manipulate for grow recipes and business process. I add teamwork, communications, and operations procedures to that foundation.”

At Onyx, Bailee Syrek works closely with her channels. She invites her customers in regularly to review the Onyx cultivars and to cover their ideal requirements. These can range from bud size for their packaging to THC or terpene profiles (Yes, channels do want both higher and lower THC content for different consumers and price points). Based on that feedback, Bailee and Andrew work together to dial in the ideal grow recipe in the AEssenseGrows Guardian Grow Manager central control software. They push their target strains to optimize the results in the direction requested by their customers. For example, “How do you get the highest possible THC out of 9lb Hammer?” You’ll have to ask Andrew and Ascendant Management.

Driven by customer requests, Onyx is adding new strains to build on their innovative brand. Bailee expects to reach new levels of terpene bundles with Cheeseburger Jones, Koffee Breath, Shangri-La and OK Boomer. Utilizing Andrew’s expert knowledge, they can take typical sub-20% cannabinoid bundles and improve them using aeroponics and better controls, into standout aeroponic 30% packages.

The Onyx Vision

Bailee Syrek believes this is the most exciting time yet for Onyx. Delivering premium grade cannabis as a white label flower supplier for years, Onyx is a profitable and successful business. But even with doubling capacity every year, they are still having trouble keeping up with customer demand. Bailee wants to get to the point where she can always say yes and accept an order from their white label customers. With this objective, she again engaged Ascendant and Andrew to get beyond 15,000 lbs. of output in 2021 to make her customers happier. Beyond that basic expansion, she is also ambitious and is preparing plans for additional lines of revenue with their own proprietary flower, oil and derivative products.

“This expansion will be a new challenge,” says Syrek. “Flower production is in our wheelhouse. We have tighter operations, with the most consistent bud size, terpenes and test results in our state. These new products will require that same quality but now in new areas.”

Her Path to Leadership

Bailee started with Onyx in a compliance position that grew out of the constant demands for government licensing and reporting. In that compliance role, she had the opportunity to work a bit in every department, giving her a good understanding of all of the facility operations and workflows. All of that experience led her to eventually take over the operations leadership role. She instills care and effort to maintain the cleanest and most efficient operations possible. “With aeroponics, we don’t have to lug soil from room to room or in and out of the facility. This saves us a ton of work that we can redirect to plant health and maintenance,” says Syrek. “Medical precision and GMP quality is a given. Each room on average is 105 lights and one room manager and one cultivation technician take the room from clone/veg transfer to harvest as a two-person team.”

Bailee Syrek, director of operations at Onyx Agronomics

Bailee prides herself with results. “Medical grade precision is normal for us. We use medical grade SOPs for every aspect of our production.” Bailee has designed these guides into their control system that runs on the Guardian Grow Manager software. From sensor tracking, to performance graphs to time cards; everything is integrated in her performance monitoring.

A quality focus is very apparent in every Onyx flower room. Every watt of light energy is transferred to the pristinely manicured canopy. Naked stems feed nutrients up to the fat buds at the trained canopy surface. Fan leaves are removed and all possible energy turns into bud weight and potency. The room technician has a passion for plant health, table care and plant maintenance all the way through to the harvest bonanza.

What is the biggest challenge for Bailee as she drives the operation? Even at 105-110 grams per square foot per harvest, they are sold out. “Every customer wants to buy beyond our capacity. It is a good problem to have,” Bailee says. “Customers want our quality and love the consistency. This is the most exciting thing about our expansion. We will finally be able to make additional channels happy with high quality supply.”

This is where Andrew credits Onyx’s performance. “Most well running operations deliver 1.1-1.8 grams of dry trim bud per watt of electricity used in powering a grow room,” says Andrew. The Onyx grow formula results leave this in the dust. Running Fluence SPYDR 2i grow lights and the AEtrium System aeroponics, Onyx plants are delivering just shy of 4 lbs. per light with every harvest cycle. At 630 watts max output, that delivers ~2.7 grams/Watt, the most efficient operation he has seen. The Onyx process and execution works.

“Bailee is a great example as a professional. She builds a motivated team that executes better than her competition,” says Andrew.

At the same time, Onyx runs a highly space efficient nursery with just enough mother plants feeding energetic cuttings into the 4-layer stacked AEtrium-2.1 SmartFarms in their environmentally controlled clone room. They produce more than enough healthy clones to jump from veg to flower in the span of a week. Grow time, harvest turn time and no veg space, results in very efficient use of power in the complete operation.

