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Wayland Group’s GMP Certification Begins To Clarify German Cultivation Scenarios

By Marguerite Arnold
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Wayland Group just announced that they received GMP (good manufacturing practices) and GDP (good distribution practices) certification for their Ebersbach facility near Dresden, Germany. The plant already produced 2,400 kg of CBD isolate last year.

The certifications give Wayland the right to sell directly into German and other EU markets, and more significantly, the ability to store bulk product domestically.They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

Wayland is also widely believed to have applied for the much-stalled German cultivation bid. With per-gram production prices at Ebersbach cited at 1.34 euros, this certainly also sends an interesting message about who might win what in the bid, and where the price of cannabis might be headed.

Currently, cannabis is being sold to pharmacies in Germany at prices almost twice the retail price per gram in Canada. In turn, this means that the “retail” price of floss (flower) is running much higher than it is in more established markets (read Canada and of course the U.S.). Point of sale prices in Germany, for example, run between $2-3,000 per month per user. That is an era that is clearly also now coming to an end.

The Cultivation Bid

With the news of Wayland’s certifications, comes an almost certainty that they will become finalists in the pending cultivation bid in Germany. Why? They have, by far, the largest cultivation site now legal in the country, with distribution to not only German pharmacies, but Europe beyond that.

If Bedrocan was the incumbent favorite to win the majority of the licenses handed out to any one firm (especially given the recent increase in cannabis allowed to be sold into Germany across the Dutch border), this places Wayland in a strong second. If Bedrocan is not involved in the bid, this news might indicate that Wayland might be the largest winner in German cultivation licenses this time around.

The plot indeed thickens.

Prices: In General, Across Europe

The firm will be providing product, no matter what the outcome of the bid, at a production price, which is in line with the widely estimated requirements of the bid itself. Winning firms must also be able to provide pricing that is competitive to each other. It is unclear where the government will set that floor, but all medical cannabis sold in Germany after that, will then be competing with that price.

Could it be that the reference price of cannabis, in other words, has just been indirectly announced with the Wayland certifications?

Then there is this wrinkle. Given that production in Germany is more expensive than other countries in Europe (see Portugal, Spain and Greece in particular), the difference in labor costs may still outweigh the costs of shipping across the continent. Or, as the market gets going, it may not. Regardless, in a country like Germany where drug prices are routinely pre-negotiated in bulk by the government, cannabis prices will start to be regulated in a way they have not in other places, notably Canada. This means that heady visions of “mark-ups” to meet a so far unmet demand are also probably not in the cards, although government supported cannabis exports might be.

Insurance “Brands” And Bulk Buys Ahead?

Then there is this intriguing wrinkle. German “public” insurance patients (in other words 90% of the population) are not always free to choose the products they use. Why not? Beyond bulk purchases by the government, insurance companies are also allowed to enter into bulk contracts with some providers, namely medical equipment manufacturers. This is sort of the same situation as visiting an “in network” provider in the United States. In other words, the equipment is free (or vastly cheaper) to the patient if the selected brand is chosen.

Could cannabis go the same route?

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Photo: Ian McWilliams, Flickr

At this juncture, that is unclear. Dronabinol, the only widely available source of cannabinoids in the country until 2016, is considered more of a generic than “name brand.” So far, neither it nor Sativex were pre-negotiated drugs. This was also for a very simple reason. There were only 800 registered patients in Germany until that year. That is far under the “orphan drug” category, which in Germany is 10,000 people. At this point, there are already much higher patient numbers (some cite as many as 79,000), with the majority of treatment going to patients with chronic pain.

By definition, this means that cannabis prices here will continue to be negotiated with little room for high mark-ups as the market consolidates. The more patients there are, the more attention will be paid to ensuring that the drug becomes affordable- not just to patients, but also insurers.

There is zero chance that the government will allow German public healthcare to be bankrupted over this still stigmatized plant, no matter how medically efficacious it is.

Germany and Israel at this point, have the longest established insurance mandate for cannabis- and in the German situation, this is now just two years old. The British NHS just announced that cannabis would be covered, with Luxembourg and Poland now also in the mix. However, the place of the insurance community in this debate is also a factor to be considered into the entire conversation as it unfolds here, beyond efficacy.

Dutch insurers in fact, stopped covering the drug almost as soon as Germany announced its own experiment.

It is unlikely that Wayland is unaware of such realities. The company has former executives from AOK on its German board. AOK is one of the largest statutory health insurers in Germany and one on the front line of cannabis reimbursements for the last two years.

8 Mistakes Businesses Make When Managing Product Labels: Part 2

By Rob Freeman
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Editor’s Note: This article contains the last four common labeling mistakes that businesses can make. The previous four mistakes were published last week here


Mistake #5: Planning Just-In-Time Inventory Too Close to Production; Effecting On-time Deliveries

Using JIT (Just-In-Time) management is common throughout North America. JIT involves manufacturers and suppliers trying to minimize, or even eliminate, their inventory. This approach relies on suppliers to deliver materials just before production is started. When this method is done properly, it is a very efficient way to minimize production costs, but when companies do not prepare for a “crisis” situation, they will have nothing in stock to fall back on.

Minimizing inventory costs is always a challenge. It’s a never-ending contradiction trying to maintain low inventory costs while factoring the percentage of potential new growth. Calculations can fluctuate from month to month, especially when industries rely on commodity ingredients or are impacted by sudden regulatory changes like we see with the cannabis, food packaging, and health supplement markets. Front runners in these markets practice minimizing their product label inventories, but their needs might quickly change from one day to the next. They do not want to place a one-time annual label order for each SKU. If an ingredient runs out of supply or a regulatory change affects their production profile, they would be sitting on unusable labels that will go to waste.

