In an unprecedented move, the U.S. Food & Drug Administration (FDA) has issued warning letters today to companies selling products containing delta-8 THC. In total, the FDA sent out five warning letters to companies for violating the Federal Food, Drug, and Cosmetic Act (FD&C Act).
Image from the FDA’s consumer update on Delta-8 THC
The violations include illegal marketing of unapproved delta-8 THC products as treatment for medical conditions, misbranding and adding delta-8 THC to food products. Back in September of last year, the FDA published a consumer update on their website, seeking to educate the public and offer a public health warning on delta-8 tetrahydrocannabinol, otherwise known as delta-8 THC.
Delta-8 THC is a cannabinoid that can be synthesized from cannabidiol (CBD) derived from hemp. It is an isomer of delta-9 THC, the more commonly known psychoactive cannabinoid found in cannabis. Delta-8 THC does produce psychoactive effects, though not quite as much as its better-known cousin, delta-9 THC. Many regulators and industry stakeholders are increasingly concerned about the rise in popularity of delta-8 products, namely because of the processing involved to produce it. Delta-8 THC is often synthesized using potentially harmful chemicals.
The FDA has a history of sending a lot of warning letters to companies marketing CBD products inaccurately and making drug claims. Earlier this year, they sent a number of letters to companies claiming that CBD can cure or prevent Covid-19.
According to Janet Woodcock, M.D., principal deputy commissioner at the FDA, they are getting more and more concerned about the popularity of delta-8 THC products sold online. “These products often include claims that they treat or alleviate the side effects related to a wide variety of diseases or medical disorders, such as cancer, multiple sclerosis, chronic pain, nausea and anxiety,” says Woodcock. “It is extremely troubling that some of the food products are packaged and labeled in ways that may appeal to children. We will continue to safeguard Americans’ health and safety by monitoring the marketplace and taking action when companies illegally sell products that pose a risk to public health.”
The FDA sent warning letters to the following companies selling delta-8 THC products:
The cannabis retail market is very unique. What began as compassion clubs and wellness centers in the early days of legal cannabis, eventually morphed into dispensaries, quickly becoming the retail model that regulators around the country adopted and businesses implemented.
For most states with legal cannabis markets, the dispensary has been the only way for consumers to buy cannabis and cannabis products. Before the pandemic began, we started seeing a handful of states warm up to allowing delivery services. During the height of the pandemic, more states adopted curbside pickup, e-commerce in some shape or form and delivery services that finally expanded cannabis retail beyond the dispensary. Still though, regulations hamper commercial growth in the retail space and the dispensary remains, by far, the place where most people buy their cannabis.
When Jack Roosevelt, co-founder of LucidaClub
When Jack Roosevelt, co-founder of LucidaClub, entered a dispensary back in 2019 in Massachusetts, he shared an experience all too common in the cannabis industry: An overwhelming number of options, jargon like sativa, indica and strain names that make no sense to the uninitiated, confusing product types and an all-around unpleasant shopping experience. Jack saw all those barriers to entry for the canna-curious or novice consumer and thought that there must be a better way to shop for cannabis.
So he started LucidaClub, a membership-based platform that is designed to guide and educate consumers with the advice of experts who can help people understand cannabis products and make the right purchase decision without all of the frustration and trial and error that is so common.
The name, Lucida, comes from a Latin phrase meaning the brightest star in a constellation. Jack and his co-founder, Lucinda, want their company to be the guiding star on your cannabis journey. LucidaClub isn’t just for the cannabis newbie; their in-house curator and team of experts can help any cannabis consumer find products to better fit their needs for sleep, wellness, relaxation, stress or just to have a good time. We sat down with Jack to chat about the cannabis retail market, what his company is all about and what the future of cannabis retail might look like.Jack Roosevelt will be speaking on the cannabis retail experience at the Cannabis Quality Conference & Expo. Click here to learn more.
Cannabis Industry Journal: Tell us about your background and how you came to the cannabis space.
Jack Roosevelt: I began my career in finance, working for JP Morgan and Barclays. I left Barclays and joined a renewable energy start up before eventually joining the cannabis space.
My move into the cannabis space was due to an event in the summer of 2019. Adult use cannabis had been legal in Massachusetts since November of 2018. Now, I smoked some weed in high school and college, but hadn’t touched it in at least 20 years. However, cannabis was now legal, so I said maybe there’s an opportunity to find something that would help me unwind at the end of the day, help with sleep and manage some of my stress.
Knowing that I smoked in high school and college, I figured that buying weed was buying weed. How difficult could this be? That took me to going to a dispensary for the first time. Walking through those doors made me realize that buying cannabis today is nothing like buying weed back when I was in college. It’s a fundamentally different experience.
I stood there looking at the menu of strains, with names that meant nothing to me, jargon like terpenes, and even the idea of sativa versus indica at that time was foreign to me. Twenty years ago, we didn’t pay attention to the strain name or anything like that. We’d walk into someone’s dorm room and your option would be ‘this is twenty bucks an eighth, forty bucks an eighth and sixty bucks an eighth.’ You weren’t paying attention to the strain or the name of anything like that.
Coming into the dispensary that day, I thought I’d walk out of there with an eighth of flower and something to help me unwind at the end of the day. I walked out of there with a tincture and it really wasn’t because they upsold me to a better product, it was because it was the least worst option I could see on the menu. It was something I felt that I could understand from a dosing standpoint and it was something that didn’t require knowing the strains or names that mean nothing to me. I was quite frankly looking for the easiest way to purchase something and get out of there as quickly as possible
Sitting in the car afterwards, I was mulling over that experience, the feeling of intimidation, how awkward it was, how frustrating it was. I am 6’8” and 300 pounds I am not a small guy, and I’m not a wallflower. I don’t intimidate easily, so if this was my experience, what was this going to be like for everyone else?
That made me reexamine and take a stronger look at the retail market and the potential growth. How do you engage the consumer like me, for whom there are lots of barriers to entry, most of which are perception-driven. Some of the barriers are regulatory and geographic, but most are perception based. Here in Massachusetts, a lot of the dispensaries are in inconvenient locations. Not all towns allow for rec sales, and not all of those towns that do will allow a dispensary to open on the High Street, so consumers often times have to drive out of their way to get to a dispensary.
