Tag Archives: USDA

GMPs & Cannabis Manufacturing

By Kathleen May
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Editor’s Note: While CIJ typically omits the word “marijuana” where possible due to antiquated nomenclature and prejudicial connotations, we understand the legal distinction between cannabis containing THC and hemp requires the use of the word when referencing federal government policies and legislative language.


Despite the rapid evolution of the cannabis industry, the assurance of safe manufacturing practices remains unclear.Both the Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA) have imposed significant hurdles for cannabis operators to remain on the “right side of the law.” Therefore, manufacturers of both hemp and marijuana products have been left to figure things out on their own, or choose to ignore existing guidance because the lack of federal oversight allows them to do so. Inconsistent regulation on manufacturing, packaging, labeling and testing of cannabis products offers the potential for unsubstantiated, non-scientific and often times blatantly false claims on product safety and efficacy.

Science vs. Law

Hemp and marijuana are both species of the Cannabis family, Cannabaceae. Genetically they are identical but are arbitrarily defined by the presence of delta-9 tetrahydrocannabinol (THC). While science does not differentiate between hemp and marijuana, the law does.

The hemp industry declared a small victory with the passing of the Agricultural Act of 2014 (2014 Farm Bill). Under this bill universities and state agriculture departments were allowed to grow hemp under state law. Additionally, “industrial hemp” was officially defined by establishing the legal limit of THC at 0.3% on a dry weight basis. The Agricultural Improvement Act of 2018 (2018 Farm Bill), under the guidance of the United States Department of Agriculture (USDA), took things a few steps further by authorizing the cultivation of hemp and removed hemp and hemp seeds from the CSA. The bill however provides no language that mandates the safe manufacture of hemp-derived consumer goods. The 2018 version also preserved the FDA’s authority to regulate products containing cannabis and cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act). To the surprise of most, listing cannabidiol (CBD), even hemp-derived, as an ingredient on consumer product labels remains illegal under the bill. Furthermore, CBD product manufacturers are not protected under the current regulations. Since 2015 the FDA has issued warning letters to firms marketing CBD products as dietary supplements and/or foods, and in December 2018, FDA declared it illegal to introduce food containing CBD (or THC) into interstate commerce, regardless if it is derived from hemp. To date, the only FDA approved CBD product is GW Pharmaceutical’s Epidiolex.

Marijuana remains classified as a Schedule I controlled substance under the CSA. Thirty-six (36) states have approved comprehensive, publicly available medical marijuana programs, and now 14 states have approved adult use programs, with New Jersey passing legislation on February 22, 2021. However, the industry has seen minimal movement toward mandating GMP requirements in the marijuana market. Only a handful of medical programs require manufacturers to follow GMP. Furthermore, the requirements are inconsistent between states and the language in the regulations on how to approach GMP implementation is vague and disjointed. This fragmented guidance supports the complexity and difficulty of enforcing a coherent, standardized and reliable approach to safe manufacturing practices.

What is GMP and Why Should You Care?

Good Manufacturing Practices (GMPs) are a system for ensuring that products are consistently manufactured and controlled according to quality standards and regulatory guidelines. The implementation of a GMP compliant program ensures consumer health and safety, allows manufacturers to understand the intended use of their products, allows manufacturers to defend product specifications as being appropriate, considers the risks to vulnerable populations and minimizes overall business risk. In a nutshell, GMP equals product safety and quality, and defines the responsibilities of the manufacturer to ensure consumers are protected from the distribution of unsafe and ineffective products. Currently, the GMP “landscape” in the cannabis space is complicated. The various “flavors” (food, dietary supplements, cosmetics and drugs/devices) of GMP leave many confused and frustrated when making the decision to implement GMP. Confusion is a result of unclear regulatory requirements as well as operators not fully understanding how to classify or designate the end use of their product(s). Implementing an effective GMP program requires proper planning (both short and long term), financial commitment and qualified resources.

Where Should You Start?

As the regulatory landscape continues to evolve and mature in the cannabis space, your business model must consider GMP implementation if you wish to remain successful and sustainable.

Intended Use

Before you can implement GMP you must first understand what GMP regulations apply to the intended use of your product(s). Are you manufacturing food, beverages or dietary supplements? Get acquainted with the FDA Code of Federal Regulations (CFRs) on GMP. 

Conduct a Gap Assessment

A gap assessment allows you to determine your deficiencies in relation to GMP compliance. The assessment should include, but is not limited to facility design, equipment design, supply chain, risk management and employee training.

Develop an Action Plan

Once the gap assessment is complete a comprehensive action plan will be developed to map out the steps required to achieve GMP compliance. The action plan should follow the SMART Goal principles:

  • Specific (simple, well-defined)
  • Measurable (meaningful)
  • Attainable (achievable, agreed upon)
  • Relevant (resource-based, reasonable and realistic)
  • Timely (time-based, defined due dates)

The plan will include prioritized deliverables, due dates and allocated resources in order to strategically plan and execute and complete the required tasks.