Mirroring Onyx for Medical Grade Cannabis in Europe

Andrew Lange’s current passion is a green-field project in Portugal. Self-funded, Andrew says that this facility will be one of the first that is pure enough in operations to supply non-irradiated clean-room-level-quality cannabis beyond the precise standards required by European regulators. Current importers have not been able to clear the European standards for cleanliness without irradiating their buds. Other companies like Aurora have abandoned efforts to access the market due to the precision requirements. Typical methods used for fruit imports use gamma radiation to get bacterial counts down. This was tried with cannabis to sterilize buds, but the problem with cannabis is this degrades the quality of the flower.

Andrew’s Portugal facility will be using a sterile perimeter surrounding his grow space (mothers, clones/veg, flower rooms) and harvest and processing areas (dry, trim, packaging). Andrew creates a safe environment for healthy production. A steady harvest cleaning regimen is built into his operational designs from the beginning. All operators are trained in procedures to exclude pathogens and limit all possible transmission (airborne, physical/mechanical touching, or water carried). Every area is cleaned during and between harvests. Andrew is confident he will reach a consistent level of accuracy and purity beyond European requirements because it is routine in all of his designs.

Certified Efficiency is the Message

Good Manufacturing Practices (GMP) and Good Agricultural and Collection Practices (GACP) are required for certification and access to European markets. Andrew always builds tight operations, but in this case, his Portugal facility is designed with the fit and finish to be GMP and GACP compliant from day one with advanced air filtration and air management throughout.

Automated aeroponics is a foundation technology that Andrew recommends for his facility designs. The automatic data logging, report generation, cloud access and storage make this a foundational technology. Andrew does get some resistance from cultivators that are used to the classic soil media approaches but he explains that software configurable grow recipes, precision controls, zero soil/no pests and hyper-fast growth makes aeroponics the foundation of competitive advantage. Precisely controlled medical quality precision operations are built on top of this foundation.

The initial phase of the Portugal facility is 630 lights and this facility is Andrew’s latest personal investment. From secure perimeters to modular grow rooms and highly automated equipment, this location will be state-of-the-art in terms of grams/watt yields and renewable energy with an output of 6 metric tons per year. Solar powered electricity from a 4-megawatt farm will use Tesla megapacks for storage and be grid independent.

Technology & Innovation, Onyx & Ascendant

From his first experience with AEssenseGrows aeroponics, Andrew has been able to design complete grow recipes in the Guardian Grow Manager software with very tight precision on dosage. This makes it possible to create ideal recipes for each strain (nutrition, irrigation cycles, lighting and environmental management). This frees up the operations teams to focus on plant health and execution. The nutrients, pH, CO2, temperature and humidity, follow the Guardian directions that he sets.

Working with Bailee at Onyx, Andrew is now consulting on the post-harvesting side of operations (drying, trimming, extracts and packaging). In parallel with his efforts, Bailee is optimizing THC & terpene production on the cultivation side with UV lighting (considering far-right red frequency light recipe enhancements).

That is the Ascendant Management approach to innovation. Trial, test constantly, perfect ideas in practice. Optimize the results for consistent, high-quality results. Even while driving for the personal craft touch, use automation to increase efficiency of mundane, but important tasks. With these methods, Andrew believes that the Onyx labor cost is one third of typical soil media grow operations. Zero soil aeroponics offers many benefits. Bailee’s team is able to give each plant more attention and delivery better quality. Automation is a win-win for them.

Bailee finds that constant testing is useful for two things: one, great results, and two, surface the best talent with their hand’s-on approach.

Always Finish with People

Bailee says that her staff works incredibly hard. “We are a different grow, with better ergonomics on the job, aeroponics for precision and yields, and advanced technology at the leading edge in every part of our grow. No dirt up and down stairs. People are proud to work here. We are not your dad’s grow operation.”

“We promote from within. Everyone starts as a room tech and has the opportunity to move up. Teams are isolated by rooms so there is no contamination between rooms or humans. Put in the work, and you will get promoted with expansions, and grow with the company as we take a bigger share in the market.” Female employees make up almost half of the current staff, and Bailee encourages employees to refer their friends. “Good people invite good people,” she says.