So, for me understanding what this new consumer base would look like and how they would come into the market was key. Obviously there would be a natural growth progression for the cannabis market. However, if we could build something to help guide people, answer their questions and make them feel comfortable with what they were buying and how to consume, really hold their hand in the initial stage of a consumer coming back into the market or coming in for the first time, then we could help grow the market quicker and put that natural progression of growth on a faster track.
That experience made me start to do some market research, look at the market size, and what that potential market could look like. Our research shows that, depending on the maturity of the market in question, there are between 1.5 and 4 times the number of Cannacurious sitting on the sidelines than there are active consumers in a market. Here in MA, conservatively there are at least 1.5MM Cannacurious sitting on the sidelines, waiting to come into the market. Because our research showed such a large opportunity he in MA and the Northeast, where we live, we decided to focus our efforts here.. Because we are Cannacurious consumers ourselves, we have a natural understanding and empathy for the consumer. I was definitely not and still am not an expert on cannabis. But if we can find the right experts that can answer the questions that we have then we can do the same for the Cannacurious. For 70+ years, we’ve been told that cannabis is bad, smoking weed is bad and everything associated with it is bad. So, we want to break that negative perception, that stigma that is still lingering and open it up to a more mainstream consumer.
CIJ: What gave you the idea to start Lucida Club?
Jack: What I just told you sums it up pretty well. It was basically built out of personal frustration. I thought that if I had this problem, those feelings of intimidation, awkwardness and frustration, then undoubtedly a lot of other people would too. Therefore, we’re looking at how we can create a platform that would make the buying process as simple and convenient as possible, while educating the consumers at the same time.
CIJ: How does Lucida Club work?
Jack: It’s a concept of simplicity and convenience. There are two sides to this: The E-commerce side, when you sign up and become a member and you want to make a purchase, all you have to do is answer three questions: What experience do you want? Do you want to smoke something or not? And how much money what do you want to spend? We put together three experience packages with three key price points, around $100, around $150 and around $250.
It is based on available inventory, which products and price points match up with different packages. We have fully integrated with Flowhub and are doing the same thing with some other POS systems as well. We see the inventory for our retail partners on a live basis. When one of our members makes a purchase, if they choose the sleep, nonsmoking, $100 package and put that option in their cart, by the time it populates in their cart, our platform has already gone to the dispensary inventory, we’ve allocated their inventory by experience and by order preference. So it will put those top two or three or four items in the cart automatically. The consumer doesn’t have to worry about what brands are available.
We’ve done all the work for them. They just need to pay attention to what experience and price point they want and we take care of the rest.
The other side of our business involves our head curator who combs through all the inventories and manages the product selection. But he also works with with our members as a concierge. When you sign up for our service, you automatically get a free consultation with our head curator, which we encourage all of our members to do before they make their first purchase. That way, we can answer all your questions and make sure the package is really tailored towards you individually. You also get a follow up consultation, which helps to guide additional advice and make sure you get the experience you’re looking for. On top of that, we’re also trying to advance consumer education through a lot of content, answering common questions and help to guide consumers on their journey with cannabis and the role it can play in their lives.
CIJ: How do you think you are innovating the cannabis retail experience?
Jack: When I was sitting in the car that fateful day back in 2019, I looked at retail the same way everyone else does: you build a store, an e-commerce platform, you have a product you’re trying to sell and focus on the product itself. What opened my eyes being the consumer that day was that cannabis unique.
We’ve been told for decades about how bad cannabis is for us and for society and these negative connotations have been drilled in to us. We need to look at the retail space from the consumer’s perspective and the barriers to entry that they feel. It’s not something that a regular retailer can do easily.
By definition, a brick-and-mortar retailer, needs to be everything to everybody, for all of their customers. They have to work with the connoisseurs, the regulars that have been consuming for a long time, who really understand what they’re looking for. At the same time, they need to engage with the canna-curious, the newbie that’s walking in the door for the first time. It’s difficult to focus on one market segment for them. If they were to focus all of their efforts on just the canna-curious, they would be missing out and losing traction and not engaging properly with their other customer bases.
We have the ability to engage with a very specific market segment, the Cannacurious, which is a very large group of people by the numbers but still niche. Our research shows that there are at least 1.5 million Cannacurious in Massachusetts alone that are either sitting on the sidelines or engaging in the market in a very small way. We’ve spoken to a lot of people that have other people make purchases for them, their sister or brother going to a dispensary that feels comfortable picking up a single package of edibles for them. That’s a form of hand holding that we want to provide. We want to make consumers feel comfortable and educate them on how they can choose products for the experience they want.
In my mind when we look at the cannabis space, it’s about how we can help people come into the marketplace, how we can help open their eyes to a litany of other opportunities for them and also how to approach things from a consumer perspective.
CIJ: What do you think the future of retail in cannabis looks like?
Jack: That’s a tough question because so much of that is driven form a regulatory standpoint. I know where I think it would go if regulators were just there to make it easy for consumers and for everyone to do business. It changes so much state to state and market to market. In retail in general, so much is moving online and on to e-commerce. Where you have a situation where people actually understand what they want and they tend to buy the same products on a regular basis, e-commerce is great and easy for them to make a purchase. Delivery opens a lot of doors as well with that. But again, it’s really difficult to look at what is going to happen because the market is so fragmented from a regulatory standpoint.
It won’t develop in one direction easily. Delivery is an option but we don’t have it on a mass scale in Massachusetts. It’s the same with e-commerce. Technically in Massachusetts, purchasing online is not an easy thing to facilitate. It still has to be done at the point of sale in-person with pickup and it hampers e-commerce. This potentially slows down how the market could develop. I definitely know where it could go, but looking into that magic eight ball will still be very cloudy if you ask it for an answer. Sorry, I have to obfuscate things a little there because it’s just so hard to figure out what the regulators will greenlight next and where they want the market to go.
We really just don’t know. There are so many ways to look at that question. If you’re a brick-and-mortar dispensary right now and you’re looking at how the market itself is growing in the state of Massachusetts, it’s tough to say. We went from about sixty licensed retailers during the height of the pandemic to well over 200 now. There’s going to be some consolidation. Whether that means that the growth of MSOs will proliferate and everything will be homogenized going forward, I don’t know what that could mean because at the moment it’s very difficult to have that full homogenization when you’re only allowed to have a handful of retail licenses. How do any of the MSOs gain real traction with three locations? If that changes, if you go somewhere like Florida where the rules are different, you see the true growth of the MSO with dozens of retail locations. Here, we still have a lot of mom-and-pop retailers along with a lot of much smaller MSOs who might have locations in one or two other states.
