Last week, on November 20, dispensaries in Massachusetts began selling cannabis to recreational consumers. The market was off to an obviously electric start, following the path of other states that legalized recreational cannabis. Consumers waited in long lines on opening day, more than two years after voters in the state legalized cannabis.
While this marks an important milestone as the first legal recreational cannabis sales began on the East Coast, regulators only approved two licensed dispensaries to begin operations on opening day. Those two retailers allowed to begin sales are Cultivate Holdings in Leicester and New England Treatment Access in Northampton.
The Cannabis Control Commission (CCC), the state’s regulatory body overseeing the new marketplace, received some criticism for taking more than a year to establish and implement regulations for the industry. In April of this year, regulators were just preparing the final rules.
It has taken them a fair amount of time to establish the regulatory framework, but much of the recent delays were due to a lack of laboratory licenses. Earlier in November, the CCC finally approved two laboratories for testing in the recreational market. Those two labs are MCR Labs LLC of Framingham and CDX Analytics LLC of Salem. With the labs approved for third-party independent testing in the recreational market, regulators began allowing retailers to open shortly after.
Shawn Collins, executive director for the CCC, told Boston 25 News that they are delivering on the voters’ requests to provide for a safe marketplace. “When Massachusetts voters legalized adult-use cannabis, they communicated a desire to purchase products that are safely regulated and properly tested,” says Collins. “The Commission has done scrupulous due diligence to make that vision a reality and ensure licensed independent testing labs maximize public health and public safety.”
While it has gotten decidedly less English-speaking press than other countries in Europe on the front edge of cannabis reform, Denmark’s pilot four-year cannabis program is moving along nicely. It is also, without all the fanfare and hullabaloo seen in other EU countries struggling with how to approach cannabis normalization, about to reach the end of its first year.
The four year program was authorized to begin on January 1, 2018.
Major Canadian cannabis companies have been establishing operations in the country since late last year. Spectrum (a division of Canopy Cannabis), jumped the shark early, as it did in Germany. On December 5, 2017, three weeks before the executive order went into effect, Spectrum announced a first of its kind Danish joint venture with a forty thousand square-meter grow facility. Others have followed since then.
Licenses are required for every step of the process. In other words, producers must receive a license to legally cultivate cannabis for medical purposes. Those wishing to distribute must also have such products admitted to the formal list of medicines that can be distributed domestically. Manufacturers are also not allowed to distribute their product to any entity except pharmacies, hospitals and other manufacturers with a license to distribute.
Exports are also tightly controlled. Any medication on the approved pilot list cannot be exported. Further, it is only legal to export to two countries from Denmark – namely Canada and Holland.
A Direct Comparison To Other European Medical Cannabis Programs
Denmark is the first member of the EU to set up a trial program specifically for cannabis, although the Danish “experiment” looks in many ways like what will emerge in Germany. Unlike in Germany, however, the process is getting off to a smooth start.
Germany, which was primed to do the same as of March last year, has struggled since then with establishing a domestic cultivation process. That said, distribution (particularly from outside the country) is already off to a flying start. The difference, however, is that distributors in Germany who have a license to distribute a restricted narcotic product, can distribute cannabis too, without additional licensing. See Aphria’s recent purchase of CC Pharma with distribution to 13,000 pharmacies in Germany. Imports will actually be the name of the game here for some time to come as the cultivation bid is widely accepted as being too small to even meet existing demand. This will be the reality going forward as the government is required to purchase all cannabis bought by tender bid.
The other place to watch right now is Greece. The country has also moved quickly to establish a cultivation program in the last year. The difference between Denmark and Greece however, is that the export game (along with medical tourism) are clearly on the agenda.
Regardless, the success of the Danish “experiment” is one that other European countries could well look to as other countries proceed down the road to cannabis normalization and legalization, even if at first, and for probably the next four to five years, as a medical product.
Chris Martinez, co-founder and chief operating officer of EVIO Labs Florida
Fast-forward almost a year and EVIO Labs Florida is continuing their expansion in the state, now with locations in Broward County and Gainesville. “We are always looking at opportunities to better serve our clients and the patients of Florida,” says Martinez. “Opening Gainesville within a year of Davie was a goal we set for our team. We knew there was a need and opening Gainesville helped support the continued growth of FL medical marijuana program.” He says that between the two locations, they can now process upwards of 1,400 samples a day.
According to Martinez, much of that expanded throughput is thanks to their partnership with Shimadzu. “Our relationship with Shimadzu is very unique,” says Martinez. “Shimadzu instrumentation allows us to test in parts per billion for accuracy and sensitivity levels that empower us to see deep into the chemical makeup of these medicines. Operating in this space where speed and turnaround times are key, these instruments provide us with a platform to meet 24/48-hour deadlines.” They can now screen for contaminants such as pesticides, heavy metals, residual solvents, mycotoxins, aflatoxins and pathogens using instruments such as HPLC, GC-MS/MS, LC-MS/MS and ICP-MS, all provided by Shimadzu.
While Florida doesn’t currently have a final rule on testing thresholds, there are proposed regulations that would require independent lab testing for medical cannabis products. “Our clients are self-regulating at this time and in favor of the current proposed regulation,” says Martinez. “The proposed regulations will give Florida the most comprehensive and stringent testing regulation in the U.S. and arguably the world.”
