Tag Archives: traditional

Navigating the Cannabis Industry in the Current Climate

By Serge Chistov
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All major industries took a hit during the COVID-19 pandemic, but in many states, cannabis dispensaries were labeled as essential, which has allowed the industry to continue with some alterations. The impact now will come from what innovations and improvements the industry can leverage going forward.

From changes to protocols and buyer behaviors to supply chain disruptions, there were many new hurdles for the industry in addition to the ones cannabis businesses already faced, such as funding. But the silver lining could be that businesses within the cannabis industry become less of a specialty and more ‘every day’ than ever before.

The effects of the pandemic on the cannabis industry

Overall, the industry has fared well, in part thanks to its distinction as an essential service in states where cannabis is legal. It’s possible states made this decision for the same reason that alcohol businesses were deemed essential in most places: hospitals are not equipped during pandemic times to take care of people who are being forced to detox or those suffering from anxiety because they don’t have access to their legal drug of choice.

In a multitude of ways, cannabis businesses have adapted to bring calm in a storm while at the same time making manufacturing adjustments to meet the CDC guidelines. For example, there is more attention placed on individually pre-packaged products for single use; something that is less sharable as an experience but eminently practical.

Another area that has shifted a little is in the limiting of the exchange and interaction between business owners and staff relative to the customers. It’s all in the aim of mitigating the risk of exposure, but it has changed the dynamic in many cannabis businesses. This is the new normal for the time being and the industry has adapted well.

Ultimately, retail cannabis businesses today are no different than the retail of candy, cigarettes or alcohol. Certainly, segments of the industry have still struggled. Lack of tourism and the curbside/take out circumstances at dispensaries took their toll. But without the opportunity to still conduct business in some capacity, 50-60% of all operators would have gone out of business. Plus, as many people use cannabis to offset medical symptoms, including pain management, there is a legitimate need for cannabis to be available. The pandemic has provided the opportunity for many who might not have tried it before to give it a chance to help them medicinally.

Behaviors have changed, including those of buyers

Driven by consumer interests, many dispensaries have adapted to provide curbside pickup options, delivery of online orders and more. That has meant that the customer also needs to be more knowledgeable about cannabis: the experienced consumer knows what they like and want and can make their choices at a distance. Someone who is new to cannabis use might find navigating the choices and options a little more difficult, without the help of experienced staff. The breadth of material online and the ability of some dispensaries to share content that helps the consumer to make choices, in the absence of walking around the dispensary, have been additional tools at the disposal of businesses.

That said, the cannabis industry today is not a vastly different one: it is adapting to the new rules and new reality. Whether this way of doing business—at a distance—is a temporary or permanent solution will be dependent upon what federal and state regulators dictate in the months ahead, but there is likely to be ongoing demand for being able to order online and keep social distance protocols in place.

An interesting example is the Ontario Cannabis Store (OCS) in Ontario, Canada. This is a government run shop that has retail as well as a robust online presence, with free delivery during the pandemic. This has facilitated an increase in new customers, which had already jumped, post legalization. People who might have felt uncomfortable going into a dispensary can still learn about cannabis online and order it, from the relative comfort and safety of their sofa.

Supply chain disruptions and the cannabis industry

The industry has long been focused on overseas suppliers. With the arrival of the pandemic and restrictions on obtaining products from other countries, supply chains have been disrupted for many cannabis businesses. That has forced many to shift their supply chains to more local manufacturers, in North and South America.

In the long run, this should have a positive impact for the industry, so that despite the short-term disruption to the supply chain, which is having an impact on the industry as a whole, there could be an upside for local producers, growers and manufacturers. It will take time to know how this will all play out.

Funding and other issues for the cannabis industry

For a new cannabis startup in these times, the key will be what it has always been for any business, just to a greater degree: due diligence. Companies that want to open a cannabis business, whether during the pandemic or not, need to evaluate the opportunity as one would any investment. It’s all about the numbers: data for the industry as a whole and specifically from competition. These days, that data is widely available and more and more consultants and investors have expertise in this industry. “Overall, there is more interest in the industry than ever before”

It’s vital to be extremely well versed, particularly for businesses that are relatively new in the industry, because the single biggest issue for many has and will continue to be funding and investment. The cannabis industry is no different than any other business, except for the fact that it is a specialty business. With that comes the need to look for funding among investors who have some knowledge or appreciation for the industry.