E-commerce will bring a lot to the market and help brands grow significantly. How we grow depends almost entirely on what the regulatory environment looks like. There are so many different things we could do with our platform, but we are so hampered by the regulations in just this one market alone. We built our platform and business model the way we did because it allows us to be flexible and adapt. As we move into a new market, we can build relationships and new markets open up. It’s all about being flexible if you can be.
Some consumers participating in the legal cannabis market want to avoid inhalable products. They are concerned about the effects of the smoke or they want their usage to be discreet — without the pungent aroma emanating from burning cannabis flower. For those consumers, edibles are the preferred option and a growing product category.
Within the edibles space, the beverage segment — with limited product options in some states — may offer significant potential for growth. In 2021, cannabis-infused beverages accounted for only 1% of total legal cannabis product sales and about 5% of the edibles segment in the United States, reports market researcher BDSA. But cannabis beverage sales are growing around the U.S.
In California, cannabis drinks grew their market share in the edibles category from 4% in 2018 to 7% in 2021. Nevada saw beverages increase their share of edibles revenues from 7% to 10% in the same time frame. And cannabis beverages’ share of edibles sales in Massachusetts went from less than 1% in 2019 to 8% in 2021.
Pegged at $180 million in revenue last year, the cannabis beverage market is projected to reach nearly $500 million by 2026, predicts BDSA.
Today, gummies and chocolate products dominate the edibles category. Although beverages are currently a small segment of edible sales, they may have some inherent advantages — familiarity, faster-acting products from improved bioavailability, and taste and flavor innovations — over other cannabis products. Since beverages can incorporate many different flavors from fruity, cola and sweet to coffee, tea, sour and bitter, these myriad flavor variations can mask or minimize any off-tastes associated with THC.
Viewed as part of their everyday regimen, consumers drink beverages for hydration, nourishment, refreshment and enjoyment. Cannabis beverages are well-suited for consumers’ lifestyles, while gummies and chocolates may be perceived as sugary treats and special occasion items.
Cruise Beverage B Happy Nitro-Infused CBD Drinks.
Brand owners are beginning to recognize the limited availability of products and growth potential of cannabis-infused beverages and are looking to enter the category. Packaging plays a key role in cannabis beverages, with sustainability, regulatory compliance (e.g., child-resistant), labeling compliance (e.g., warning symbols and text), convenience and branding all contributing to the success of the expanding product category.
Sustainable Packaging
Consumers, especially younger generations, are concerned about the environment and support brands that align with their values. According to the 2020 Sustainable Market Share Index from the NYU Stern Center for Sustainable Business, sustainability-marketed products delivered about 55% of the market growth in consumer packaged goods (CPG) from 2015 to 2019 in the U.S. despite being only 16% of the market. Sustainability-marketed goods grew seven times faster than products not marketed as sustainable and nearly four times faster than the overall CPG market.
As a primary consumer touchpoint, packaging is a good way for cannabis beverage brands to show their commitment to the environment. But finding the most sustainable packaging option for a particular application may not always be as straightforward as it seems. Many considerations are involved — material choice (e.g., plastic, glass, or aluminum), recyclability of the material, the weight of the material, recycled content of the final package, package design (minimalist vs. excessive), transportation costs and other factors like reusability.
To help facilitate the process, Berlin Packaging uses life cycle analysis to determine a product’s environmental impact or carbon footprint over its entire life cycle, including sourcing & raw materials extraction (minerals resource use), manufacturing (energy and water usage), distribution (freight miles, fuel usage) and end-of-life (recovery, recycling, reprocessing).
We have the know-how to improve the sustainability of any packaging material — whether it be lightweighting, use of post-consumer recycled (PCR) content, greater recycling rates and more.
Regulatory Compliance
Because legal cannabis products are regulated by individual states and not at the federal or national level, the regulations for cannabis packaging requirements can vary widely from one state to another. However, there are some common rules that all states follow.
Child-resistant capable cap fits snugly over the top of a can.
All cannabis products — including beverages — require child-resistant packaging to meet the standards of the Consumer Product Safety Commission. For aluminum cans, Berlin Packaging offers a child-resistant capable mechanism that fits snugly over the top of a can. Available in polypropylene or a bio-based resin, the single-use device can be custom developed to fit the exact specifications of the customer’s cans. In-stock products are available for standard 202 can ends.
Along with child-resistant capable packaging, states also require some type of warning symbol and statement on the label to indicate the product contains cannabis. Depending on the state, the symbol may be a triangular or diamond shaped in a bright or contrasting color to call attention to it on the label. The symbol typically houses a cannabis leaf image or “THC”.
Convenience
Like any packaged drink, cannabis beverages need to check all the boxes for consumer convenience — easy to drink, portability, cupholder friendly and resealable.
Users can easily reseal PET and glass bottles with continuous thread or lug finish closures, but cans present a challenge. Berlin Packaging offers a solution with a resealable can that opens like a traditional stay-on-tab. Here’s how it works. Lifting the pull tab breaks the tamper-evident band and unlocks the slider mechanism. Pulling the slider opens the can and makes the familiar venting sound — even after reopening.
The configuration of the opening creates a smooth laminar flow to improve the drinking experience. Moving the slider back to its original position and pushing down the pull tab, which produces a clicking sound, reseal the closure. The tamper-evident band remains on the can underneath the pull tab.
Branding
Cannabis beverages come in drops, shots, syrups, carbonated, iced tea, lemonade, fruity, water, sports & energy, mocktails, tea, coffee and hot cocoa.
Because cannabis has been associated with medicinal uses, many consumers use cannabis products to manage their wellbeing and health. Thus, some cannabis products have been positioned to relieve stress, promote relaxation and sleep, reduce pain and inflammation, improve mental focus, enhance mood or simply for indulgence and enjoyment.
Product positioning and the experience the brand owner wants to create for the consumer can help inform the brand design, personality, and narrative or storytelling. It’s also important that the brand design and messaging resonate with the product’s target audience.