For Martinez and the rest of the EVIO Labs Florida team, this is about protecting public health. “Our lab’s main focus is always first and foremost patient safety,” says Martinez. “As the market continues to grow, we continue to innovate through business intelligence software and other technologies to streamline the testing process for our customer’s.”
Bearing through four voluntarily recalls in the first two months since the transition window ended, the California cannabis industry showed its commitment to providing safe goods for its consumers. Recalls are considered the removal of products deemed unsafe at the point of retail. With unsafe product already on shelves, it is that much more important to have a thought out strategy if a recall need arises. Currently, the California Department of Public Health-Manufactured Cannabis Safety Branch is the only regulatory agency in the state of California with recall stipulations for California cannabis companies. Thus, the onus is on individual cannabis companies to initiate their own recall plans.
Why establish a recall plan if one is not compulsory? To start, a cannabis product recall is more challenging than recalls in other industries because of the classification as a Schedule 1 drug and the misunderstanding and stigma of the drug that promotes fake news. These considerations affect the way both the government officials and consumers perceive cannabis recalls – not preparing ahead of time could be devastating to your brand. Furthermore, a recall is not just a one day headache – in December 2017, the Inspector General of Department of Health and Human Services found that food companies took 57 days on average to initiate a recall after the Food and Drug Administration (FDA) first learned a product was potentially hazardous. Not only is a recall tricky to navigate and time intensive, a recall can also be costly – a joint study by the Food Marketing Institute (FMI) and the Grocery Manufacturers’ Association (GMA) in the USA found that 77% of the study respondents estimated the financial impact to be up to $30 million dollars; 23% reported even higher costs. One major factor of the financial impact to consider is that many retailers do not remove only the affected products, instead sweeping entire lines and brands. To estimate how much a food recall would cost your company, researchers Moises Resende-Filho and Brian Burr developed a model to estimate the direct costs of a food recall. To take a step back, it is true that, while recalls can be tricky to navigate, time intensive and costly, recalls are generally infrequent. At the same time, you never know where or when a recall could happen. For example, your manufacturing process might be flawless, but a supplier may suddenly issue a recall or the retail facility is compromised. Moreover, not all recalls are equal – imagine that consumers would react differently to an undeclared allergen on the label versus a life threatening pathogen in a product distributed to patients with weakened immune systems. Ergo, it is strategic for every cannabis company (grower, manufacturer, retail, etc.) to have a recall plan to be ready for any type of recall situation.
Take these 6 tips in designing a recall plan:
Product recalls due to manufacturing errors in sanitation cause mistrust among consumers.
Before a Recall
1) Be familiar with how recalls work by staying up to date with recalls
2) Write a recall plan. Select a recall template and fill in your company information, but also take into consideration any regulations on recalls at the federal, state, and county levels.
3) Record everything that was said and done. If there was no prewritten recall plan, during a recall is a good time as any to begin documenting all actions and communication – internal within the management team and external with business partners (suppliers, retailers) and external with the consumers.
4) Find the flaw in the product. Why is the product being recalled? This is important to know, whether it was your item or not, to better answer the next question of “What happens with the recalled product?” The most common causes for a recall in the USA are identified in the joint study mentioned above by the FMI and GMA.
After a Recall
5) Reevaluate the recall plan. Compare to a reputable third-party auditing standard (example here is Safe Quality Food Institute’s SQF Food Safety Code for Manufacturing Edition 8). Updates to the recall plan are inevitable and constant. The changes may be due to updates in company products, adjustments in the recall network or the experience gained when going through a recall. Also keep an eye out for updates to templates of recall plans. Conduct mock recalls with different recall origins.
6) Reevaluate the food safety plan. After finding the flaw in the product, identify the flaw in the process and improve. Examples to improve the food safety plan may be to: amend the supplier approval program, refine process flow, polish the sanitation program or revise the preventative maintenance program. The foundation of a recall plan is having a robust food safety plan to minimize the risk of running a recall.
Genome sequencing has made remarkable strides since the initiation of “The Human Genome Project” in 1990. Still, there are many challenges that must be overcome before this methodology can reach its fullest potential and be useful in serving as a method of Cannabis sativa genetics verification and tracking throughout the cannabis supply chain. Several major milestones that must be realized include end-to-end haploid type (single, unpaired set of chromosomes instead of complete paired set or “diploid”), long read, resolved genome sequences at a reasonable cost within a reasonable timeframe and with confidence in accuracy (Mostovoy et al.). These genomes are typically generated as shorter reads that are then scaffolded (Fig 1.) or matched to reference genomes in order to build a longer continuous read. While shorter sequencing reads indeed lower the cost barrier for producing more genomic data, it has created another issue as a result of this short-read technology.
Figure 1: Four sets of sequencing data (long-read WGS, Hi-C, optical mapping, and short-read WGS) were produced to generate the goat reference genome. A tiered scaffolding approach using optical mapping data followed by Hi-C proximity-guided assembly produced the highest-quality genome assembly. (Bickhart et al.)