Some of the key concerns traditional investors will have include:

  • Regulatory differences from state to state: since cannabis is still illegal at the federal level, there can be an array of hurdles at state and local level that make cannabis businesses trickier to work with.
  • There are religious based/morality issues for some lenders in dealing with the industry. These aren’t dissimilar from issues with other industries such as adult entertainment and gaming. It’s also fair to point out that, morality aside, these industries have thrived in the last several decades.

So, while traditional banking institutions will often deal with the proceeds from the cannabis industry, including allowing bank accounts for these businesses, there is far less of a chance that they would invest in a cannabis business, for fear of risking their license. They can even go so far as to refuse to include income from a cannabis business in the determination of a loan application.

There are more unique lending or investing groups that either specialize in cannabis or are starting to open their books to specialize in cannabis. Overall, there is more interest in the industry than ever before, as it becomes normalized in American society: more participants and more insiders of the industries that are willing to invest in the right idea.

Will legalization be more likely in the future?

The fact that cannabis businesses and dispensaries have been deemed essential services during the pandemic, where they legally operate, has shed new light on the relevance of these businesses and the advantages of more widespread legalization.“Consumers will help drive the innovations as they demand clean consumption methods”

In fact, the pandemic has normalized a lot of new behaviors, including the acceptable use of cannabis to help with stress and anxiety. People are, perhaps thanks to staying at home more, doing the legwork to understand how cannabis could be useful to them in managing their stress. The medicinal benefits of cannabis have long been researched and understood: consumers are coming into the fray to express their interest in it, which can only fuel the possibility of more widespread legalization.

Add to this the fact that the cannabis industry is a growth industry. There are companies and jobs that aren’t coming back, post-pandemic. There is an opportunity to grow the cannabis industry to the general benefit of many, both as business owners and employees. The revenue generated from taxation following legalization would also benefit many state coffers. Federal level legalization would be the panacea to eliminate the mixed message, state by state regulation that currently exists.

Opportunities for innovation, moving forward

As more and more people become interested in the industry, and as cannabis use is normalized within society through legalization, the opportunities for the industry can only expand.

For an industry that started on the simple concept of smoking cannabis, the advances have already been legion: edibles, nanotechnology-based formulations for effective, clean consumption and many more innovations.

In a world that increasingly sees smoking as a negative, for the obvious impact to lung health, there are so many opportunities to grow the industry to find consumption methods that are safe and still deliver the impact of the inhaled version.

Here again, consumers will help drive the innovations as they demand clean consumption methods. The technology is available to make this possible; it only takes innovation and education to find the best ways to move this industry forward.

As legalization expands—and particularly if it is dealt with at the federal level—the industry will be able to capitalize on existing infrastructure for manufacturing and distribution, allowing new businesses to grow, get funded and thrive in the new normal.

Cannabusiness Sustainability

Designing More Sustainable Cannabis Facilities

By Sophia Daukus
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The topic of sustainability has grown in importance and priority for both consumers and regulators. From reducing emissions to lowering energy and water consumption, cannabis growing facilities face unique challenges when it comes to designing sustainable operations. Moreover, as the cannabis market grows and usage becomes more accepted, regulatory bodies will continue to increase the number of directives to help ensure the safety and quality of cannabis products.

Non-porous flooring options are impervious in nature, helping to isolate contaminants on the surface, thus enabling proper cleanup and disposal.

Ubiquitous throughout cannabis grow rooms and greenhouses, flooring can be easily overlooked, yet offers an economical way to create more sustainable facilities. Many of today’s grow rooms are located in old retrofitted warehouses or former industrial buildings that were designed without sustainability or environmental concerns in mind.

Combined with energy efficient lighting and more thoughtful water usage, flooring can help create a more efficient facility that not only improves business operations, but also contributes to a better bottom line.

