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March 29, 2023

Product Liability in the Cannabis Industry: Insights From 2022 & Looking Forward

By Andrew Solow, David Kerschner, Alessandra Lopez

In 2022, product liability lawsuits in the cannabis/cannabidiol (CBD) industry continued to focus on levels of THC and the psychoactive ingredient in cannabis, while federal agencies continued issuing warning letters for CBD products (including CBD-infused food and dietary supplements) that made misleading medical claims. Against this backdrop of ongoing litigation and regulatory enforcement, 2022 showed that at the Federal level, there is more recognition that marijuana is becoming increasingly normalized. For example, President Biden pardoned federal offenses of simple marijuana possession and requested a reassessment of marijuana’s classification as a Schedule I drug under federal law. Additionally, Congress passed its first standalone piece of cannabis reform with the Medical Marijuana and Cannabidiol Research Expansion Act (MMCREA) which, among other things, will ease restrictions on cannabis research and allow for more clinical trials. And even though the Food and Drug Administration (FDA) declined to act on CBD products, the agency announced that it will work with Congress to create a new regulatory framework for CBD products (2023 FDA Announcement).

These events of the past year provide a glimpse into what the future may hold for cannabis and CBD companies when it comes to product liability risks. This article looks at the types of product liability actions that the cannabis and CBD industry faced in 2022 and may encounter in the future, and provides some basic guidance on how to best mitigate, and if necessary, defend these potentially costly litigations.

Focus on Cannabis and CBD Risks

A central part of any product liability lawsuit—regardless of whether brought under a design defect and/or adequate warning theory—is that a product caused or was a substantial contributing factor to a Plaintiff’s injury or illness. Thus, any potential safety concerns over cannabis/CBD could end up as the subject of litigation in the future. In the 2023 FDA Announcement, the FDA recognized that “the use of CBD raises various safety concerns, especially with long-term use,” including potential harm to the liver and negative interactions with certain medications. The agency also noted that questions still exist on how much CBD can be consumed, and for how long, before causing harm. Furthermore, on December 2, 2022, President Biden signed the MMCREA into law, which is intended to advance research on the potential risks and medical benefits of cannabis and cannabis products.¹ This additional funding will not only help researchers learn more about possible safety risks that may lead to future product liability claims, but will also allow for better exploration of the benefits of these products to possibly expand product indications and help reach new customers.

Given the FDA’s statements and the increased funding for new research, CBD and cannabis companies should ensure that they are properly monitoring both regulatory communications and new research regarding risks that may be associated with their products. As new information is released, companies should evaluate how their product labels and marketing messages should be altered. Announcements like this one by the FDA can be seen as providing industry participants with knowledge about certain risks, and how companies react could be analyzed, post hoc, in any litigation down the road.

2022 Product Liability Actions

Over the last year, misbranding/mislabeling issues presented some of the most prevalent litigation risks for industry participants.

An example of a warning letter the FDA sent to a CBD products company making health claims

For example, at the Federal level in 2022, the FDA issued thirty-three warning letters to CBD companies, a nearly 400% increase from 2021. These letters generally focused on CBD products that made medical claims. Some of these warning letters addressed misbranding, where the product labels provided inadequate directions for consumer use. In one letter, the FDA noted that because the CBD products were “offered for conditions that are not amendable to self-diagnosis and treatment by individuals who are not medical practitioners,” ranging from cancer to diabetes, labeling compliance was only possible if the product was an FDA-approved prescription drug with FDA-approved labeling. Other companies received warning letters in March of 2022 for making misleading representations that their CBD products were safe and/or effective to prevent or treat COVID-19. Many of these representations were made via companies’ websites and social media platforms. The warning letters—often triggers for product liability actions, as well as consumer protection/fraud actions—serve as a reminder that companies cannot make medical claims on non-FDA approved drug products and must otherwise present accurate information to consumers not only on product packaging, but any form of marketing or advertising, including company websites and social media platforms.

Turning to state-level regulatory actions, Oregon’s Liquor and Cannabis Commission fined a cannabis company $130,000 and suspended the company’s license for 23 days over an alleged label mix-up between its CBD and THC products. According to the state’s investigative report, a company employee allegedly confused two product buckets with similar identification numbers, one that contained THC and the other CBD, and accidentally switched the labels of the two products. In addition to the fine and license-suspension, the state agency also issued a mandatory recall on the CBD drops based on the alleged undisclosed levels of THC.

This same incident also spurred a string of civil lawsuits, resulting in several settlements by the company in 2022.² Numerous customers reported experiencing “paranoia,” “mind fog,” and feeling “extremely high,” with at least five people going to the emergency room with serious health issues due to use of the CBD drops. One lawsuit, which was publicly settled for $50,000 in January of 2022, alleged that the company failed to warn the plaintiff that the CBD drops contained THC or that the product may have been contaminated with foreign substances like THC, and that the company failed to exercise quality control standards that would have detected the THC.³ Nine other lawsuits made similar failure to warn allegations based on the same batch of CBD drops and were settled by January of 2022, although those settlements were not disclosed.⁴ In October of 2022, the company agreed to pay a settlement of $100,000 in a class action suit, which alleged that the company failed to disclose that the CBD product contained substantial amounts of THC.⁵ The class action focused on unlawful trade practices claims, including that the company falsely represented that the product had the characteristics, uses, and benefits of a CBD product that did not contain THC.⁶ Also in October 2022, the company settled a wrongful death lawsuit—alleging that the company failed to warn the plaintiff that the drops contained THC and had negligent quality control standards—stemming from the same CBD drops,⁷ where the plaintiff suffered stroke-like-symptoms, allegedly due to the tainted CBD product, and ultimately died.⁸

