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The Hopes of Illinois Social Equity Applicants

By Taneeshia Thomas
4 Comments

It is almost impossible to turn on the tv and not find a show or news conference or even live footage of an ongoing protest over “Black Lives Matter” or “Economic Equality.” The same situation exists with social media platforms, radio broadcast, etc. All sharing the common theme of social equity. While we all seek a solution, the state of Illinois is doing their part by awarding the coveted adult use cannabis business licenses for craft growing, infusion, transportation and dispensaries to social equity applicants by using a scoring system that favors the social equity applicant. We believe in this vision at TGC Group and our dream is to pay it forward.

Taneeshia Thomas and her husband, Christopher Lacy, who did 3.5 years in prison for growing cannabis in 2009.

We see the world, especially for minorities living in poverty, quite differently because of where we come from. “Black Lives Matter” is a movement to save the lives of all people and have human life viewed equally no matter the race of an individual. Economic equality is a totally different fight. Our communities that are impoverished need cash infusions. There needs to be financial infrastructure that recirculates the dollars from the poor communities and that comes from having business owners in the affected community to put their profits back into their community. There needs to be a system of lending that is not based on credit scores and criminal background checks because most people at the bottom will never qualify. An example would be my husband, Christopher Lacy: he went to prison for 3.5 years for growing cannabis back in 2009. He is not a violent man; he never even had a fight in prison. He spent much of his time in prison teaching inmates how to read, write and most importantly, he tried to teach them economics. He is educated about cannabis because he has been intimately involved with this plant and has been growing it for just about 20 years. Yet when he tried to apply for jobs in Illinois for growing cannabis, his invisible barrier starts with the resume. Just think about it, my husband, knows more about cannabis than most people in the industry today and could manage a facility with ease. No one could see his worth because of his background and work experience? This is the same situation with so many others in our poor communities. We know for a fact that there is hidden talent in the impoverished communities and prison system, and we intend to find it and empower these individuals to rebuild what was destroyed by the war on drugs. I speak for all the ghettos when I say this: give us access to the capital and we will get the rest done on our own. Conventional banks have their hands tied with this approach because they are regulated, but private funds have more flexibility. The excess capital needed to rebuild will not come from jobs, it only comes from ownership. Luckily, J.B. Pritzker and Toi Hutchinson are aware of this and hence created the social equity fund to help the social equity applicants fund their projects if and when they are awarded a license. We must find a way to give to the bottom so that the dollars can trickle up. Trickledown economics is kind of like that movie “Platform” on Netflix. There are never enough resources to get to the bottom because the people sending the resources down have no idea how to get them to the bottom floors of society. Trickle up economics can start at the very bottom rungs of society and still will reach to this highest level of the economic system because its built in such a way that it will inevitably get there.

State Sen. Toi Hutchinson (D-Park Forest), now The Illinois Cannabis Regulation Oversight Officer

These new licenses, literally pathways to financial freedom if operated correctly and efficiently, are revenue machines capable of changing our community. This change does not come from providing jobs (although jobs do help and will be available), but by providing capital to rebuild. These funds can provide scholarships, business loans, even small infrastructure projects can get accomplished via the tax revenue generated by the local governments. We have already made a written commitment to give a portion of net margins to the village. Capital in the right hands can make dreams come true. In theory, poverty can be solved. Poverty is not a prerequisite to the American way of life. That is why we were so proud to get zoning approval by our village. They see what we see. We can change neighborhoods like Beacon Hill. The dollars must recirculate in the community. Wherever you see high poverty rates you see high crime rates. This is not a coincidence. If you can lower the poverty rate you can lower the crime rates. This raises the quality of life for everyone. We see the state is on board, the county is on board, the Village of Park Forest is on board and the citizens of the community are on board. Now all we need is the license and capital to get the resurrection started.

Unlike other applicants, we were only capable of applying for one license for a craft grow facility. Some may see this as a disadvantage because only 40 licenses will be issued for this purpose. I wish we could have applied for more to increase our odds, but resources were scarce and applying was not cheap. We decided to stick with the efficient market theory and put all our eggs in the one basket that we know we can carry and be successful with. Without the help of Justice Grown, we would’ve never completed the application so shout out to them and anyone else that helped “true” social equity applicants apply.