Sustainability Challenges Facing Cannabis Facilities

Whether in an old warehouse space or a new structure designed from the ground up, cannabis businesses face unique operational challenges when it comes to sustainable best practices.

  • Energy Consumption: Like any indoor farm, lighting plays an important role in cannabis growing facilities. Traditional grow lights can utilize a large amount of electricity, putting a strain on the company budget as well as regional energy resources. Switching to highly-efficient LED lighting can help facilities reduce their consumption, while still maximizing crop yield.
  • Water Consumption: Among the thirstiest of flora, cannabis plants require consistent and plentiful watering for healthy and fruitful crop production.
  • Carbon Dioxide (CO2) Enrichment: In many cases, carbon dioxide is introduced into facilities to help enhance the growth of crops. However, this practice may pose safety and health risks for workers, the surrounding community and the planet at large. CO2 is a greenhouse gas known to contribute to climate change.

In order to head off upcoming regulatory restrictions, as well as to alleviate the mounting safety and health concerns, it behooves cannabis grow room managers and owners to explore alternatives for improving sustainability in their facilities.

Flooring Requirements for More Sustainable Cannabis Facilities

Spanning thousands or even hundreds of thousands of square feet throughout a facility, flooring can be a unique way to introduce and support sustainable practices in any grow room or greenhouse.

When seeking to improve operational efficiency and implementing the use of sustainable practices in cannabis facilities, look for flooring systems with the following characteristics:

  • Impervious Surfaces— Fertilizers, fungicides, and other chemicals can infiltrate porous unprotected concrete to leach through the slab matrix and into the soil and groundwater below. Non-porous flooring options, such as industrial-grade, fluid-applied epoxies and urethanes, are impervious in nature, helping to isolate contaminants on the surface, thus enabling proper cleanup and disposal.
  • Light-Reflective Finishes— Light-colored white or pastel floor surfaces in glossy finishes can help reduce the amount of energy needed to properly illuminate grow rooms. By mirroring overhead lighting back upward, bright, light-reflective flooring can help minimize facilities’ reliance on expensive ceiling fixtures and electricity usage.
  • USDA, FDA, EPA, OSHA and ADA Compliancy— With cannabis industry regulations currently in flux, grow facilities that select food- and pharmaceutical-compliant flooring will be ahead of the game. Governing bodies in some states have already begun expanding the facility requirements of these sectors to the cannabis market.
  • Durable and Easy Care— Having to replace flooring every couple of years imposes high costs on businesses as well as the environment. Installation of many traditional types of flooring produces cut-off waste and requires landfill disposal of the old floor material. In contrast, by installing industrial-grade flooring systems that are highly durable and easy-to-maintain, facilities can count on long-term performance and value, while helping to minimize disposal costs and concerns.
Light-colored white or pastel floor surfaces in glossy finishes can help reduce the amount of energy needed to properly illuminate grow rooms.

Optimal flooring can help cultivation facilities reduce waste, improve the efficacy of existing lighting and lengthen floor replacement cycles for a better bottom line and a healthier environment. Additionally, having the right grow room floor can assist facilities in meeting regulatory requirements, help ensure production of quality products and improve the safety for consumers and staff.

Flooring Benefits for Employees and Consumers

Safety is paramount in any workplace. When it comes to the manufacture of foodstuffs and other consumed products, government oversight can be especially stringent. With the right compliant flooring in place, cultivation facilities can focus on the rest of their business, knowing that what’s underfoot is contributing to the safety of employees and their customers.

Here’s how:

  • Chemical Resistance— Floors can be exposed to a high concentration of chemicals, acids and alkalis in the form of fertilizers, soil enhancers and other substances. In processing locations, the proper disinfecting and sanitizing of equipment can require harsh solvents, detergents and chemical solutions, which can drip or spill onto the floor, damaging traditional flooring materials. It pays to select cannabis facility flooring with high chemical resistance to help ensure floors can perform as designed over the long term.
  • Thermal Shock Resistance— Optimal cannabis facility flooring should be capable of withstanding repeated temperature cycling. Slab-on-grade structures in colder climates may be especially vulnerable to floor damage caused by drastic temperature differences between a freezing cold concrete slab and the tropical grow room above. This extreme contrast can cause certain floor materials to crack, delaminate and curl away from the concrete substrate. The resulting crevices and uneven surfaces present trip and fall hazards to employees and leave the slab unprotected from further degradation. As an alternative, thermal shock-resistant floors, such as urethane mortar systems, furnish long-lived functionality even when regularly exposed to extreme temperature swings.
  • Humidity and Moisture Resistance— Traditional floor surfaces tend to break down in ongoing damp, humid environments. Cannabis facility flooring must be capable of withstanding this stress and more.
  • Pathogen Resistance— Undesirable microbes, fungi and bacteria can thrive in the moist, warm environments found in grow rooms. Floors with extensive grout lines and gaps provide additional dark, damp locations for pathogen growth. Fluid-applied flooring results in a virtually seamless surface that’s directly bonded to the concrete. Integral floor-to-wall cove bases can further improve wash down and sanitation.
  • Proper Slope and Drainage— Where food and/or pharmaceutical facility regulations have already been extended to cannabis operations, flooring is required to slope properly toward a floor drain. This prevents puddling, which can be a slip hazard as well as a microbe breeding ground. Unlike more typical materials, resinous flooring offers an economical solution for correcting floor slope wherever needed.

The Problems Presented by Traditional Flooring Options

Previously, cannabis growers often relied on traditional greenhouse-type flooring, including tamped down dirt floors, gravel or bare concrete. However, current and upcoming regulations are curtailing the use of these simple flooring options.

Growers often compare and contrast the benefits and value of traditional greenhouse flooring with more modern solutions, such as fluid-applied epoxy and urethane floors.

Dirt and gravel flooring offers little opportunity to properly sanitize, thus potentially inviting microorganism and pathogen invasion, contamination and costly damage. Growers who have turned to bare concrete floors face other concerns, including:

  • Unprotected concrete is inherently porous and therefore able to quickly absorb spilled liquids and moisture from the air. In addition, organic and synthetic fertilizers, fungicides, and chemicals can leach through the concrete floors, contaminating the groundwater, injuring the surrounding environment and wildlife.
  • Older slabs often lack an under-slab vapor barrier. Even in new construction, a single nail hole can render an under-slab barrier ineffective. In these situations, moisture from underneath the floor slab can move upward osmotically through the alkaline slab, leading to blistering and damage to standard commercial floor coverings.
  • Bare concrete floors can stain easily. These dark stains tend to absorb light instead of reflecting it, contributing to a potential increase in energy usage and cost.
  • The mold proliferation encouraged by the warmth and humidity of grow rooms can easily penetrate into the depths of unprotected slab surfaces, eventually damaging its structural integrity and shortening the usable life of the concrete.

While traditional greenhouse flooring options can initially seem less expensive, they frequently present long-term risks to the health of cannabis grow businesses. In addition, the performance of dirt, gravel and bare concrete floors runs counter to the industry’s commitment to reducing the carbon footprint of growing facilities.

Choosing Sustainable Grow Room Flooring

It’s no secret that the cannabis industry is undergoing enormous change and faces numerous environmental challenges. Luckily, optimal flooring options are now available to help growers economically increase their eco-friendly practices on many fronts. By focusing on quality resinous flooring, cannabis growers can get closer to meeting their sustainability goals, while simultaneously contributing to improved operation efficiency, enhanced yields and an increased bottom line.

Flag_of_the_People's_Republic_of_China.svg

The Awakening Green Giant: China and Cannabis

By Marguerite Arnold
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Flag_of_the_People's_Republic_of_China.svg

There are many ironies along the path towards global cannabis legalization. Too many to count. But surely one of the oddest was always going to be the reacceptance and relegalization of cannabis in China.

The path so far has been, at a minimum, tortured.

Ritualistic, religious, and medical use of cannabis is mentioned in Chinese texts as early as 3,000 years B.C. and medical literature for the last 2,000 years. Fast forward through Imperial dynasties, the western Age of Empire and exploitation, a cultural and political revolution and two world wars, and it took China until 1985 to actually declare cannabis “illegal.”