Other recent lawsuits have also focused on mislabeled cannabis products, alleging that companies failed to inform customers that products contained THC. For example, in Kentucky, a man who drove into a bus after using a CBD vape sued both the CBD manufacturer and retailer on December 14, 2022, claiming that he was not warned that the vape contained a substance that would make him intoxicated.⁹ According to the complaint, the store employees told the man that the vape was “all natural” but made no mention that the product contained THC.¹⁰ The man alleged that the vape actually contained Delta-8 THC and brought negligence, failure to warn, and state consumer protection law claims.¹¹

As noted above, in addition to traditional product liability actions, companies are likely to face increased consumer fraud and false advertising actions in the absence of personal injuries. Two class actions brought in December of 2020 against a hemp tea maker alleged that the company’s website and the product’s packaging fraudulently stated that a tea contained zero THC.¹² Plaintiffs claimed that they tested positive for THC after drinking the tea and that product testing similarly revealed that the tea contained some THC.¹³

Potency inflation marketing communications from a laboratory

Last year also saw a rise in cases focused on potency inflation, alleging that cannabis companies knowingly overstated the amount of THC in their products to charge higher prices.¹⁴ Again, while these actions focused on consumer fraud allegations rather than product liability claims, these cases underscore the importance of accurate labeling. Due to potency inflation concerns, states have started investigating licensed cannabis testing labs within their respective jurisdictions, resulting in product recalls and fines. Some states have also updated their regulations, requiring cannabis companies to test their products through two separate labs.

Finally, contamination and the existence of impurities and other byproducts has been a recent focus of several product liability lawsuits across the life sciences space, and this trend is something that cannabis and CBD companies should be aware of and take steps to mitigate.

For example, a Canadian cannabis producer reached a $2.31 million settlement over a class action brought in March of 2017 regarding pesticide-contaminated medical marijuana. The marijuana was recalled due to the presence of myclobutanil and bifenazate pesticides, neither of which were authorized for use on cannabis plants in Canada. The lead plaintiff experienced nausea and vomiting, allegedly from consuming the medical cannabis, and brought numerous claims on behalf of the class, including negligent design, development, testing, manufacturing, distribution, marketing, and sales.¹⁵ In the United States, California’s Department of Cannabis Control issued a mandatory recall on January 26, 2022 for a batch of cannabis flower that was contaminated with mold. On March 25, 2022, the New Mexico Cannabis Control Division recalled cannabis products sold by a local medical cannabis company because the product contained impermissibly high levels of mold. New Mexico’s Cannabis Control Division also required the company to immediately cease and desist operations at its production and manufacturing site.

A Look at the Future and What Companies Can do to Mitigate Product Liability Risks

The FDA’s 2023 announcement means that the industry will have to wait for Congressional action for the development of a regulatory scheme that can help standardize requirements and provide industry players additional defenses when facing product liability actions. Many of the proposed risk management tools in the FDA Announcement could help companies mitigate future litigation risks if implemented. These risk management tools may include “clear labels, prevention of contaminants, CBD content limits, and measures, such as minimum purchase age, to mitigate the risk of ingestion by children.” Although the FDA has had regulatory oversight over CBD and other hemp-derived products for nearly four years, the agency has not developed a regulatory framework for these products aside from issuing warning letters, leaving manufacturers and distributors without much guidance. The FDA has also left the states to fill the void, resulting in a patchwork of differing—and sometimes conflicting—state laws. Additional guidance and regulation on labeling at the federal level for cannabis and cannabis-derived products will make compliance a more straightforward proposition and may provide avenues for industry participants to explore preemption defenses in the face of future mislabeling claims.

In addition to following the changing regulatory landscape and understanding how regulatory changes can impact litigation defenses, cannabis and CBD companies can continue to take various steps to help mitigate future litigation risks.

Quality Control: Adequate testing procedures and effective quality control procedures can help avoid contamination issues and situations where products are mixed up during the manufacturing process. For example, the company whose license was suspended in Oregon due to the alleged mix up between CBD and THC subsequently implemented new ingredient tracking protocols, adopted a policy to retain samples from each batch of product, and now sends additional samples to an independent lab to ensure product compliance before anything is sold.

Proper documentation of testing and quality control procedures, as well as maintaining records of compliance checks, can also help companies put together a defense to state regulatory actions or lawsuits relating to contamination or manufacturing defects. Indeed, in February of 2022, an Arizona marijuana testing lab was fined $500,000 for various incomplete records and documentation as well as improperly calibrated machines for contamination testing, with an inspector also noting that one of the employees was trained to use a technique that produced inflated potency results.

Ongoing Safety & Regulatory Review: Keeping up to date with regulations and science will play a key role in making sure labels are accurate and defendable. Working directly with regulators and seeking guidance from regulators on labeling can help potential defendants present a clear and compelling labeling defense. Moreover, the 2023 FDA Announcement made clear that the agency will not pursue rulemaking on CBD’s potential use in foods and dietary substances. Thus, industry players should monitor agency announcements and engage with the FDA’s Cannabis Product Committee (CPC) and Congress to better understand the potential structure of this new regulatory pathway.

Stay on Top of the Science: A boost in cannabis research is on the horizon, as the Medical Marijuana and Cannabidiol Research Expansion Act (MMCREA) will advance research on the potential risks and benefits of cannabis products and promote the development of FDA-approved drugs derived from marijuana and CBD. On the litigation front, causation is an essential element in most causes of action, and plaintiffs will have to prove that the cannabis caused their injury. Thus, industry players should be aware of the current science, including potential side effects.