Best Method Approach: Think in terms of what the bottom line effect will be when factoring how you should manage your inventory. Try not to reduce your inventory too low. This could cause your company to experience shipping delays when complications arise with suppliers or quality control. You should have at least one-to-two production cycles worth of inventory available for those “crisis” moments.

Rob Freeman, author of this article, is the Director of Business Development and Marketing at Label Solutions Inc.

This backup inventory can also help reduce paying for excessive rush fees. Sometimes businesses can experience unexpected demand for a product, especially when companies consolidate production plants, acquire other companies, or have a new product launch. Supplier material shortages can greatly impact internal quality control and delay delivery times. Building a strong business relationship with your label provider is key to working around business demands and potential problems; which in turn, will help your label provider ship on-time deliveries so your production deadlines are met.

Mistake #6: Selecting the Lowest Price, But Approving the Wrong Materials for Your Product Needs

Sometimes clients buy the lowest priced labels without their procurement department knowing what the label specification requirements should be. It’s always a good business practice to shop for the best price, but it is equally as important to make sure you understand what you’re buying for that price.

Label providers vary on the quality of work they do, value-added services they offer, their production expertise, and the quality of material they use. Additionally, the hidden potential costs to lowest price shopping is that once the construction of those labels fail, it could cost you much more than a simple reorder.

Best Method Approach:Establish clear and concise procedures so your production team can forward the necessary criteria for your procurement department to have during the buying process.

brands want strong, eye-catching labels that stand out online, on the shelf, and/or on the retail floor. On a separate note, some businesses and manufacturers don’t care how long their brand and contact information remains on their product after the purchase. This gives them the flexibility to buy extremely low-quality material, but the outcome is a much lower brand awareness reminder at the end of the product’s use. But if your business model is such that you sell a “one-time use” product and all that you need is the label to survive through the POS, then the cheapest materials and lowest price might be your best solution.

In most cases, brands want strong, eye-catching labels that stand out online, on the shelf, and/or on the retail floor. Manufacturers want their labels to remain on their product, so their customers have a reminder of what they need to buy again or the ability to reread product use instructions and label warnings. Even if you don’t require the most expensive materials, using good quality, durable substrates and inks is always a solid approach.

Mistake #7: Not Preparing for Oil Based Products

One of the most popular products expected in retail for 2019 will be essential oils and/or CBD infused oil ingredients in foods, drinks, and wellness supplements. One of the most common mistakes relating to oil-based products is that entrepreneurs often forget that oils can soak into paper substrates and/or disperse certain inks, even when laminated.

Whether your product is on display in retail, or being sampled at a trade show, the last thing you want to be concerned about is your product name and contact information smearing or washing out. Even the smallest drop of oil can seep into a paper label and spread the ink to the point that you’ll have your own little tie-dye action on the label. That might look cool to some, but you lose your branding and the perception with most retail customers will be that your company is either cheap or is not professional.

Best Method Approach: There are affordable films such as polypropylene materials that will allow you to print the look you want while still protecting your branding and product. From cooking oils to industrial grade oils, the approach is the same but may require different types of films and ink solubility, so each bottle and container has oil resistant labels that maintain a professional look.Whenever one of our clients launch a new product or changes the intended surface conditions for label application, testing the label is always extremely important

If you’re feeling overwhelmed, remember that you don’t need to select all the label materials on your own. Your label provider should help you settle on the best solution.

Mistake #8: Not Properly Testing New Labels and New Product Surfaces

This is one of the most common and overlooked issues. Whenever one of our clients launch a new product or changes the intended surface conditions for label application, testing the label is always extremely important. This is especially critical when dealing with high quantity orders.

Best Method Approach: Testing parameters should be outlined by you and your label provider so both parties understand how long the label and the ink consistency should remain on the surface after purchase and use of product. There are wide variations of testing, so it will depend on the type of product and the intended industry.

For example, testing hand-applied, durable labels on powder coated metals for the boat and trailer industry require a completely different testing method compared to tests for typical food and beverage products that are machine applied. Usually, with uniform container products like food clamshell packaging, beverage cans, and supplement jars, all you will need to do is make sure to test labels on your production line, so your team is confident with the results.

Final Thoughts

In summary, preventing just one of these mistakes can yield huge cost savings no matter if your company is a start-up or a large corporation. Even if these eight common mistakes do not directly apply to your own issues, hopefully the “Best Methods” approach will give your company ideas about how you can prepare for future product releases, reduce product label issues, and improve your own quality control metrics.

If you have topics relating to product labeling that you would like me to discuss, please write to info@easylabeling.com. Be sure to save this article and forward it to your peers for future reference.

WHO Makes Noise About Cannabis “Rescheduling”

By Marguerite Arnold
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At this point in the end of prohibition, not even the United Nations (UN) or the World Health Organization (WHO) are immune to the great green wave sweeping the planet. Yet, lest anyone get too optimistic about developments at the nose bleed level of international drug reform, the newest round of headlines regarding “WHO cannabis reform” is hardly cause for celebration.

The Story At The International Level So Far

In documents obtained by Cannabis Industry Journal last fall, it appeared that cannabis reform of the serious kind had caught the eye of senior leaders at the WHO. Further, it also appeared that some kind of decisive action or declaration would be forthcoming by the end of the year.