Schedule a Mock GMP Inspection

A mock inspection verifies that the action plan was adequately executed. Hire an experienced resource familiar with related GMPs and QMS to conduct the inspection. A successful mock inspection is a perfect litmus test if the end goal is to achieve GMP certification.

Cannabis manufacturers that ignore the obvious progression toward an FDA-like industry will not survive the long game. Those that embrace the momentum and properly plan to mitigate product and business risk – those who demonstrate integrity and are truly in this space to ensure safe, effective and quality products to consumers will come out on top, gain credibility and secure brand recognition.


References:

  • 21 CFR Part 111, Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements.
  • 21 CFR Part 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food and the Food Safety Modernization Act (FSMA).
  • 21 CFR Part 210, Current Good Manufacturing Practice in Manufacturing, Processing, Packing, or Holding of Drugs; General.
  • 21 CFR Part 211, Current Good Manufacturing Practice for Finished Pharmaceuticals.
  • 21 CFR Part 700, Subchapter G-Cosmetics.
  • 21 CFR Part 820, Subchapter H-Medical Devices; Quality System Regulation
  • Congressional Research Service, FDA Regulation of Cannabidiol (CBD) Products, June 12, 2019.
  • United States Food and Drug Administration-Warning Letters, Current Content as of 02/19/2021.

Links:

extraction equipment

THC Remediation of Hemp Extracts

By Darwin Millard
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extraction equipment

Remediation of delta-9 tetrahydrocannabinol (d9-THC) has become a hot button issue in the United States ever since the Drug Enforcement Agency (DEA) released their changes to the definitions of marijuana, marijuana extract, and tetrahydrocannabinols exempting extracts and tetrahydrocannabinols of a cannabis plant containing 0.3% or less d9-THC on a dry weight basis from the Controlled Substances Act. That is because, as a direct consequence, all extracts and tetrahydrocannabinols of a cannabis plant containing more than 0.3% d9-THC became explicitly under the purview of the DEA, including work-in-progress “hemp extracts” that because of the extraction process are above the 0.3% d9-THC limit immediately upon creation.

The legal ramifications of these changes to the definitions on the “hemp extracts” marketplace will not be addressed. Instead, this article focuses on the amount of d9-THC that is available in the plant material prior to extraction and tracks a “hemp extract” from the point it falls out of compliance to the point it becomes compliant again and stresses the importance of accurate track-n-trace protocols at the processing facility. The model developed to support this article was intended to be academic and was designed to follow the d9-THC portion of a “hemp extract” through the lifecycle of a typical CO2-based extract from initial extraction to THC remediation. A loss to the equipment of 2% was used for each step.

Initial Extraction

For this exercise, a common processing scenario of 1000 kg of plant material at 10% cannabidiol (CBD) and 0.3% d9-THC by weight was modeled. This amount, depending on scale of operations, can be a facility’s total capacity for the day or the capacity for a single run. 1000 kg of plant material at 0.3% d9-THC has 3 kg of d9-THC that could be extracted, purified, and diverted into the marketplace. CO2 has a nominal extraction efficiency of 95%, meaning some cannabinoids are left behind in the plant material. The same can be said about the recovery of the extract from the equipment. Traces of extract will remain in the equipment and this little bit of material, if unaccounted for, can potentially open an operator up to legal consequences. Data for the initial extraction is shown in Image 1.

Image 1: Summary Data Table for Typical CO2-based Extraction of Phytocannabinoids

As soon as the initial extract is produced it is out of compliance with the 0.3% d9-THC limit to be classified as a “hemp extract”, and of the 3 kg of d9-THC available, the extract contains approx. 2.8 kg, because some of the d9-THC remains in the plant material and some is lost to the equipment.

Dewaxing via Winterization and Solvent Removal

Dewaxing a typical CO2 extract via winterization is a common process step. For this exercise, a wax content of 30% by weight was used. A process efficiency of 98% was attributed to the wax removal process and it was assumed that 100% of the loss can be accounted for in the residue recovered from the equipment rather than in the removed waxes. Data for the winterization and solvent recovery are shown in Image 2 and 3.

Image 2: Summary Data Table for Typical Winterization of a CO2 Extract
Image 3: Summary Data Table for Solvent Removal from a CO2 Extract

Two things occur during winterization and solvent removal, non-target constituents are removed from the extract and there is compounded loss from multiple pieces of process equipment. These steps increase the concentration of the d9-THC portion of the extract and produce two streams of noncompliant waste.