Litigation Monitoring: Finally, companies will also be well served by following court decisions involving CBD and cannabis products. For example, courts in 2022 were split over the legality of Delta-8 THC, a substance typically manufactured from hemp-derived CBD. The Ninth Circuit held in AK Futures v. Boyd Street Distro that Delta-8 THC found in e-cigarettes and vape products is legal under the 2018 Farm Act, at least in the intellectual property context.¹⁶ But in Kansas, a federal judge ruled that the 2018 Farm Act does not make selling hemp-derived products such as Delta-8 THC legal.¹⁷ In Texas, litigation initiated in 2021 is ongoing over the legality of Delta-8 THC.¹⁸ There, a hemp company sued the Texas Department of State Health Services for its classification of Delta-8 THC as a Schedule I drug, making the sale of this substance a felony offense. A temporary injunction was granted on November 8, 2021—temporarily lifting the ban on sales of Delta-8 THC products—but the plaintiff’s request for a permanent injunction remains pending.¹⁹ As these lawsuits show, the legality of different products may vary by jurisdiction, whether by regulation or a judicial decision.

References

Medical Marijuana and Cannabidiol Research Expansion Act, Pub. L. 117–215, 136 Stat. 2257 (2022).
Agbonkhese v. Curaleaf Inc., No. 3:21-cv-01675, (D. Or. Jan. 5, 2022).
Agbonkhese v. Curaleaf Inc., No. 3:21-cv-01675, ECF 1, 6 (D. Or.).
See Crawforth v. Curaleaf, Inc., No. 3:21-cv-1432 (D. Or. Sept. 29, 2021); Lopez v. Curaleaf, Inc., No. 3:21-cv-1465 (D. Or. Oct. 6, 2021);
Williamson v. Curaleaf, Inc., No. 3:22-cv-782, ECF 1, 8 (D. Or.).
Williamson v. Curaleaf, Inc., No. 3:22-cv-782 (D. Or. May 30, 2022).
Estate of Earl Jacobe v. Curaleaf, Inc., No. 3:22-cv-00001, 19 (D. Or. Oct. 18, 2022).
Estate of Earl Jacobe v. Curaleaf, Inc., No. 3:22-cv-00001 1 (D. Or. Jan. 1, 2022).
Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Complaint at ¶ 11, Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Complaint at ¶¶ 15-33, Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Williams v. Total Life Changes, LLC, No. 0:20-cv-02463 (D. Minn. Dec. 3, 2020); Santiago v. Total Life Changes LLC, No. 2:20-cv-18581 (D.N.J. Dec. 9, 2020).
Complaint at ¶¶ 54-59, Williams v. Total Life Changes, LLC, No. 0:20-cv-02463 (D. Minn. Dec. 3, 2020); Complaint at ¶¶ 21-25, Santiago v. Total Life Changes LLC, No. 2:20-cv-18581 (D.N.J. Dec. 9, 2020).
See Centeno v. Dreamfields Brands Inc., No. 22STCV33980 (Cal. Superior Ct. L.A. Cnty. Oct. 20, 2022); Shanti Gallard v. Ironworks Collective Inc., No. 22STCV38021 (Cal. Superior Ct. L.A. Cnty. Dec. 6, 2022).
Downton v. Organigram Holdings Inc., Hfx No. 460984 (Sup. Ct. Nova Scotia Mar. 3, 2017).
AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682 (9th Cir. 2022).
Dines v. Kelly, No. 2:22-cv-02248, 2022 WL 16762903 (D. Kan. Nov. 8, 2022).
Hometown Hero v. Tex. Dep’t of State Health Services, No. D-1-GN-21-006174 (Travis Cnty., Tex. Oct. 20, 2021).
Hometown Hero v. Tex. Dep’t of State Health Services, No. D-1-GN-21-006174 (Travis Cnty., Tex. Nov. 8, 2021).

March 21, 2023

The Science of Cultivating Cannabis: Tips for a Thriving Grow Operation

By Nathan Johnson, Ph.D.

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Creating a healthy cannabis growing environment based on the science behind growing top-notch, medical-grade cannabis is essential for producing consistent results, assuming you start with quality genetics. Before speaking about the environment, it is necessary to highlight that quality and consistency has to first start with quality plant material. In this article, we will explore six key factors that make for a healthy cannabis growing environment and how regular testing allows growers to achieve consistency and quality. Keep in mind, optimizing these factors to the cannabis strains and environment they are grown in is a must.

Lighting

Lighting is the most important factor in creating a good cannabis growing environment. Cannabis plants require specific types, wavelength and exposure times to grow and produce high-quality flower. The two main types of light that are essential for cannabis growth are blue and red spectrum light where blue is primarily dedicated to vegetative growing and red for flowering. The exposure time is necessary for non-autoflower cannabis to maintain a vegetative or a flowering plant.

To ensure that the plants are receiving the right type and amount of light, growers can use specialized grow lights that provide both blue and red spectrum light. They can also monitor the intensity and duration of light using light meters and timers. Regular testing of the light spectrum and intensity can help growers fine-tune their lighting setup for optimal plant growth and flower development.

Temperature

Temperature always needs to be considered when creating a strong, healthy cannabis growing environment. Cannabis plants prefer a warm, humid environment, but temperatures that are too high or too low can negatively affect plant growth and flower development. The ideal temperature range for cannabis growth is between 70-85°F (21-29°C) during the day and between 58-70°F (14-21°C) at night.

To maintain a consistent temperature in the growing environment, growers can use temperature-controlled grow rooms or HVAC systems. They can also monitor the temperature using digital thermometers and adjust the temperature as needed. Regular testing of the temperature can help growers identify and address any temperature fluctuations that may affect plant growth and flower development.

Humidity

Like other factors that require precision, humidity needs to be carefully dialed in when creating an optimal cannabis growing environment. Cannabis plants prefer a humid environment, but too much humidity can promote the growth of mold and mildew. On the other hand, low humidity can cause the plants to dry out and become stressed.

To maintain a consistent humidity level, growers can use humidifiers and dehumidifiers in the growing environment. They can also monitor the humidity level using a hygrometer and adjust the humidity as needed. Regular testing of the humidity level can help growers identify and address any issues that may affect plant growth and flower development.

