According to a press release, the ANSI National Accreditation Board (ANAB) accredited Pure Labs, LLC to ISO/IEC 17025. The Phoenix, Arizona-based laboratory achieved the accreditation after demonstrating the ability to meet general requirements for the competence of testing labs.
The press release says that Pure Labs is one of the first cannabis testing labs in Arizona to achieve the ISO/IEC 17025 accreditation. According to R. Douglas Leonard, vice president of ANAB, they have seen a rise in demand for labs across the country. “Demand for competent testing laboratories is growing as many states have legalized medical and adult-use recreational marijuana,” says Leonard. “Testing by a laboratory accredited to ISO/IEC 17025 is necessary to demonstrate that cannabis products are safe for consumption and free from harmful levels of contaminants.”
Barbara Dow, CEO of Pure Labs, LLC, believes their scope of accreditation is the best in their state. “The ANSI National Accreditation Board welcomed us and our scope of accreditation, which is the most comprehensive scope in Arizona,” says Dow. “I am proud of our team and our success as one of the first ISO/IEC 17025 accredited laboratories in our state. This level of excellence was made possible by ANAB, our accreditation partner. It is an exciting time for our laboratory in this fast-paced industry.”
Europe continues to be the new frontier of medical and wellness developments in the cannabis industry, with various sources predicting that Europe will become the world’s largest legal cannabis market over the next 5 years. Key related statistics, include:
A population of over 740 million (over double US and Canada combined)
Total cannabis market estimated to be worth up to €123 billion by 2028 (€58bn medical cannabis (47%), €65bn recreational cannabis (53%))
Over €500 million has been invested in European cannabis businesses (including significant expenditure in research and development, manufacturing and distribution)
To reiterate this belief, this month, hundreds of industry experts and delegates will be attending Cannabis Europa in Madrid, to discuss the expansion of cannabis across Europe and the challenges facing the industry across the member states of the EU and the UK.
Global mainstream leans to European strength
Since late 2018, major global operators have made substantial moves into the cannabis sector. Anheuser-Busch InBev, the world’s largest beer company and maker of Budweiser, entered into a partnership to research beverages infused with two types of cannabis. Constellation, owner of Corona beer, announced a commitment for $4 billion investment in Canadian cannabis company Canopy Growth. BlackRock Inc, through five actively managed BlackRock funds, has invested into Curaleaf Holdings Inc, a dispensary operator, for a not too insignificant investment sum of $11 million (as at March 2019). Such international investments prove that cannabis has moved from the fringes and into the mainstream.
When considering the impact of mainstream cannabis, it should be recognised that major European countries have approved or are planning on implementing, legalisation of medicinal cannabis. The UK, Germany, Italy and the Netherlands already have legal systems in place for medicinal cannabis and France and Spain are currently reviewing key legislative reform to align themselves with international practices. At present the German market is the third largest cannabis market (in terms of size) behind the US and Canada.
Member states of the EU, pre-Brexit
In addition to medicinal cannabis, several key European countries have systems in place, or are developing systems, or considering the reform of existing systems, to approve cannabis with THC content at a recreational level. The Netherlands already has a system and Luxembourg’s health minister in August 2019 announced the intention to legalise cannabis for Luxembourg residents. The Luxembourg government is lobbying EU member states to follow suit.
Whilst the EU has a labyrinth of laws in relation to edible CBD (as a novel food) which make the regulatory landscape complex, there has been an explosion of CBD products for vaping and cosmetics. Of course, with each of these products being subject to different local laws (some aligned between EU members states) in relation to vaping and cosmetic related regulations. The Brightfield Group has predicted a 400% increase in the European CBD market (including vaping liquid) from $318m in 2018 to $1.7 billion by 2023. There is also an expansion into applications for CBD with animals with many US manufacturers of CBD-infused pet food.
The European Parliament’s health committee has been calling for properly funded scientific research and there are motions to establish policies to seek to incentivise member states to advance the studies of medical cannabis, with a priority on scientific research and clinical studies – the first step necessary to drafting legislation, designed to better support the industry.
Where does the UK sit within cannabis?
Medicinal cannabis famously saw a legalisation, of sorts, by the then Secretary of State, Sajid Javid, who provided the authorisations for prescriptions for the high profile cases of Billy Caldwell and Alfie Dingley. Subsequently, on 1 November 2018, this was codified into law by an amendment to Schedule 2 of the 2001 Misuse of Drugs Regulations. This allows clinicians to prescribe cannabis as an unlicensed medicine.
There have, of course, been some high profile licensed medicines. The UK company, GW Pharmaceuticals, is the largest exporter of legal medical cannabis in the world, cultivating medical cannabis for production of cannabis-based medicines (e.g. Epidiolex & Sativex). Epidiolex (manufactured by subsidiary Greenwich Biosciences) became the first cannabis-derived medicine approved for use in the US for treatment of seizures caused by Lennox-Gastaut and Dravet syndromes (both severe forms of epilepsy).
When considering the level of research development and investment in the medicinal field, it is no surprise that the UK is the world’s largest producer and exporter of medical cannabis. Research published by the International Narcotics Control Board indicates that the UK produces over 100,000kg a year of medicinal cannabis.