Flag_of_the_People's_Republic_of_China.svgDuring the 19th Century British occupation, the majority Muslim Xinjang region of the country was a major cannabis producer (and exporter) to British India.This was done legally and under tariff until 1934 when the communist government cut off legal trade.

Currently,punishment for possession yields10-15 days jail time and a 2,000-yuan (approximately $300) fine. Illegal sales, however, carry the death penalty. Last year, China executed 10 people convicted of drug trafficking in a public space to send a strong statement about the launch of a new anti-drug campaign. It certainly sent a message.

But to Westerners, in particular, a highly confusing one.

So where is the “market?” And how and where is cannabis being slowly reintroduced to the country in the age of global reform?In 2003, they issued regulations to normalize the industry.

Hemp Is Widely Farmed

Farmers in the northerly province of Heilongjiang province, near Russia, are producing hemp legally these days – bound for industrial, medical and edible commercial use. The crop is highly profitable for farmers – bringing in about USD $1,500 per acre.This is far more than other crops like corn. Chinese authorities had, until earlier this century, turned a blind eye to its production. In 2003, they issued regulations to normalize the industry.

This production region also accounts for half of all farmland currently under legal hemp production, globally.

That is not a typo.

More Than Half Of Global Cannabis Patents Are Chinese

During the 20th Century,as cannabis reform moved on, not to mention western medical knowledge expanded about the plant, no surprise, the Chinese government began to lend support to a burgeoning industry and medical research. That also began surprisingly early. During the Chinese involvement in the Vietnam War during the 1970’s, the government needed a source of cheap clothing material for soldiers. They also needed cheap, accessible medicines with strong anti-bacterial properties, particularly in the humid jungle.

Given the highly politicized nature of the plant itself, not to mention current geopolitical developments shaping the global industry, Chinese exports are likely to stir a global conversation.Approximately half of the world’s 600 cannabis patents are now held in China, rivalling the potential of Israel on both the cannabinoid medicine and medical device front.

These days, there is a greater appreciation than ever for “traditional” Chinese medicine,long stigmatized by Western approaches to the same, far from China. The discovery of the so-called “endocannabinoid system” of the body by Israeli scientists at the turn of the century also supports this sea change. Including not only the use of cannabisbut other natural herbs and procedures like acupuncture to stimulate it.

The Chinese domestic medical cannabis trade, in other words, is ready to take off in the world’s largest greying population. The horse has, obviously, left the barn in the West.

But what does all this mean for non-Chinese competitors not only in Chinabut outside of it, as the drug heads for export crop status?

Cannabis Trade Wars Are In The Offing

Given the highly politicized nature of the plant itself, not to mention current geopolitical developments shaping the global industry, Chinese exports are likely to stir a global conversation.

President Donald Trump’s administration, it should be remembered, allowed a British CBD import to enter the U.S. pharmaceutical market this summer (while still banning all U.S. producers from entering the same thanks to delays on rescheduling domestically). It is not an unreasonable prediction to make, certainly after Trump also struck a deal with Israeli President Benjamin Netanyahu to delay the date of Israeli medical cannabis to the rest of the world in exchange for political support in moving the nation’s capital from Tel Aviv to Jerusalem.

A U.S. “ban” on Chinese-sourced cannabis would be one of the most natural responses in the world for the current American administration, which has not only used the cannabis trade card before (Israel, UK) but has yet to move on rescheduling the drug at home.

What To Expect If Considering Importing

Tread carefully. While Europe (at least to North Americans) has its eccentric quirks when it comes to international business, the situation in China is far different.Tread carefully, and find local partners where possible. 

Beyond appalling penalties for getting the paperwork (or etc.) wrong, there aremany differences in business, medical and even broader culture that are completely foreign to Westerners (in particular).

Tread carefully, and find local partners where possible. Where to meet Chinese partners?

Chinese investors are beginning to enter particularly European markets via conferences. In the past several years, while they are still a trickle, Chinese doctors, investorsandscientists have begun appearing in the West. Particularly in more medically oriented forums in Europe.