Airflow and Ventilation

Proper ventilation helps regulate temperature and humidity and prevents the buildup of carbon dioxide, which can be harmful to the plants. It also helps prevent the growth of mold and mildew. To ensure proper airflow and ventilation, growers can use fans and air ducts in the growing environment. They can also use carbon filters to remove odors and other contaminants from the air. Regular testing of the air quality can help growers identify and address any issues that may affect plant growth and flower development.

Nutrients

Nutrients are a non-negotiable for cannabis growth and flower development. Cannabis plants require a balanced supply of macronutrients such as nitrogen, phosphorus and potassium, as well as micronutrients such as calcium, magnesium and iron.

To ensure that the plants receive the right amount of nutrients, growers can use nutrient-rich soils or hydroponic systems. They can also supplement with fertilizers and other nutrients. Regular testing of the nutrient levels in the soil or growing medium can help growers adjust their nutrient regimen for optimal plant growth and flower development.

Pest and Disease Management

Cannabis plants are susceptible to over 90+ pests and diseases, including insects, mold, mildew, viruses and viroids commonly infected through the environment by touch, air, water and nutrients. The most common are spider mites, aphids, powdery mildew, botrytis, fusarium and hop latent viroid. It is estimated by the United Nations that 20% to 40% of total global crop loss is due to improper pest and disease management. The cannabis growing environment is no different.

Damage from whiteflies, thrips and powdery mildew could be prevented with an appropriate IPM

While lighting, humidity, air flow and nutrients are key aspects for a cannabis growth environment, the most common overlooked aspect of growing is proper pest and disease management. Cannabis plants are susceptible to a variety of pests and diseases, which can have a significant impact on plant health and crop yields. To take optimizing a cannabis growing environment one step further, here are five essentials for developing an effective pest and disease management setup.

Prevention

Prevention is the first and most important step in pest and disease management. Growers should always take steps to prevent pests and diseases from entering or infesting the growing environment in the first place. This can be done by quarantining new plants or clones, using clean equipment, sterilizing the growing area, and monitoring plants for signs of pests and diseases through both visual inspection as well as testing.

Some diseases such as those caused by viruses and viroids, require molecular based testing to identify. Growers should quarantine and test any new plants or clones before introducing them to the growing area. This can help prevent the spread of pests and diseases from infected plants to healthy ones. Growers can also use biological controls, such as beneficial insects, to help prevent pests from infesting the plants. These insects can help control pest populations by preying on them or interfering with their reproduction.

Early Detection

Early detection is key to preventing an entire crop from being infected and scrapped. Growers need to regularly inspect their plants for signs of pests and diseases, including yellowing leaves, discoloration, spots and unusual growth patterns. Early detection can help prevent the spread of pests and diseases and limit the damage they cause, not to mention saving a business’s bottom line!

Integrated Pest Management

Integrated Pest Management (IPM) is an approach to pest and disease management that involves a combination of preventative measures, biological controls and chemical treatments. IPM aims to reduce the use of chemical pesticides, which can be harmful to the environment and human health.

IPM involves regular monitoring of plants for signs of pests and diseases, using biological controls to prevent and control infestations, and only using chemical treatments as a last resort. Chemical treatments should be used sparingly and only when necessary, and growers should follow all safety precautions when using them.

Sanitation

Taking the necessary precautions to ensure all equipment used throughout a cultivation is properly sterilized will save growers from countless headaches. Growers should keep the growing area clean and free of debris, which can provide a breeding ground for pests and diseases. They should also regularly sterilize equipment and growing containers to prevent the spread of pathogens.

Record Keeping

Record keeping is essential for effective pest and disease management in the growing environment. Keep detailed records of all pest and disease issues, including the type of pest or disease, the severity of the infestation, and the treatments used. Cultivators, you will thank yourselves later! This will help identify recurring issues and develop effective pest and disease management strategies.

While there are key aspects of creating a healthy cannabis growing environment, the most common overlooked aspect of growing is on proper pest and disease management, which involves prevention, early detection, integrated pest management, sanitation, quarantine, and record keeping. By taking these steps, growers can help ensure the health and vitality of their plants, produce high-quality cannabis that consumers want and preserve their business’s bottom lines.

February 21, 2023

2023 Cannabis Labs Virtual Conference: February Program

By Cannabis Industry Journal Staff

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2023 Cannabis Labs Virtual Conference: February Program

Click here to watch the recording

Agenda

When & Why You Should use Molecular-Based vs. Cultural-Based ID Methods

Josh Smith, MS, President & CSO, Telic Labs; Acting Lab Director, ABKO Labs

When it comes to microbial diagnostics, there are many different methods to choose from. How do you know which ones to choose for each application? If you know how and why the different methods do what do it makes it much easier to look for and identify your target microbe of interest. Additionally learn why not all methods are created equal, and not all methods can be used for every test or target.

Hop Latent Viroid – The Pandemic of the Grow Room: Fact, Fiction & Management

Dr. Tassa Saldi, Chief Science Officer, TUMI Genomics

In this talk Dr. Saldi will provide a laymen overview of viroid biology including how viroids differ from more familiar pathogens such as viruses, bacteria and fungus. Dr. Saldi will discuss the various HLVd testing options and what a cultivator should look for when choosing a testing lab. Finally, recommendations regarding sample collection, ideal HLVd testing schedules and how to mitigate losses from HLVd when it is found in a facility will be reviewed.

Cannabis Laboratory Accreditation – Challenges & Solutions

Christopher Fox-Strauss, Accreditation Manager, ANAB

Most cannabis laboratories are familiar with accreditation as required by state regulations, but many labs still have questions about how to conform to the requirements. During this session we will focus on some of the recurring challenges and questions we are seeing in ISO 17025-accredited cannabis laboratories. We will also highlight some supplemental resources and programs to elevate laboratory performance and compliance.

