Documents play a key role in the world of regulations and global standards. Documents tell a story on programs development, implementation and verification during an inspection or audit. Documents are used as evidence to determine conformance to the law or standard. However, do you know what kind of documents may be reviewed during a regulatory inspection or a food safety audit? Are you prepared to show that the implementation of regulatory requirements or a standard is done efficiently at your facility?
Inspectors and auditors will look for compliance either to regulations or to a standard criterion. Regulations and standards require that documentation is controlled, secured and stored in an area where they cannot deteriorate. Therefore, writing a Document Management Program (DMP) will help a business owner ensure consistency in meeting this and other requirements.Radojka Barycki will host a a plenary session titled, “Cannabis: A Compliance Revolution” at the 2018 Food Safety Consortium | Learn More
A well-developed and implemented DMP provides control over documents by providing a number sequence and revision status to the document. In addition, ownership for development, review and distribution of the documents are assigned to specific individuals within the company to ensure that there are no inconsistencies in the program. Documents must also have the name of the company in addition to a space to write the date when the record is generated. It is recommended to include the address if there are multiple operational sites within the same company.
There are different types of documents that serve as support to the operations:
Program: A written document indicating how a business will execute its activities. When it comes to the food industry, this is a written document that indicates how quality, food safety and business activities are controlled.
Procedures: General actions conducted in a certain order. Standard Operational Procedures (SOPs) allow the employee to know what to do in general. For example, a truck receiving procedure only tells the employee what the expected conditions are when receiving a truck (cleanliness, temperature, etc.) However, it doesn’t tell the employee how to look for the expected conditions at the time of the truck arrival.
Work Instructions: Detailed actions conducted in a certain order. For example, truck inspection work instruction tells the employee what steps are to be followed to perform the inspection.
Forms: Documents used to record activities being performed.
Work Aids: are documents that provide additional information that is important to perform the job and can be used as a quick reference when performing the required activities within the job.
The inspectors and auditors base their role on the following saying: “Say what you do. Do what you say. Prove it!” The programs say what the company do. The procedures, work instructions and work aids provide information on implementation (Do what you say) and the forms become records that are evidence (prove) that the company is following their own written processes.
Regulatory requirements for cannabis vary from state to state. In general, an inspector may ask a cannabis business to provide the following documentation during an inspection:
Product Traceability Programs and Documents
Product Testing (Certificate of Analysis – COAs)
Certification Documents (applicable mainly to cannabis testing labs)
Proof of Destruction (if product needs to be destroyed due to non-compliance)
Training Documents (competency evidence)
As different states legalize cannabis, new regulatory requirements are being developed and modeled after the pharma, agriculture and food industries. In addition, standards will be in place that will provide more consistency to industry practices at a global level. The pharma, agriculture and food industries base their operations and product safety in programs such as cGMPs, GAPs, HACCP-based Food Safety Management Systems and Quality Management Systems. Documents required during an inspection or audit are related to:
Good Agricultural Practices (GAPs)
Current Good Manufacturing Practices (cGMPs)
Food Safety Plan Documents
Ingredient and Processing Aids Receiving
Ingredient and Processing Aids Storage
Operational Programs (Product Processing)
Final Product Storage
Final Product Transportation
Document Management Program
In the always evolving cannabis industry, are you prepared to face document requirements now and in the future?
It is old news that Canadian companies are entering the European market. And it is also no stop-the-presses flash that Germany is a big prize in all of this. But there are other Euro markets to watch right now. Switzerland is one of them.
Look for the Canadian influx here too.
One of the more interesting entrants this month? Green Relief – a Canadian LP with a really unique twist. They are the only company in the world to produce cannabis oil from flower grown with aquaponics. This unique method creates unbelievably “clean” cannabis with no pesticides – and no residue of them.
It also sets the company up for a really unique market opportunity on the ground outside Canada. Especially as they have now just announced a partnership with two Swiss companies– Ai Fame GmbH and Ai Lab Swiss AG. Both companies have been leading European pharmaceutical companies since the turn of the century. The idea is to leverage all three company’s intellectual capital with Green Relief’s additional and first international investment with an eye to the entire European cannabis market. Ai Fame specializes in cultivation, manufacturing, sales and distribution to both the food and medical sectors. Ai Lab Swiss AG operates as a laboratory and testing facility.Less than three weeks before Green Relief publicized their European announcement, there were also strategic developments afoot at home.
From this unique perch in the Swiss canton of St Gallen, the three companies are setting up to conquer Europe.