The wheels are in motion so all we can do is wait to see who wins. I would hate to be on the team who must decide who wins these licenses. Everyone knows large corporations found ways to apply as social equity applicants because they only needed a certain number of “social equity” employees to qualify. But if you go ask the employees, not the owners, if they have been cured of their financial burdens and see if $15 has raised their quality of life to a middle-class level. The answer is emphatically NO. You cannot give out band-aids for heart attacks. If these large corporations are awarded the licenses, it will perpetuate the cycle of poverty. We do not personally have anything against the big companies. Like Toi Hutchinson said regarding the first round of dispensary and cultivation licenses: we needed the big company dollars to fund the next round of licenses. Well, the next round is here. Let’s do right by the communities that were truly affected by the war on drugs and on a more personal level and my reason for applying: let’s do right by my husband because he lost 3.5 years of his life and was excluded from participating with his family for doing what is now legal.

7 Factors to Consider When Choosing Cannabis Software

By Ella Alpina
1 Comment

These days, there are countless choices for cannabis operators when it comes to software. There are general tools like Trello, Airtable, Hubspot and Mailchimp. And then there is industry-specific software built just for cannabis operators.

The cannabis industry is fast-paced and highly regulated. So, there are certainly additional factors to consider in the search for software.

Because no two systems are exactly alike, it’s important to set up a decision-making framework in order to do a clean side by side comparison. Consider the following factors when evaluating software. Specifically, think about each one’s importance to the team and its ultimate goals.

1. Functionality

Functionality is the most important factor in the evaluation process. But, before the demos begin, take the time to identify the problems this new software should solve for the company.

Will it help you automate or optimize your processes or just offer basic features that won’t make a meaningful impact on the bottom line? (The whole point!)

2. Customer Support

For some, the level of customer support is an afterthought. The team that will use the software needs prompt, attentive support both during onboarding and after.

How does one evaluate the level of customer service a software company offers?

Questions like these will gather the info needed to make a decision:

  • How many support specialists are there vs how many total customers?
  • What’s the turnaround time for a support ticket?
  • Can I schedule one-on-one calls after the onboarding period?
  • Describe your onboarding process – how many sessions or hours do we get with your team?

Ideally, the software company takes support very seriously. Because if they don’t, here’s what happens: the team won’t use it or worse, costly mistakes will be made.

Another aspect seldom considered is the company’s industry expertise. Software vendors that stay up to date on changing regulations can provide much more value than those who don’t. Test their knowledge and see whether they would make a solid resource for you.

Software built for the cannabis industry is likely to provide this kind of support. Some industry-specific vendors, that provide cannabis cultivation software for instance, are able to answer their customers’ ongoing Metrc questions. They can become your right hand in solving compliance and, oftentimes, operational challenges.

3. Ease of Use

Always keep in mind who the end user will be. Is it someone who’s tech-driven or not at all?

The trick is to balance complexity with ease of use. If complexity is feared, there’s a risk for selecting software too simple. In this case, the value of automation and cost savings isn’t gained.

At the same time, it’s important to stay mindful of how complicated or difficult it will be for the team to adopt and use.

What does a typical day look like for employees and will the software be an approachable, useful tool for them?

4. Credibility

In a new, growing industry, there are many software vendors. How long have they been in business? Some have been around for years while others only months.

The last thing you want is for the software company to disappear off the face of the earth just when your team is on-boarded and trained. Also, beware of huge corporations that have turned their attention to the Green Rush and created a separate business unit just for cannabis. A lack of industry knowledge can be felt in the software application. If it’s being repurposed for our industry, chances are it won’t seamlessly work for our workflows.

Finally, ask what companies are currently using the software. Bonus points for recognizing any of them! It shows that established companies trust this vendor. In making the decision for which software to go with, this validation holds weight for many.  Before signing a contract and implementing the new software, make sure to read the fine print!

5. Cost vs Value

At the top of everyone’s mind is price. In these tumultuous times, we’re all worried about the bottom line.

That said, review a software company for the value it can bring to your cannabis business. How much labor time will the software save due to its automation and streamlining? Is it quantifiable?