Her training program introduces the technical aspects of their unique operation, the positive expectations and career path for every new employee. The social environment is friendly with good pay and regular raises. Each new employee fills a range of roles during their 1-month training circuit and are assigned to a cultivation space under a lead as an official cultivation tech at the end of 30 days. “One thing that we do more than at other grows is constant cleaning,” says Bailee. “This is an ever-present mantra for the staff.”

May 3, 2021

How Private-Sector-Led Information Sharing Can Transform Cybersecurity in the Cannabis Industry.

By Andy Jabbour, Ben Taylor

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The cannabis industry’s advancement towards legalization continues to dominate national headlines, from the stance of incoming Attorney General Merrick Garland to deprioritize enforcement of low-level cannabis crimes, Senate Majority Leader Chuck Schumer’s continued advocacy, to the recent passing of legislation in New York, New Mexico and Virginia (the first in the South) to authorize adult-use cannabis. While these updates are likely to intrigue customers and investors alike, they are also sure to draw the attention of cyber criminals who could look at the relative youth of the industry, as well as its rapid growth, as a prime target of opportunity for nefarious acts.

In order to understand risk mitigation best practices across a wide spectrum of private sector industries, this article will first identify the current security environment in order to understand the threats, briefly highlight specific case studies and assess the risks and identify methods that individual organizations, as well as the cannabis industry as a whole, can take action to enhance security and preparedness and to develop resiliency against future attacks.

Understanding the Threats

For an industry that has operated in a largely cash-based system for much of its existence, the idea of security is not foreign. Typically, these concerns focused on physical security implementation. The topic has received plenty of coverage, including a recent article in this journal articulating Important Security Considerations When Designing Cannabis Facilities. While an audit of physical security measures is a valuable part to any all-hazards threat assessment, securing a growing online network – from email to online finances to connected devices within cannabis facilities – can pose more unfamiliar challenges. When consulted for this article, Patten Wood, a former VP of marketing for a prominent west-coast cannabis retail brand noted: “While the topic of cybersecurity is critically important to customers, businesses, and the industry at large, it isn’t top of mind for many of the cannabis companies that I’ve experienced.” Understanding what risks are present is the first step to mitigating them, so we must first discuss several common cyber threats for the cannabis industry.

Phishing: Phishing happens when cybercriminals impersonate a trusted individual or entity, typically through email. The goal in this instance is to get the target to share confidential information or download software that can allow unauthorized access into an organization’s network. Phishing is one of the most common types of cyberattacks as it is relatively easy to conduct and surprisingly effective.

Ransomware Attacks: Ransomware attacks are used to gain access to a computer network and then lock and encrypt either the entire system or certain sets of high-value files, which can compromise important business information, and impact client and vendor privacy. A ransom is then demanded for restoring access, but paying the ransom comes with its own risk as it doesn’t guarantee the files will be restored.

Cyber Extortion: Similar to ransomware attacks in their design, cyber extortion typically deals with a threat of leaking personal information and will generally demand payment in cryptocurrency in order to maintain their anonymity.

Lumu: 2020 Ransomware Flashcard

Remote Access Threats: As 2020 has forced organizations to rethink how they conduct business and shift to more remote operations than they had in the past, it can open up several new threats. According to a survey by IT social network SpiceWorks.com, six out of every ten organizations allow their employees to connect their company-issued devices to public Wi-Fi networks. Utilizing unsecured Wi-Fi networks opens the user up to man-in-the-middle attacks, allowing hackers to intercept company data. Unsecure Wi-Fi also brings the threat of malware distribution. An additional consideration with remote workers is the uptick in cyber attacks against remote access software referred to as remote desktop protocol (RDP) attacks. According to Atlas VPN, RDP attacks skyrocketed 241% in 2020 and we’ve seen numerous RDP attacks against critical infrastructure throughout the pandemic and across all industries.

Internet of Things (IoT) Leaks: With IoT devices running everything from security systems to automated growing operations, the convenience has been a huge boost for the industry. Unfortunately, many IoT devices don’t have sophisticated built-in security. Another common problem is the tendency of users to keep default passwords upon installation, which can make devices easy for cyber criminals to access. Once they are inside the system, malware can easily be installed, and the actors can move laterally throughout the network.

Personal and Medical Record Security: Many cyberattacks expose some level of personal data, whether that be customer, employee or vendor information. An extra consideration for retail operations that either treat medical patients, or medical and adult-use customers, is the additional information they must store about their clients. Medical facilities will maintain protected health information (PHI), which are much more valuable on the dark web than personally identifiable information (PII). But even adult use facilities may keep government-issued ID or other additional information above that of a typical retailer, which makes the potential value of their information much more intriguing for a cybercriminal.