Studio One Eleven, Berlin Packaging’s in-house innovation division, can help cannabis beverage marketers with their product branding from concept to commercialization. We offer market research and consumer insights, brand strategy and visual branding design, brand name development, structural package design, and more. Our services are available at no additional charge in exchange for a customer’s packaging business.
Cruise Beverage distributes nitrogen-infused CBD drinks with all-natural ingredients in 12-oz aluminum cans under the B Happy brand. The team at Studio One Eleven helped Cruise Beverage and its B Happy brand tell their story of free-spirited enjoyment with updated branding, expressive flavor names (i.e., Loosen Up Lemon, Peaceful Pear, Mellow Mango, and Blissful Blood Orange), and unique packaging graphics.
Uplifting illustrations speak to the brand’s sense of freedom and relaxation, and the hand-drawn style reflects the craftsmanship of the CBD beverage product. A white background with flavorful pops of color says clean and fresh, while tiny bubble imagery communicates the delightful effervescence of the fizzy drinks.
The Future of Cannabis Concentrates: in Hydrocarbon Extraction & Manufacturing
Michelle Sprawls, Director of Science, CULTA
This presentation delves into closed loop hydrocarbon extraction, what products can you make with this type of extraction method, advancements for manufacturing and new techniques.
Hardy Diagnostics Sponsored TechTalk
Jessa Youngblood, Food and Beverage Market Coordinator, Hardy Diagnostics
Extraction Optimization Through Artificial Intelligence
Dr. Markus Roggen, President & Chief Science Officer, Delic Labs
Attendees can expect to learn about:
Data is the basis for optimization, but which data is important and how to collect it.
What system exist for extraction optimization?
What is Bayesian Optimization, and how does it work?
What are the best parameters for extracting average cannabis?
How the Notorious CO2 Became a Superhero: SFC for Green Cannabinoid and Terpene Purification
Jason Lupoi, Ph.D., Director of Laboratory Operations, Thar Process
Attendees can expect to learn:
Assessment of the ways in which SFC can be used to purify cannabinoids as well as remediate THC from hemp products such that they are compliant with the Farm Bill.
The use of SFC for removing unwanted contaminants from product batches or chemical conversion processes such as those used in making delta-8-THC
The application of CO2 extraction and SFC for terpene refinement.
The adult beverage industry, like any other category of consumer branded products, is driven by trends. If you’re old enough to remember Bartles & Jaymes wine coolers, you probably also remember Zima and Smirnoff Ice, and more recently “healthy” options like Skinny Girl and Michelob Ultra. The sensation that was craft beer saw many brands being acquired by Big Alcohol so that while the brands remain, ownership and production have changed significantly. Gin, tequila and vodka have had their moments in the sun and the current market is undeniably saturated with what is probably the largest current trend – hard seltzers. However, with the seltzer craze waning, many are wondering what’s next. And with the growing sober/California sober trends, some are betting it is cannabis-infused beverages.
Cannabis-infused beverages offer both an alternative method of consumption of cannabis and are also an attractive alternative to alcohol. Infused beverages are more appealing to the new demographic of casually curious cannabis consumers. i.e., consumers that may not be interested in smoking a joint or vaping, but are comfortable micro-dosing from a can or bottle, as they would a seltzer or beer. The same type of consumer may be moving away from alcohol consumption to eliminate hangovers or other negative health effects.
The emerging market and curious consumer group present an enormous opportunity right now for cannabis-infused beverage brands. Of course, with opportunity and growth come challenges. And while cannabis-infused beverages face a host of legal and regulatory challenges relative to sourcing, manufacturing, packaging, labeling, shipping, marketing, distribution and sale, one of the most critically important business assets to address at inception is the brand.
Lines are Blurring, Gaps are Being Bridged
The U.S. cannabis market is currently a geographic hamburger. Hear me out: Geographically, you have a relatively mature market out west and a relatively new and growing market along the east coast. These are the buns. You have a mixed bag in between, with some states coming online and allowing medical or adult use cannabis use and others that have not yet embraced any form of legalization. The landscape has lent itself to the development of regional brands, such that brands that are so similar they might otherwise confuse consumers, have been able to co-exist in different regions without issue, or because there is little to no trade channel or market overlap. Similarly, adult beverages and cannabis have historically been separate verticals, with an arguably low likelihood that a consumer would assume a particular cannabis product and adult beverage product emanate from the same source.
A drink additive, made by Splash Nano, that uses nano emulsion technology
However, lines are blurring and gaps are being bridged. Walls are breaking down. The increasing number of states coming online with legalized cannabis, and the proliferation of multi-state operators (MSOs), means that cannabis brands can grow to be more than siloed regional brands. This will inevitably lead to brands that previously co-existed bumping into one another and there’s bound to be some pushing and shoving. The advent of infused beverages likewise bridges the gap between cannabis products and alcoholic beverages. While the respective industries were not historically per se related, competing, or overlapping, now you’ve got infused beverages that bridge the gap between the two, and traditional alcohol brands (e.g., Boston Beer Company, Molson Coors, Lagunitas, Pabst.) entering the market (albeit under different brands). This makes a strong argument that cannabis and alcohol (or, more generally, adult beverages) are within each other’s logical zones of expansion, for purposes of a likelihood of confusion analysis.
The growing pains infused beverage brands will experience are analogous to those craft beers saw in the 2000 – 2010s. Many craft brewers had catchy, cheeky names and brands that contributed to their ability to engage consumers and develop a following, but failure to clear and protect the brands prior to launch detracted from the brands’ market values. Localized use prior to expansion also led to many brands bumping into one another and stepping on each other’s trademark toes. This was significant as the brands sought investment dollars or an exit strategy, making clear that the brand itself contributed heavily to valuation.
Mitigating Risks and Overcoming Challenges: Search and Protect
The risks and challenges can be significantly mitigated and/or overcome with proper preliminary clearance searching and assessments, and by seeking and obtaining state or federal protection for the brand or brands, to the extent possible.