Decarboxylation & Devolatilization

Most cannabinoids in the plant material are in their acid form. For this exercise, 90% of the cannabinoids were considered to be acid forms. Decarboxylation is known to produce a mass difference of 87.7%, i.e. the neutral forms are 12.3% lighter than the acid forms. Heat was modeled as the primary driver and a process efficiency of 95% was used for the conversion rate during decarboxylation. To simplify the model, the remaining 5% acidic cannabinoids are presumed destroyed rather than degraded into other compounds because the portion of the cannabinoids which get destroyed versus degrade into other compounds varies from process to process.

Devolatilization is the process of removing low-molecular weight constituents from an extract to stabilize it prior to distillation. Since the molecular constituents of cannabis resin extracts vary from variety to variety and process to process, the extracts were assumed to consist of 10% volatile compounds. The model combines the decarboxylation and devolatilization steps to account for complete decarboxylation of the available acidic cannabinoids and ignores their weight contribution to the volatiles collected during devolatilization. Destroyed cannabinoids result in an amount of loss that can only be accounted for through a complete mass balance analysis. Data for decarboxylation and devolatilization are shown in Image 4.

Image 4: Summary Data Table for Decarboxylation and Devolatilization of a CO2 Extract

As the extract moves along the process train, the d9-THC concentration continues to increase. Decarboxylation further complicates traceability because there is both a known mass difference associated with the process and an unknown mass difference that must be calculated and justified.

Distillation

A two-pass distillation was modeled. On each pass a portion of the extract was removed to increase the cannabinoid concentration in the recovered material. Average data for distilled “hemp extracts” was used to ensure the model did not over- or underestimate the concentration of the cannabinoids in the distillate. The variables used to meet these data constraints were derived experimentally to match the model to the scenario described and are not indicative of an actual distillation. Data for distillation is shown in Image 5.

Image 5: Summary Data Table for Distillation of a Decarboxylated and Devolatilized Extract

After distillation, the d9-THC concentration is shown to have increased by 874% from the original concentration in the plant material. Roughly 2.2 kg of the available 3 kg of d9-THC remains in the extract, but 0.8 kg of d9-THC has either ended up in a waste stream or walking out the door.

Chromatography – THC Remediation Step 1

Chromatography was modeled to remove the d9-THC from the extract. Because there are several systems with variable efficiency rates at being able to selectively isolate the d9-THC peak from the eluent stream, the model used a 5% cut-off on the front-end and tail-end of the peak, i.e. 5% of the material before the d9-THC peak and 5% of the material after the d9-THC peak is assumed to be collected along with the d9-THC. Data for chromatography is shown in Image 6.

Image 6: Summary Data Table for d9-THC Removal using Chromatography

After chromatography, a minimum of three products are produced, compliant “hemp extract”, d9-THC extract, and noncompliant residue remaining in the equipment. The d9-THC extract modeled contains 2.1 kg of the available 3 kg in the plant material, and is 35% d9-THC by weight, an increase of 1335% from the distillation step and 11664% from the plant material.

CBN Creation – THC Remediation Step 2

For this exercise, the d9-THC extract was converted into cannabinol (CBN) using heat rather than cyclized into d8-THC, but a similar model could be used to account for this scenario. The conversion rate of the cannabinoids into CBN through heat degradation alone is low. Therefore, the model assumes half of the available cannabinoids in the d9-THC extract are converted to CBN. The entirety of the remaining portion of the cannabinoids are assumed to convert to some form of degradant rather than a portion getting destroyed. Data for THC destruction is shown in Image 7.

Image 7: Summary Data Table for THC Destruction through Degradation into CBN

Only after the CBN cyclization step has completed does the product that was the d9-THC extract become compliant and classifiable as a “hemp extract.”

Image 8: Summary Data Table for Reconciliation of the d9-THC Portion of the Hemp Extract

Throughout the process, from initial extraction to the final d9-THC remediation step, loss occurs. Of the 3 kg of d9-THC available in the plant material only 2.1 kg was recovered and converted to CBN. 0.9 kg was either lost to the equipment, destroyed in the process, attributable to the mass difference associated with decarboxylation, or was never extracted from the plant material in the first place. All of these potential areas of product loss should be identified, and their diversion risk fully assessed. Not every waste stream poses a risk of diversion, but some do; having a plan in place to handle waste the DEA considers a controlled substance is essential. Without a track-n-trace program following the d9-THC and identifying the potential risk of diversion would be impossible. The point of this is not to instill fear, instead the intention is to shed light on a very real issue “hemp extract” producers and state regulators need to understand to protect themselves and their marketplace from the DEA.

New Guidance on Waste Disposal for Hemp Producers

By Stephanie McGraw, Emily Sellers
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On January 15, 2021, the USDA published its final rule on US hemp production. The rule, which becomes effective on March 22, 2021, expands and formalizes previous guidance related to waste disposal of noncompliant or “hot” crops (crops with a THC concentration above .3 percent). Importantly for the industry, the new disposal rules remove unduly burdensome DEA oversight and provides for remediation options.