Assessing the Risks

Depending on where your organization lies in the seed to sale chain, you will have different levels of risk for various types of attacks. We briefly discussed ransomware attacks earlier. Ransoms can range widely depending on the size of the organization that is attacked, but the ransom alone isn’t the only risk consideration. Businesses must also factor in the cost of downtime (an average of 18 days in 2020) caused by the ransomware when evaluating the impact to business operations, as well as reputation. While small – medium businesses are absolutely at risk, especially given their relative lack of cybersecurity resources and sophistication, a recent trend involves “Big Game Hunting” where cybercriminals are targeting larger organizations with the potential for bigger paydays. Criminals understand that big business can rarely afford major delays, and may be more able and willing to pay, and pay big, for a return to normal operations.

Below are several examples of attacks which have either directly impacted the cannabis industry, or have valuable lessons the industry can learn from.

GrowDiaries: In October 2020 researcher Bob Diachenko discovered that 3.4 million records including passwords, posts, emails and IP addresses were exposed after two open-source application Kibana apps were left exposed online. As a platform for cannabis growers around the world (who are not all growing legally), this type of exposure puts the community at great risk, and can lower user confidence in the product, as well as putting them at personal risk of harm or legal ramifications. The applications being left open is a prime example of either a lack of good cybersecurity policies, or not following through on those policies.

Aurora Cannabis: On December 25^th, 2020 Canadian company Aurora Cannabis suffered a data breach when SharePoint and OneDrive were illegally accessed. Included in the data that was compromised was credit card information, government identification, home addresses and banking details. The access point coming through Microsoft cloud software is a prime example of some of the challenges facing businesses who have an increasingly remote workforce yet still need that workforce to access critical (and usually highly sensitive) information.

THSuite: A database owned by seed to sale Point-Of-Sale (POS) software provider THSuite was discovered by researchers in December 2019. The database contained PHI/PII for 30,000 people, with over 85,000 files being exposed. The information that was left accessible included scanned government IDs, personal contact information and medical ID numbers. Clearly this gets into HIPAA territory, which can result in fines of up to $50,000 for every exposed record.

Door Dash: As cannabis delivery apps become more prevalent, it’s good to reference how similar businesses in other industries have been targeted. In May of 2019 nearly 5 million user records were accessed by an unauthorized third party, exposing PII and partial payment card information.

Taking Action

On an organizational level, employee training, password hygiene and malware protection are some of the basic and most important steps that should be taken by all organizations. But, if “knowledge is power,” the best defense for any organization against cyber threats is a well-informed organization- including leadership down to the front-line employees. Excellent tools to assist in this are Information Sharing & Analysis Centers/Organizations (ISACs/ISAOs). ISACs were established under a presidential directive in 1998 to enable critical infrastructure owners and operators to share cyber threat information and best practices. The National Council of ISACs currently has over 20 member ISACs including Real Estate, Water, Automotive and Energy. ISAOs were created by a 2015 executive order to encourage cyber threat information sharing within private industry sectors that fall outside of those listed as “critical infrastructure”. Christy Coffey, vice president of operations at the Maritime and Port Security ISAO (MPS-ISAO) says information sharing enabled by the executive order is critical. “We need to accelerate private sector information sharing, and I believe that the ISAO is the vehicle.”

According to Michael Echols, CEO of the International Association of Certified ISAO’s (IACI) at the Kennedy Space Center, security experts have long understood that threat information sharing can allow for better situational awareness and help organizations better identify common threats and ways to address them. “On the other side, hackers in a very documented way are already teaming up and sharing information on new approaches and opportunities to bring more value (to their efforts).” The ongoing crisis surrounding the Microsoft Exchange Server Vulnerability demonstrates that different cybercriminal groups will work simultaneously to abuse system flaws. As of March 5^th it was reported that at least 30,000 organizations in the U.S. – and hundreds of thousands worldwide – have backdoors installed which makes them vulnerable to future attacks, including ransomware.

Below are several links to recent products that have been shared by various ISACs/ISAOs, which are provided as an example of the type of information that is commonly shared via these organizations.

If organizations are interested in learning more about enhancing their cybersecurity resiliency through private-sector led information sharing, please reach out to the newly formed Cannabis ISAO at ben@cannabisisao.org