Previous guidance from the National Institute for Health and Care Excellence (NICE) indicated that further research is required to demonstrate the benefit of medicinal cannabis, citing its cost versus evidenced benefit. However, there is now renewed confidence in the UK following NICE’s approval of two cannabis-based medicines produced by GW Pharmaceuticals, Epidiolex (cannabidiol) oral solution and Sativex (nabiximols), for routine reimbursement through the NHS.
Following the re-categorisation of medicinal cannabis in November 2018, a number of clinics have been established where specialised clinicians can start the process of prescribing cannabis based medicinal products (CBMPs). Whilst this route is not fast, and challenges are well documented as to the satisfaction of prescriptions made in the UK, there is momentum behind the development of this as a means for providing genuine and established medical care. A significant step in October 2019, was the CQC registration of one such cannabis clinic, Sapphire Medical Clinics Limited.
In November 2019, a project backed by the Royal College of Psychiatrists was announced with the aim to be the largest trial on the drug’s use in Europe with a target of 20,000 UK patients.
The UK medicinal cannabis sector is establishing a research-based approach to expand usage in the UK and across Europe.
How North America compares to Europe
Canada
Canada, as a first mover within the cannabis sector, has a multitude of large companies which are well-capitalised and have substantial international footprints. The Canadian exchanges have large listed companies looking to Europe with the intention of acquiring or investing into European operations. As of the date of writing, the 10 largest cannabis companies in Canada have an aggregate market cap of over $23.5 billion (and all registered cannabis companies in Canada having an aggregate market cap of over $46.5 billion).
Listed companies have had a tough time over the last 6-12 months with a slowdown in the market as a natural re-balancing occurs – part of which is due to rapid expansion and heavy investment into cultivation by all the major participants in the market. Over the next 6 -12 months we can expect to see management changes (some of which will be voluntary and some of which will be imposed by institutional pressure) to introduce different skill sets at board and senior management level to facilitate the oversight and leadership necessary for large pharmaceutical companies. Many operations have expanded into highly regulated products and complex supply chains whilst still operating with fundamentally the same team that established the operations with entrepreneurial efforts but, perhaps, a lack of experience in these sectors. The recent announcements by Aurora Cannabis and Tilray demonstrate that these restructurings and costs reductions have already commenced. However, with increased experience at board level and an improvement of profitability focused on sustainable business practices, should come new opportunities on a global scale for these North American operations.
The US
The US market, because of the complexity of state and federal laws not being fully aligned, is closer to its infancy than the Canadian market. This is not too dissimilar to the European market. That said, there are a number of well-funded and quite large US enterprises. A limited number of these, such as Tilray, are looking to expand into Europe.
Many of the companies in the US have, and continue to, expand quickly so we can expect to see a number of mergers and acquisitions. We are likely to witness Canadian and US entities merging with one another with the potential for acquisitions for operations within Europe. It is unlikely that the North American companies will risk their capital through organic growth so would be expected to be identifying “turnkey” solutions.
One of the major challenges facing US companies is the complexity of supply and distribution. This is largely a result of the complexities for state and federal laws interacting with one another as well as international importation and exportation with US states.
How you can invest within the UK and Europe
Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.The UK remains, despite the events of Brexit, a major financial hub for Europe. The London market has seen the growth of several investment and operation cannabis companies. This includes private companies such as; EMMAC Life Sciences Limited and the operations formerly trading as European Cannabis Holdings (now demerged into several new entities including NOBL and LYPHE) as well as publicly listed companies; including Sativa Group PLC (the first publically listed cannabis specific company in the UK) and World High Life Plc, both operating on the NEX Exchange.
The Medical Cannabis and Wellness Ucits ETF (CBDX), Europe’s first medical cannabis ETF fund, domiciled in Ireland, and which has been passported for sale in the UK and Italy, has also caused a renewed stir within the market with a further platform for listed investment.
As the regulatory framework evolves further there is an anticipation that more medicinal cannabis and CBD related enterprises should have the opportunity to list on public exchanges, whether in the UK or in European countries.
Conclusion
Despite a period of slow down following the natural rebalancing of the fast-growing North American markets for the cannabis sector, there is renewed confidence in the expansion of the industry. Developments in the fields of research and development are anticipated to add further weight to the lobbying of government and regulatory bodies across Europe.
There is an increased push for a public dialogue and consultation in relation to medicinal and recreational cannabis in the UK, backed by several mainstream media platforms. This is likely to be shaped in some parts by national debates in Luxembourg and other European countries as they consider their own domestic laws.
With European parliaments across the EU (including the UK) hopefully having time freed up to discuss other political matters now that Brexit is progressing, the next 18 months should prove an exciting time within the European cannabis sector.
Germany, for all of the other developments going on right now (globally) is still chugging forward, in integrating medical cannabis. It is slow going – but certainly going.
In terms of overall numbers, there is certainly an interesting story to tell. The import of medical cannabis grade flowers also more than doubled last year over 2018.
Hooray.
But does the “average” German patient have easier access even with more product in the market?
Answer: There are certainly more Germans with more cannabis prescriptions. See the increase in imports and the numbers from the statutory health insurers.