Click here to watch the recording

February 21, 2023

Cannabis Quality Conference Dates, Location Announced

By Cannabis Industry Journal Staff

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Innovative Publishing Company, Inc., the publisher of Cannabis Industry Journal has announced the return of the Cannabis Quality Conference (CQC), taking place October 16-18, 2023 at the Hilton in Parsippany, New Jersey. Presented by Cannabis Industry Journal, the CQC is a business-to-business conference and expo where cannabis industry leaders and stakeholders meet to build the future of the cannabis marketplace.

“New Jersey and the surrounding cannabis markets welcomed the CQC with open arms in 2022 and we’re excited to come back to North Jersey and expand on what we have built,” says Aaron Biros, editor of Cannabis Industry Journal and director of the Cannabis Quality Conference. “In addition to the sessions on cannabis quality, lab testing and infused products manufacturing, we will host sessions on the quality of business, strategic operational considerations and more.” The CQC is seeking abstracts for presentations and posters to be considered for the event. Click here to see the call for abstracts.

In addition to the two full days of cannabis education and programming, pre-conference workshops designed to address safety and compliance in cannabis edibles will take place on October 16. Also new to this year’s event is a strategic co-location with the Food Safety Consortium (FSC) running at the same time and in the same space as the CQC, allowing for food safety and cannabis professionals to meet and share best practices.

“We are bringing two great conferences together under one roof,” says Rick Biros, president of Innovative Publishing and director of the Food Safety Consortium. “The Food Safety Consortium will continue its strategic meeting of the minds format, but we are complementing that with the practical, boots-on-the-ground Food Safety Hazards track. Co-location with the CQC allows attendees to take advantage of additional education on product testing and quality assurance in the burgeoning cannabis market, as well as preconference workshops delving into infused product safety and compliance that will appeal to both food safety and cannabis professionals.”

Click here to stay up to date on lodging, early bird pricing, keynote announcements and more. All of these events will take place October 16-18, 2023 at the Hilton in Parsippany, New Jersey. For sponsorship and exhibit inquiries, contact RJ Palermo, Director of Sales, and Chelsea Patterson, Account Executive. Stay tuned for more information and when registration opens.

About Cannabis Industry Journal

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference

The Cannabis Quality Conference is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

February 8, 2023

ASTM Develops Two New Cannabis Standards

By Cannabis Industry Journal Staff

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According to a press release emailed this week, ASTM International’s subcommittee focused on cannabis, D37, is in the midst of developing two new standards surrounding cannabis safety and education.

One standard, WK84667, is designed to “help document engineering controls for air filtration and person protective equipment (PPE) in cannabis processing facilities,” says ASTM member Trevor Morones. The premise of this standard appears to be employee safety; with proper, standardized air filtration and PPE, the standard will help companies keep their workers safe and prevent inhalation of potentially harmful particles, like cannabis dust, stalk fiber, florescence and crystalized dust. “We are working to develop a robust community of cannabis professionals who can share their experiences in workplace and personnel safety,” says Morones.

The other proposed standard, WK84589, seeks to develop a uniform metric for “determining the intoxication level of a cannabinoid.” Initially focusing on delta9-THC, the standard will help raise awareness and promote public health and safety by informing consumers how intoxicating a cannabis product is for the average adult.

ASTM Pamela Epstein says this standard will hopefully develop a form of measurement akin to ABV in alcoholic drinks, allowing consumers to see how potent a certain cannabis product is. “Beyond providing consumers with a complete assessment of a product’s total intoxicating/impairing effects, the proposed standard may provide regulators with a methodology to meaningfully account for public health and safety,” says Epstein. “The specification can unify consumer awareness and can be used across all product types and jurisdictions.”

The ASTM D37 committee is working on a number of other standards related to these and they invite anyone interested to share their feedback.

February 7, 2023

From Seed to Storefront: Why Cannabis Retailers Should Know How to Cultivate

By Itali Heide

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There isn’t one simple formula that holds the secrets of success in cannabis branding, but there are some things that might give you an advantage. The possibilities of cannabis are endless and understanding the cultivation process can be incredibly advantageous to brands who want to become involved every step of the way and build a trustworthy brand from seed to storefront.

Some of the most successful brands in the cannabis industry have built their name on quality and the best way to ensure that is to know exactly where your bud is coming from.

The Advantages of Understanding the Cultivation Side of Cannabis

Understanding the cultivation side of the cannabis industry can be quite valuable for many reasons. If you’re in commercial cannabis, getting up close and personal with the cultivation process can lend cultivation expertise to your brand name and help connect you with the process from the very start so you can offer your customers a guarantee of high-quality products with a hands-on approach. Being close to the process allows you to develop the highest standards when it comes to better yields, stronger plants and more potent cannabis. In short, it gives you complete control of your brand and its reputation.

Radiant Huoang, CEO of Delta Munchies, shares how a deeper knowledge of the brand’s cultivation has affected and given Delta Munchies an advantage. “The years of experience on the cultivating side of cannabis, gave me an appreciation for the craftsmanship and the hard work that is essential to creating a great product,” says Huong. “In a crowded market, it’s impossible to build a lasting brand without a product of undoubtable quality, and that starts with the flower we use, thanks to our cultivators.”

Essentially, when you have control of the cultivation side of the business, you are able to craft strains, edibles and other products that are unique to your company. It gives you control over the quality of your product and gives you a consistent edge over the competition.

Being close to the process allows you to develop the highest standards when it comes to better yields, stronger plants and more potent cannabis.

“This level of craftsmanship bled over [to the retail side] when creating our brand and what we choose to offer to our consumers,” says Hoang. “Always trying to craft and improve the best products possible that deliver a similar effect to your traditional cannabis is our goal.”