Quatreau CBD infused sparkling water
Of course, clearance searches and assessments come with their own challenges, as does federal protection. With respect to clearance searches, these typically look at U.S. federal and state trademark databases. These resources are not sufficient for purposes of clearing a proposed cannabis brand. Many brands are not recorded at the federal or state level and indeed may not even show up in a basic search engine. An appropriate search looks at social media resources like Instagram, Twitter, Facebook and known cannabis resources like Leafly and Weedmaps. Additionally, the scope of the search should exceed cannabis products and services and at least look at alcohol and merchandise. Adoption and use of a brand for a cannabis-infused beverage is high risk if that brand is similar to a prior existing alcohol brand. A current example is Cointreau’s taking aim at Canopy’s adoption and use of QUATREAU for an infused beverage.
A U.S. federal trademark registration presents its own unique challenges, but is incredibly valuable and beneficial to a brand since it provides the owner with a nationwide presumption of ownership and validity in a trademark, and can also secure priority for the owner with a constructive first use in commerce date that is years before actual use of a mark begins. The U.S. Trademark Office categorically denies protection of brands that violate its “lawful use” rule, and will treat as per se unlawful any applied for mark that covers marijuana, or that covers foods, beverages or pharmaceuticals that contain CBD. With respect to brands that cover products containing THC, since it is federally scheduled, use of the brand would violate the Controlled Substances Act (CSA). With respect to brands that cover CBD or products containing CBD, these may be lawful pursuant to the Farm Bill and the U.S. Trademark Office’s subsequent allowance of marks that claim CBD “solely derived from hemp with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis,” however under the Food Drug Cosmetics Act (FDCA) it is currently federally unlawful to introduce CBD – even if it fits the definition above – into foods or beverages.
Even if cannabis is not specifically claimed in a trademark application, cannabis brands have a natural gravitation toward names and logos that can do some of their marketing for them, and announce to the world they cover cannabis. This increases the chances that a trademark application for the brand will get push-back from the U.S. Trademark Office, and if not at the initial review stage, then at the point in time when the brand must submit to the U.S. Trademark Office a sample of (lawful) use of the applied-for mark. While this all sounds like bad news for cannabis-infused beverages, all is not lost.
There are typically ancillary and federally lawful products and services cannabis companies offer under their brands that can be covered in a U.S. federal trademark application, and arguments to be made that registered protection of a brand for the ancillary items should be sufficient to enforce against third parties using the same or confusingly similar brands in their space. Some cannabis brands’ lawful ancillary products are actually product lines (e.g., beverages) offered under the same brand that contain no cannabis. Others may be more causally related, like online forums and blogs. The former is closer to the actual product, and the latter would be more beneficial to a brand that is inherently stronger and more distinctive. One note of caution: A trademark application and eventual registration that expressly disclaim cannabis (THC or CBD) may be difficult to enforce against a third party using the same or a similar mark on and in connection with cannabis. So, while there is a natural inclination to follow a U.S. Trademark Office request to disclaim coverage of cannabis, there may be enforcement consequences down the road.
The cannabis-infused beverage market is poised for explosive growth. The brands that survive – and succeed – will be those that position themselves for growth by clearing and buttoning up their brands as early as possible. The market leaders will be those that select strong and distinctive brands, with geographic and market space around them for growth and expansion; and those that protect and enforce their brands, to the extent possible, at the federal and/or state levels.
On Thursday, April 21, a handful of dispensaries in New Jersey begin selling cannabis to adults over the age of 21. The state has so far issued licenses for adult use sales to seven alternative treatment centers (ATCs), otherwise known as medical cannabis businesses already established in the state. In total, thirteen dispensaries in the state can sell cannabis to adults over 21.
The Capitol in Trenton, New Jersey
The reason why adult use sales could not start on April 20 is because of “unmanageable logistical challenges for patients and other buyers, surrounding communities, and for municipalities,” Toni-Anne Blake, communications director for the New Jersey (CRC) told The Philadelphia Inquirer. “Regulators and industry representatives agreed it was not feasible.”
The seven ATCs awarded adult use licenses are Ascend, Curaleaf, GTI, Acreage, Verano, Columbia Care and TerrAscend. The state’s roll out created a lot of controversy over allowing already established, larger medical cannabis businesses and multi state operators to begin adult use sales before smaller businesses and social equity applicants get licensed.
According to The New York Times, the CRC gave condition approval to 102 companies for cultivation and manufacturing, but they need local approval and real estate before commencing operations. Another 320 organizations have applied for licenses for the New Jersey adult use cannabis market, but could wait up to a year or more before they begin operating.
Regulators in New Jersey say the seven companies commencing sales will need to follow social equity rules, including providing technical knowledge to social equity applicants. “We remain committed to social equity,” says CRC Chair Dianna Houenou. “We promised to build this market on the pillars of social equity and safety. Ultimately, we hope to see businesses and a workforce that reflect the diversity of the state, and local communities that are positively impacted by this new and growing industry.”
Jeff Brown, executive director of the CRC, says they anticipate long lines and crowds. “We expect 13 locations for the entire state will make for extremely busy stores,” said Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission. “The dispensaries have assured us that they are ready to meet the demand without disrupting patient access, and with minimal impact on the surrounding communities, but patience will be key to a good opening day.”
Adults in New Jersey can purchase up to one ounce of flower, up to five grams of concentrates or up to ten 100mg packages of edibles. Click here for a list of the locations opening their doors for business.
Happy 4/20! The cannabis holiday with unclear origins is today and with it comes hundreds and hundreds of marketing and story pitches landing in every journalist’s inbox. Some of those pitches are impactful, some lack substance, some celebrate anniversaries, most offer discounts and sales and some are truly bizarre.
Every year, April 20th marks the cannabis holiday that people around the world celebrate with copious amounts of cannabis, concerts, festivals, deals, sales and marketing gimmicks. This year, here are some noteworthy (and weird) happenings going on as we celebrate the wonderful plant that brings us all together:
Leafly rings in the holiday on the NASDAQ: Leafly CEO Yoko Miyashita, surrounded by her colleagues, rang the opening bell for the NASDAQ Stock Exchange. The company began publicly trading on the NASDAQ as ‘LFLY’ back in February.