But even though these are clearly positive signs, it has not necessarily gotten much easier so far. That said, it is about to get quite a bit cheaper.
The Mainstreaming of the German and EU Cannabis Market
National pride aside, the German government is in fact the entity which got this whole ball of wax rolling here, and it is they who still determine the pace of regulated change. The cultivation of medical cannabis is now fully underway in the country, with Demecan still in the most interesting position. Aurora has just gotten another certification and is back on the ground in pharmacies.
But many issues remain.
Photo: Ian McWilliams, Flickr
On the ground, pharmacists cannot get enough product on a reliable basis. Patients are still caught in the never-ending merry-go-round of chasing down willing doctors, battling insurance companies for reimbursement and trying to have a good relationship with their local pharmacist. If, of course, they can afford both the drug itself, along with its outlying costs and frustrations to access, and their health insurance company plays ball.
Even then, chances are, the most seriously ill patients are still relying on “other” sources. A reference wholesale price (of €2.30 a gram set by the German government last year) is likely to stabilize the market if not pricing. For everyone – not just those on public healthcare.
The plant is becoming commoditized, even if slower than most people in the industry long to see.
On top of that, while certification is currently gaining steam in the industry, especially in Europe, there are many problems and issues remaining – on everything from processing of the flower to registration of products made from it. And in both the medical and recreational market.
Overall, in other words, markers are all good. But the process is going to be (very) slow if steady for the next several years.
Don’t Expect Continual Explosive Growth
Dronabinol is still at least a third of the public healthcare market. The majority of patients who receive the drug still fit the same overall treatment profile (chronic pain). And doctors are still highly reluctant to consider it as a more standard practice.
But the most important conversation, by far, is still basic legalization and regulation beyond that. That too will change. Not to mention the recreational discussion now absolutely on the table. Four years of a medical market only continue to open doors, not close them. And elsewhere, across the continent, reform is generating new producers from not only southern Europe but just about everywhere else on the globe where cannabis is becoming legit.
For the next year, however, as all of these issues continue to be debated, and at both a national and increasingly local level, don’t expect “explosive” anything.
Those who have established themselves are dug in. It is going to be trench warfare from now on out, barring a major surprise, for the next few years.
What Is Likely To Change The Equation?
CBD battles are absolutely strategic manoeuvres through the intricacies of this regulatory shift (legalization of the plant). This alone, particularly for the next few years, is likely to also move the conversation forward – and not just on the medical front.
It is also patently obvious that governments (starting with Italy) are beginning to again consider the topic of limited home grow and recreational reform.
But the most important conversation, by far, is still basic legalization and regulation beyond that. And until that happens, nothing will be “normal” about a market that is clearly being allowed to grow, in a market which is being carefully tended and managed.
“Explosive” in other words, is far from the agenda of anyone in authority who is making the decisions. And that includes regulated market growth and numbers for the next 48 months at least.
Information economics has existed for decades and drives much of how products, including cannabis, are marketed and purchased. One of the essential frameworks that guides information economics are the search, experience, and credence properties of a product (Patterson, 2017). Understanding these different product attributes is key to setting up a sustaining cannabis product, corporation, and industry.
Search
The search attribute of a product is largely what we see prior to the purchase of a product. Images, claims, and packaging may all contribute to the search attribute of a product. You’ve got a good-looking, flower, pre-roll or edible, and it shows well on your insta page. Information is seemingly symmetrical between agency and consumer, what you see is what you get. In the developing cannabis industry, firms are investing a tremendous amount of resources into search attributes.
Experience
What is the effect of the product? There are two aspects of the experience attribute in information economics. Testimonials may be also considered experience attributes, as they give a user knowledge of how a product tastes, how long it takes to kick in, how long it lasts and descriptions of how others perceived the product’s deliverables. Despite testimonial power, experience is largely personal and occurs only after the product is consumed. Information is seemingly symmetrical; you get the experience that the agency planned and you anticipated. Advances in genetics, homogeneous production methods and potency testing demonstrate that the cannabis industry is investing in experience attributes.
A level playing field where transparency is at the forefront of all transactions will help solidify trust and drive sustainable growth. So, your product looks good, tastes good, and has very positive reviews. Customers can’t get enough; they are voting with their wallets for your product. But there is a third part of information economics you may be missing.
Credence
Credence attributes rely on information asymmetry. Think of used cars as a textbook example: sellers of used cars rely on asymmetry to motivate purchases. Highway miles, adult driven, oil changes every 3,000 miles, etc. are claims that can only be verified by the seller, the buyer has no way of knowing if these are true or not. Credence attributes can’t be verified by the seller due to lack of knowledge or expertise (Ford et al, 1988). The same goes for a consumable good like cannabis, only the grower or manufacturer knows what occurred in the “back of the house.” Product safety, therefore, is a credence attribute of cannabis products.
Investing in credence attributes in a young market may seem cost prohibitive. Many in the cannabis industry simply want to follow whatever the state they operate in dictates as the minimum allowable. In hemp we see states that require QR codes on each product that link to a COA, but many do not. Does the cost to produce the COA and QR code make a product more eye-catching or enhance the experiences? No, but those producing it may pay a hefty price if and when the product makes someone sick.