Anyone buying a cannabis product wants to know that what they’re consuming is cultivated with passion and a careful eye for the details. As a retailer, cultivating their own crop allows Delta Munchies to ensure the integrity of the final product and deliver a true plant-centered experience to their clients.

Beyond retail, growing is an excellent place to start in the cannabis industry. It sets up a solid foundation for you to understand cannabis and allows you to bring the highest quality products to the market. Especially since a rise in the use of cannabis calls for more growers and cultivation-centered businesses.

Understanding the Headwinds of Cannabis Cultivation and Cannabis Retail

Not everything in the cannabis cultivation and retail world is perfect, as with any other industry. Making it can be challenging, especially as local regulations fluctuate while nationwide legalization remains in limbo.

The first challenge is legalization: as of now, hemp is federally legal and hemp-derived products containing less than 0.3% delta 9 THC are technically legal in all states. It can be difficult to keep up with new laws and constant changes. Right now, cannabis businesses can still struggle with access to banking services and insurance.

It’s important to follow general federal regulations for your product, such as the nutrition facts section

Growers are also faced with the bureaucracy and costs of regulations, testing conditions, label requirements and other additional investments that come with constant change. Still, change is a part of any budding industry, so it’s important to keep this in mind and remain adaptable.

Some states place a limit on the number of licenses they’re allowed to issue to cannabis businesses and growers, which can make it challenging for new players to join and results in the market being dominated by the top dogs, but this isn’t unlike any other industry. Making sure you can commit to a business of this type is another thing to consider deeply before endeavoring into the world of cannabis.

What About the Future of Cannabis Cultivation and Retail?

The future of cultivation and retail is bright, although not without speedbumps along the way. The good: we can expect more consistency and structure after regulation becomes the norm, advances in technology are being used to make exciting, creative products and growing interest and preferences make for a promising future of growth.

On the other hand, regulation could go a bit too far. When asked about the future of the industry Huong believes brands need to be given the freedom to innovate. “We think that cannabis cultivation will always be a beautiful art, but with so much saturation and over-regulation it makes it extremely difficult to operate,” says Hoang. This is an important factor to consider, although regulation can have its advantages, states need to consider whether their regulations are truly aimed at improving quality and safety, or just acting as barriers to entry.

Technology will surely play a role in the future of cannabis cultivation and retail. Advances in the agricultural sector grow exponentially, with systems that are developed and optimized to grow hemp and cannabis with a variety of top-of-the-line technologies that help ensure high-quality raw materials.

The future of the cannabis industry will be shaped by many things, but nothing can influence the market as much as its consumers. Customer preference, brand trustworthiness and effectiveness, and legality will ultimately lead the way for cannabis trends.

soslticefarms_feb — Getting involved with the cultivation process can be important for overall quality.

One way to do this is to be in complete control of your product, from seed to storefront. Being able to cultivate the product you sell allows you to pivot more easily when the market demands it. Rather than seeking out new suppliers, a nimble cannabis brand will be set up to shift its cultivation operations as consumers switch from high THC strains to CBD or any other novel cannabinoid to hit the market.

Final Thoughts

Getting involved with the cultivation process can be important for overall quality. If you own a cannabis brand, having a close relationship with your grower or growing your own cannabis can lead to a product that’s higher in quality, as you can achieve a deeper understanding of the unique effects that you want your product to have and the quality necessary to achieve them. At the end of the day, what customers care for most is the product inside the packaging that you’ve designed to catch their eye. This is what will keep them coming back. It’s that quality that will imprint the packaging in their minds on their next trip to the dispensary.

Knowing more about cannabis from the ground up can be beneficial when it comes to innovation opportunities. Being able to apply your own knowledge or that of your trusted growers to a new product can help you grow your brand in a way that’s uniquely yours.

Hoang says harmony between the grower and the brand is important: “Seeing something you grew yourself come to life bleeds into the brand.” Becoming involved in the cultivation process of cannabis allows you to gain perspective that can be beneficial for your brand.

February 2, 2023

FDA Punts on CBD Rules

By Cannabis Industry Journal Staff

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On December 20, 2018, Former President Trump signed the Farm Bill into law, which removed hemp-derived cannabidiol (CBD) from the Controlled Substances Act, stripped the DEA’s authority from hemp and gave states the ability to regulate hemp markets of their own, with approval from the USDA.

When that Farm Bill became law, it paved the way for state-sanctioned hemp and CBD product markets and it seemed as if the floodgates were opening for legal CBD, but some caveats and gray areas remained. The same day the Farm Bill became law, the FDA released a statement asserting their authority, threatening enforcement actions for things like unsubstantiated drug marketing claims.

Over the past four years, the FDA has dealt with dozens of enforcement actions involving CBD products. The agency said they were “working quickly to further clarify our regulatory approach,” but that seems categorically false given how long it took them to tell the public they don’t know what to do. Finally, after four years and change of comment periods, industry frustration, warning letters and state-sanctioned gray markets, the FDA announced they need help from Congress.

Janet Woodcock, M.D., principal deputy commissioner at the FDA

Last week, the FDA published a statement from Janet Woodcock, M.D., principal deputy commissioner, that says, to paraphrase, they’ve given up. Industry stakeholders have long agreed that the food and dietary supplements regulatory framework is adequate for CBD products, citing minimal public health risk and a pre-existing framework that CBD could fit into easily. “The FDA’s existing foods and dietary supplement authorities provide only limited tools for managing many of the risks associated with CBD products,” says Dr. Woodcock. “Under the law, any substance, including CBD, must meet specific safety standards to be lawfully marketed as a dietary supplement or food additive.”