Budgeting for a more expensive software might actually make sense if the value is there. Crunch the ROI, to the best of your abilities, to see the impact its set of features can make.

6. Enhancements

How quickly and how often does the software provider innovate its product? Ask the company for examples of how they’ve listened and addressed requests for changes or additions to their software.

Also ask what their road map looks like for the year. What new features and changes will they be making?

Without updates, software can quickly become outdated and irrelevant. A perfect solution today is not a perfect solution two years from now. Select a vendor who’s committed to regular improvements.

7. Exit Strategy

Before signing a contract and implementing the new software, make sure to read the fine print!

Some companies will try to lock in a multi-year contract. Beware of contracts that will charge for early termination if you change your mind down the road.

Get the fine print and ask for clear terms of the commitment. In a fast-paced industry like ours, priorities and needs change often. Contract lock-up is not optimal.

How to Streamline Labeling from Seed to Sale in The Time of COVID-19

By Travis Wayne
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As if the cannabis industry doesn’t regularly go through enough rapid change, with COVID-19, cultivators, processors and dispensers of all sizes are trying to do more with less. Lower operational headcount and unpredictable production volume, along with a rapidly-changing supply chain – make eliminating manual steps a necessity. Labels include barcodes or various barcode symbologies to help companies manage inventory, identify products and ultimately ensure that the right products get to the right customers at the right time. By eliminating manual steps in your labeling environment, you can address these issues through automation, scalability, efficiency and accuracy: benefits that will last through the pandemic and position you well for the recovery period.

Automation

Automation of many kinds is being implemented from seed to sale including barcode label printing automation. Integration of labeling software and seed to sale traceability systems including METRC, BioTrack, Leaf Data and others enables streamlined barcode label data population and high-volume label printing to counteract the decreasing operational headcount and eliminate manual touchpoints.

Print automation can be defined as “a centralized technology that replaces the manual process of triggering a print job within a labeling environment.” Look for a labeling software solution that allows you to:

    • Completely automate your label printing process
    • Print to a greater number of printers
    • Initiate printing directly from any business system
Integrating your label printing system with your seed to sale traceability system can minimize errors, increase print speeds and maximize your ROI.

By integrating your label printing system with your seed to sale traceability system, you can expect to minimize errors, increase print speeds and maximize your ROI. Your business system already holds the variable data such as product names, license number, batch or lot codes, allergens, net quantity, cannabis facts, warning statements and more. By systematically sending this data to the right label template at the right time, labeling becomes an efficient and cost-effective process.

Scalability

One of the most important considerations for cannabis cultivators, processors and dispensers is to invest in solutions that can grow and pivot quickly as the business changes. Whether you are responding to temporary requirements or changes, or your business needs to scale up quickly to respond to a spike in demands as a result of COVID-19 or to prepare for coming out of this pandemic. Whatever your needs are, think about short-term and long-term goals for sustainable business solutions. Scalability includes:

Printing to a greater number of printers

As needs and automation requirements change, and your printer inventory has the possibility of increasing, make sure your labeling design software can be licensed per simultaneous user, with cost-effective, multi-user networking licenses. That way, you don’t run the risk of paying for more printers as you grow or going over budget with each additional printer.

Print documents and labels from the same application

If you use the same data for your documents (like order receipts, bills of materials or packing lists) and labels, moving document printing into your label design software makes sense logistically. An advanced label creation and integration software enables label and document printing standardization by allowing multiple database records to be on one file. That means when new documents or labels come into your database, your software can seamlessly integrate.

Efficiency and accuracy

In a time where responding to the changing market needs to happen very quickly, where costs are being scrutinized and when errors cannot happen – you need to set up your labeling environment to have high levels of accuracy and control. With increased accuracy you will reduce waste, eliminate returns due to mislabeled product, efficiently track product and gain more efficiencies that will save you money and time.