If a firm relies on fragmented, disparate regulatory bodies to dictate their investments in product safety, they will eventually face credence issues. Is smokable flower grown in Texas safer than that grown in Maine? We don’t have data to support either regulation’s effectiveness, so a firm or industry must dictate what the standard is and stick to it.
We need only look at the leafy green industry to see an example of a product that did not break any regulatory guidelines yet continued to sell a good with very negative credence attributes. How long were folks getting sick from leafy greens prior to them identifying the source? No one knows and that is what makes credence attributes so hard to pin down and develop an ROI formula for. Inputs that yield not-sick people aren’t known until someone gets sick. For leafy greens, they had an advantage – years of studies showing that they were good for you. Cannabis, unfortunately, doesn’t have that leg to stand on and faces an uphill battle gaining public trust.
As soccer moms (and dads) across the nation start to work cannabis into their play date wine sessions, the industry must ensure that they are investing in all avenues of information economics. A level playing field where transparency is at the forefront of all transactions will help solidify trust and drive sustainable growth.
References
Patterson, M. (2017). The economics of information. In Antitrust Law in the New Economy (pp. 39-60). Cambridge, Massachusetts; London, England: Harvard University Press. Retrieved February 7, 2020, from www.jstor.org/stable/j.ctvc2rkm6.6
Ford, G., Smith, D., and Swasy, J. (1988), An Empirical Test of the Search, Experience and Credence Attributes Framework, in NA – Advances in Consumer Research Volume 15, eds. Micheal J. Houston, Provo, UT : Association for Consumer Research, Pages: 239-244.
Here’s some news that might sound familiar: recently, Governor Andrew Cuomo insisted that cannabis would soon be legal in New York. Perhaps this seems like déjà vu given that he made the same pronouncement back in 2018, insisting that cannabis would be legal in the Empire State by 2020.
Might this simply be wishful thinking on Governor Cuomo’s part? Perhaps, but if cannabis is, in fact, legalized—whether this year or anytime down the road—it’d be a boon to cannabis entrepreneurs looking to expand into New York and capitalize on the vast resources of its citizenry. Still, by virtue of the inherent challenges and question marks related to legal cannabis in the state, these would-be cannabis titans should keep their excitement in check.
Questions Abound
When any jurisdiction considers legalizing cannabis, uncertainty follows. In the case of New York, the questions are many: Will the recreational use of cannabis be legal or just further decriminalized (as was done last year)? And if recreational cannabis is given the green light, what sort of distribution regulations will be in place; where will it be permitted to be sold; will the four-dispensary limit remain in effect; and what’ll the parameters regarding growing in state be? To properly formulate New York business plans with eyes wide open, players in the cannabis biz must be given answers to these and other related queries that are crystal clear.
Does Cannabis Equal Revenue?
NY Governor Andrew Cuomo Image: Pat Arnow, Flickr
No doubt about it, Governor Cuomo was beyond enthusiastic when he publicly promised for a second time that legalization of cannabis is coming later this year, citing the $300M in potential tax revenue the state can glean once that mission is accomplished. Yet this guarantee and income forecast might be best taken with a grain of salt in light of New York’s history when it comes to legal vices. Remember, the state managed to run off track betting into bankruptcy, partially as a result of oppressive taxation and the OTB being staffed with political cronies. No wonder former Mayor Rudy Giuliani called OTB “the only bookie joint to ever go broke.”
Consequently, New Yorkers and cannabis entrepreneurs must adopt a bit of skepticism when it comes to the “pot of gold” at the end of the “legalized cannabis rainbow.” This is especially true given the downturn of the cannabis business in Canada, as reported by the New York Times. According to the news outlet, the cannabis slump up north can be attributed to several factors, including an extremely slow licensing process; limits placed on the number of licenses issued to distributors; marketing restrictions (e.g., how, where, and to whom cannabis companies can market themselves); and infrastructure challenges. Is it realistic to think things would be any different in New York?
MedMen: A Case Study
To avoid the current fate of the legal cannabis business in Canada, adopting a streamlined and open-minded regulatory framework that translates to a robust and healthy cannabis economy within the state will be essential. However, New York’s track record so far—at least as it pertains to medical cannabis—isn’t very promising. The case of MedMen on Long Island is illustrative.
Colorado’s economic success story—both in terms of growth and tax dollars—is a model to emulate.Late in 2018, MedMen, the best-known cannabis retailer in the U.S., attempted to change the location of its Nassau county medical cannabis dispensary from Lake Success to Manhasset, New York. This effort was met with outrage and vocal resistance from civic leaders, who objected to the proposed move, despite the fact that it was within the very same county. The stated reason: MedMen’s sought-after location was in close proximity to an elementary school and within the town’s main commercial district. But certainly, the stigma that attaches to the cannabis world (legal or not) was also squarely on the decision-makers’ collective radar screen, which overshadowed the potential tax revenue that MedMen would’ve brought to Manhasset. No surprise, in light of the perceived obstacles and push back, MedMen scrapped its relocation plans.
The moral of that story is this: players in the cannabis industry must effectively make their cases to New York public officials, and regulators, in turn, must make informed decisions that best serve communities throughout the state and the growth of the cannabis sector, more generally. Colorado’s economic success story—both in terms of growth and tax dollars—is a model to emulate.