Smoke em if ya got em: Leafly CEO Yoko Miyashita, surrounded by her colleagues, rang the opening bell for the NASDAQ Stock Exchange
Americans for Safe Access (ASA) turned twenty on April 19: The policy, action and advocacy organization has been influential in passing medical cannabis laws throughout the country for twenty years now. The organization has trained thousands of public defenders, worked with thousands of incarcerated medical cannabis prisoners, organized protests all over the country, worked with regulators in dozens of states to pass safety rules, published reports, launched their Patient Focused Certification program and much more. Happy birthday ASA!
Emerald Cup and SC Labs celebrate thirteenth anniversary: The couple has been together now for thirteen years, with the Emerald Cup heading into their eighteenth annual competition next month. For the past thirteen years, Santa Cruz-based SC labs has worked with the Emerald Cup as their official testing partner, verifying COAs for potency and purity, gathering data on terpenes and classifying products and strains. Happy anniversary you two!
Smoking’ sandwiches: The cannabis-inspired, Arizona-based sandwich shop chain Cheba Hut celebrates the holiday with $4.20 “nugs” (pretzel nuggets) served on a frisbee and two PBRs for $4.20.
NORML stays busy: Executive Director Erik Altieri called for reforms in a press release: “While we have undoubtedly made immense progress in recent years, hundreds of thousands of our fellow citizens are still arrested each year for simple possession of a plant. That is why we are calling on all Americans to take time out of their day on 4/20 to help us finish the fight, both at the federal level and in those states that still are living under the dark ages of prohibition. We have an overwhelming mandate from the people and we intend to make sure that elected officials abide by it.”
New Jersey, a day late and a dollar short: The Garden State will begin adult use sales on April 21st at thirteen dispensaries. The delays, licensing process and regulatory hurdles have created confusion and frustration for the industry, but the state is moving forward with their plan and dispensaries will serve adults over 21 tomorrow, a day after the holiday.
Cannabis-infused Mac and cheese, a dangerously cheesy combination.
Sluggish Senate: The SAFE Banking Act has passed the House six (six!) times so far, most recently in February of this year. Sen. Cory Booker has long said he opposes the cannabis banking bill without wider legalization legislation (say that six times fast). Sen. Chuck Schumer also announced last week that his cannabis bill introduction is delayed. The CAOA won’t come until August now he says.
Cannabis Cuisine: Celebrity chef Todd English curates a “cannabis-curious cuisine” with infused Mac & Cheese via LastLeaf.
Erotic infusions: This CBD company offers 20% off their infused lubes, massage oils and products with code oOYes20. OoYes! CBD Lube is a female-founded formulations company focusing on the sex positive, “cannagasmic” hemp-derived CBD products space.
Backwards down the number line: Phish plays their first night back at Madison Square Garden in New York for a four-night run. Correctly guess the opener for tonight in the comments below and win a free beer and a burger with me at this year’s Cannabis Quality Conference & Expo.
That’s all folks! Thanks for reading and blaze on!
Blast from the past: Here’s a little treat if you’ve made it this far. This is me ten years ago today (back in college), smoking a joint on April 20, 2012. Time flies.
Once again, the U.S. Food and Drug Administration (FDA) has issued a number of warning letters to companies selling hemp-derived cannabidiol (CBD) products. This time around, the FDA sent these warning letters to companies that had statements on their website claiming CBD is an effective treatment or prevention of Covid-19.
In this latest round, the FDA sent a total of seven warning letters to:
Just some of the many hemp-derived CBD products on the market today
Earlier this year, a slew of preliminary research studies went viral for shedding light on promising signs that certain cannabis compounds could help treat or prevent Covid-19. The conclusions from most of that research is: It is still too early to tell if any of these studies will show evidence of cannabis treating Covid-19, let alone if they mean cannabis products can be used as a treatment or preventative for Covid-19. However, the research is significant and we should keep an eye on any developments that come from those studies.
The hemp-derived CBD market has a history of clashes with the FDA over health claims. Since the Farm Bill legalized cannabis with less than 0.3% THC back in 2018, the hemp-derived CBD market has proliferated, with all sorts of companies seizing the opportunity. Jumping on the health and wellness trend, companies incorporated this messaging into their marketing campaigns. Over the past four years, the FDA has issued dozens and dozens of warning letters and threatened enforcement actions to companies making unsubstantiated health claims about CBD.
While CBD definitely does have medical benefits, such as being used as an anti-inflammatory or anticonvulsant, preliminary research alone is not enough to say it does. Products need to be approved by the FDA with a new drug application (NDA) in order to make those claims. Therefore when companies make unsubstantiated health claims about their CBD products, like claiming it can prevent Covid-19, they are violating the FD&C Act by marketing “unapproved new drugs” or “misbranded drugs.”
The bottom line is companies that are marketing CBD products need to ensure that their marketing materials and labeling comply with FDA requirements and avoid making unapproved drug claims.
By Kelsey Cagle, Frank L. Dorman, Jessica Westland No Comments
Sample preparation is an essential part of method development and is critical to successful analytical determinations. With cannabis and cannabis products, the analyst is faced with a very challenging matrix and targets that may range from trace level through percent level thus placing considerable demands on the sample preparation techniques.1 The optimal sample preparation, or “extraction”, method for potency analysis of cannabis flower was determined using a methanol extraction coupled with filtration using regenerated cellulose filters.
In the United States (US), Canada, and other countries where medicinal and/or adult recreational cannabis has been legalized, regulatory entities require a panel of chemical tests to ensure quality and safety of the products prior to retail sales2. Cannabis testing can be divided into two different categories: Quality and Safety. Quality testing, which includes potency analysis (also known as cannabinoid testing or cannabinoid content), is performed to analyze the product in accordance with the producer/grower expectations and government regulations. Safety testing is conducted under regulatory guidelines to ensure that consumers are not exposed to toxicants such as pesticides, mycotoxins, heavy metals, residual solvents and microbial contaminates.
Potency testing evaluates the total amount of cannabinoid content, specifically focusing on tetrahydrocannabinol (THC) and cannabidiol (CBD). In the US, the biggest push for accurate total THC is to differentiate between hemp (legally grown for industrial or medicinal use), which is defined as cannabis sativa with a THC limit ≤ 0.3 %, and cannabis (Cannabis spp.), which is any cannabis plant with THC measured above 0.3 %3. Potency testing is typically performed by liquid chromatography (LC) with UV detection to determine the quantity of major cannabinoids.