Producers will not be required to use a DEA reverse distributor or law enforcement to dispose of noncompliant plants. Instead, producers will be able to use common on-farm practices for disposal. Some of these disposal options include, but are not limited to, plowing under non-compliant plants, composting into “green manure” for use on the same land, tilling, disking, burial or burning. By eliminating DEA involvement from this process, the USDA rules serve to streamline disposal options for producers of this agricultural commodity.

Alternatively, the final rule permits “remediation” of noncompliant plants. Allowing producers to remove and destroy noncompliant flower material – while retaining stalk, stems, leaf material and seeds – is an important crop and cost-saving measure for producers, especially smaller producers. Remediation can also occur by shredding the entire plant to create “biomass” and then re-testing the biomass for compliance. Biomass that fails the retesting is noncompliant hemp and must be destroyed. The USDA has issued an additional guidance document on remediation. Importantly, this guidance advises that lots should be kept separate during the biomass creation process, remediated biomass must be stored and labeled apart from each other and from other compliant hemp lots and seeds removed from non-compliant hemp should not be used for propagative purposes.

The final rules have strict record keeping requirements, such rules ultimately protect producers and should be embraced. For example, producers must document the disposal of all noncompliant plants by completing the “USDA Hemp Plan Producer Disposal Form.” Producers must also maintain records on all remediated plants, including an original copy of the resample test results. Records must be kept for a minimum of three years. While USDA has not yet conducted any random audits, the department may conduct random audits of licensees.

Although this federal guidance brings some clarity to hemp producers, there still remains litigation risks associated with waste disposal. There are unknown environmental impacts from the industry and there is potential tort liability or compliance issues with federal and state regulations. For example, as mentioned above, although burning and composting disposal options for noncompliant plants, the final rule does not address the potential risk for nuisance complaints from smoke or odor associated with these methods.

At the federal level, there could be compliance issues with the Resource Conservation and Recovery Act (RCRA), Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and ancillary regulations like Occupation Safety and Health Administration (OSHA). In addition to government enforcement under RCRA and CERCLA, these hazardous waste laws also permit private party suits. Although plant material from cultivation is not considered hazardous, process liquids from extraction or distillation (ethanol, acetone, etc.) are hazardous. Under RCRA, an individual can bring an “imminent and substantial endangerment” citizen suit against anyone generating or storing hazardous waste in a way the presents imminent and substantial endangerment to health or the environment. Under CERCLA, private parties who incur costs for removal or remediation may sue to recover costs from other responsible parties.

At the state level, there could be issues with state agency guidance and state laws. For example, California has multiple state agencies that oversee cannabis and hemp production and disposal. CA Prop 65 mandates warnings for products with certain chemicals, including pesticides, heavy metals and THC. The California Environmental Quality Act (CEQA) requires the evaluation of the environmental impact of runoff or pesticides prior to issuing a cultivation permit. Both environmental impact laws permit a form of private action.

Given the varied and evolving rules and regulation on hemp cultivation, it remains essential for hemp producers to seek guidance and the help of professionals when entering this highly regulated industry.

Soapbox

How to Vote for Cannabis Research on November 3rd

By Dr. Jordan Zager
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It was 1996. I was four years old. California Proposition 215 passed and for the first time, legal medical cannabis became available. I don’t remember it honestly, but that moment triggered a reckoning of outdated and ineffective efforts to control cannabis, which continues on November 3rd.

The moment in 1996 created for me and my generation of millennials a new, decriminalized lens for which to view cannabis and its potential. In my lifetime, from first experimenting with cannabis after high school and then earning my PhD in plant biochemistry, advancing cannabis research, to starting an agtech company dedicated to the genetic improvement of cannabis, we continue this march toward legalization. But another march hasn’t started yet.

The cannabis we consume today is still largely the same (albeit more potent today) as the cannabis that was legalized in 1996. There’s been little advancement in our scientific understanding of the plant. This can and should change. I believe the future and legitimacy of the cannabis crop in the medical field and in farmers’ fields is on the ballot this November.

Five states have cannabis on the ballot for November 3rd

In 33 states, medical cannabis is currently legal and in eleven of those, including my home states of Nevada and Washington, legalized adult-use recreational cannabis is generating millions in tax revenue every month. But compared to every other commercial crop, cannabis is still decades behind.

We are seeing a glacial cadence with cannabis research. As voters in five more states consider this November whether to legalize cannabis, that same tipping point we reached in 1996 comes closer to being triggered for cannabis research.