Yet as reported at the end of January, such decisions appear to be headed for a tortoise speed approvals track. Yes, it appears that CBD will probably be descheduled, and from both the hemp and cannabis perspective. That should be good news to many who are caught in a raft of international standards that are confusing and all over the place on a country-by-country level. However, this will not be much of a boon to the industry in Europe, in particular, where the discussion is less over CBD but the source of it, and how distillates are used. From this perspective, the draft WHO documents will make no difference, except perhaps to speed the acceptance of CBD, and create clearer regulations around it.

On the THC front, the WHO appears to do nothing more than move cannabis squarely into international Schedule I territory. More interesting of course, is the intent of international regulators to keep cannabis very much in uncertain status while moving “pharmacized” versions of the same into Schedule III designation.

What Does The Opinion of The WHO Really Mean?

What this means is also still unclear except that those who want to sell to regulated medical and nonmedical markets have to get their products (whatever those are) registered as medicine or a legitimate consumer product in every jurisdiction and eventually at a regional level (see Europe). That is clearly underway right now by both the big Canadian and emerging Israeli entities in the market as well as savvy European players in both verticals. That said, it is also a game that is about to create a very interesting market for those who are able to produce cheap, but high-grade oils in particular.

What Does This Mean For The Future Of Flower?

On the medical front, Germany became the third country in the world to consider reimbursing flower via national healthcare. Of the three who have tried it to date so far (and it is unclear what Poland will do at this point longer term), Israel is inching away and Holland nixed the entire cannabis covered by insurance conversation at the same time Germany took it on. Where that plays out across Europe will be interesting, especially as the cost of production and end retail cost continues to drop. And doctor education includes information about “whole plant” vs. pre-prescribed “dosing” where the patient has no control. The reality in the room in Europe right now is that this drug is being used to treat people with drug resistant conditions. Dosing dramas in other words, will be in the room here for some time to come as they have in no other jurisdiction.

european union statesBeyond dosing and control issues that have as much to do with doctors as overall reform, flower is still controversial for other reasons. One, it is currently still being imported into Europe from highly remote and expensive import destinations. That will probably change this year because of both the cultivation bid and Israel’s aggressive move into the middle of the fray as well as widely expected ex-im changes that will allow imports from countries throughout Europe. However, in the meantime, this is one of the reasons that flower is so unpopular right now at the policy and insurance level. The other is that pharmacists in Germany are allowed to treat the flower as a drug that must be processed. In this case, that means that they are adding a significant surcharge, per gram, to flower because they grind it before they give it to patients.

How long this loophole will exist is unclear. However, what is also very clear is that oils in particular, will play a larger and larger role in most medical markets. Read, in other words, “pharmaceutical products.”

For this reason, the WHO recommendations, for one, are actually responding to unfolding realities on the ground, not leading or setting them.

Setting A Longer-Term Date For Widespread Recreational Reform

This conservative stance from the WHO also means, however, that in the longer run, individual country “recreational reform” particularly in places like Europe, will be on a slower than so far expected track. There are no countries in the EU who are willing to step too far ahead of the UN in general. That includes Luxembourg, which so far has made the boldest predictions about its intentions on the recreational front of any EU member. However, what this also may signal is that the UN will follow the lead set by Luxembourg. Even so, this legitimately puts a marker in the ground that at least Europe’s recreational picture is at least five years off.

In the meantime, the WHO recommendations begin to set international precedent and potentially the beginnings of guidelines around a global trade that has already challenged the UN to change its own regulations. In turn, expect these regulations to guide and help set national policy outside a few outliers (see Canada, Uruguay and potentially New Zealand) globally.

Bottom line, in other words? The latest news from the UN is not “bad” but clearly seems to say that cannabis reform is a battle that is still years in the making. That said, from the glass is half full perspective, it appears, finally, there might be the beginning of a light at the end of the international tunnel of prohibition.

Canadian Companies Continue European Cannabis Moves

By Marguerite Arnold
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There is a lot of European news afoot from the big public Canadian companies between all the headlines about Israel. Namely, established cannabis companies in the market already continue to shore up their presence across multiple member EU states.

What is at stake? Establishing some kind of European foothold in an environment where licensing and production costs will not bust the bank- and what will be the first government-set, pre-negotiated bulk price for medical cannabis flower. For all the high-flying news of even hundred million-dollar (or euro) investments, right now the biggest hunt is on for ways to trigger sales figures that continue to grow steadily in the customer column.

There is also a dawning realization that prices are going to start stabilizing if not falling after the German government finalizes its selection of bid winners.european union states

As a result of all of this, to compete against each other and streamline distribution and supply chain costs, the larger Canadian companies in the market are clearly angling to set up efficient distribution networks- even if that means buying pieces of them one country and property at a time.

How well that will work in the longer run remains to be seen- but it is a play that is starting to show up in other European developments (from the Israeli side). That said, the latest news of the big guys in the field make sense within this context, if none other.

Canopy Growth Announces UK and Polish Moves

Spectrum Cannabis, the European-based medical brand of Canopy Growth chalked two more achievements off its Euro “to do list” in January. At the beginning of the month, Spectrum announced it was preparing to enter the UK market via the creation of a joint venture with Beckley Canopy Foundation, Spectrum Biomedical.

In Poland, the company also announced the successful shipment of its high-THC whole flower “Red No.2.” The Polish government began allowing sales late last year.