In addition to reporting THC and CBD, their respective precursors are also important for reporting total potency. Tetrahydrocannabinolic acid (THCA) is the inactive precursor to THC while cannabidiolic acid (CBDA) is the precursor to CBD.4,5
Methods and Materials
Sample Preparation
All samples were homogenized using an immersion blender with a dry material grinder. The nominal sample amounts were 200 mg of flower, 500 mg of edibles, and 250 mg of candy samples.
Potency Extraction Method (1)
Twenty milliliters (mL) of methanol (MeOH) was added to each sample. The samples were mechanically shaken for 10 minutes and centrifuged for 5 minutes.
Potency Extraction Method (2)
Ten mL of water was added to each sample. The samples were mechanically shaken for 10 minutes. 20 mL of acetonitrile (ACN) was then added to each sample and vortexed. An EN QuEChERS extraction salt packet was added to the sample. The samples were placed on a mechanical shaker for 2 minutes and then centrifuged for 5 minutes.
Each extract was split and evaluated with two filtration/cleanup steps: (1) a regenerated cellulose (RC) syringe filter (Agilent Technologies, 4 mm, 0.45 µm); (2) a PFTE syringe filter (Agilent Technologies, 4 mm, 0.45 µm). The final filtered extracts were injected into the ultra-performance liquid chromatograph coupled with a photodiode array detector (UPLC-PDA) for analysis.
Figure 1: Calibration curve for THC potency
Calibration
Standards were obtained for the following cannabinoids at a concentration of 1 mg/mL: cannabidivarin (CBDV), tetrahydrocannabivarin (THCV), cannabidiol (CBD), cannabigerol (CBG), cannabidiolic acid (CBDA), cannabigerolic acid (CBGA), cannabinol (CBN), tetrahydrocannabinol (9-THC), cannabichromene (CBC), tetrahydrocannabinol acid (THCA). Equal volumes of each standard were mixed with MeOH to make a standard stock solution of 10 ug/mL. Serial dilutions were made from the stock to make concentrations of 5, 1, and 0.5 ug/mL for the calibration curve (Figure 1).
Instrumental Method
All instrument parameters were followed from Agilent Application Note 5991-9285EN.8 A UPLC with a PDA (Waters Corp, Milford, MA) detector was employed for potency analysis. An InfinityLab Poroshell 120 EC-C18, 3.0 x 50 mm, 2.7 um column (Agilent Technologies, Wilmington, DE) was utilized for compound separation. The organic mobile phase composition was 0.05 % (v/v) formic acid in HPLC grade MeOH and the aqueous mobile phase composition was 0.1 % (v/v) formic acid in HPLC grade water. The mobile phase gradient is shown in Table 1. The flow rate was 1 mL/min (9.5 minute total program), injection volume was 5 uL, and column temperature was 50 °C.
Table 1: LC mobile phase gradient for potency samples6
Discussion and Results
Table 2 summarizes the relative standard deviations (% RSD) were found for the THC calibrator (at 1 ug/mL) and one extract of a homogeneous sample (utilizing 7 replicates).
Table 2- %RSD values for the instrument response precision for THC in both the calibrations and the homogeneous extract.
The cannabinoid potency of various cannabis plant and cannabis product samples were determined for the various extraction techniques In the chromatograms THC was observed ~8.08 minutes and CBD was observed ~4.61 minutes (Figure 2).
Figure 2: Chromatogram of the 10ug/mL calibrator for potency/cannabinoid analysis
Total potency for THC & CBD were calculated for each sample using the equations below. Equation 1 was used because it accounts for the presence of THCA as well as the specific weight difference between THC and THCA (since THCA will eventually convert to THC, this needs to be accounted for in the calculations).
Table 3 shows the % THC and the total THC potency values calculated for the same flower samples that went through all four various potency sample preparation techniques as described earlier. Figure 3 also provides LC chromatograms for flower sample 03281913A-2 and edible sample 03281912-1.
Table 3-THC and Total THC potency values for the same cannabis flower sample processed through the combination of extractions and cleanups.Figure 3: Potency/Cannabinoid analysis chromatogram for flower sample 03281913A-2 (red trace) and edible sample 03281912-1 (green trace).
The results indicated that with the “Potency Extraction Method 2” (ACN/QuEChERS extraction) coupled with the RC filter provided a bias of 7.29 % greater for total THC % over the other extraction techniques. Since the other 3 techniques provided total THC values within 2% of each other, the total THC of the sample is more likely ~14%.
Since the sample dilution for the above data set reduced the CBD content, an undiluted sample was run and analyzed. This data is reported in Table 4.
Table 4- CBD and Total CBD potency values for the same cannabis flower sample processed through different sample preparation techniques.
The CBD results indicated that with the “Potency Extraction Method 1” (methanol extraction) coupled with RC filter, allowed for a greater CBD recovery. This may indicate the loss of CBD with an ACN/QuEChERS extraction.
With an average ~14% total THC and 0.06% total CBD for a homogenous cannabis flower sample, the optimal sample preparation extraction was determined to be a methanol extraction coupled with filtration using a regenerated cellulose filter. Since potency continues to remain at the forefront of cannabis regulatory testing it is important to utilize the right sample prep for your cannabis samples.
References
Wang M, Wang YH, Avula B, Radwan MM, Wanas AS, Mehmedic Z, et al. Quantitative Determination of Cannabinoids in Cannabis and Cannabis Products Using Ultra-High-Performance Supercritical Fluid Chromatography and Diode Array/Mass Spectrometric Detection. Journal of Forensic Sciences 2016;62(3):602-11.
Matthew Curtis, Eric Fausett, Wendi A. Hale, Ron Honnold, Jessica Westland, Peter J. Stone, Jeffery S. Hollis, Anthony Macherone. Cannabis Science and Technology, September/October 2019, Volume 2, Issue 5.
Sian Ferguson. https://www.healthline.com/health/hemp-vs-marijuana. August 27, 2020.
Taschwer M, Schmid MG. Determination of the relative percentage distribution of THCA and 9-THC in herbal cannabis seized in Austria- Impact of different storage temperatures on stability. Forensic Science International 2015; 254:167-71.