Why Is Switzerland So Strategic?
Switzerland has been on the legalization track since 2011. As of this date, the Swiss government began allowing adults to buy and use CBD-only cannabis. Shops were allowed to obtain licenses. A trickle of sales began. However, rather suddenly, as reform hit Europe, the craze took off. Last year, for the first time, the industry generated a significant amount of revenue (close to $100 million). That is $25 million for the government via taxes- just on CBD sales. Even more intriguing for those looking for market opportunity across borders? Less than a week ago, the German-based budget discount store Lidl just announced they were carrying smokeable CBD – in Swiss grocery stores. The leap across the border is imminent.
That has opened up other conversations, including the “legalize everything” push that makes an awful lot of sense to the ever tax-aware Swiss. This is a push afoot just about everywhere across the continent, including, of course, just across the border in Germany.
The cities of Zurich and the cantons of both Winterthur and St Gallen (home of the Swiss companies behind the new venture with Green Relief) have already indicated that they will not pursue possession fines for those busted with 10 grams or less– no matter what kind and even of the THC variety.
Read between the lines, and it is clear that the cannabinoid conversation locally has begun to attract the Canadians. And not just because of the many opportunities of the Swiss CBD market – but the huge medical and THC German and European opportunities now opening beyond that.
No matter which way Green Relief and their new partners slice it, they are now in the game – and across Europe – with a unique new play and product, and further one set to enter both the medical THC and “consumer,” albeit still CBD, market now burgeoning.
A Cross Market Play
Here is the truly interesting part about this new announcement. Less than three weeks before Green Relief publicized their European announcement, there were also strategic developments afoot at home. Cannabis Growth Opportunity Corporation also just announced an investment in Green Relief. The share purchase agreement netted Green Relief $750,000 in both cash and common shares.
With this, Green Relief seems to have set sail on its European expansion. Look for more interesting turns to this developing saga soon!
HACCP is a food safety program developed in the 1960s for the food manufacturing industry, mandated for meat, seafood and juice and adopted by foodservice for the safe serving of meals at restaurants. With state requirements for the safe production of cannabis-infused products, namely edibles, facilities may be inspected against HACCP principles. The cannabis industry and state inspectors recognize the need for safe edible manufacture. Lessons can be learned from the food industry, which has advanced beyond HACCP plans to food safety plans, starting with procurement and including the shipment of finished product to customers.
In my work with the food industry, I write HACCP and food safety plans and deliver training on food safety. In Part 1 of this series, I wrote about the identification of hazards, which is the first step in HACCP plan development. Before we continue with the next HACCP step, I will discuss Good Manufacturing Practices (GMPs). GMPs are the foundation on which HACCP is built. In other words, without GMPs in place, the facility will not have a successful HACCP program. GMPs are required in the food, dietary supplement and pharmaceutical industries, all under the enforcement of the federal Food and Drug Administration (FDA). Without federal regulation for cannabis edible manufacture, there may not be state-mandated requirements for GMPs. Let me warn you that any food safety program will not succeed without proper control of GMPs.
GMPs cover all of your programs and procedures to support food safety without having a direct, instant control. For example, when brownies are baked as edibles, food safety is controlled by the time and temperature of baking. A written recipe and baking procedure are followed for the edible. The time and temperature can be recorded to provide documentation of proper baking. In the food industry, this is called a process preventative control, which is critical to food safety and is part of a HACCP plan. Failure of proper time and temperature of baking not only leads to an unacceptable product in terms of quality, but results in an unsafe product that should not be sold.
Back to GMPs. Now think of everything that was done up to the steps of mixing and baking. Let’s start with personnel. Facilities for edibles have hiring practices. Once an employee is hired, the employee is trained, and training will include food safety procedures. When working at the job after training, the employee measuring ingredients will demonstrate proper grooming and hand washing. Clean aprons, hairnets, beard nets and gloves will be provided by the facility and worn by the employee. The same goes for the employee that bakes and the employee that packages the edible. One category of GMPs is Personnel.
Edibles facilities are not foodservice; they are manufacturing. A second GMP category is cleaning and sanitizing. Food safety is controlled through proper cleaning and sanitizing of food contact surfaces (FCS). The edible facility will have in place the frequency and methods for cleaning all parts of the facility- outside, offices, restrooms, break room and others. GMPs cover the general cleaning procedures and procedures for cleaning receiving, storage; what we would consider processing to include weighing, process steps and packaging; finished product storage and shipping. Management of the facility decides the methods and frequency of cleaning and sanitizing with greater care given to processing. Without proper cleaning and sanitizing, a facility cannot achieve food safety.