Neither development however should be a surprise to those watching the strategy of either Canopy or for that matter several other public Canadian cannabis companies. Aurora, for example, announced its first successful shipment into the country on the same day that the Polish government changed the law. On the British side, the combined forces of changing the regulatory scheduling of cannabis and allowing the drug to be dispensed by prescription have certainly changed the game on some levels. Brexit is about to play havoc with most imported products, and cannabis is no exception to this.Canopy_Growth_Corporation_logo

In this sense, the challenges facing both British and Polish patients right now are also fairly analogous. Importing is the only way to get the drug to patients, and the cost of import is also prohibitively high for most. Then of course, there is actual approval beyond that, which is also a problem everywhere cannabis has become legal.

While both developments of course, are good news for the company, this does not mean that the initial going will be easy or smooth for any company, including one as skilled at strategic market entry in core countries across the continent for the last several years as Spectrum has reliably proven to be.

Green Organic Dutchman Gets Cultivation License In Denmark

TGOD has now gone where other Canadian Euro cannabis players have gone before– namely it has joined the national trial program and several other Canadian cannabis companies before it (see Spectrum Cannabis for one) in Denmark.

Why are so many public cannabis companies attracted to the tiny country? The first is that the country, like Switzerland, in fact, is not as bound by EU rules as say, Germany and France. It can “experiment” in ways that are notably different from its neighbors.

As a result of this and a change in the law that began a multiyear trial to experiment with regulation and medical efficacy, cultivation licenses are also easier to obtain than in other places. There are also other plusses to establishing a presence in the country if not the continent including a strong social care system, and a research environment that promises to produce great results on the medical efficacy discussion continent wide.

Beleave Achieves ISO 9001 Certification

By Aaron G. Biros
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According to a press release, Beleave Inc. announced recently that their subsidiary, Beleave Kannabis Corporation, received the ISO 9001:2015 certification. The facility that received the certification, based in Hamilton, Ontario, was certified “for the research, development, and production of cannabis products for medicinal and recreational purposes,” reads the press release.

Beleave is a vertically-integrated cannabis business headquartered in Oakville, Ontario that cultivates cannabis as well as producing oils and extracts. The company operates in both medical and recreational sectors of the market. They have been working on developing cannabis food and beverage products, such as infused powders and sugars, expecting that the recreational cannabis market in Canada will soon open its doors to infused products in 2019.

ISO 9001:2015 is an international standard that stipulates requirements for a quality management system (QMS), showing that a facility can provide products that meet customer and regulatory requirements. ISO 9001:2015 is the most up-to-date version for the standard, which can help show a company’s commitment to quality, efficiency and consistency. The 2015 version uses criteria with an emphasis on risk-based thinking to aid in the application of the process approach, improved applicability for services and increased leadership requirements.

“We continue to develop international partnerships and plan to enter global markets”The company’s facility was certified by Bureau Veritas Certification Holding SAS in late January of 2019. According to Roger Ferreira, chief science officer at Beleave, the process of certification was no easy undertaking. “After many months of hard work and preparation, we are extremely proud to be one of the few licensed producers of cannabis to have received ISO 9001:2015 accreditation,” says Ferreira. “This certification reflects Beleave’s ongoing commitment to quality across key elements of our business, which includes research, innovation, and production of cannabis products.”

Going beyond Canada, Ferreira says they are building the foundation of a company preparing to expand internationally. “Further, this internationally recognized certification for our quality management system positions us well as we continue to develop international partnerships and plan to enter global markets,” says Ferreira. Through their ownership in Procannmed S.A.S., they are licensed to cultivate and produce medical cannabis products out of Colombia, with the goal to export products to the Latin American market. They have also partnered with Canymed GmbH, based in Germany, to further explore opportunities in the European medical cannabis market.

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Here Comes The Start-Up Nation Of Cannabis: Israel

By Marguerite Arnold
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israel flag

For those who have been watching (if not in the thick of) the drama over Israeli medical cannabis export rights, this latest development was not only inevitable but overdue. Israel’s parliament unanimously approved the legislation on Christmas Day (along with Thailand). Less than a month later, the cabinet concurred.

That means that export rights are now actionable law.

Beyond this final passage into reality, export rights have been at the forefront of a global drama on cannabis- most recently in this part of the world, as a specific chip in political dealmaking between U.S. President and Israel’s Prime Minister, Benjamin Netanyahu since the former entered office. This go around at least.

Tel Aviv, Israel

The political bargaining that even allowed Israel’s medical program to flourish and get funding from its earliest days (including of the U.S. federal government kind) of course, is nothing new.

Pioneers Of The Cannabis Industry

Hard as it is to believe, most of what is widely known and easily digitally shared (including on social media) about cannabis (as a plant, let alone distinctions between cannabinoids) is information created during this last four to eight-year period (certainly since 2010). This has been driven by reform, and a birth of wider education about medical and recreational cannabis plus the cannabis industry and broader lifestyle press. And most of what is credible out there, no matter who claims credit today, has an Israeli origin, and of the medical kind.

Add this history of scientific research and insight to the philosophy of a nation driven by entrepreneurial zest, and say no more.

Now that Israel can begin to export its cannabis, the interesting thing to see is whether cannatech will in the end, be more valuable than individual strains themselves. The pick axe in this particular “green gold rush?”

For now, of course, all bets are off, even on the cultivation front. Because, no matter what else it is, it is well timed, globally, to give even the Israeli medical production market a big green shot in the arm.

Germany and Europe Beckons

The change in the law in Israel also comes as those who made first qualifying round in the German cultivation bid are getting prequalification letters, although this time, no firms, anywhere, have issued press releases about their finalist round status.