Storm C, Zumwalt M, Macherone A. Dedicated Cannabinoid Potency Testing Using the Agilent 1220 Infinity II LC System. Agilent Technologies, Inc. Application Note 5991-9285EN
As the demand for legal cannabis continues to rise and more states come online, it is imperative to enact more rigorous and comprehensive testing solutions to protect the health of consumers. People use cannabis products for wellness and to find relief; they should not be susceptible to consuming pathogens and falling ill. Especially for immunocompromised consumers, the consequences of consuming contaminated cannabis or hemp are dire. Of course, there should be federal standards for pathogen testing requirements like we have for the food industry. But right now, as cannabis is not yet federally legal, testing regulations vary between states and in many states, testing requirements are too loose and enforcement is minimal. It is up to state legislators, regulators and cannabis operators to protect the health of consumers through implementing more stringent testing.
From the outset, the environmental elements needed to grow cannabis – heat, light, humidity, soil – make cannabis ripe for pathogens to proliferate. Even when growers follow strict sanitation procedures through the supply chain from seed to sale, contaminations can still occur. Cannabis companies need to be hypervigilant and proactive about testing, not just reactive. The lack of regulations in some states is alarming, and as the cannabis industry is highly competitive and so many companies have emerged in a short time, there are unfortunately unscrupulous actors that have skated by in a loose regulatory landscape, just in the game to make a quick buck, even at the expense of consumer health. And there are notable instances where states do not have enforcement in place to deter harmful manufacturing practices. For instance, there are some states that don’t mandate moisture control and there have been incidents of companies watering down flower so it has more weight and thus can be sold at a higher cost – all the while that added moisture leads to mold, harming the consumer. This vicious circle driven by selfish human behavior needs to be broken by stricter regulations and enforcement.
While in the short term, looser testing regulations may save companies some money, in the long run these regulatory environments carry significant economic repercussions and damage the industry at large, most importantly injury or death to customers and patients. Recalls can tarnish a company’s brand and reputation and cause sales and stock prices to tank, and since cannabis legalization is such a hotly contested issue, the media gloms onto these recalls, which opponents to legalization then leverage to justify their stance. In order to win the hearts and minds of opponents and bring about federal legalization sooner, we need safer products so cannabis won’t be cast in such a dangerous, risky light.
Certainly, there’s a bit of irony at play here – the lack of federal regulations heightens the risk of contaminated cannabis reaching consumers, and on the flip side recalls are used by opponents to justify stigmatizing the plant and keeping it illegal. Nevertheless, someday in the not-too-distant future, cannabis will be legalized at the federal level. And when that day happens, federal agents will aggressively test and regulate cannabis; they’ll swab every area in facilities and demand thorough records of testing up and down the supply chain; current good manufacturing practices (cGMP) will be mandated. No longer will violations result just in a slap on the wrist – businesses will be shut down. To avoid a massive shock to the system, it makes sense for cannabis companies to pivot and adopt rigorous and wide-sweeping testing procedures today. Wait for federal legalization, and you’ll sink.
Frankly, the current landscape of cannabis regulation is scary and the consequences are largely yet to be seen. Just a few months ago, a Michigan state judge reversed part of a recall issued by the state’s Marijuana Regulatory Agency (MRA) on cannabis that exceeded legal limits of yeast, mold and aspergillus, bringing contaminated cannabis back to shelves without even slapping a warning label on the packaging to inform consumers of the potential contamination. This is a classic case of the power of the dollar prevailing over consumer safety and health. Even in well-established markets, the lack of regulations is jarring. For example, before this year in Colorado, testing for aspergillus wasn’t even required. (Aspergillus inhalation, which can cause Aspergillosis, can be deadly, especially for people who are immunocompromised). Many states still allow trace amounts of aspergillus and other pathogens to be present in cannabis samples. While traces may seem inconsequential in the short term, what will happen to frequent consumers who have been pinging their lungs with traces of pathogens for 30 years? Consistently inhaling trace amounts of pathogens can lead to lung issues and pulmonary disease down the road. Look what happened to people with breathing and lung issues during the last two years with COVID. What’s going to happen to these people when the next pandemic hits?
We need state regulators and MSOs to step up and implement more aggressive testing procedures. These regulators and companies can create a sea of change in the industry to better protect the health and well-being of consumers. Just complying with loose regulations isn’t good enough. We need to bring shortcomings around testing into the limelight and demand better and more efficient regulatory frameworks. And we should adopt the same standards for medical and adult use markets. Right now, several states follow cGMP for medical but not adult use – that’s ridiculous. Potentially harming consumers goes against what activists seeking legalization have been fighting for. Cannabis, untainted, provides therapeutic and clinical value not just to medical patients but to all consumers; cannabis companies should promote consumer health through their products, not jeopardize it.
For best practices, companies should conduct tests at every step in the supply chain, not just test end products. And testing solutions should be comprehensive. Most of the common tests used today are based on petri dishes, an archaic and inefficient technology dating back over a century, which require a separate dish to test for each pathogen of interest. If you’re waiting three to five days to see testing results against fifteen pathogens and a pathogen happens to be present, by the time you see results, the pathogen could have spread and destroyed half of your crops. So, not only do petri dishes overburden state-run labs, but due to their inherent inefficiencies, relying on these tests can significantly eat into cannabis companies’ revenues. At PathogenDx, we’ve created multiplexing solutions that can identify and detect up to 50 pathogens in a single test and yield accurate results in six hours. To save cannabis companies money in the long run and to make sure pathogens don’t slip through the cracks, more multiplexing tests like the ones we’ve created should be implemented in state labs.
Right now, while the regulatory landscape is falling short in terms of protecting consumer health, better solutions already exist. I urge state regulators and cannabis companies to take testing very seriously, be proactive and invest in creating better testing infrastructure today. Together, we can protect the health of consumers and create a stronger, more trustworthy and prosperous cannabis industry.
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According to Janet Woodcock, M.D., principal deputy commissioner at the FDA, they are getting more and more concerned about the popularity of delta-8 THC products sold online. “These products often include claims that they treat or alleviate the side effects related to a wide variety of diseases or medical disorders, such as cancer, multiple sclerosis, chronic pain, nausea and anxiety,” says Woodcock. “It is extremely troubling that some of the food products are packaged and labeled in ways that may appeal to children. We will continue to safeguard Americans’ health and safety by monitoring the marketplace and taking action when companies illegally sell products that pose a risk to public health.”