The reasoning behind the agency’s unwillingness to regulate it as a dietary supplement is because of safety concerns, like potential liver damage, possible drug interactions and reproductive harm. Scientific data available to the FDA shows that they cannot say that CBD is generally recognized as safe (GRAS). “Today we are announcing that after careful review, the FDA has concluded that a new regulatory pathway for CBD is needed that balances individuals’ desire for access to CBD products with the regulatory oversight needed to manage risks,” says Dr. Woodcock. “The agency is prepared to work with Congress on this matter.”

January 30, 2023

3 Benefits of Conducting Genetic Tests on Your Plants

By Angel Fernandez

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Many growers may wonder why it’s important to get their plants genetically tested, but the truth is that genetic testing can make growing a lot easier. Genetic analysis in plants can give a wide range of results that can help scientists solve everyday problems in plant cultivation, such as detecting diseases and identifying important traits in plant species.

Currently, three of the most important benefits that genetic testing can give growers are the ability to detect diseases, identify the gender of their plants and control the quality of their crops.

Pathogen detection

Pathogen infections can be difficult to detect and by the time symptoms are obvious, it may be too late and the rest of the crop is already contaminated. This is why DNA tests are a valuable tool for the early detection of diseases in plants. Even though plants reproduce through cloning, it’s crucial to make sure the mother plant is healthy before proceeding, as 100% of the genetic material will be transferred to the clone, including any diseases the mother plant may have, such as a virus.

There are a few ways to detect pathogens in plants, including detection and symptomatology, serological techniques for viruses and microbiological techniques for fungi and bacteria. However, another effective method is detection tests using genetic material, also known as molecular methods. These tests involve screening the plant’s genetic material for any alterations, such as the presence of the pathogen’s genetic material. These tests are particularly useful as they provide accurate results when at least part of the pathogen’s genome sequence is known. This is important as many of these genomes have yet to be fully studied and there may be new unknown variants.

Tobacco Mosaic Virus symptoms can include tip curling, blotching of leaf mosaic patterning, and stunting

The reliability and effectiveness of genetic and molecular tests are due to the use of DNA as the starting material for pathogen detection. DNA is a stable molecule that can withstand adverse conditions, such as high temperatures or low humidity. Additionally, this technique can still be effective even when the samples used are very damaged or necrotic. Due to these qualities, genetic testing is considered one of the best methods for pathogen detection.

In summary, genetic testing is the most effective technique for pathogen detection as it is highly specific, requires a small sample and provides accurate results in a short period of time.

Plant gender detection

In the case of the cannabis plant, it is naturally diploid and dioecious, meaning that it has separate male and female reproductive structures, and each one contributes a chromosome during reproduction. However, there may be mutations that result in hermaphrodite plants, which have both male and female reproductive structures.

Growers who propagate their crops through seeds must wait several weeks to identify the sex of their plants, as their dioecious nature makes it difficult to recognize the plant’s sex in the early stages of growth. This can be time-consuming and resource-intensive. However, thanks to genetic testing, it is possible to determine the sex of a plant long before it reaches the flowering stage.

The sex organs on a Cannabis plant identified.

The determination of the gender of a dioecious plant is influenced by a sex chromosome system. Male plants have an XY sex chromosome system, known as heterogametic, while female plants have the XX sex chromosome system, known as homogametic.

To identify the sex of a plant through genetic studies, DNA or RNA-based molecular markers are used with a tissue sample. These markers typically look for the male trait “Y” in the plant, as the trait “X” is present in both male and female plants. In this way, the presence of the Y chromosome can be used to confirm the plant is male, and its absence can be used to confirm that it is female.

Crop quality control

The same species can often present one or more varieties, and although they may have physical features that distinguish them, it is not always possible to identify them with the naked eye. Beyond physical characteristics, genetic traits can have considerable differences.

Molecular identification is a very accurate tool for identifying varieties

Different varieties of cannabis have been widely cultivated and crossbred, making it possible for plants to have very similar physical traits, making it difficult to identify the variety being cultivated. This is why molecular identification is a very accurate tool for identifying varieties in cases where there is uncertainty about their identity.

Additionally, some plants can produce lower or higher amounts of cannabinoids due to their genetic nature or small mutations that occurred during growth. This is how there are plants with the advantage of having genes that code for high production of THC or CBD. These outstanding traits can be detected through the selection of characteristics using analysis of molecular markers that indicate the presence of these genes in the plant, or that detect the genes responsible for synthesizing these substances and determine their respective quality.

These procedures are performed using a tissue sample from the plant and using DNA as a starting material for testing, which provides information on the genetic traits of interest and validates their function.

January 24, 2023

Soapbox

Attracting Investment: How Cannabis Companies Can Best Position Themselves

By Joe Madigan

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Remember those heady days of the Green Rush a decade ago, when markets were small and it seemed everyone had a chance? Now it’s more of a mad rush to get some green in the form of investment capital.

The majority of states in the country now have some type of legal cannabis market. Businesses in those states operate in spite of regulations that are restrictive, confusing and make it very difficult to make a profit. Meanwhile, heavy tax burdens, differences in enforcement techniques and varying degrees of oversight are other factors that influence bottom lines in the cannabis industry.

Saturated markets are giving businesses trouble when it comes to their bottom line

Inflation also continues to be a prominent force across world markets. Sales of cannabis products have fallen as consumers adjust to inflation and post-COVID supply chain issues that are causing higher prices on necessary staples like food and gas. An oversaturation of cannabis flower is becoming a perennial problem in some states and another factor causing industry distress.

When cash flow slows to a trickle, companies of all sizes seek out investment funding to keep their momentum. But catching the eye of an investor group requires more than just sticking your hand out.

What Attracts Potential Investors?

A company is best positioned to attract those interested in cannabis investment opportunities when it appears serious about its growth plans. That means being well positioned with a solid upper-management foundation and so much the better if there’s an advisory board in place too. A company built with a diverse group of talent—ideally from consumer packaged goods companies—presents an attractive opportunity for investors.