Common Sense Regulation Is Key
In his quest to legalize cannabis this year, Governor Cuomo will continue to be confronted with his share of naysayers, like those from the County Health Officials of New York who persist in expressing serious concern about cannabis reform. In the face of such opposition, he must make clear that like cannabis plants, cannabis businesses need room to grow—and the benefit of reasonable, common sense regulation—in order to foster a healthy crop of thriving cannabis-related companies . . . and the tax revenue that comes along with them.
If you were at Davos this year, you heard alot about CBD. The cannabinoid will again be a headliner in business analysis and bottom line reports this year. But as the market matures, globally, what is the real temperature of the industry? And how fast will regional hiccups resolve?
Regulatory Issues Are In The Room
From the US state markets to the EU, hemp is coming into its own, even though almost everyone also refers to it as CBD (cannabidiol).
In the United States, things are even more murky because of a lack of federal reform and the individual rules and regs of existing state markets. To an extent, the market is being “federalized” on the testing front (see ISO for example) and GMP (at the federal pharmaceutical level), producers are beginning to be able to get certified on a global scale. However, the vast majority of the U.S. market is not anywhere close to the regulatory muster now required of even the most-humble commercial hemp farmer anywhere in the EU.
In Europe, the entire cannabis discussion is already far more defined, and as a result, very much likely to set the rulebook globally, especially as so many people want to import here. And this is going to be a bugbear for the next two years. The rules on EU Bio for starters, are still in flux. And where this ties into GMP downstream, those who brave such waters are in for choppy seas for the time being.
Tie this into Novel Food, and this is an area right now that should only be charted by the most experienced navigators, and not just using the stars.
The Battle Is On – Both On The High Seas And The High Streets
For all the desire to bring “whole plant” into the room, (in other words recreational cannabis and medical cannabis with the THC still attached), CBD fever at least has spread in Europe faster than any pending flu epidemic from China.
There are positives and negatives that come with this discussion. Namely, the ever pounding need to commercialize the legal industry and remove all Drug War stigma and barriers from the discussion.
CBD-only legalization is also a powerful answer to those who claim that if CBD is legit, then the police will not chance busting people, no matter how much THC is or is not in the offending substance in question.
These are also the same people frequently who also have a stake in some level of the industry as it legalizes. And this is also where some of the fiercest battles for regulatory control and definition have also begun to happen.
The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.
Where they have come to a head (see Italy), it appears that governments are indeed reconsidering the whole “insurance” if not “home grow” discussion. Not to mention, as a result, recreational after that. The conversation in Italy, of all places, right now, is a good indication of this trend. It is a conservative country in every way, yet it is the first to not only cancel a government controlled monopoly license, but also the largest country in Europe to again tinker with limited home grow of cannabis plants.
Ironically this is also the place where the most dedicated “CBD revolutionaries” have also hit. In places like the UK right now, the lack of appetite for EU regulatory control generally (see Brexit) has resonated, particularly with a pro cannabis crowd sick and tired of more delay on a topic whose day in the sun has finally come. If not more government wobbles on discussion on the medical side (see the recent NHS decision to ignore cannabinoids and chronic pain).
In other places like Europe however, and this certainly showed up at Davos, CBD is a hardy foot soldier if not cannaguerilla from the hills that is beginning to chalk up discussions if not yet wide-ranging sovereign victories.
This is absolutely clear to see in places like the African market (and Lesotho is about to become a hot ticket globally if not within the African continent). Indeed, the first seeds were sown several years ago).
Yes, it is ridiculous that CBD is being banned. And it is also obvious that governments are unwilling to be bankrupted over medical cannabis of any kind or THC concentration, and know they must also seek other ways to deal with the issue.
CBD, in other words, is a kind of Che Guevara that is going to take down a few of the established orders in this revolution that is now global. And for that very reason, taking on a character if not place at the table all of its own.
EDGARTOWN, MA, Jan. 23, 2020 – Innovative Publishing Co., the publisher of Cannabis Industry Journal and organizer of the Cannabis Quality Conference & Expo is announcing the launch of the Cannabis Labs Conference. The event will address science, technology, regulatory compliance and quality management as they relate to the cannabis testing market. It will take place on June 2–3 at U.S. Pharmacopeia in Rockville, MD.
A few of the noteworthy topics that will be discussed at the conference include hemp testing under new federal guidelines, ISO 17025:2017 accreditation, potency and cannabinoid quantification, regulatory compliance and state regulations, microbiology and sample preparation best practices, among other topic areas.
The event is co-located with the Food Labs Conference, which will focus on regulatory, compliance and risk management issues that companies face in the area of testing and food laboratory management. More information about this event is available on Food Safety Tech. Some of the critical topics include a discussion of FDA’s proposed FSMA rule, Laboratory Accreditation Program for Food Testing; considerations in laboratory design; pathogen testing and detection; food fraud; advances in testing and lab technology; allergen testing, control and management; validation and proficiency testing; and much more.
“By presenting two industry conferences under one roof, we can provide attendees with technology, regulatory compliance and best practices that cannabis and food might share but also focused topics that are unique to cannabis or food laboratory industry needs,” said Rick Biros, president of Innovative Publishing Co., Inc. and director of the Food Labs Conference.