Cutting manual steps out of the process

Removing manual steps in your printing process is a sure-fire way to gain efficiency and accuracy in your labeling environment. Look for labeling software features that allow you to add variable data from a device to your labels automatically, which limits the human interaction with your labels and in turn helps minimize human errors. Other efficiencies include:

On-demand color labeling streamlines efficiency and accuracy across a wide variety of labeling needs.
  • Increased print speed within your labeling environment
  • Reduced label waste
  • Collection of data from several devices such as:
    • Scanners
    • Scales
    • Keyboards

On-demand color labeling

On-demand labeling is specifically helpful in the cannabis labeling world because of all the regulations you must comply with. Each state has its own regulations, which means each label throughout the cannabis supply chain must be compliant with whichever state they are located. With on-demand labeling, cannabis companies print labels as needed and make changes as they go without the risk of wasting obsolete pre-printed label stock. This is beneficial as pre-printed labels often have large minimum order quantities. On-demand labeling also helps companies maintain better control of their own branding and graphics.

With on-demand labeling, label information can be populated by using pre-approved label templates in order to save you time with the variations of cannabis labels. This gives you the ability to print the specific label you need without having to waste your pre-printed label stock, or spend time switching out your pre-printed label stock in your printer.

Cannabis cultivators, processors and dispensers are faced with many obstacles during these challenging times due to COVID-19 – ensuring workers are safe, keeping operations at 100% capacity with potentially fewer people, creating contingency plans that may be changing daily. In an environment that is changing very quickly, consider how labeling solutions can evolve. You may also need to lean more on your partners than you ever have in the past.

CARES Act – Stimulus Package Won’t Aid the Cannabis Industry

By Steve Levine, Megan Herr
3 Comments

On Wednesday, March 25, the United States Senate approved an estimated $2-trillion stimulus package in response to the economic impact of the COVID-19 outbreak. The legislation, formally known as the “Coronavirus Aid, Relief, and Economic Security Act” (or the CARES Act), was approved by the Senate 96-0 following days of negotiations. One of the most highly anticipated provisions of the CARES Act, the “recovery rebates” for individuals, will provide a one-time cash payment up to $1,200 per qualifying individual ($2,400 in the case of eligible individuals filing a joint return) plus an additional $500 for qualifying children (§6428.2020(a)). The CARES Act, which remains subject to House approval, also prescribes an additional $500 billon in corporate aid, $100 billion to health-care providers, $150 billion to state and local governments and $349 billion in small business loans in an effort to provide continued employment and stabilize the economy. The legislation further provides billions of dollars in debt relief on existing loans.

CARES Act – Paycheck Protection Program 

Under the CARES Act, small businesses who participate in the “Paycheck Protection Program” can receive loans to cover payroll expenses, group health care benefits, employee salaries, interest on mortgage obligations, rent, and utilities (§1102(F)(i)). To qualify for these small business loans, businesses must employ 500 employees or less, including all full-time and part-time employees (§1102(D)). Eligible recipients must also submit the following as part of their loan application: (i) documentation verifying the number of full-time equivalent employees on payroll and applicable pay rates; (ii) documentation verifying payments on covered mortgage obligations, payments on covered lease obligations, and covered utility payments; and (iii) a certification that the documentation presented is true and the amounts requested will be used to retain employees and make necessary payments (§1106(e)). The CARES Act delegates authority to depository institutions, insured credit unions, institutions of the Farm Credit System and other lenders to provide loans under this program (§1109(b)). The Treasury Department will be tasked with establishing all interest rates, loan maturity dates, and all other necessary terms and conditions. Prior to issuing these loans, lenders will consider whether the business (i) was in operation as of February 15, 2020, (ii) had employees for whom the business paid salaries and payroll, or (iii) aid independent contractors as reported on a Form 1099-MISC (§1102(F)(ii)(II)).

What Does This Mean for Cannabis Businesses?

Due to the continued Schedule I status of cannabis (excluding hemp) under the Controlled Substances Act (CSA), cannabis businesses are not eligible to participate in the Paycheck Protection Program intended to keep “small businesses” afloat during the current economic crisis. Because federal law still prohibits banks from supporting marijuana businesses, financial institutions remain hesitant to service the industry, as anti-money laundering concerns and Bank Secrecy Act requirements (31 U.S.C. 5311 et seq.) are ever-present. As a result, even if cannabis businesses technically qualify to receive federal assistance under the Paycheck Protection Program, they will face an uphill battle in actually obtaining such loans.