Here’s what cannabis scientists, like me, face as we work to apply real scientific methods to the long-neglected crop: I published one of the most cited papers on cannabis research last year, titled, Gene Networks Underlying Cannabinoid and Terpenoid Accumulation in Cannabis. But, as per university policy, we were unable to touch the plant during any of our research. We could not study the physical cannabis plant, extracts or any other substantive physical properties from the plant on campus or as a representative of the university. Instead we studied cannabis DNA processed through a third-party. Funding for the research came from private donors who were required to be unassociated with the cannabis industry.

While we were conducting our heavily restricted, bootstrapped cannabis research, the university lab in the next building over was experimenting with less restrictions on mice using other drugs: cocaine, opioids and amphetamines. (Quick note, marijuana is listed as more dangerous than cocaine, which is a Schedule II drug.)

I get it. Due to the federal prohibition on cannabis as a heavily regulated Schedule I drug, universities cannot fund research without the risk of losing all of their federal funding. While the USDA does not support research and SBIR grants are all but impossible, one government agency does allow research, from cannabis grown only in Mississippi. It’s the Drug Enforcement Agency (DEA) and any research conducted using its crop is as ineffective as you’re imagining. Relevant research is likely impossible using the crop which dates back to a 1970’s strain with a potency that’s about 30 percent of today’s commercial cannabis offerings.

To change this anti-research climate, do what those in California did with Prop 215 in 1996. Vote.

Dr. Jordan Zager, author and CEO of Dewey Scientific

Vote for legalization of cannabis if you’re in those five states where legalization is on the ballot; that’s Arizona, New Jersey, Montana, South Dakota and Mississippi. The more states that align with cannabis legalization, the stronger the case becomes for the federal government to reschedule the drug from a Schedule I controlled substance. Currently cannabis is listed as a Schedule I alongside heroin. The DEA claims cannabis has no currently accepted medical use and a high potential for abuse. Both are not true, just listen to the scientists.

Those outside of the five states putting cannabis on the ballot can still play a role in creating a Congress that is more receptive to cannabis reform. This Congress is the oldest, one of the most conservative and least effective in our country’s history. Younger, more progressive representation will increase our odds of advancing cannabis research.

Cannabis holds far too much possibility for us to allow it to be an unstudied “ditch weed.” THC and CBD are just two of nearly 500 compounds found in cannabis which, when scientifically scrutinized will harvest – I believe – vast medicinal and commercial benefits and the tax windfalls that accompany both. But first you have to vote.

If cannabis and your representatives are not on the ballot, do something millennials have built somewhat of a reputation for failing to do; pick up a phone and call your current representative. Tell them cannabis deserves scientific attention and investment. There’s too much potential in the cannabis plant to wait any longer.

Overcoming Challenges in the Private Label CBD Industry

By Josh Epstein
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Private labelling, or white labelling, is a popular option for brands looking to enter the CBD space. This practice is where a product is manufactured by one company but branded, marketed and sold by another.

There are several companies that specialize in manufacturing end-to-end finished CBD products. They commonly provide third-party test results, certificates and data to verify the purity and potency of products created. Technically, all new brands need to do is place their label on the package and start selling! However with any new venture, establishing a successful private label CBD brand will inevitably mean various challenges need to be overcome.

Securing Quality Sources of CBD

Finding the right partners to work with is a must. The best way to source credible and trustworthy suppliers and manufacturers is to look for certifications and audits from third-party agencies. These include the Global Food Safety Initiative (GFSI), the Safe Quality Food (SQF), the United States Department of Agriculture’s (USDA) organic certification program and others.

The USDA organic certification program is a rigorous multi-step audit process to increase supply chain sustainability. Organic certification is a form of elective, self-regulation for manufacturers which consumers have eagerly welcomed into the marketplace. Look for the USDA organic seal to help identify which manufacturers are trustworthy and can produce a range of organic products.

From a consumer perspective, certifying your products as organic is an additional way to provide both supply chain transparency and increase confidence when trying new CBD products. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic will consistently choose organic products for the quality and transparency they provide with pure and natural ingredients.

Creating a Unique Product

Innovation and creativity will continue to be important differentiators due to the highly competitive nature of the CBD marketplace. New ingredient innovations such as water dispersible materials are big game-changers. From chewing gum to energy drinks, the opportunities for new and unique CBD products under your own private label are limitless.

Just some of the many hemp-derived CBD products on the market today.

There are only a handful of CBD brands who are willing, or even able, to be certified organic today. USDA certification is an opportunity for brands looking to adapt to changing consumer preferences, diversify their product offerings and invest in supply chain transparency.

In the past, product differentiators involved third-party lab testing or providing COAs — today that’s just industry standard. The USDA organic seal is becoming one of the hemp industry’s most coveted certifications because it is a product differentiator.

Building Credibility

Trustworthiness, transparency and traceability are important factors for consumers to consider when shopping for products. These factors should also be considered when producing products and while vetting vendors, partners, stakeholders and supply chain suppliers.