Cannabis legalization has taken the United States by storm, with 33 states approved for medicinal cannabis use — 11 of which are also approved for recreational use for adults aged 21 and over. With new patients and consumers entering the market every day, it’s more important than ever for cannabis cultivators to establish more effective methods for mold and fungal prevention in their crops and to ensure consumer confidence in their brands.
Today, many cultivators address the risk of mold and fungus growth by testing crops for contaminants at the end stage of production. While this helps to catch some infected product before it reaches the market, this method is largely ineffective for mold and fungal prevention during the cultivation process. In fact, recent studies have shown an 80% failure rate in mold and fungal testing in Denver cannabis dispensaries. By relying on late-stage, pass/fail testing, cannabis entrepreneurs also expose themselves to increased risk of lost crops and profits.
Photo credit: Steep Hill- a petri dish of mold growth from tested cannabis
However, emerging sensor technologies exist that can test plants during the grow process, significantly reducing the risks associated with cannabis cultivation while increasing the bottom line for commercial grow operations. By leveraging data from these monitoring sensors along with environmental automation systems that are integrated with data analytics platforms, cannabis professionals can take a proactive approach to achieve the ideal environmental conditions for their crops and prevent against mold and fungal infestation.
Common Causes for Bud Rot in Indoor Growing Systems
Botrytis cinerea — commonly known as “bud rot” — is a pathogenic fungi species that creates a gray mold infection in cannabis plants. An air-borne contaminant, it is among the most prevalent diseases affecting marijuana crops today and can lead to significant damages, particularly when left untreated during post-harvest storage. Bud rot is one of the most difficult challenges cannabis entrepreneurs face: Once plants have been affected, only 2% can be expected to recover. This is because Botrytis cinerea can use multiple methods for attacking host plants, including using the plant’s natural defenses against it to continue infestation.
While difficult to contain, bud rot is very easy to spot. Plants affected with the fungus will begin yellowing, experience impaired growth, and develop gray fungus around its buds. Overall crop yield will be significantly reduced, leading to decreased profit for cannabis cultivators. The biggest contributing factors to a Botrytis cinerea infestation are as follows:
Humidity: Indoor grow facilities that maintain humidity levels in excess of 45% are breeding grounds for mold and fungus. These environments can become perfect conditions for mold and fungal growth.
Temperature: Bud rot typically thrives in environments where temperatures fall between 65- and 75-degrees Fahrenheit, which is why greenhouses and grow rooms are often the victim of such infestations.
Ventilation: Poor airflow is another contributing factor to Botrytis cinerea Without proper ventilation, excess moisture buildup will eventually result in mold and mildew growth.
Strain: Some marijuana strains are better equipped to fend off bud rot infection. In particular, sativa plants have a higher resistance to mold development than their C. indica and C. ruderalis cousins.
Controlling mold and fungal growth in commercial grow facilities is a top priority for cannabis cultivators. Not only detrimental to their profitability and crop yield, infected plants can pose serious health risks to consumers, especially for immunocompromised patients. Consuming cannabis products that have been compromised by bud rot or other mold and fungal infections can cause a wide range of medical concerns, including pneumonitis, bronchitis, and other pulmonary diseases. As a result, growers are required to dispose of all infected plants without the possibility to sell.
Bud rot isn’t the only culprit responsible for cannabis plant destruction. Powdery mildew, Fusarium, sooty molds, and Pythium all contribute to the challenges faced by cannabis professionals. In fact, a recent study conducted by Steep Hill Labs and University of California, Davis – Medical Center found that in 20 randomly-selected samples submitted for testing, all samples showed detectable levels of microbial contamination7. Many of these samples also contained significant pathogenic microorganism contamination. Without proper detection and prevention methods in place, these pesky plant-killers will only continue to terrorize the cannabis cultivation industry.
The Current Cannabis Cultivation Landscape
The data is clear: Current practices for cannabis cultivation are insufficient for preventing against mold and fungal growth. Sterilization and pass/fail testing do not identify the root cause of harmful infestations in plants, therefore leaving cannabis professionals in the dark about how to better optimize their grow conditions for improved crop reliability and safety. In order to prevent against damages incurred from mold and fungal infestation, marijuana growers must be more diligent in their grow condition monitoring practices.
Many cannabis professionals rely on manual monitoring to identify environmental changes within their indoor grow facilities. While it’s important to collect data on your operation’s essential systems, doing so without the right tools can be time-consuming and ineffective. Manual monitoring often relies on past data and does not illustrate the relationship between different systems and their impact on environmental changes. The goal is to assemble data from all the grow systems and create correlations on actual bio-environmental conditions during the grow process to compare to yield results. This is only available when an information management platform is synthesizing data from all the systems within the grow facility and presenting meaningful information to the growers, facility operators and owners.
Especially as the cannabis industry is expected to grow exponentially in coming years, growers need more robust tools for tracking and manipulating environmental changes within their indoor growing systems.