I could go on and on about GMPs. Other GMPs include water safety, integrity of the buildings, pest control program, procurement, sewage disposal and waste disposal. Let’s transition back to HACCP. In Part 1 of this series, I explained identification of hazards. Hazards are one of three types: biological, chemical and physical.
At this point, I am not surprised if you are overwhelmed. After reading Part 1 of this series, did you form a food safety team? At each edibles facility, there should be at least one employee who is trained externally in food safety to the standard that foodservice meets. Classes are offered locally and frequently. When the facility is ready, the next step of training is a HACCP workshop for the food industry, not foodservice. Edibles facilities are not foodservice; they are manufacturing. Many colleges and associations provide HACCP training. Finally, at the least, one employee should attend a workshop for Preventive Controls Qualified Individual.
To institute proper GMPs, go to ConnectFood.com for a GMP checklist. Did you draw up a flow diagram after reading Part 1? With a flow diagram that starts at Receiving and ends at Shipping, the software at ConnectFood.com takes you through the writing steps of a HACCP or food safety plan. There are many resources out there for GMPs, so it can get overwhelming. ConnectFood.com is my favorite resource.
The next step in HACCP development after identification of hazards is to identify the exact step where the hazard will be controlled. Strictly speaking, HACCP only covers process preventive controls, which typically start with a weigh step and end with a packaging step. A facility may also have a step where temperature must be controlled for food safety, e.g. cooling. In HACCP, there are commonly two process preventive controls:
Biological hazard of Salmonella and Escherichia coli: the heat step
Physical hazard of metal: metal detector
Strictly speaking, HACCP does not include cleaning, sanitizing and supplier approval for procurement of ingredients and packaging. I hope you see that HACCP is not enough. There have been hundreds of recalls and outbreaks due to problems in non-processing steps. The FDA requires food manufactures to go beyond HACCP and follow a written food safety plan, which includes hazards controlled at these steps:
Biological hazard of Listeria monocytogenes: cleaning and sanitizing of the processing environment and equipment
Physical hazards coming in with ingredients: supplier approval
Physical hazard of glass and hard plastic: Here I am thinking of glass breaking or plastic pieces flying off buckets. This is an internal hazard and is controlled by following written procedures. The written document is a Standard Operating Procedure (SOP).
Chemical hazard of pesticides: supplier approval
Chemical hazard of mycotoxins: supplier approval
Chemical hazard of allergens: supplier approval, label check at Receiving and product labeling step
Does a cannabis edible facility honestly not care or not control for pesticides in ingredients because this is not part of HACCP? No. There are two ways for procurement of ingredients in which pesticides are controlled. Either the cannabis cultivation is controlled as part of the samebusiness or the facility works with a supplier to confirm the ingredient meets pesticide tolerances. Strictly speaking, this control is not part of HACCP. For this and many other reasons, HACCP is a good place to start the control of food safety when built on a solid foundation of GMPs. In the same way the food industry is required to go beyond HACCP with a food safety plan, the cannabis industry must go beyond HACCP.
My thoughts will be shared in a webinar on May 2nd hosted by CIJ and NEHA. I encourage you to listen in to continue this discussion.Please comment on this blog post below. I love feedback!
The outside environment can vary widely depending on where your facility is located. However, the internal environment around any activity can have an effect on that activity and any personnel performing the activity, whether that’s storage, manufacturing, testing, office work, etc. These effects can, in turn, affect the product of such activities. Environmental control strategies aim to ensure that the environment supports efforts to keep product quality high in a manner that is economical and sensible, regardless of the outside weather conditions.
For this article, let us define the “environment” as characteristics related to the room air in which an activity is performed, setting aside construction and procedural conditions that may also affect the activity. Also, let us leave the issue of managing toxins or potent compounds for another time (as well as lighting, noise, vibration, air flow, differential pressures, etc). The intent here is to focus on the basics: temperature, humidity and a little bit on particulate counts.
Temperature and humidity are key because a non-suitable environment can result in the following problems:
Increased operator error
Difficulty in managing products (e.g. powders, capsules, etc)
Degradation of raw materials
Microbial and mold growth
USP <659> “Packaging and Storage Requirements” identifies room temperature as 20-25°C (68-77 °F) and is often used as a guideline for operations. If gowning is required, the temperature may be reduced to improve operator comfort. This is a good guide for human working areas. For areas that require other specific temperatures (e.g. refrigerated storage for raw materials), the temperature of the area should be set to those requirements.