Credible certifications allow consumers to make informed decisions while feeling confident that they are purchasing products from reputable sources. Research has shown that today’s CBD market lacks credibility while consumers are desperately seeking comfort and are eager to purchase from trustworthy brands.

NCIA to DEA: Rescind the Interim Hemp Rule

By Cannabis Industry Journal Staff
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In a press release published this week, the National Cannabis Industry Association (NCIA) urges the DEA to rescind the controversial Interim Hemp Rule. Back in August, the DEA published the rule and it has received widespread criticism for its language in conflict with the 2018 Farm Bill.

The rule is a classic example of the federal agency’s resistance to cannabis reform. It states that legal hemp products can be converted to products containing more than 0.3% THC, the threshold established in the 2018 Farm Bill, thus becoming an illegal controlled substance.

Under the Interim Hemp Rule, the DEA could arrest and prosecute legal hemp processors if they are in possession of hemp or CBD oil that contains more than 0.3% THC at any time, even if only for a temporary moment in the extraction process. This creates a lot of criminal risk for hemp companies as it is an almost inevitable step in the extraction process.

Almost every state in the country has an established USDA-compliant hemp program and the NCIA believes the Interim Hemp Rule is in direct conflict with the USDA’s rulemaking authority. According to Aaron Smith, co-founder and chief executive officer of the NCIA, the DEA is overstepping its authority and going outside of its jurisdiction. “Given this agency’s history of doing everything in its power to maintain the criminalization of cannabis in any form, this rule was clearly not proposed to help the thousands of small farmers who are participating in approved hemp programs and could put them in unnecessary danger,” says Smith. “Failure to rescind it immediately is a clear violation of congressional intent and established law.”

You can view the NCIA’s full comments here.

Why Organic Should be the Future of CBD

By Josh Epstein
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The hemp industry is rapidly growing, but it’s no secret that it suffers from a major legitimacy problem. When manufacturers choose to certify their products and processes under a third-party agency, such as the USDA, it is a way for those companies to gain credibility with new customers.

USDA LogoThe USDA’s organic certification program is a great way to increase transparency and trust with both ingredients and processes used within the hemp industry. Organic certification is a rigorous audit program to review both manufacturing facility design and production process plans with the ultimate goal of increasing supply chain sustainability.

Investing in organic certification is a smart business decision – especially in today’s competitive CBD market. A recent Bloomberg report has shown that COVID-19 has actually accelerated organic food sales in the US due to increased demand for health-conscious foods and drinks. “Sales of organic food and drinks surged 25% during the 17-week period ended June 27,” according to Nielsen Data.

Organic certification is one way to differentiate between the thousands of seemingly identical CBD products being sold in the marketplace today. From a consumer perspective, organic certification provides both supply chain transparency and increases confidence with brands and products they already love. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic will consistently choose organic products for the quality and transparency it provides with pure and natural ingredients.

Not only does certification support ethical practices, it’s also good for business. According to the USDA, “Food labeling can be confusing and misleading, which is why certified organic is an important choice for consumers. Consumers are willing to pay a premium for food that carries the USDA organic seal, or that contains organic ingredients.”

Organic farming and production processes significantly contribute to increasing sustainability within the CBD industry. In general, organic farming is a growing practice for farmers across the US. According to the Pew Research Center, “There were more than 14,000 certified organic farms in the United States in 2016, according to the latest available data from the U.S. Department of Agriculture’s National Agricultural Statistics Service. This represents a 56% increase from 2011, the earliest comparable year.” The USDA has found that organic production practices can improve water quality, conserve energy, increase biodiversity and contribute to soil health. In terms of organic farming, soil ecology and water quality are both protected by farmers committing to working within regulated guidelines.

Organic certification ensures transparency and trust with a consumer-friendly approach to ingredient products. This comes on the heels of research showing that the CBD market lacks credibility. Organic CBD should be the next step all brands should take to ensure they’re adapting to changing consumer preferences.

Kaycha Labs Named Designated Lab for Florida’s Hemp Program

By Cannabis Industry Journal Staff
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Last week, Kaycha Labs, a cannabis testing laboratory company based in Florida, announced that they have executed an agreement with the Florida Department of Agriculture & Consumer Services (FDACS) to be the first “Designated Compliance Laboratory” for the state of Florida’s new hemp program.

As part of the agreement, Kaycha Labs will be procuring samples for the mandatory compliance testing program, as well as providing the required potency analysis for the Division of Plant Industry (an office under the FDACS).

The USDA recently approved the hemp program under the FDACS, and with that comes a host of regulations that producers need to follow.

Florida’s program requires a “designated approved representative” to go out in the field and collect compliance samples for testing from hemp licensees. Those samples then get tested to ensure they have less than 0.3% THC, per state and federal requirements.