Leveraging Building Automation Systems & Data Analytics in Cannabis Cultivation
A powerful approach to prevent environmental conditions that are known to lead to mold and fungus growth exists in leveraging the data produced from your grow facility’s various automation systems. Most commercial cultivation facilities have multiple stand-alone and proprietary systems to control their indoor environment, making it difficult to not only collect all of this valuable data, but also to achieve the level of grow condition monitoring necessary for mold and fungal prevention.
With some data analytics platforms, such as GrowFit Analytics, data is collected across disparate systems that don’t normally communicate with one another, providing access to the key insights necessary for achieving environmental perfection with your cannabis crops. A viable solution collects vital grow facility system data and relevant bio-environmental monitoring data, and delivers this information in one, centralized software interface. The software then will apply analytic algorithms to develop key performance indicators (KPIs) while working to detect system anomalies, faults, and environmental fluctuations. The right analytics solution should also be customizable, allowing you to track the KPIs that are most important to your unique facility, and to achieve the vision of your chief grower. Ultimately, the software should serve up actionable insights that empower facility management and growers.
Sample data visualization dashboard from GrowFit Analytics showing real-time Temperature and Relative Humidity readings and indicating potential Mold Risk as defined by the Grower.
Collecting reliable data from different grow facility systems and environmental sensors can be a complex process and the information collected illustrates more than just what’s working right and what isn’t. By implementing an advanced data analytics solution, cannabis cultivation professionals can now be empowered to track minute details about their indoor grow facility, providing a safer, healthier environment for their crops and avoiding those environmental conditions that lead to mold and fungus altogether.
An ideal data analytics platform won’t simply collect data to be analyzed at a later date, and simple trending of sensor data is not enough. Information — especially in a commercial grow facility — is time-sensitive, which is why growers should select a system that offers real-time analytics capabilities. Some platforms offering real-time analytics utilize cloud computing, allowing for easy access from anywhere while also providing enhanced security to protect sensitive facility data. The most robust data analytics platforms provide detailed historical data for your entire crop’s lifecycle that provide a “digital recipe” to replicate successful crops, and fine-tune the process for continuous improvement.
Data analytics tools can also impact the bottom line by lowering operational costs. GrowFit Analytics, for example, was born out of a software solution designed to lower energy costs for large complex buildings like commercial grow facilities.
The data and insights provided can help identify opportunities for greater energy efficiency, which can lead to significant utility savings. Grow facilities operate 24 hours/day, with energy expenses representing one of the largest operational costs. With data analytics tools at their disposal, facility managers are armed with the information they need to improve system efficiency, increase energy savings, and improve profitability.
Eliminating Mold & Fungus from the Future of Cannabis Cultivation
By focusing on grow condition monitoring using data analytics tools, cannabis professionals can effectively eliminate the risk of mold and fungus growth in their crops. Leading data analytics tools make tracking environmental changes simple and easy to manage, allowing cannabis professionals to take a proactive approach to mold and fungus prevention. As we look to the future of the cannabis cultivation industry, it’s paramount for professionals to explore the technological advancements available that can help them address their business’ most pressing challenges.
The diverse cannabis industry has experienced tremendous growth, especially in the popular edibles market whether consumed recreationally or medicinally. Since these cannabis-infused food and beverage products come in a variety of forms, including candies, baked goods, energy drinks, chips, chocolates and teas, food safety questions and concerns for companies manufacturing these products can seem daunting. ERP software solutions designed for the cannabis industry play an imperative and necessary role in addressing key food safety issues for edibles producers, helping to fill in the gaps where new and established businesses struggle. By mitigating the potential for damaging effects of a food safety event, companies can prevent, or greatly lessen the impact, to both their reputation and public perception, as well as limit the financial liability and legal penalties.
What is safety?
On a fundamental level, safety is the state of being protected from undergoing or causing hurt, injury or loss. As a manufacturer of cannabis edibles, it is critical that products are consistent, labeled appropriately and safe for consumers. Forward-thinking companies are employing ERP solutions to help ensure their products are not harmful to their current and future customers.
A lack of safety in the cannabis edibles market stems from the unregulated nature of the industry on a federal level, despite consumers’ expectations otherwise. Similar to products in the food and beverage industry, safety issues with inaccurate labeling, food-borne pathogens and disease outbreaks are all concerns within the manufacturing environment. Particularly to cannabis businesses, extraction methods, bacteria and mold growth, pest and pesticide contamination, chemical exposure, improper employee handling and the unintentional consumption or overconsumption of edibles are all potential safety concerns. In states where edible products are legal, local municipalities and state governments each have their own unique regulations – requiring manufacturers to comply to different guidelines. With the absence of federal regulations, many cannabis companies have adopted a more conservative approach to food safety. Following U.S. Food and Drug Administration (FDA) guidelines and Food Safety Modernization Act (FSMA) best practices allows manufacturers to address key current food safety issues and prepare for future regulation.
Utilize Best Practices and ERP
Introducing current Good Manufacturing Practices (cGMP’s) traditionally implemented in the food and beverage industry help to form a foundation for cannabis edibles safety in 9 key areas:
Personnel – As an often-overlooked aspect of cannabis edibles manufacturing, adequate training on procedures to ensure disease control and proper cleanliness is required to maintain a company culture of safety. Advocating for quality standards with proper safety procedures should be a priority for every employee.