Humidity can affect activities at the high end by allowing mold growth and at the low end by increasing static. Some products (or packaging materials) are hydroscopic, and will take on water from a humid environment. Working with particular products (e.g. powders) can also drive the requirement for better humidity control, since some powders become difficult to manage in either high or low humidity environments. For human operations without other constraints, a typical range for desirable humidity is in the range of 20 to 70% RH in manufacturing areas, allowing for occasional excursions above. As in the case of temperature, other requirements may dictate a different range.
In a typical work environment, it is often sufficient to control the temperature, while allowing the relative humidity to vary. If the humidity does not exceed the limits for the activity, then this approach is preferred, because controlling humidity adds a level of complexity (and cost) to the air handling. If humidity control is required, it can be managed by adding moisture via various humidification systems, or cooling/reheating air to remove moisture. When very low humidity is required, special equipment such as a desiccant system may be required. It should be noted that although you can save money by not implementing humidity control at the beginning, retrofitting your system for humidity control at a later time can be expensive and require a shutdown of the facility.
Good engineering practice can help prevent issues that may be caused by activities performed in inappropriately controlled environments. The following steps can help manage the process:
Plan your operations throughout your facility, taking into account the requirements for the temperature and humidity in each area and know what activities are most sensitive to the environment. Plans can change, so plan for contingencies whenever possible.
Write down your requirements in a User Requirement Specification (URS) to a level of detail that is sufficient for you to test against once the system is built. This should include specific temperature and RH ranges. You may have additional requirements. Don’t forget to include requirements for instrumentation that will allow you to monitor the temperature and RH of critical areas. This instrumentation should be calibrated.
Solicit and select proposals for work based on the URS that you have generated. The contractor will understand the weather in the area and can ensure that the system can meet your requirements. A good contractor can also further assist with other topics that are not within the scope of this article (particulates, differential pressures, managing heating or humidity generating equipment effects, etc).
Once work is completed, verify correct operation using the calibrated instrumentation provided, and make sure you add periodic calibration of critical equipment, as well as maintenance of your mechanical system(s), to your calibration and maintenance schedules, to keep everything running smoothly.
The main point is if you plan your facility and know your requirements, then you can avoid significant problems down the road as your company grows and activity in various areas increases. Chances are that a typical facility may not meet your particular requirements, and finding that out after you are operational can take away from your vacation time and peace of mind. Consider the environment, its good business!
Right now the map of Europe, from a cannabis cultivation perspective at least, is shaping up to be very much like a game of Risk. Throw the dice, move your armies (or more accurately line up your financing), and apply for federal import and cultivation licenses.
In the process, all sorts of interesting strategic plays are popping up. And as a result, here is a new and actually pretty cool “alternative” reality that is easy to verify in several different ways. Medical cannabis is being cultivated in multiple countries across Europe as of 2018, however unbelievable this was even four years ago. Even though it is still cleary just early days. And those cultivators are already international, operating across federal jurisdictions in Europe and across both the Atlantic and Pacific oceans.
With all the excitement and attention paid to the American hemisphere and the European moves of big Canadian LPs (and they are pretty amazing), there are still other moves afoot that are absolutely of note. Specifically, Australian firms and MGC Pharma in particular, have been moving steadily to establish both distribution and cultivation presence on the ground in Europe.
The latest news? MGC’s production facility in Slovenia was officially inspected by authorities and issued an interim license for its production plant in January, before presumably being given a green light of approval permanently. The company is also moving forward with the production of CannEpil, the company’s first pharmaceutical-grade medical cannabis product for the treatment of refractory epilepsy.
Refractory epilepsy affects about 30% of all those who suffer from the condition. Refractory is one of those words however, that hides its real meaning. Translation for those without an MD? This is “drug resistant” epilepsy. Resistant to all drugs before, of course, except cannabinoids.
And that is a welcome relief for patients domestically and throughout Europe. It is also a note to investors looking for savvy Euro plays right now.For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating
This is a major win for MGC. Not to mention a vibrant medical market. No matter where specialty drugs are now going to be sourced from.