And here is the other issue to consider: While the bid itself does not have anything to do with import capability, new Israeli game in town is, in itself, a big game changer for anyone whose hat was thrown into the coalitions who applied for the pending cultivation license. Why? Until they deliver their first crops grown auf Deutschland, firms have to deliver from somewhere. And this being Germany, the import destination has to be from a place where the plant is federally legal. Israel becomes another option in a market so far dominated by Dutch and Canadian firms.

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The Tikun Olam strain Avidekel being grown in Israel.

Can you smell new bid lawsuits also, if this scenario has not already been addressed by BfArM? The history of cannabinoids in Germany in general (historically as well as recently) is fraught already. This pending challenge, should it come, will be laden with symbology modern Germany will do everything to avoid provoking.

Beyond the soap opera that the bid has turned into in Germany (the ultimate test case for cultivation and insurance-backed medical and industry acceptance across the rest of the EU essentially), there are of course, other markets beckoning. This includes all of Eastern Europe and much of the EU. This includes France and the UK immediately.

In other words, no matter what the longer-term impacts will be, this well timed, politically astute Israeli decision is coming at the beginning of what is going to be, as everyone is clearly seeing at the end of January, a momentous and earth-shaking year not only for Europe, but globally.

And that is big business for a little country with an eye on the export game.

Swiss Cloud 9 Begins Importing Cannabis From United States

By Marguerite Arnold
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For all the success of the cannabis market in the United States, there are two big issues that still confound the industry because of a lack of federal reform. The first, of course, is national recognition of an industry that still struggles with banking, insurance and selling products across state lines. The other is international trade.

However, it appears that one Colorado-based company, United Cannabis, has now successfully begun to navigate the complex regulatory and standards puzzle, and further, has set up trade and import agreements in both France and Switzerland. Even more interesting? It managed to do the same before the passage of the Farm Bill.

At present they are exporting to Europe from Florida – but the fact that they are exporting in the European direction at all is a feat still unmatched by many other American firms all looking to do the same thing.

Francis Scanlan, founder of Cloud 9 Switzerland

In Switzerland, they are also partnering with an equally intriguing firm called Cloud 9 Switzerland. We sat down with Francis Scanlan, founder of Cloud 9 Switzerland, to talk about what they are doing and how they are doing it- and from the European perspective.

The First Compliant Swiss Chocolate Maker

Cloud 9 is a start-up that is going head to head with the larger Canadian firms in innovative ways and in several directions. That includes the creation of food and beverage products. It also includes pharmaceuticals.

As of January 22, 2019, Cloud 9 also received approval from Swiss authorities to proceed with production of what will be, as Scanlan describes it, “the first EU-compliant hemp chocolate bar.” The hemp they are using contains a full spectrum hemp extract, which does not fall under the rubric of a so-called “novel food” because hemp has been a product in the consumer market here for a long time.

The product will be on Italian shelves as of the end of Q1 this year. Beyond the regulatory approvals necessary to get to market, it also took him about a year to find and convince a chocolate manufacturer in Switzerland to work with him.

Scanlan describes his year and a half old firm as the “value added” between suppliers, manufacturers and distributors. With a background in the corporate food and beverage industry including a stint at Nestlé, he and his team create the formulations and commercialize new products. And they keep a sharp eye on the regulatory bottom line in Europe.

Cloud 9’s corporate mission, Scanlan says, is to improve the quality of life and wellness of their customers. “We are not in the opportunistic marketing business” he says. “We want to create products that really benefit people. Our motto has always been Win-Win for both our partners and consumers.”

Bringing A Glaucoma Drug To The EU Market

However do not mistake Cloud 9 or even Scanlan himself as a kind of cannabis Willy Wonka one hit wonder. Or a firm that is solely operating in the wellness space. They are also now working to bring a Glaucoma drug into the EU where they will begin with medical trials to start the approval process. That said, Scanlan is confident about the success of this product as well. “It has a great dossier in its home country,” he says. “And that has also already caught the interest of doctors in Italy and Switzerland.”

Beyond that, there are other plans in the works, including the introduction of a transdermal patch that delivers cannabinoids through the skin. “The great thing about this kind of approach,” Scanlan says, “is that it allows people to get over their fear of orally ingested drugs. They don’t like the effect, they can just take it off.” He also noted that the patch uses a patented technology that allows a far more efficient delivery mechanism, which creates a time-delayed medication approach and allows for a 90% transfer of cannabinoids.

In other words, this small, privately funded start-up, using innovative approaches to a market Scanlan knows well, is absolutely in the ring and going to market. And further doing so with a European mindset and operating philosophy that incorporates not only hemp exported from the American hemisphere, but is mixed with a large dollop of good old “American” entrepreneurial gusto and inclinations.


Disclaimer: Cloud9 is a sponsor of the MedPayRx pilot to market program in the EU.

From The Lab

I Was Wrong… und das ist auch gut so!

By Dr. Markus Roggen
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I was wrong. And that’s a good thing! Based on all available data, I assumed that evaporating ethanol from a cannabis oil/ethanol solution would result in terpene loss. As it turns out, it doesn’t. There are so many beliefs and assumptions about cannabis: Cannabis cures cancer!1 Smoking cannabis causes cancer!2 Sativas help you sleep; Indicas make you creative!3,4 CBD is not psychoactive!5 But are these ‘facts’ backed by science? Have they been experimentally tested and validated?