Cannabis Businesses Are Also Precluded from “Disaster” Assistance

Moreover, the conflict between state and federal law continues to prevent cannabis business from receiving assistance from the U.S. Small Business Administration (SBA) under the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6201). In light of the COVID-19 outbreak, the SBA revised its “Disaster Loan” process to provide low-interest “Disaster Loans” to eligible small businesses. To qualify for these loans, a state must submit documented business losses for at least five businesses per county. The problem, however, is that the SBA still refuses to assist state-legal cannabis businesses in equal need of small business loans. Specifically, in a 2018 Policy Notice, the SBA reaffirmed that cannabis businesses – and even some non “plant-touching” firms who service the cannabis industry – cannot receive aid in the form of federally backed loans, as “financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity.” The 2018 Policy Notice clarified that the following business are ineligible to receive SBA loans:

(a) “Direct Marijuana Business” — a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law where the applicant business is or will be located.

 (b) “Indirect Marijuana Business” — a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana. Examples include businesses that provide testing services, or sell grow lights or hydroponic equipment, to one or more Direct Marijuana Businesses. In addition, businesses that sell smoking devices, pipes, bongs, inhalants, or other products that may be used in connection with marijuana are ineligible if the products are primarily intended or designed for such use or if the business markets the products for such use.

More recently, the SBA provided further clarification that cannabis businesses are not entitled to receive a cut of the federal dollars being appropriated for disaster relief because of the CSA’s continued prohibition of the sale and distribution of cannabis. Last week, the SBA reiterated that:

“With the exception of businesses that produce or sell hemp and hemp-derived products [federally legalized under the 2018 Farm Bill], marijuana related businesses are not eligible for SBA-funded services.” (@SBAPacificNW)

Consequently, because of the continued Schedule I status of cannabis under federal law, cannabis businesses will not be entitled to receive Disaster Loans from the SBA, regardless of whether they qualify as a struggling small business.

Resolving the Issue

While the federal government has been considering legislation, such as SAFE Banking and the STATES Act, to create a more rational federal cannabis policy, neither of these bills are likely to pass any time soon given the current COVID-19 pandemic.

At the end of the day, until Congress passes some form of federal cannabis legalization, these small businesses will remain plagued by the inability to receive financial assistance, as evinced by the Paycheck Protection Program.

Product Safety Hazards: Looking Beyond Food Safety in Cannabis

By Radojka Barycki
No Comments

I think that we need to start changing the terminology around the hazards associated with cannabis from food safety hazards to product safety hazards. These hazards have not only been associated with harmful effects for those that ingest cannabis infused products, but also for those that consume the cannabis products in other ways such as inhalation (vaping or smoking). So, when we refer to these hazards as food safety hazards, the immediate thought is edibles, which misleads cultivators, manufacturers and consumers to have a false sense of security around the safety of products that are consumed in other ways.

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

There are several product safety hazards that have been associated with cannabis. These hazards can become a public health problem if not controlled as they could harm the consumer, regardless of the method of consumption.

Let’s take a look at the different types of hazards associated cannabis:

Biological Hazards refer to those microorganisms that can cause illness to the consumer of a product that contain them. They are not visible to the naked eye and are very dangerous when their metabolic by-products (toxins) are ingested or their spores are inhaled. The symptoms for illnesses caused by these microorganisms will vary. Consumers may experience gastrointestinal discomfort (vomiting, diarrhea), headaches, fever and other symptoms. The ingestion of these pathogens, allergens or their by-products may lead to death, if the illness is not treated on time or if the consumer of the product is immunocompromised. In addition, the inhalation of mold spores when smoking cannabis products, can lead to lung disease and death. Some of the biological hazards associated with cannabis are: Salmonella sp., E. coli, Clostridium botulinum, Aspergillus sp. and Penicillium sp.

Chemical Hazards refer to those chemicals that can be present in the plant or finished product due to human applications (pesticides), operational processes (extraction solvents and cleaning chemicals), soil properties (heavy metals), environmental contamination (radiological chemicals) or as a result of occurring naturally (mycotoxins and allergens). Consuming high concentrations of cleaning chemicals in a product can lead to a wide range of symptoms from mild rash, burning sensation in the oral-respiratory system, gastrointestinal discomfort or death. In addition, long term exposure to chemicals such as pesticides, heavy metals, radiological contaminants and mycotoxins may lead to the development of cancers.