Cynthia Brewer, vice president of Kaycha Labs, says this new regulatory framework will help a lot of stakeholders. “I am thrilled that Florida has created a regulatory framework that incorporates both well-defined procedures and high standards,” says Brewer. “Everyone benefits – consumers are protected and hemp producers become known for as- advertised, quality product. All of us at Kaycha are looking forward to working with both and the cultivators and the Department of Plant Industry.”

european union states

International Supply Chains: Considerations for European Imports

By Marguerite Arnold
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european union states

The recent decision in Germany on the reclassification of CBD (kudos to the European Industrial Hemp Association) as something other than “novel” has now opened an interesting new discussion in Germany and by extension, Europe.

It basically means that hemp plants, if they are European in origin, can be grown (under the right regulatory structure starting with organic) and even extracted without ever being considered a “novel food.”

Look for (hopefully) similar discussions now across Europe and the UK where the Food Safety Authority is also examining similar policies.

What this ultimately means, however, is that the market is clearly opening on the CBD front, but only for products that make the grade.

What should the average producer or manufacturer from North America think about when setting up a supply chain for export?

Regulations

Thanks to the new treaties in place between the United States, Canada and Europe right now, there are market openings in the cannabis industry in Europe. Starting with the fact that the cannabis bug has clearly hit the continent, but there is actually not enough regulated product to be found yet and just about anywhere.

This is keeping prices high right now, but do not expect that to last.

european union states
Member states of the EU, pre-Brexit

Regardless, pricing of imports will not be like anything you have experienced if your background is state or even national market in the U.S. or Canada. There are higher regulations in every direction in Europe. Understanding how to translate the same into equivalencies that do not bankrupt you, overprice your products, or worse, get you in trouble with authorities is a critical first step, and not one to be taken lightly.

Get professional guidance from the country you are hoping to export to, at minimum. And that includes the legal kind. Every step of the way, you have to be certified with, at minimum, federal if not at an international certification.

No matter what cannabinoid is in the mix, this is ultimately a plant-based product. All rules one would normally think about when talking about other food products (for starters) are in the room.

While it is far from “this easy” (although thanks to the USDA’s decision about hemp, not to mention the FDA update on its own deliberations, there are now federal standards), think about the problem this way: If you were the world’s best chocolate bar, or even tomato juice, how would you hit Europe right now?

They have tomatoes here, and unbelievably great chocolate already. What is it about your offering that can stand out?  This is the million-dollar question. There are a few people and companies doing this right now, but it takes experience, and understanding the multiple regulatory guidelines involved. Once you figure that out, then you need to look at your supply chain, piece by piece and literally from the plant through end production for where you fit, and where you might not, into the regulatory discussion and market you hope to enter.

The Medical Discussion

There is now the possibility of exporting medical grade hemp and hemp extracts from the United States to Europe. However, everything must be GMP-certified to a medical standard, from organic production on up. This is an international standard, not an American one.

GMPThat qualification does not exist much in the cannabis industry in the United States (although ISO very much is) yet. Although it is dawning. On the Canadian side, there are plenty of companies in the discussion, because there is already a beaten path to export.

As the German cultivation bid proved, European certification, certainly is a high barrier to reach. Indeed, it is not only GMP certification in the room on the medical side but also rules about the import of all plant products.

From this perspective, it is also easier to import “finished” product rather than plant.

The Recreational Discussion

Before anyone gets too excited about recreational reform, the reality is that Europe is not going to step ahead of the UN (which has now pushed its next deliberation on the topic to the end of 2020). Yes, there are trials in a couple of places, but far from earth-shaking (recreational trials in the land of the coffee shop anyone?)

More interesting, of course, is what has just happened on the CBD side. But before American hemp farmers get too excited about this, they have hemp and farmers in Europe. And quite a few people have seen the light on this one already.

Sure New York state exports to Europe are probably in the offing, but so are hemp exports from the Southern states where the weather is warmer and the labor cheaper.

The European Union’s logo that identifies organic goods.

Certified labs, processing and extraction, and labelling are all in the mix. And every step must be documented as you go.

How to Proceed?

Whatever your crop or product is, take stock of the certifications you have now. If your plant was not organic, forget export anywhere. You are out of the international game.

However, with this taken care of, look at the certification requirements in Europe for extraction, processing and import of food and plant products and obtain production partners with the same – either in the US or abroad.

With luck, patience, skill and knowledge, yes, the doors are slowing opening, even to U.S.-based cannabis trade of the international kind.

Just don’t expect it to be easy, and leave lots of time for workarounds, pivots and even re-engineering at every point of the way.