There are two main issues with the more affordable short read sequencing methodology, the first being that sequential variants are typically not detected, especially if they involve a ton of repeats/inverted repeats, due to the limitation of the current referenced Cannabis genomes and the mapping process of the short-read sequences. This is especially unfortunate because larger variants can have up to a 13% variance within a diploid multichromosomal genome, such as Cannabis sativa, and this variance is thought to largely contribute to disease in various species, or maybe terpene profile in Cannabis sativa. Not being able to detect these variances with more affordable sequencing methodologies is particularly problematic and reference genomes produced with short read sequences are typically highly fragmented. The second limitation is the inherent errors, gaps and other ambiguities associated with taking tons of short read sequences and combining them all, like a jigsaw puzzle, in order to draft the larger genomic picture. While there is software with algorithms to assist in deciphering raw sequences, there is still much more work to be done on this challenge, considering that cannabis genome sequencing is new genomics territory. Unfortunately, as researchers seek higher and higher levels of data quality, shortcomings of this type of sequencing technology begin to become apparent. This sort of sequencing methodology relies heavily on reference sequences. This isn’t much of an issue with microbial genomes, which tend to be rather short and typically have one chromosome, however, when seeking to analyze much longer genomes with multiple diploid chromosomes and tons of mono and dinucleotide repeats, problems arise (English et al.).
Figure 2: Blockchain Digital Stamping Certificate which publicly documents the date and time of the completion of this work. (Mckernan – Crypto Funded Public Genomics)
The other category of sequencing is long read sequencing. Long read sequencing is as it sounds, the deciphering of much longer DNA strands. Of course, the technology is limited by the quality of the DNA captured, therefore, special high molecular weight DNA extraction protocols must be deployed in order to obtain the proper DNA quality (Fig. 3). Once this initial limitation is overcome there is the stark cost of long read sequencing technology. PacBio without a doubt makes one of the highest quality long read sequence generating instruments that has ever graced the field of biotechnology, but due to the steep price tag of the machine, progress in this field has been stifled simply because it just isn’t affordable and the read depth for mammalian and plant genomes is currently almost completely prohibitive until read lengths double in length for this instrumentation. In order to produce what is considered to be a “validated genome” both short read and long read sequencing methodologies are combined. Long read sequencing data is used to produce the reference contigs because they are much easier to assemble, then short read sequencing is scaffolded against the reference contigs as a sort of “consensus validation” of the long read contigs.
Figure 3: Depiction of various DNA high molecular weight DNA quality captured during cannabis genome submission project. (Mckernan – Crypto Funded Public Genomics)
Despite the shortcoming of utilizing short read sequencing technology for analysis of the cannabis genome, it is still useful especially when combined with other longer read sequencing technologies or optical mapping technologies. Kevin McKernan, chief scientific officer of Medicinal Genomics, has been working feverishly to bridge the information gap between the cannabis genome and other widely studied plant genomes. As a scientist that worked on the Human Genome Project in 2001, McKernan has a demonstrated history of brilliance in the field of genomics. This paved the way for him to coordinate the first crypto funded and blockchain notarized sequencing project (DASH DAO funded) (Fig. 2), which was completed in 60 days, and surprisingly showed that the cannabis genome is over 1 billion bases long which is 30% larger than any cannabis genome submitted prior to his work. By reaching the standard of 500kb N50 set forth by the Human Genome Project, Kevin McKernan was able to see new aspects of the cannabis genome that were not visible due to the fragmented genomic data previously generated. Information such as a possible linkage of THCA synthase and CBDA synthase genes is crucial when seeking to use the cannabis genome for verification and tracking purposes. This is because special linkages can be considered a type of “genetic marker” that may be used to differentiate cannabis cultivars and lineages. There are many types of genetic markers, including SNP (single nucleotide polymorphisms), VNTR (variable number tandem repeats) and even patterns of gene expression. Funding and recording of cannabis genomics must be further developed in order for potential markers to be identified and validated via larger scale genome-wide association studies.
These technologies, when combined, often reduce the number of scaffolds while increasing the percent of resolved genome by filling in gaps within the drafted genome. Nanopore sequencing is an especially interesting and innovative sequencing technology that is useful in many ways. One of the most powerful uses of this technology is its ability to upgrade the quality of draft and pushed genomes by resolving poorly organized genomes and genomic structure for a fraction of the time and cost of other long read sequencing platforms (Jian et al.), making it an excellent candidate for solving cost and time constraints. Nanopore’s portability and convenience makes it a real-time solution to solving genetics-based problems and questions. A notable use of this technology is recorded during an epidemiological outbreak in Africa, its proof of concept in pathogen detection in space, and its ability to detect base modifications during sequencing process. Even still there are more uses to this exciting technology and it has the potential to elevate cannabis genomics and the field of genomics entirely, while remaining portable and expeditious. A shortcoming of the Nanopore sequencing platform is its low sequencing coverage, which makes this platform inefficient for applications like haplotype phasing and single nucleotide variant detection due to the number of variants to be detected being smaller than the published variant-detection error rates of algorithms using MinION data. Single nucleotide variants can be considered to be genetic markers, especially markers for disease, so this is what inhibits Nanopore from resolving our cannabis genome sequencing problems, as of today.
There are genetic markers to discover, molecular biology protocols to optimize, and industry wide potential for exciting collaborationMany algorithmic problems seem to occur due to input data quality. Typical input data quality suffers as the reads get longer and the sequencing depth gets shorter, resulting in not enough data being generated by the sequencing to provide confidence in the genome assembly. To mitigate this, scientists may decide to fractionate a genome, sequence it, or they may clone a difficult to sequence region with highly repetitive regions in order to produce reads with greater depth and thus resolve the region. They can then perform single molecule sequencing to resolve genome structure then determine and confirm the place of the cloned region. Thus, it seems that the best solution to the limitation of algorithms is to be aware of sequencing platform limitations and compensate for these limitations by using more than one sequencing platform to obtain enough pertinent data to confidently produce authentic, “validated” genome assemblies (Huddleston et al.). With input data being critical in producing accurate sequencing data, standardization of DNA isolation protocols, extraction reagents and any enzymes utilized may be deemed necessary.