Physical Hazards refer to those foreign materials that may be present in the plant or finished product. Foreign materials such as rocks, plastics or metals can cause harm to the consumer by chipping teeth or laceration of the mouth membranes (lips, inner cheeks, tong, esophagus, etc.) In the worst-case scenario, physical hazards may lead to choking, which can cause death due to asphyxiation.

These hazards can be prevented, eliminated or reduced to an acceptable level when foundational programs (Good Agricultural/Cultivation Practices, Good Manufacturing Practices, Allergen Management Program, Pest Control, etc.) are combined with a Food [Product] Safety Plan. These lead to a Food [Product] Safety Management System that is designed to keep consumers safe, regardless of the method of consumption.

Canadian Cannabis 2.0: Going Beyond GPP

By Lindsay Glass
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One year after Canadian recreational cannabis’s historic date of October 17th, 2018, in comes Cannabis 2.0, which will see edibles containing cannabis and cannabis concentrates enter the legal recreational market. As of October 17th, 2019, there are seven classes of legal cannabis products in the marketplace, making Canada an innovative leader in this evolving industry.

The launch of cannabis edibles and concentrates into the legal market has also led to changes in the regulatory framework and the introduction of new best practices in terms of Good Production Practices (GPP). This should not come as a surprise, as these products are introducing the inclusion of cannabis and food products.

Since Oct 17th, 2019, we have seen a significant amendment to the Cannabis Regulations through the addition of sections 88.93 and 88.94, stating that holders of a license to process cannabis edibles or extracts must identify and analyze all potential hazards and have control measures in place to prevent, eliminate or reduce these hazards from occurring. Any license holder that conducts activities related to cannabis edibles, extracts or produces an ingredient used in an edible or extract must also prepare, retain, maintain and implement a preventive control plan (PCP). To indicate that cannabis edibles and extracts regulations resemble other regulated food commodities, would not be an understatement.

By having license holders establish food safety practices similar to the ones being used by federally regulated food commodities, it is allowing cannabis producers to implement a preventive approach by focusing on safety and reducing hazards in their operation.

According to the Cannabis Regulations a license holder’s PCP must include the following:

  • Identify all of the biological, chemical and physical hazards that could contaminate or could be at risk of contaminating any cannabis product or anything that could be used as an ingredient in producing a cannabis product. Once all of the hazards have been identified, you need to determine the likelihood of that hazard occurring
  • The measures to be taken to control each identified hazard. Each control measure must then describe the task involved, how the monitoring task is carried out, who will be performing the monitoring task and how often the monitoring task is carried out
  • A description of the critical control points, which are the steps in the process where a control measure is applied and is essential to eliminating a hazard. Next are the measures to be taken to monitor a critical control point
  • A description of each cannabis product produced or ingredient that will be used in a cannabis product, including extract contents, permitted & prohibited ingredients, exceptions, naturally occurring substances and uniform distribution
  • A description of corrective action procedures for every critical control point
  • A description of verification procedures

What else comes with the collaboration of these two commodities in a regulatory environment? The need for industry to adapt and move beyond the basic GPP and pharmaceutical requirements and start thinking in terms of preventative controls and food safety. By encompassing the GPP requirements, traceability, employee training and now a complete hazard analysis and preventive control plan, you have the makings of a full food safety plan. However, food safety plans can be comprehensive and difficult to manage by utilizing a manual system.

HACCPCompanies that are serious about the integration of cannabis edibles and extracts into their operations, will need to implement compliance and traceability technology that will facilitate an automated system. In return, you will streamline all monitoring processes throughout the production, packaging and storage stages of the system. This is crucial to a preventive control plan. An automated solution will also help with record keeping, document management and corrective actions, as license holders deal with failures in real time to avoid negative impacts on their products.