Manufacturing Environment – Effective management of the manufacturing environment ensures that facilities are controlled to prevent the contamination of finished goods – restricting extraneous materials such as glass, metal, rubber, etc. from the production floor. Warehouse and office lighting should be adequately maintained so that employees are able to inspect equipment, by-products and finished goods and conduct their jobs effectively.
Sanitary Operations – Physical facilities and all equipment must be maintained in clean and sanitary conditions and kept in good repair to prevent food and beverages from becoming contaminated. Cleaning processes should protect ingredients, work in progress, finished goods and workspaces from potential contamination.
Sanitary Facilities and Controls – Effective control of water, plumbing, sewage disposal and drainage are essential. Staff must have access to adequate handwashing and restroom facilities and employee changing rooms. Restrooms and break rooms should be clean and stocked at all times, while garbage is handled properly and disposed of in a timely manner.
Equipment and Utensils – Properly cleaning and maintaining vats, conveyor belts, shrink wrap machines, blenders, etc. to avoid contamination and allergen cross-contact ensures safe procedures are being followed. A robust sanitation program with defined cleaning schedules should be followed for the sanitizing of utensils and equipment.
Processes and Controls – The manufacturing of edible products should be done in accordance with best practices established in the food and beverage industry, taking account of sanitation, quality control and protection from allergens and contamination. Ongoing testing is conducted to identify sanitation failures and contamination occurrences and ensure items are discarded properly.
Personal Protective Equipment (PPE) can reduce the risks of contamination
Warehousing and Distribution – Establishing proper storage and transportation processes protects the products from contamination, allergen cross-contact and container deterioration – ensuring proper handling procedures throughout the growing, manufacturing and distribution steps.
Defect Action Levels – Quality control is used to minimize defects by requiring an action response when a problem is discovered. An established response plan demonstrates the proper procedures to follow when defects occur during production.
Holding and Distribution of By-products for use as Animal Food (if applicable) – This applies to food and beverage facilities that either donate or sell a by-product for use as animal food. By-products used for animal consumption that are managed properly remain free from contamination. Accurate labeling should identify by-product by the common or usual name and denote not for human consumption when distributed.
Cannabis-specific ERP solutions efficiently provide the structure, integration and processes to follow cGMP’s to address food safety concerns in all phases of growing, manufacturing and distribution. By automating the documentation of audit trails, edibles companies are equipped with the same tools that food and beverage manufacturers have utilized for decades. Validated procedures and best practices incorporate safety initiatives from cannabis cultivation to the sale of edible products and beyond, offering greater efficiency than manual methods. Since cGMP’s provide a foundation for Hazard Analysis Critical Control Points (HACCP) planning, edibles manufacturers are able to take advantage of incorporating control points into the ERP solution to prevent and control hazards before they affect food safety. Having a HACCP Plan, along with proper implementation and adherence to cGMP’s, helps to minimize food safety hazards for edibles manufacturers in the cannabis industry.
Quality and safety in the cannabis edibles market is an area that cannot be ignored, as the consequences for failing to handle hazards are potentially devastating. Savvy cannabis companies are employing best practices of food and beverage manufacturers, including the 9 addressed above, in tandem with an ERP software solution, to effectively navigating this highly competitive market. Paving the way with their commitment to quality and in delivering safe and consistent products to the market demonstrates to customers and investors alike their preparedness for growth.
According to a press release emailed today, Perry Johnson Laboratory Accreditation Inc. (PJLA) announced the accreditation of PharmLabs LLC to ISO/IEC 17025. Based in San Diego, California, PharmLabs has four locations, with three in the Southern California region and one in Maui.
PharmLabs offers a very wide variety of services including: California Compliance testing, a specialized Hemp Testing Program, Hemp Biomass Verification testing, and THC-free testing for the state of California. In addition, they offer the testing of cannabinoids, pesticides, residual solvents, microbiological contaminants, mycotoxins, heavy metals, terpenes, water activity, moisture content, and filth/foreign material testing.
“Our experience with [Perry Johnson Laboratory Accreditation] has been incredible over the years. Since we have multiple locations, we have had many visits with PJLA and their knowledge and quick response time has helped us get where we need to be,” says Greg Magdoff, founder of PharmLabs.
According to the press release, PharmLabs has plans to expand throughout the state of California and the rest of the United States in both hemp and cannabis testing in legal states.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
We use tracking pixels that set your arrival time at our website, this is used as part of our anti-spam and security measures. Disabling this tracking pixel would disable some of our security measures, and is therefore considered necessary for the safe operation of the website. This tracking pixel is cleared from your system when you delete files in your history.
We also use cookies to store your preferences regarding the setting of 3rd Party Cookies.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
The press release says that Pure Labs is one of the first cannabis testing labs in Arizona to achieve the ISO/IEC 17025 accreditation. According to R. Douglas Leonard, vice president of ANAB, they have seen a rise in demand for labs across the country. “Demand for competent testing laboratories is growing as many states have legalized medical and adult-use recreational marijuana,” says Leonard. “Testing by a laboratory accredited to ISO/IEC 17025 is necessary to demonstrate that cannabis products are safe for consumption and free from harmful levels of contaminants.”