I postulated a theory, designed experiments to validate it and evaluated the results. Simply putting “cannabis backed by science” on your label does not solve the problem. Science is not a marketing term. It’s not even a fixed term. The practice of science is multifaceted and sometimes confusing. It evolved from the traditional model of Inductivism, where observations are used in an iterative process to refine a law/theory that can generalize such observations.6 Closely related is Empiricism, which posits that knowledge can only come from observation. Rationalism, on the other hand, believes that certain truths can be directly grasped by one’s intellect.7 In the last century, the definition of science was changed from the method by which we study something, such as Inductivism or Rationalism, and refocused on the way we explain phenomena. It states that a theory should be considered scientific if, and only if, it is falsifiable.8 All that means is that not the way we study something is what makes it scientific, but the way we explain it.

I wonder how can we use empirical observations and rational deliberations to solve the questions surrounding cannabis? And more importantly, how can we form scientific theories that are falsifiable? Cannabis, the plant, the drug, has long been withheld from society by its legal status. As a result, much of what we know, in fact, the entire industry has thrived in the shadows away from rigorous research. It’s time for this to change. I am particularly concerned by the lack of fundamental research in the field. I am not even talking about large questions, like the potential medical benefit of the plant and its constituents. Those are for later. I’m talking about fundamental, mundane questions like how many lumens per square centimetre does the plant need for optimal THC production? What are the kinetics of cannabis extraction in different solvents? What are the thermodynamics of decarboxylation? Where do major cannabinoids differ or align in terms of water solubility and viscosity?

The lack of knowledge and data in the cannabis field puts us in the precarious position of potentially chasing the wrong goals, not to mention wasting enormous amounts of time and money. Here’s a recent example drawn from personal experience:Certainly, I cannot be the only one who has made an incorrect assumption based on anecdotes and incomplete data?

Some of the most common steps in cannabis oil production involve ethanol solutions. Ethanol is commonly removed from extraction material under reduced pressure and elevated heat in a rotary evaporator. I expected that this process would endanger the terpenes in the oil – a key component of product quality. My theory was that volatile terpenes9 would be lost in the rotary evaporator during ethanol10 removal. The close values of vapor pressure for terpenes and ethanol make this a reasonably assumed possibility.11 In the summer of 2018, I finally got the chance to test it. I designed experiments at different temperatures and pressures, neat and in solution, to quantify the terpene lost in ethanol evaporation. I also considered real life conditions and limitations of cannabis oil manufacturers. After all the experiments were done, the results unequivocally showed that terpenes do not evaporate in a rotary evaporator when ethanol is removed from cannabis extracts.12 As it turns out, I was wrong.

We, as an industry, need to start putting money and effort into fundamental cannabis research programs. But, at least I ran the experiments! I postulated a theory, designed experiments to validate it and evaluated the results. At this point, and only this point, can I conclude anything about my hypothesis, even if that is that my working theory needs to be revised. Certainly, I cannot be the only one who has made an incorrect assumption based on anecdotes and incomplete data?

There is a particular danger when using incomplete data to form conclusions. There are many striking examples in the medical literature and even the casual observer might know them. The case of hormone replacement therapy for menopause and the associated risks of cardiovascular diseases showed how observational studies and well-designed clinical trials can lead to contradicting results.13 In the thirties of the last century, lobotomy became a cure-all technique for mental health issues.14 Dr. Moniz even won the Nobel Prize in Medicine for it.15 And it must come as no surprise when WIRED states “that one generation’s Nobel Prize-winning cure is another generation’s worst nightmare.”16 And with today’s knowledge is impossible to consider mercury as a treatment for syphilis, but that is exactly what it was used as for many centuries.17 All those examples, but the last one in particular should “be a good example of the weight of tradition or habit in the medical practice, […] of the necessity and the difficulties to evaluate the treatments without error.”18 There is the danger that we as cannabis professionals fall into the same trap and believe the old stories and become dogmatic about cannabis’ potential.

We, as an industry, need to start putting money and effort into fundamental cannabis research programs. That might be by sponsoring academic research,19 building in-house research divisions,20 or even building research networks.21 I fully believe in the need for fundamental cannabis research, even the non-sexy aspects.22 Therefore, I set up just that: an independent research laboratory, focused on fundamental cannabis research where we can test our assumptions and validate our theories. Although, I alone cannot do it all. I likely will be wrong somewhere (again). So, please join me in this effort. Let’s make sure cannabis science progresses.