To conclude, the field of cannabis genomics is teeming with opportunities. There are genetic markers to discover, molecular biology protocols to optimize, and industry wide potential for exciting collaboration. More states will need to take into account the lack of federal government research grant availability and begin to think of creative ways to get cannabis science funds to continue the development of this industry. Specifically speaking, developing a feasible method for genetic tracking of cannabis plants will require improvements within the availability of sequencing technology, improvements in deploying the resources to these projects in order for them to be completed expeditiously, and standardization/validation of methods and SOPs used in order to increase confidence in the accuracy of the data generated.
A special thank you to all of my cannabis industry mentors that have molded and elevated my understanding of current needs and applied technologies within the cannabis industry, without you there would be no career within this industry for me. You are immensely appreciated.
Citations
Bickhart, D. M., Rosen, B. D., Koren, S., Sayre, B. L., Hastie, A. R., Chan, S., . . . Smith, T. P. (2017). Single-molecule sequencing and chromatin conformation capture enable de novo reference assembly of the domestic goat genome. Nature Genetics,49(4), 643-650. doi:10.1038/ng.3802
English, A. C., Salerno, W. J., Hampton, O. A., Gonzaga-Jauregui, C., Ambreth, S., Ritter, D. I., . . . Gibbs, R. A. (2015). Assessing structural variation in a personal genome—towards a human reference diploid genome. BMC Genomics,16(1). doi:10.1186/s12864-015-1479-3
Huddleston, J., Ranade, S., Malig, M., Antonacci, F., Chaisson, M., Hon, L., . . . Eichler, E. E. (2014). Reconstructing complex regions of genomes using long-read sequencing technology. Genome Research,24(4), 688-696. doi:10.1101/gr.168450.113
Jain, M., Olsen, H. E., Paten, B., & Akeson, M. (2016). The Oxford Nanopore MinION: Delivery of nanopore sequencing to the genomics community. Genome Biology,17(1). doi:10.1186/s13059-016-1103-0
Mostovoy, Y., Levy-Sakin, M., Lam, J., Lam, E. T., Hastie, A. R., Marks, P., . . . Kwok, P. (2016). A hybrid approach for de novo human genome sequence assembly and phasing. Nature Methods,13(7), 587-590. doi:10.1038/nmeth.3865
According to a press release published yesterday, Steep Hill Hawaii announced the opening of their second location on the Big Island. Their first location located on Oahu and operating for a little over a year, was the first cannabis-testing laboratory to be certified by the State of Hawaii Department of Health (HDOH). It’s also the first ISO/IEC 17025:2005 accredited cannabis testing lab in the state.
Owner and CEO of Steep Hill Hawaii, Dana Ciccone announced the second location yesterday. “”We are thrilled to open up our new location in Kailua Kona, Hawaii,” says Ciccone. “We have been working closely with the Department of Health and we look forward to working together with the large patient population and the two new dispensaries opening very soon.” Ciccone says with the new location they are focusing on quick turnaround times, good service and competitive prices.
According to Dr. Andrew Rosenstein, CEO of Steep Hill, they want to help provide safe medicine and quality testing to the Hawaii medical cannabis community. “In extending its services, Steep Hill Hawaii is committed to providing safe medicine and high quality testing to Hawaii’s patient community,” says Rosenstien. “Dana and the Steep Hill Hawaii team have worked hard to open up this new location and will continue to support cultivators and dispensaries in this emerging market.”
The Food Safety Consortium, taking place November 13-15 in Schaumburg, Illinois, will host a series of talks geared towards the cannabis industry this year. The newly launched Cannabis Quality Track features a number of panels and presentations designed to highlight the many intersections between food safety and cannabis.
Jenna Rice, Director of Operations at Gron Artisan Chocolates
The track will have presentations discussing food safety planning in cannabis manufacturing, HACCP, GMPs, regulatory compliance and supply chain issues among other areas.
Ben Gelt, board chair of the Cannabis Certification Council, is moderating a panel titled What’s In My Weed? that will delve into issues like supply chain, production and other difficulties in creating cannabis products and the challenges inherent in teaching consumers to be more discerning.
Ben Gelt, Board Chair of the Cannabis Certification Council
Kimberly Stuck, Founder of Allay Compliance Consulting
Ben Gelt and the Cannabis Certification Council orchestrated the development of this panel to help promote their #WhatsInMyWeed consumer awareness and education campaign. “The Cannabis Certification Council believes consumer education campaigns like #Whatsinmyweed are critical to drive standards and transparency like we see in food,” says Gelt. “What better place to discuss the food safety challenges the cannabis industry faces than the Food Safety Consortium”
Before Kim Stuck founded Allay Compliance Consulting, she was the first Marijuana Specialist for a public health authority in the nation, where she was working with regulators in Denver, Colorado. She is currently a cannabis food safety expert and a Certified Professional of Food Safety (CP-FS) through NEHA. She has helped Colorado and California develop cannabis food safety requirements. “I will discuss pitfalls we have experienced in the regulation of cannabis in Denver and what mistakes not to make,” says Stuck. “I’d also like to talk about how to be prepared for when those regulators start to come in to facilities.”