There are many compliance software platforms available in the industry and choosing the right one for your operation is a task in itself, as not all software platforms for the cannabis industry are created equally. Although many seed-to-sale platforms handle regulatory requirements and some document management, these platforms do not see cannabis as food products, and therefore, are leaving companies with a void in this aspect of their operation. When looking for a software platform that will encompass all of your regulatory needs, pay particular attention to systems that are designed for the food industry but have adapted to cannabis. These systems will be the most dynamic when it comes to implementing preventive control plans, handling in-depth traceability with recall plans and the ability to become completely digital.

For more information on how to automate your food safety plan for cannabis edibles and extracts, please contact Iron Apple QMS to learn about our online Cannabis QMS.

Cannabis Economics & Creating Efficiencies for Profit Margin

By Laura Breit
1 Comment

News of cannabis glut and falling wholesale prices has been dominating the airwaves of late, despite some recent reports showing that prices are remaining steady. As legalization continues to spread across the nation, the industry is poised to become commoditized, especially in those areas where it has been legal for a longer period of time. Whether specializing in retail cannabis products or industrial hemp, companies in the cannabis industry should be taking note of the sweeping economic implications of a maturing marketplace.

As is true in any industry, rapid growth and significant investments are sometimes followed by a slowdown (think dot-com, but less extreme). There are measures that companies can take in order to avoid negative outcomes, and a step in the right direction includes focusing on the bottom line and planning for future growth. Company leaders need to educate themselves on the competitive landscape and take the long view toward solutions for their operations.

Sounds easy enough, but how do we actually do this? One key step is to pay attention to overall expenses and create efficiencies wherever possible in order to remain competitive. This means that during the facility and systems design phase, all outcomes need to be taken into account. One of the most important – and cost conscious – things to consider is energy usage. Energy Star, the EPA-backed program for energy efficiency, says that facilities can “reduce their energy use by up to 30 percent through low or no-cost measures.” Generally, this means that efficiencies are built-in to the design with energy cost savings and sustainability in mind.

One of the largest energy outputs for a cannabis operation includes the facility’s HVAC and electrical systems. We have found that when clients step back to consider a range of alternatives, they have a more comprehensive base for this important decision. Considering outside factors, such as growth projections and specific goals, cannabis companies can make a more educated decision on the system that will provide the best economic outcome for their business. Often, those that plan ahead and look past the initial system cost, find longer term savings and lower energy usage over time.

A plant in flowering under an LED fixture

As an example, we had a client looking to build an indoor cannabis cultivation operation. They had originally chosen to build their facility with high pressure sodium lighting to save money up front. Because this method of lighting typically has a lower first cost, it appeals to many companies that are starting out and wary of their budget. However, this particular client was poised for growth and looking to make sustainable choices that would impact their bottom line and meet their goals for environmentally sound business practices. We were able to create a model for them to illustrate the long-term benefits of installing LED lighting. This type of lighting allows growers to keep room temperatures higher, without compromising plant health with issues like tip burn. In addition, LED lights are more efficient and reduce the cooling load. This means mechanical systems were able to be downsized reducing first costs, and these systems also consumed less energy, reducing operational costs. Despite a higher first cost of the LED lights, the company ended up saving enough money in the reduced mechanical equipment size, as well as in the reduction of energy use from the lights and the mechanical equipment. The first costs between an HPS system and an LED system were much more comparable than originally expected, and they were able to keep their operational costs to an absolute minimum. This type of scenario has proven true over and over when models are built to show longer-term cost benefits for electrical and HVAC systems, using analysis from an experienced team of designers and engineers.

While the greater economic outlook for the cannabis industry is in flux, a thoughtful approach can help operations avoid negative outcomes. As more and more companies continue to enter the space, investments roll in and supply rises, we will all watch to see if demand will match this growth. Taking note of incremental methods for impacting the bottom line, such as smart HVAC and electrical system selection, can mean the difference between success and failure (and profit margins!) in this turbulent landscape.

Soapbox

Increase Density in your Canopy

By Carl Silverberg
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One goal all growers seem to agree on is the need to increase density in their houses. How that gets done, well, there are a variety of ways and here’s one way a grower chose to do it:

With 45,000 square feet of greenhouse space, Nathan Fumia, a cannabis grower and consultant for a commercial operation in California, wasn’t pleased with what he was seeing. “If I put my hand inside the canopy and I can see sunlight on it, I’m losing money,” was how he described the situation. Unfortunately, the operators and staff of the greenhouse disagreed. They thought increasing density would rob the leaves of needed light.