References

  1. No, it does not. There are preliminary in-situ studies that point at anti-cancer effects, but its more complicated. The therapeutic effects of Cannabis and cannabinoids: An update from the National Academies of Sciences, Engineering and Medicine report, Abrams, Donald I., European Journal of Internal Medicine, Volume 49, 7 – 11
  2. No, it does not. National Academies of Sciences, Engineering, and Medicine. 2017. The Health Effects of Cannabis and Cannabinoids: The Current State of Evidence and Recommendations for Research. Washington, DC: The National Academies Press. https://doi.org/10.17226/24625.
  3. No, it does not. The chemical profile of the plant dictates the biological effects on humans, not the shape of the leaf.  Justin T. Fischedick, Cannabis and Cannabinoid Research, Volume: 2 Issue 1: March 1, 2017
  4. Indica and Sativa are outdated terms. Piomelli D, Russo EB. The Cannabis sativa versus Cannabis indica debate: An Interview with Ethan Russo, MD. Cannabis Cannabinoid Res 2016; 1: 44–46.
  5. No, it is. CBD’s supposed “calming effects” is indeed a psychoactive effect. However, it is not intoxicating like THC. Russo E.B., Taming THC: potential cannabis synergy and phytocannabinoid-terpenoid entourage effects.Br. J. Pharmacol. 2011; 163: 1344-1364
  6. As attributed to Francis Bacon.
  7. See the work by philosopher Baruch Spinoza.
  8. As theorized by Karl Popper.
  9. Monoterpenes have a vapor pressure in the low to mid hundreds of Pascals at room temperature.
  10. Vapor pressure of 5.95 kPa at 20˚C.
  11. Furthermore, there is always the possibility of azeotropes in complex mixtures. Azeotropes are mixtures of two or more liquids that have different boiling points individually, but in mixture boil together.
  12. Terpene Retention via Rotary Evaporator Application Note, Heidolph North America
  13. https://www.pharmaceutical-journal.com/research/review-article/establishing-the-risk-related-to-hormone-replacement-therapy-and-cardiovascular-disease-in-women/20202066.article?firstPass=false
  14. https://psychcentral.com/blog/the-surprising-history-of-the-lobotomy/
  15. https://en.wikipedia.org/wiki/António_Egas_Moniz
  16. https://www.wired.com/2011/03/lobotomy-history/
  17. https://www.infezmed.it/media/journal/Vol_21_4_2013_10.pdf
  18. https://www.ncbi.nlm.nih.gov/pubmed/11625051
  19. Canopy Growth funds a professorship of cannabis science at UBC. Tilray collaborates with UCSD on a phase I/II clinical trial.
  20. For examples see: NIBR, PMISCIENCE.
  21. For examples see: CEMI, theAIRnet, Future Sky.
  22. Research that does not lead to short-term stock value spikes but long-term progress

Cannabis Reform Comes To Africa

By Marguerite Arnold
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For those familiar with the tragic history of apartheid in South Africa up until the end of the 1980’s, Lesotho is a country long associated with terrible political and economic repression. Also known as the “Kingdom in the Sky” because of its stunning geography, the tiny, landlocked country is literally inside and completely surrounded by South Africa. During the apartheid regime, Lesotho was a place where “vice industries” like prostitution and gambling were allowed to flourish by a much more conservative surrounding political regime. Much like Indian reservations in the U.S., in fact.

Even today, diamonds and water are the country’s top exports although tourism, including skiing, is still a major underpinning of the country’s domestic economy.

Moving forward into the 21st century and much like American Indians, the mountainous, impoverished country is looking at the cannabis trade to create a national income of global worth. In 2017, the country became the first on the African continent to actually legalize cultivation for medical purposes, as well as export. Illicit cultivation, mostly bound for the black market, however, has boomed since the end of the apartheid regime.

The country’s high altitude and fertile soils untainted with pesticides, makes Lesotho an ideal place to grow even outdoor crops. And as a result, the country has also begun to attract foreign capital interested in the production and export of finished products rather than the raw plant material. Several big Canadian producers, in fact, have already established commercial operations.

2018 Was The “Year For Cannabis” In South Africa

As a result of Lesotho’s lead, neighboring countries are now also following suit on the legalization front. Zimbabwe, just to the north of South Africa, has also legalized cultivation for medical purposes although local farmers have been slow to seize the opportunity. Malawi is also moving towards some kind of cannabis reform along with NigeriaGhana and Swaziland. And of course, to the north, Morocco, already established globally for illicit cannabis and hashish production (much of it making its way into Europe as it has for literally hundreds of years at this point) is also teetering on some kind of reform.

In South Africa itself, the economic powerhouse of the continent, the personal cultivation and smoking of cannabis (for both medicinal and recreational reasons) was enshrined as a constitutional right as of September 2018. That said, commercial production and sales for recreational use remains illegal. As in other places, the licensing process in South Africa has held up the medicinal and recreational market already on the table if not in the room. And most locals cannot afford the licensing fees.

That said, there is already a commercial cannabis beer brewing company called Durban Poison which rushed into the space as soon as the constitutional question changed in South Africa. The country is the biggest beer market in Africa. And there are competitors already lining up for similar opportunities of both the medical and recreational kind.

Including South Africa, according to estimates, there are already 10,000 tons of product produced (mostly illicitly) across the continent. Much as in other places, this “green gold” has financed many of the regional wars of the last sixty years. For this reason, apart from the economic benefits that legalization brings, it may well be that the first big continental competition on the cannabis front that enters first world markets, will be African rather than Latin American (or even Chinese).

Legalization and regulation will help stamp out the illicit financing of guerrilla wars and devastation, bringing more political and economic stability. It may also provide one of the best regional economic incentives to stop rare wildlife poaching.

Medical and Recreational Opportunities Loom Large- But So Do Liabilities

But for all the potential of the future, now comes the hard part (as in other regions of the world where reform has come). Stamping out the black market and establishing licencing and other regulations (of all kinds, starting with GMP). Plus of course, because this is Africa, attracting capital at reasonable rates, and establishing legitimate distribution domestically, plus trade routes for global export. Including of course, both to Europe and Australia.

Medical research in Africa is also likely to be an interesting question especially given the impact of cannabis on infection. Africa is home to some of the more dire contagious natural diseases known to man. This plant, in other words, produced locally, might also be applied locally to help manage everything from Malaria to Ebola. If not become a staple in the medical kits distributed by foreign aid organizations. That of course, will take reform at the UN level. But even this conversation, at this point, is now moving.

That said, as 2019 gets underway, there is not a single continent of the world, much less a region, where cannabis reform has not touched.