Comparable to Organic: How This California Company Aims to Certify Cannabis

By Aaron G. Biros
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Cannabis that contains more than 0.3% THC is not eligible for USDA organic certification, due to the crop’s Schedule I status. While some hemp farmers are currently on the path to obtain a USDA organic certification, the rest of the cannabis industry is left without that ability.

Growers, producers, manufacturers and dispensaries that utilize the same practices as the national organic program should be able to use that to their advantage in their marketing. Ian Rice, CEO of Envirocann, wants to help cannabis companies tap into that potential with what he likes to call, “comparable to organic.”

Ian Rice, CEO of Envirocann & co-founder of SC Labs

Rice co-founded SC Laboratories in 2010, one of the first cannabis testing labs in the world, and helped develop the cannabis industry’s first testing standards. In 2016, Rice and his partners at SC Labs launched Envirocann, a third-party certification organization, focused on the quality assurance and quality control of cannabis products. Through on-site inspections and lab testing, Envirocann verifies and subsequently certifies that best practices are used to grow and process cannabis, while confirming environmental sustainability and regulatory compliance.

“Our backyard in Santa Cruz and the central coast is the birthplace of the organic movement,” says Rice. California Certified Organic Farms (CCOF), founded in Santa Cruz more than 40 years ago, was one of the first organizations in the early 1990s that helped write the national organic program.

“What we came to realize in the lab testing space and as the cannabis market grew, was that a lot of cannabis companies were making the organic claims on their products,” says Rice. “At the time, only one or two organizations in the cannabis space were making an attempt to qualify best practices or create an organic-type feel of confidence among consumers.” What Rice saw in their lab was not cannabis that could be considered organic: “We saw products being labeled as organic, or with certain claims of best practices, that were regularly failing tests and testing positive for banned chemicals. That really didn’t sit well with us.”

Coastal Sun Farms, Enviroganic-certified

At the time, there was no real pathway to certify cannabis products and qualify best practices. “We met with a few people at the CCOF that were very encouraging for us to adopt the national organic program’s standards for cannabis. We followed their lead in how to adopt the standards and apply a certification, building a vehicle intended to certify cannabis producers.”

Because of their background in lab testing they added the requirement for every crop that gets certified to undergo a site inspection, sampling, as well as a pesticide residue test to confirm no pesticides were used at all during the production cycle. One of their clients is Coastal Sun Farms, a greenhouse and outdoor cannabis producer. “They grow incredible products at a high-level, commercial scale at the Enviroganic standard,” says Rice. “They have been able to prove that organic cannabis is economically viable.”

The Envirocann certification goes a bit beyond the USDA’s organic program in helping their clients with downstream supply chain risk management tools (SCRM). “Because of the rigorous testing of products to get certified and go to market, we are getting way ahead of supply chain or production issues,” says Rice. “That includes greater oversight and transparency, not just for marketing the final product.”

A good example of using SCRM to a client’s advantage is in the extraction business. A common scenario recently in the cannabis market involves flower or trim passing the pesticide tests at the lab. But when that flower makes it down the supply chain to a manufacturer, the extraction process concentrates chemical levels along with cannabinoid levels that might have previously been acceptable for flower. “I’ve witnessed millions and millions of dollars evaporate because flower passed, but the concentrated final product did not,” says Rice. “We’ve introduced a tool to get ahead of that decision-making process, looking beyond just a pass/fail. With our partner labs, we look at the chromatograms in greater detail beyond regulatory requirements, which gives us information on trace levels of chemicals we may be looking for. It’s a really rigorous audit on these sites and it’s all for the benefit of our clients.”

Envirocann has also recently added a processing certification for the manufacturing sector and a retail certification for dispensaries. That retail certification is intended to provide consumers with transparency, truth in labeling and legitimate education. The retail certification includes an assessment and audit of their management plan, which goes into details like procurement and budtender education, as well as basic considerations like energy usage and waste management.

Fog City Farms, Envirocann-certified

While Envirocann has essentially adopted the USDA’s organic program’s set of standards for what qualifies organic producers, which they call “Enviroganic,” they also certify more conventional producers with their “Envirocann” certification. “While these producers might not be considered organic farmers, they use conventional methods of production that are responsible and deserve recognition,” says Rice. “A great example for that tier would be Fog City Farms: They are growing indoor with LED lighting and have multiple levels in their indoor environment to optimize efficiency and minimize their impact with waste and energy usage, including overall considerations for sustainability in their business.”

Looking to the future, Ian Rice is using the term “comparable to organic” very intentionally, preparing for California’s roll out of their own organic cannabis program. The California Department of Food and Agriculture (CDFA) is launching the “OCal Comparable-to-Organic Cannabis Program.” Envirocann is obviously using the same language as the CDFA. That’s because Envirocann aims to be one of the verifying agents under the CDFA’s new program. That program will begin on January 1, 2021.