He chose to test his theory by increasing the number of plants on one of his benches from 140 to 150 plants. To ensure the validity of the research, Nathan grew the same strain on Bench 1 as Bench 2, and to make sure all the metrics were equal, he even processed the crops separately. After weighing, Bench 2 (his research bench) showed an 8% higher yield than Bench 1.

“The post-harvest data from the weight, yield confirmed my decision to maximize density by increasing the total number of plants per bench,” says Fumia. “Whenever I saw red on the canopy heat map from LUNA, I knew there was room for improvement and I knew that I wasn’t making the money that I should have from those areas.”

His next challenge was where to place the extra ten plants? Did it make a difference or could he just shove 150 plants in a space that was originally planned for 140? Again, his greenhouse system was able to pinpoint the best sub-sections on the benches and Nathan was able to see exactly which plants were growing the fastest. That also gave him the ability to understand why certain quadrants of the bench were doing better than others.

“We were able to determine which quadrant on which bench was already at 100% density, and determine which quadrant wasn’t. Without that data, it would have been pure guesswork.”

He dialed down even further to find out which cultivars grew the best on a particular bench in the greenhouse. “Some cannabis cultivars need more light, some need less, some need warmer climates, and some need cooler climates,” Fumia noted. “Additionally, in order to increase the density of flowering points/buds, we began focusing on better pruning techniques in the vegetative phase, directly increasing branches for flowering.”

With optimization even more important now than it was 12-18 months ago, Nathan summed up the impact on his bottom line. “With a crop cycle averaging just over six a year, at that time we were averaging $600-$800 a pound depending on the strain. Some were even more. Ten extra plants per bench per cycle was a nice bounce for us.”

Obviously, this isn’t the only way to increase density. What’s your suggestion? Share your ideas with the rest of us by posting your comments below.

PerkinElmer & Emerald Scientific Collaborate

By Cannabis Industry Journal Staff
1 Comment

Last week, just before MJBizCon, PerkinElmer announced a collaboration with Emerald Scientific, allowing Emerald Scientific customers access to PerkinElmer’s portfolio of cannabis and hemp testing products and services. PerkinElmer is a leading instrument manufacturer and analytical method developer. Emerald Scientific is a distributor for scientific lab testing equipment and instrumentation.

Emerald Scientific now offers their customers PerkinElmer products, like their QSight® 420 Triple Quad system LC/MS, the Titan MPS™ Microwave Sample Preparation System, the Clarus® SQ 8 Gas Chromatograph/Mass Spectrometer (GC/MS) and the Flexar™ High-Performance Liquid Chromatography (HPLC) system. This partnership also allows Emerald Scientific customers to utilize the PerkinElmer analytical methods and standard operating procedures (SOPs) for cannabis and hemp testing. That includes SOPs for things like sample preparation, acquisition methods and consumable use. They’ll also be able to shop for lab products like PerkinElmer’s chromatography columns, vials and sample prep products.

According to Greg Sears, vice president and general manager, Food and Organic Mass Spectrometry at PerkinElmer, the cannabis testing market is exploding and this will help labs get their equipment and necessities all in the same place. “With the cannabis and hemp markets continuing to grow rapidly and regulations strengthening, labs increasingly need streamlined access to best-in-class, user-friendly testing solutions geared toward the unique requirements of the industry,” says Sears. ““This collaboration with Emerald Scientific brings together leading cannabis analysis offerings in one place to help labs start up and expand more efficiently.  In addition, we can build on the work we have done with Emerald around testing standardization which is important for the science of the industry.”

Kirsten Blake, Vice President of Emerald Scientific, says they are really excited about the partnership. “As regulations become more challenging, laboratory competition intensifies, and the science of the industry receives increasing focus, it is essential to align with organizations dedicated to improving both the quality and throughput of analytics,” says Blake. “After working with PerkinElmer to inform, educate, and advance the cannabis science industry around best practices, we see them as the industry leader for providing analytical instrumentation, methods and SOP’s. By adding their complementary solutions to our existing portfolio, we can now deliver complete packaged analytical solutions to the cannabis and hemp industries.”