Kristen Hill, MIP Director at Native Roots Dispensary
Kristen Hill is the MIP Director at Native Roots, arguably one of the largest dispensary chains in the world. She oversees 30 employees in Native Roots’ MIP facility where product testing and quality assurance of products are all led under her guidance. Her background includes managing quality assurance and regulatory compliance with FDA regulations, among other areas. She said she’s particularly excited to talk about implementing manufacturing best practices in the cannabis space. “Cannabis is maturing and is beginning to shape operations around long standing best practices in other industries,” says Hill.
Leslie Siu, Founder and CEO of Mother & Clone
Leslie Siu brings to the panel 17 years of liquor, tobacco and pharma marketing and operational oversight plus global digital and experiential campaigns. Her company, Mother & Clone, produces infused, sublingual cannabis sprays. Based in Colorado, Mother & Clone’s team of biochemists are Merck alumni, currently working towards GMP standards in preparation for Canada, slated to be on shelf in the spring of 2019. Her main consideration for cannabis product development comes from what she has learned from the FDA in traditional industries- what they will and will not tolerate.
There are going to be some states that are less progressive in the pro-cannabis movement, the same way there were states that were slow to move past alcohol prohibition. This is normal for any country moving towards change, better economic standing and safer healthcare.
There are only four states that completely ban recreational and medical cannabis altogether, and those states are Idaho, Kansas, Nebraska, and South Dakota. Although, there is no doubt that more and more states are moving towards a pro-recreational and medical cannabis stance. There are some states in the Northeast that are making strides to legalize cannabis.
Most of the states in the Northeast already have some form of medical cannabis law in the books already, but some are moving towards recreational legalization surprisingly quickly. Massachusetts already has legalized recreational cannabis and is setting up their regulatory framework currently while Vermont, New Jersey and New York, all of which already have medical laws, appear to be just steps away from legalizing it recreationally.
Northeast States Moving Towards Legalization
With Canada’s recent recreational legalization, a number of states just south of the border appear to be eyeing the issue for themselves. While some of these states have somewhat strict regulations in place, they look like promising emerging market opportunities.
New Jersey
New Jersey is closer than ever to legalizing recreational cannabis. Governor Phil Murphy built his campaign on the pledge to end cannabis prohibition. Murphy says having recreational cannabis legalized this year is his goal.
Murphy says that he wants legal recreational cannabis to be available because he believes it is a way to improve social justice in New Jersey and to bring the state new tax revenue. The biggest issue is what the legislation will look like and how it can be tied to expanding the states medicinal cannabis program.
New Jersey Governor Phil Murphy
Their current medical program, while still small in market size, appears to be gaining steam and growing in terms of patients getting access. Six months ago, The New Jersey Department of Health added a number of qualifying conditions patients can get a cannabis prescription for. The program still has its limits, like a 10% THC potency cap, small selection of types of products and other various restrictions.
New York
It was just last year when Governor Andrew Cuomo said cannabis was a “gateway drug” and he was opposed to legalization. After conducting a study on cannabis legalization, the result was a July Health Department report that determined the positive effects of legalization outweighs the potential negative impacts.
The debate between Andrew Cuomo and Cynthia Nixon in the gubernatorial race has highlighted their views of cannabis as well as other important issues; it’s important that New Yorkers vote in the primary election to have the best opportunity for the future.
Companies with large amounts of capital are planting their flags in New York, like MedMen’s dispensary in Manhattan, even if the medical market might still be in its infancy.
MassachusettsOver the next six months, this market will be one to watch closely
Recreational cannabis became legalin the last couple months for Massachusetts, while the state legalized medical cannabis some time ago. Their medical program is relatively advanced compared to New York or New Jersey. Online registration, a large number of qualifying conditions, and a less restrictive business environment seemed to encourage a much larger number of patients and businesses supporting them.
Regulators in Massachusetts are currently consideringthe option of allowing delivery operations for the recreational market. The roll out for the recreational industry might seem somewhat slow, but regulators are tackling a wide range of issues and making considerable progress towards the highly anticipated recreational market opening. Just last week, regulators issued licenses to two cannabis-testing laboratories, and, according to the Boston Globe, the debut could be just weeks away.
While the industry and regulators get ready for the recreational debut, a recent crackdown on pesticide usehighlighted some of the growing pains that come with it. Over the next six months, this market will be one to watch closely as dispensaries begin selling recreational cannabis and the industry develops.
Vermont
The recent Canadian legalization of recreational cannabis will no doubt put pressure on states sharing a border with them to consider adjusting their laws.
Legalizing recreational cannabis will likely increase tourism to Vermont, the way other states saw an influx in tourism when they legalized. Unfortunately, Vermont has only decriminalized recreational cannabis. You can possess, grow and consume cannabis, but you can’t buy or sell it, which obviously restricts the ability of any business to enter the market.
Vermont Statehouse, Montpellier, VT Image: Tony Fischer, Flickr
However, their legal medical program is relatively laissez-faire compared to other states in the region. They allow for cultivation at home or through a caregiver and there are a number of small businesses working under the legal medical program.
Maryland
Recreational cannabis isn’t legal in Maryland yet, but medical cannabis has been legal since 2014. It’s illegal for patients and caregivers to grow their own. Attempts have been made to make recreational cannabis in 2016, but the bill didn’t move forward.
Maryland’s industry was off to a rocky start, when the application process for businesses wanting to enter the market slowed to a crawl. This month, the state just approved four new medical dispensaries and one new processor for the market. The latest round of approvals brings the total to 69 dispensaries serving patients, while back in 2016, the state pre-approved 102 dispensaries originally.