Talent from the CPG space can help attract investors

Top-quality and industry savvy finance employees who maintain sound financial books and establish a solid banking arrangement are also important. If the company’s financial scenario is robust enough to provide confidence in case of an audit and the books are in good shape with auditable METRC logs investors will be far more inclined to put money on the line.

A cannabis company with full inclusion (or seed to sale) is often a smart choice for investment. The vertical integration of cultivation, processing/manufacturing and retail allows them to sell their own products while also stocking other brands’ products on the floors of their dispensaries. If their products are respected and the brand is held in high regard, even better. Similarly, a cultivation enterprise that can grow crops for multiple brands can also be very attractive. The ability to pivot and adjust production to reflect the market and consumer demands indicates a strong business foundation.

Despite the current headwinds and saturated markets, other chances for growth exist. When a local municipality finally decides to “opt-in” to adult-use cannabis sales, there’s opportunity for both established brands and startups. It’s a matter of being ready for those opportunities and having a plan to leap in whenever new licenses become available.

What Businesses Will Struggle to Attract Investment?

Culture is key here. Poor employee relations and weak cohesion across departments are indicative of deeper problems. Do people actually want to work for the business? Do they feel supported by human resources? A company with underdeveloped or non-existent workers’ compensation policies and a management team that is not respected by its employees is not going to look good in the eyes of potential investors.

Non-diversified cannabis businesses are also at a major disadvantage when seeking investors. Cultivators of one type of product or service are locked into a single operation geared to do one thing. Any changes to market whims or problems with the supply chain can wreak havoc on a business based around a single product.

Stick to Business Basics

The cannabis industry is unique, but the basics of running a business well enough for success still apply. Strictly adhering to the traditional methods that any successful organization follows is extra important in cannabis. Businesses that are active in their community and make a real effort to be involved will be held in higher regard by investors. They want to see cannabis businesses that are not just setting up shop to make a quick buck, but are dedicated to bettering their community. That indicates a relationship with customers that involves mutual respect and promotes business longevity and financial stability.

January 18, 2023

Data: The Key to Success in Today’s Cannabis Market

By Rick Maturo

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As the cannabis industry continues to evolve, recent market challenges have created an environment that is more difficult for industry leaders to navigate. To find success in today’s marketplace, company leaders need to adopt a robust, data-driven approach to combat the influx of rising brands, emerging markets and pricing challenges, among other obstacles. By leveraging data, cannabis brands and companies can better make well-informed decisions to refine their business strategies and drive growth.

The Evolution of the U.S. Cannabis Market

The cannabis industry maintains its ranking as one of the fastest growing industries in the U.S. as the legalization of adult-use and medical cannabis continues to expand. When California first legalized medical cannabis in the 1990s, a lack of regulations in the market created space for new cultivation businesses and dispensaries to form. These early cannabis players leveraged capital to expand and grow, developing a business model that has been replicated many times over the years in markets like Washington, Michigan and Arizona.

“Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.”Some of the strongest cannabis brands today were formed during this time. Today, the U.S. cannabis landscape looks vastly different, and strict government regulations and stagnant federal policies make it more difficult to find success. Brands that are surviving and thriving in today’s landscape have invested heavily in data operations.

Investing in Data Operations

While data wasn’t essential for cannabis operations in the past, today, it can mean the difference between success and failure for a company. Cultivators, processors and dispensaries that analyze data have a broader perspective that allows them to pivot quickly and stay relevant.

Data-driven decision making is critical for cannabis companies looking to meet and exceed revenue goals at every level. For cultivators, data can help create an optimal environment for growth. Manufacturers can utilize data to improve environmental conditions, reduce waste, cost and more. By leveraging data, retailers can benefit significantly from learning precisely which products should have a place on their shelves.

Business leaders in the emerging cannabis industry benefit from embracing the infrastructure and business practices that are already standard practice in other industries. Many top-performing cannabis companies today are structured similarly to other CPG organizations, and those who employ these tried-and-true strategies will be primed to win. One successful approach that many cannabis companies are adopting is a three-tiered system for manufacturing and selling products similar to the one employed in the beverage alcohol industry, providing economic, regulatory and commercial benefits for all.

Unlocking Efficiency with Pricing

Pricing challenges have plagued the cannabis industry for the past 18 months. While an inflationary environment has caused the prices of products in many sectors to rise, cannabis has been largely unaffected. Yet, because cannabis is not yet legal at a federal level, markets have become segmented, and prices are highly dependent upon demand factors in each state. This unique dynamic, combined with increased competition, has forced many producers to accept lower profit margins rather than pass on costs to consumers.

“Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need.”These challenging market conditions have made it critical for companies to drive more efficient operations. By implementing data-driven technology, cannabis leaders can operate more precisely to minimize costs and produce high-quality products. Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.

Leveraging Data for Growth and Innovation

For retailers, running a successful cannabis operation with sustained growth is nearly impossible without leveraging in-depth industry data and analytics. Consumer data offers key insights to guide in-store activations, including promotions and discounting, to boost sales for retailers. By utilizing data, including data from loyalty programs, retailers can optimize their product mix based on what consumers are actually buying, and improve scaling and segmenting. From analyzing a store’s traffic to monitoring product, brand and category performance, data is indispensable when it comes to elevating business performance.

Data is also essential for innovation planning, pipeline building and analyzing location-specific variances. Seasonal trends influencing cannabis products often depend on various geographic and socioeconomic variables. While in the past large retail chains often ran the same shelf assortments at each location, utilizing data allows retailers to account for variances that make a significant impact based on location and consumer set.

While some cannabis industry leaders are accustomed to making business decisions based on their gut instinct, data enables them to quantify predictive levels of success and plan for what sales will look like once products hit shelves. Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need. As the cannabis industry continues to expand quickly, an increasing demand for products will encourage innovation that will be powered by data-driven intelligence for years to come.