A Treatment-Driven “Branded” Pharma Market
What more traditional American pharmaceutical companies have known for a long time (certainly since the 1950’s) is now a fact also facing all cannabis brands coming to the European market and Germany in particular. The regulatory environment is hostile to the extreme for Auslanders in particular. Specifically, the development of “branded” or “name brand” drugs runs economically and philosophically counter to the concept of public health insurance itself even as their market accessibility is required by the same. This is even more the case for foreign firms with such ideas.
Here is the problem. Name brands are expensive. They are also usually outlier drugs for specific, relatively rare conditions. This is also the place where new drugs enter the market, no matter what they are.
In an environment where the government negotiates bulk contracts for common drugs and these can be bought at every apotheke (pharmacy) for 10 euros and a doctors rezept (prescription), the chronically ill and those with drug resistant conditions are left out of the discussion. They face steep and usually inaccessible bills up front for all meds not in bulk purchase categories. And that as of last year in Germany specifically, includes cannabis. That is the case even though technically the government is now buying cannabis in bulk and making purchase commitments to foreign companies for the same. Insurance companies, however, are still forcing patients to pay the entire out of pocket cost up front and wait to reimbursed.
“Generic” Brands For Off label Chronic Conditions
However medical cannabis is clearly not just another drug. Cannabis falls on both sides of every fence in this discussion.
The first problem is that the providers (importers and soon to be domestic cultivators) are private companies. All of them are foreign helmed at this point, with a well-developed bench of branded products. That makes all cannabis drugs, oil and flower, by definition, fall into the “expensive” branded category immediately. The German, Italian, and Danish governments appear to be now negotiating bulk buys during a licensing season that is well on the way to domestic cultivation too. That alone will affect domestic prices and new products. But again, this is now several years behind other countries – notably MGC in Slovenia, Tilray in Portugal, all things now afoot in Denmark and clearly, Greece.
Next, cannabis’s status as a still imported, speciality, semi-trial status in the EU means it is in the most restricted categories of drugs to begin with (no matter the name or strength of the cannabinoid in particular). And because it can be bought as bud, in an “unprocessed” form as well as processed oils or other medicine, this is throwing yet another spanner into the mix.
Look for distribution deals all over Europe as a result, starting with PolandThen there is this wrinkle. Cannabis (even CBD) is currently considered a narcotic within the EU and even more specifically the largest continental drug market – Germany. The German regulatory system in particular, also imposes its own peculiarities. But basically what this means in sum is that the legal cannabis community including distributors and pharmas at this point, have to educate doctors in an environment where cannabis itself is a new “brand.” Who manufactures what, for the purposes of German law, at least, is irrelevant. It is what that drug is specifically for that matters.
For all manufacturers now considering entering this market, this is a complicated environment to begin negotiating. This is sure not how things are back home.
What this also means is that low cost, speciality cannabis products will continue to be imported across Europe for the German and other developing, regulated sovereign markets here as doctors learn about cannabis from condition treatments. And that is what makes the news about MGC even more interesting.
Look for distribution deals all over Europe as a result, starting with Poland. And, despite the many well-connected and qualified hopefuls from Canada, a little competition in the German market too.
MS is the only “on-label” drug at present for cannabis treatment in Germany. As a result, particularly when it comes to paediatric treatment for drug resistant epilepsy, this is the kind of strategic presence that will create a competitive source for highly condition-branded medication for a very specific audience of patients. It is also what the German market, for one, if not the EU is shaping up to be at least in the near term.
As this interesting abstract from 2006 clearly shows, this kind of epilepsy is also high on the German radar from a public policy and healthcare-cost containment perspective. The costs of treatment per patient were between 2,600 and 4,200 euros for three months a decade ago, and not only have those risen, but so have the absolute number of people in similar kinds of situations.
Further, with indirect costs far higher than direct costs including early retirement and permanent semi disability, MGC’s market move into an adjacent (and cheaper) production market might be just what the German doctors if not policymakers now looking at such issues, will order.
In late November, California released their proposed emergency regulations for the cannabis industry, ahead of the full 2018 medical and adult use legalization for the state. We highlighted some of the key takeaways from the California Bureau of Cannabis Control’s regulations for the entire industry earlier. Now, we are going to take a look at the California Department of Public Health (CDPH) cannabis manufacturing regulations.
According to the summary published by the CDPH, business can have an A-type license (for products sold on the adult use market) and an M-type license (products sold on the medical market). The four license types in extraction are as follows:
Type 7: Extraction using volatile solvents (butane, hexane, pentane)
Type 6: Extraction using a non-volatile solvent or mechanical method
(food-grade butter, oil, water, ethanol, or carbon dioxide)
Type N: Infusions (using pre-extracted oils to create edibles, beverages,
capsules, vape cartridges, tinctures or topicals)
Type P: Packaging and labeling only
As we discussed in out initial breakdown of the overall rules, California’s dual licensing system means applicants must get local approval before getting a state license to operate.