Delaware Expect to see another attempt at legalizing via the legislature in early 2019.
The Delaware Department of Health will continue to accept applications for medical cannabis cards, which is required for patients seeking to obtain their medicine from a compassion center. Patients are not allowed to grow their own cannabis. The state’s program has been operational for quite a while, and a small number of companies have established footprints in the state, like the Israeli brand Tikun Olam.
Pennsylvania
In 2016, Pennsylvania legalized medical cannabis. In contrast to some of the other states discussed earlier, PA is off to a more streamlined start. The second phase of their medical program allowed for more businesses to enter the market, a wider range of qualifying conditions and a larger number of patients registering. The industry is maturing here fast and could make for an exciting opportunity with recreational legalization potentially on the horizon.
The bill would call for the immediate release of people jailed for cannabis-related crimes. This would also allow anyone with a criminal history related to cannabis to have that expunged.
If the bill passes, the tax imposed is estimated to generate $500 million a year.
This collection of leaders in the European cannabis market is by no means completely neutral. Much less comprehensive. It is however, German and European centric, because these people, by definition and geography, are now sitting at the nexus of a global, and even within Europe, international industry. Europe for that reason, will be the place, and for some time, where the global cannabis industry comes to make deals across borders, meet the high levels of compliance required here that is setting global standards and push the medical revolution forward for (at least) the next five to ten years.
For that reason, the people listed below carry influence far beyond one country or even region, by definition. But they are also not the only people redefining an industry.
Most notably, of course by their exclusion, are women, although there are some exceptions to that and women are increasingly establishing their place at high executive levels although not yet founder or cofounder or, auf Deutsch, Geschäftsfüherin– (Managing Director) at any of the establishing global companies with European presence. That said, they are beginning to make their appearance in every place and career path within the industry.
Movers and Shakers
Dr. Pierre Debs, Ph.D. An American expat with a German Ph.D., and twenty five plus years’ experience in stem cell research, including endocannabinoid system function. Debs is also the often uncredited individual who opened the current medical market in Germany in particular, but with immediate impact throughout Europe. As the scrappy start up MedCann, Debs, his cofounders and a skeleton team based just south of Frankfurt, not only got into the game first, they beat other established companies to obtain the first import license for Canadian flower in the summer of 2016. Including and most notably Tilray. MedCann GmbH at that point became the only other company besides Bedrocan, the perennial Dutch provider for the last twenty years to be able to provide medicinal, GMP-certified flower to the German market. That market distinction of course, did not last long as other companies quickly jumped into the ring but as the medical brand of Canopy, Debs has continued to lead industry development across Europe. Today, as the Geschäftsführerof Spektrum Cannabis GmbH (as MedCann was renamed after its purchase by Canopy sometime in Q4 2016-Q1 2017) and as Canopy Growth Corp Managing Director Europe, Debs has not only established but currently oversees operations in multiple European countries as Canopy Cannabis expands its global medical brand. From, it should also be added, its swanky new digs in central Frankfurt.
Tjalling Erkelens, Bedrocan founder and CEO. Bedrocan is the legacy cannabis player here in a game that is rapidly changing as it expands. The first exporter of medical cannabis in the world, the family owned company currently produces five different cannabis strains bound for the medical market, and is expected to be the beneficiary of the newly expanded import quota into Germany from Holland for medical grade flower, as well as place well in the German cultivation bid.
Gerhard Muller of the Wayland Group
Gerhard Müller. The unassuming Chair of the Audit Committee of Wayland Group, the cannabis company formerly known as Maricann. Müller is less often in the English-speaking press than Ben Ward, company CEO. However, Müller is a force to be reckoned with as Wayland begins to unfold its usually understated strategy in Germany and Europe from its Munich HQ base. Müller is the former head of Ernst and Young’s GSA Tech Practice, also adding household names like Birgit Homburger and Christopher Peterka to Wayland’s German Advisory Board. Also of note is GM for Wayland Germany Josef Späth now tasked with bringing his connections and previous experience as a top, internationally experienced clean tech architect and engineer to the build out of Wayland’s infrastructure. This includes previous work with NASA Jet Propulsion Lab alumni to develop new techniques for harvesting and processing of cannabis. German ingenuity and engineering at its best!
Patrick Hoffmann, CEO of Aurora Deutschland (formerly Pedianos). This firm too, was one of the early start-ups to get into the distribution and cultivation game and so far they have proven to be adept at navigating the complex path to winning cultivation rights. Aurora placed in the top ten finalists for the last German cultivation bid. As Pedianos, the firm won the first distribution and cultivation deal for Italy, sourced via Berlin. They have already proven to be highly skilled at finding market advantages in an exploding European market puzzle.
David Henn, CEO of Cannamedical Pharma
David Henn, CEO of Cannamedical Pharma. The millennial at the front of the cannabis import and distribution craze in Germany, founded his start up in November 2016. Henn then obtained one of the first issued licenses for trading and ex-im of medical cannabis just as the law changed in Germany officially to mandate insurance coverage of medical cannabis by prescription. Since then, the fiercely independent entrepreneur has turned down multiple acquisition offers from companies in Canada, Israel and Australia. The Cologne-based company supplies a growing network of German pharmacies and entered into off-take agreements with major companies in Europe, Canada and Australia. Bolstered by its cash flow in the existing distribution business, Cannamedical is continually expanding and has already established European subsidiaries that are in the progress of obtaining additional production and distribution licenses for the company.