Soapbox

ERP’s Role in Ensuring Traceability & Compliance in the Cannabis Market

By Daniel Erickson
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Recent trends in the cannabis space and media headlines reveal the challenges and complexities of the evolving cannabis industry with regard to traceability and compliance. Keeping abreast of the evolving state of legislative requirements is complex and requires effective procedures to ensure your business will flourish. At the forefront is the need to provide complete seed-to-sale traceability from the cannabis plant to the consumer, increasing the demand for effective tracking and reporting technologies to assure cultivators, manufacturers, processors and dispensaries are able to meet regulatory compliance requirements. An enterprise resource planning (ERP) solution offers a business management solution designed to integrate all aspects from the greenhouse and growing to inventory, recipe/formulation, production, quality and sales, providing complete traceability to meet compliance regulations.

The main force driving cannabusinesses’ adoption of strict traceability and secure systems to monitor the growth, production and distribution of cannabis is the Cole Memorandum of 2013 issued by former US Deputy Attorney General James Cole. The document was designed to prevent the distribution of cannabis to minors, as well as prevent marijuana revenue from being used for criminal enterprises. Due to the non-legal status of cannabis on the federal level, the memo provides guidance for states whose voters have passed legislation permitting recreational or medical cannabis use. If states institute procedures for transparent inventory control and tracking documentation, the memo indicates that the federal government will refrain from interference and/or prosecution. Despite the Trump administration rescinding the memo in early 2018, companies have largely continued to follow its guidelines in an attempt to avoid targeted enforcement of federal law. Local government reporting is a primary reason for strict inventory control, necessitating reliable traceability documentation of the chain-of-custody. 

Process metrics within an ERP solution are essential in providing the accountability necessary to meet required cannabis compliance initiatives. With a centralized, streamlined and secure system, each process becomes documented and repeatable – enabling best practices to provide an audit trail for accountability in all cannabis activities. Whether cultivating, extracting, manufacturing or dispensing cannabis, an ERP’s functionality assists with compliance demands to manage and support traceability and other state-level requirements.

An ERP solution solves the traceability and compliance issues faced by the industry by providing inventory control management and best practices that automates track and trace record keeping from seed to consumer. Growers are also implementing cultivation management solutions within their ERP and highly secure plant identification methods to mobilize greenhouse and inventory to support real-time tracking. Monitoring the loss of inventory due to damage, shrinkage, accidentally or purposeful destruction is efficiently documented to assure that inventory is accounted for. Similar to other process manufacturing industries, it is possible to produce tainted or unsafe products, therefore an ERP solution that supports product recall capabilities is fundamental. With a centralized framework for forward and backward lot, serial and plant ID tracking, the solution streamlines supply chain and inventory transactions to further ensure compliance-driven track and trace record keeping is met.

Local government reporting is a primary reason for strict inventory control, necessitating reliable traceability documentation of the chain-of-custody. Data regarding inventory audit and inspection details, complete with any discrepancies, must be reported to a states’ seed-to-sale tracking system to conform with legal requirements. An ERP utilizes cGMP best practices and reporting as safeguards to keep your company from violating compliance regulations. Failure to complete audits and meet reporting guidelines can be detrimental to your bottom line and lead to criminal penalties or a loss of license from a variety of entities including state regulators, auditors and law enforcement agencies. A comprehensive ERP solution integrates with the state-administered traceability systems more easily and reliably as compared to manual or stand-alone systems – saving time, money and detriment resulting from non-compliance.

Similar to other food and beverage manufacturers, the growing market for cannabis edibles can benefit from employing an ERP system to handle compliance with food safety initiatives – encompassing current and future requirements. Producers of cannabis-infused products for recreational and medicinal use are pursuing Global Food Safety Initiative (GFSI) certification, employing food safety professionals and implementing comprehensive food safety practices–taking advantage of ERP functionality and processes currently in place in similarly FDA regulated industries.

As legalization continues and reporting regulations standardize, dynamic cannabis ERP solutions for growers, processors and dispensaries will evolve to meet the demands and allow for operations to grow profitably.In addition to lot, serial and plant ID tracking, tracing a product back to the strain is equally important. An ERP can efficiently trace a cannabis strain from seedling through the final product, monitoring its genealogy, ongoing clone potency, CBD and THC content ratios and other attributes. The health, weight and required growing conditions of each individual plant or group of plants in the growing stages may be recorded throughout the plant’s lifecycle. In addition, unique plant identification regarding the performance of a particular strain or variety, how it was received by the market and other critical elements are tracked within ERP system. This tracking of particular strains assists with compliance-focused labeling and determining the specific market for selling and distribution of cannabis products.

Collecting, maintaining and accessing traceability and compliance data in a centralized ERP system is significant, but ensuring that information is safe from theft or corruption is imperative as well. An ERP solution with a secure platform that employs automated backups and redundancy plans is essential as it uses best practices to ensure proper procedures are followed within the company. User-based role permissions provide secure accessibility restricted to those with proper authorization. This level of security allows for monitoring and recording of processes and transactions throughout the growing stages, production and distribution; ensuring accountability and proper procedures are being followed. Investing in an ERP solution that implements this level of security aids companies in their data assurance measures and provides proper audit trails to meet regulations.

In this ever-changing industry, regulatory compliance is being met by cannabusinesses through the implementation of an ERP solution designed for the cannabis industry. Industry-specific ERP provides functionality to manage critical business metrics, inventory control, local and state reporting and record keeping, and data security ensuring complete seed-to-sale traceability while offering an integrated business management solution that supports growth and competitive advantage in the marketplace. As legalization continues and reporting regulations standardize, dynamic cannabis ERP solutions for growers, processors and dispensaries will evolve to meet the demands and allow for operations to grow profitably.