Peter Homburg. Partner, Denton’s Law Firm. Peter has already had an established career as a high-powered partner and the head of the firm’s Life Sciences Division. Yet like many people of different paths and persuasions, he began to explore the world of the legal end of the business several years ago. These days, albeit based in Frankfurt, he has helped establish the firm’s reputation internationally as a leading law firm in the cannabis space.
Rob Reid, co-founder of European Cannabis Holdings
Rob Reid. Reid wears several influential hats based out of his offices in London. As the director of publicly listed, SOL Investments Corp (formerly Scythian), he invests in the U.S.-based cannabis industry. He is also the co-founder of European Cannabis Holdings (ECH), which is investing in a portfolio of private medical cannabis companies on this side of the pond. He is also the co-founder of Prohibition Partners, the increasingly prolific market intelligence and consultancy firm, and Cannabis Europa, a conference and networking platform. Finally, he is involved in a number of cultivation JVs around the world.
Marla Luther. As co-director for Tilray Europe (along with Sean Carney) and based in Berlin, Marla has the most senior leadership title of any woman in the cultivation and distribution industry in Europe. She has also been in the position for the last several years.
Alex Rogers. As the founder of the International Cannabis Business Conference (ICBC), Alex has established perhaps the first truly international cannabis conference brand catering to the professional end of the regulated industry but retaining the soul of the advocacy movement. The Berlin conference going into its third year in 2019, literally reset the standards if not stage for the next upgrade of the industry conference concept. Within a year of its first international conference in Berlin, Alex and his team had also established conferences in Canada and are establishing the B2B conference of Spannabis under their rubric in Barcelona as of next year.
No matter the size of your cannabis greenhouse operation, keeping your plants alive and healthy requires the best possible growing environment. This means greenhouse managers and personnel must frequently monitor the status of environmental conditions and equipment. The sooner someone discovers extreme temperature fluctuations, rising humidity or equipment failure, the more inventory you can save.
Cloud-based remote monitoring system in protective enclosure
That’s why integrating a remote monitoring system into your greenhouse operation can save you time, money and anxiety. Monitoring systems that use cloud-based technology let you see real-time status of all monitored conditions and receive alerts right on your mobile device.
Installing a monitoring system and sensors can be easier than you might think. Here are answers to ten questions to ask before installing a cloud-based monitoring system:
What is required to use a remote monitoring system?
Most remote monitoring systems require an internet or WiFi connection and access to an electrical outlet. Programming is done through a website, so it’s easiest to use a computer for the initial setup. If you don’t have an internet connection at your location, you’ll want to choose a cellular system. Make sure that there’s sufficient signal strength at your site, and check the signal quality in the area before purchasing a cellular device.
2. How do we determine what kind of monitoring system and sensors we need?
A reputable manufacturer will have a well-trained support team that can assess your needs even without a site visit to determine which products are best for your application. If you feel you need them to check out your greenhouse operation,many companies can set up a video conference or FaceTime chat to substitute for being on site.
You will want to provide details about the scope and purpose of your cannabis growing operation. Important factors to discuss include:
Skeletal structure of the greenhouse (metal, plastic, wood, etc.) and the covering material (glass or plastic).
Floor space square footage and height of each of your greenhouses.
Number of greenhouse structures in your operation.
Outdoor climate to determine if you rely more on heating or air conditioning and the level of humidity control needed.
Space dedicated to phases of growth (cloning and propagation, vegetative, flowering) and the microclimates needed for each.
Types of lighting, ventilation and irrigation systems.
Level of technological automation versus manual operation in place.
The monitoring system representative will then determine the type of system that would best serve your operation, the number of base units you will need and the types of sensors required.
Temperature display provides quick view of sensor data
The representative should also be able to provide tips on the placement of the sensors you’re purchasing. For example, to ensure thorough air temperature coverage, place sensors throughout the greenhouse, next to the thermostat controlling the room temperature and in the center of the greenhouse out of direct sunlight.
Note that there shouldn’t be a cost for a demo, consultation or assistance throughout the sales process. Be sure to ask if there are any fees or licenses to keep using the monitoring equipment after you purchase it.
3. Are sensors included with the monitoring system?
In most cases, sensors are sold separately. The sensors you select depend upon the conditions you want to monitor and how many you can connect to your base unit. Certainly, temperature is critical, but there are many other factors to deal with as well, such as humidity, CO2, soil moisture, water pH, power and equipment failure, ventilation and physical security.
For example, humidity has a direct impact on the photosynthesis and transpiration of plants. High humidity can also cause disease and promote the growth of harmful mold, algae and mildew. Sensors can detect changes in humidity levels.
Water pH sensor
Like any other plant, cannabis needs CO2 to thrive, so it’s a good idea to include a CO2 sensor that will signal to the monitoring device when readings go out of the preset range. There are even sensors that you can place in the soil to measure moisture content to help prevent over- or underwatering, budget water usage costs, promote growth and increase crop yield and quality.
Of course, all the critical systems in your growing facility—from water pumps to irrigation lines to louvers—rely on electrical power. A power outage monitoring sensor detects power failure. It can also monitor equipment for conditions that predict if a problem is looming, such as power fluctuations that occur at specific times.
Ventilation systems not only help control temperature, they also provide fresh air that is critical to plant health. Automated systems include features like vented roofs, side vents and forced fans. Sensors placed on all these systems will send personnel an alert if they stop running or operate outside of preset parameters.
To monitor the physical security of your greenhouses, you can add sensors to entrance doors, windows, supply rooms and equipment sheds. During off hours, when no staff is on duty, you can remain vigilant and be alerted to any unauthorized entry into your facility.
4. Do monitoring systems only work with the manufacturer’s sensors?
Not necessarily. For example, certain monitoring units can connect with most 4-20mA sensors and transmitters regardless of the brand. When selecting sensors, you might have a choice between ones that are designed by the manufacturer to work specifically with the monitoring system or universal components made by a third party. If the components aren’t made by the system manufacturer, you’ll want to find out if they have been tested with the monitor you are choosing and if you need to work with another vendor to purchase the parts.
A humidity sensor mounted in a weatherproof enclosure
5. Is a monitoring system easy to set up, or do we need to hire an electrician?
Many monitoring systems are quick and easy to install, and users can often set them up without hiring an outside expert. Look for one that requires only a few simple physical installation steps. For example:
Mount the device to the wall or somewhere secure;
Plug it into an electrical outlet and an internet connection;
Connect the sensors.
You connect the sensors to the base unit’s terminal strip using wire, which is included with many sensors. The range of many wired sensors can be extended up to 2,000 feet away from the base unit by adding wire that can be easily purchased at any home store. It’s a good idea to hire an electrician if you need to run wires through walls or ceilings.
Usually, once you plug in the device and connect the sensors, you then create an account on the manufacturer’s designated website and begin using your device. There should be no fee to create an account and use the site.
If the manufacturer doesn’t offer installation services, ask if they can recommend a local representative in your area who can set up your system. If not, make sure they provide free technical support via phone or email to walk you through the installation and answer any questions you might have about programming and daily usage.
6. Is there a monthly fee to access all the functionality of a monitoring device?
Many web- or cloud-based systems provide free functionality with some limitations. You might have to purchase a premium subscription to unlock features such as text messaging, phone call alerts and unlimited data logging access.
7. Should we get a system that is wired or wireless? Will we need to have a phone line, cable, internet or something else?
Wireless can mean two different things as it relates to monitoring: how the system communicates its data to the outside world and how the sensors communicate with the system.
The most popular systems require an internet or WiFi connection, but if that’s not an option, cellular- and phone-based systems are available.
A hardwired monitoring system connects the sensors to the base device with wires. A wireless system uses built-in radio transmitters to communicate with the base unit. Some monitoring systems can accommodate a combination of hardwired and wireless sensors.
8. Can one system monitor several sensor inputs around the clock?
Once the monitoring system is installed and programmed, it will constantly read the information from the sensors 24/7. Cloud-based systems have data logging capabilities and store limitless amounts of information that you can view from any internet-connected device via a website or app.
If the system detects any sensor readings outside of the preset range, it will send an alarm to all designated personnel. The number of sensors a base unit can monitor varies. Make sure to evaluate your needs and to select one that can accommodate your present situation and future growth.
When a monitoring system identifies a change in status, it immediately sends alerts to people on your contact list. If you don’t want all your personnel to receive notifications at the same time, some devices can be programmed to send alerts in a tiered fashion or on a schedule. Multiple communications methods like phone, email and text provide extra assurance that you’ll get the alert. It’s a good idea to check the number of people the system can reach and if the system automatically cycles through the contact list until someone responds. Some systems allow for flexible scheduling, so that off-duty personnel don’t receive alerts.
9. Do monitoring systems have a back-up power system that will ensure the alarming function still works if the power goes out or if someone disconnects the power?
The safest choice is a cloud-based system that comes with a built-in battery backup that will last for hours in the event of a power failure. Cloud-based units constantly communicate a signal to the cloud to validate its online status. If the communication link is interrupted—for example by a power outage or an employee accidently switching off the unit—the system generates an alarm indicating that the internet connection is lost or that there is a cellular communications problem. Users are alerted about the disruption through phone, text or email. All data collected during this time will be stored in the device and will be uploaded to the cloud when the internet connection is restored.
If you opt for a cloud-based monitoring system, make sure the infrastructure used to create the cloud platform is monitored 24/7 by the manufacturer’s team. Ask if they have multiple backups across the country to ensure the system is never down.
10. What should we expect if we need technical support or repairs to the system?
Purchase your system from a reputable manufacturer that provides a warranty and offers full repair services in the event the product stops working as it should. Also, research to make sure their tech support team is knowledgeable and willing to walk you through any questions you have about your monitoring system. Often, support specialists can diagnose and correct unit setup and programming issues over the phone.
It helps to record your observations regarding the problem, so the tech team can look for trends and circumstances concerning the issue and better diagnose the problem. Ideally, the manufacturer can provide loaner units if your problem requires mailing the device to their facility for repair.
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While this marks an important milestone as the first legal recreational cannabis sales began on the East Coast, regulators only approved two licensed dispensaries to begin operations on opening day. Those two retailers allowed to begin sales are Cultivate Holdings in Leicester and New England Treatment Access in Northampton.
Licenses are required for every step of the process. In other words, producers must receive a license to legally cultivate cannabis for medical purposes. Those wishing to distribute must also have such products admitted to the formal list of medicines that can be distributed domestically. Manufacturers are also not allowed to distribute their product to any entity except pharmacies, hospitals and other manufacturers with a license to distribute.