The rules dictate a close-loop system certified by a California-licensed engineer when using carbon dioxide or a volatile solvent in extraction. They require 99% purity for hydrocarbon solvents. Local fire code officials must certify all extraction facilities.
In the realm of edibles, much like the rule that Colorado recently implemented, infused products cannot be shaped like a human, animal, insect, or fruit. No more than 10mg of THC per serving and 100mg of THC per package is allowed in infused products, with the exception of tinctures, capsules or topicals that are limited to 1,000 mg of THC for the adult use market and 2,000 mg in the medical market. This is a rule very similar to what we have seen Washington, Oregon and Colorado implement.
On a somewhat interesting note, no cannabis infused products can contain nicotine, caffeine or alcohol. California already has brewers and winemakers using cannabis in beer and wine, so it will be interesting to see how this rule might change, if at all.
The rules for packaging and labeling are indicative of a major push for product safety, disclosure and differentiating cannabis products from other foods. Packaging must be opaque, cannot resemble other foods packaged, not attractive to children, tamper-evident, re-sealable if it has multiple servings and child-resistant. The label has to include nutrition facts, a full ingredient list and the universal symbol, demonstrating that it contains cannabis in it. “Statute requires that labels not be attractive to individuals under age 21 and include mandated warning statements and the amount of THC content,” reads the summary. Also, manufacturers cannot call their product a candy.
Foods that require refrigeration and any potentially hazardous food, like meat and seafood, cannot be used in cannabis product manufacturing. They do allow juice and dried meat and perishable ingredients like milk and eggs as long as the final product is up to standards. This will seemingly allow for baked goods to be sold, as long as they are packaged prior to distribution.
Perhaps the most interesting of the proposed rules are requiring written standard operating procedures (SOPs) and following good manufacturing practices (GMPs). Per the new rules, the state will require manufacturers to have written SOPs for waste disposal, inventory and quality control, transportation and security.
According to Donavan Bennett, co-founder and chief executive officer of the Cannabis Quality Group, California is taking a page from the manufacturing and life science industry by requiring SOPs. “The purpose of an SOP is straightforward: to ensure that essential job tasks are performed correctly, consistently, and in conformance with internally approved procedures,” says Bennett. “Without having robust SOPs, how can department managers ensure their employees are trained effectively? Or, how will these department managers know their harvest is consistently being grown? No matter the employee or location.” California requiring written SOPs can potentially help a large number of cannabis businesses improve their operations. “SOPs set the tempo and standard for your organization,” says Bennett. “Without effective training and continuous improvement of SOPs, operators are losing efficiency and their likelihood of having a recall is greater.”
Bennett also says GMPs, now required by the state, can help companies keep track of their sanitation and cleanliness overall. “GMPs address a wide range of production activities, including raw material, sanitation and cleanliness of the premises, and facility design,” says Bennett. “Auditing internal and supplier GMPs should be conducted to ensure any deficiencies are identified and addressed. The company is responsible for the whole process and products, even for the used and unused products which are produced by others.” Bennett recommends auditing your suppliers at least twice annually, checking their GMPs and quality of raw materials, such as cannabis flower or trim prior to extraction.
“These regulations are only the beginning,” says Bennett. “As the consumer becomes more educated on quality cannabis and as more states come online who derives a significant amount of their revenue from the manufacturing and/or life science industries (e.g. New Jersey), regulations like these will become the norm.” Bennett’s Cannabis Quality Group is a provider of cloud quality management software for the cannabis industry.
“Think about it this way: Anything you eat today or any medicine you should take today, is following set and stringent SOPs and GMPs to ensure you are safe and consuming the highest quality product. Why should the cannabis industry be any different?”
In rather shocking news out of Germany on the cannabis front, it appears that Canadian LP ABcann has not been selected as one of the finalists in the country’s first tender bid to cultivate cannabis domestically.
As reported in the German press, the company has not been invited to submit an offer in the final award procedures. The reason per a company spokesman as quoted in the German media? The company proved it met the required qualification thresholds – namely it could deliver the required amount of product as required by the German government. However the amount it could produce was less than other firms being considered.
That is a strange statement, especially because the ten licenses on offer only called for a total of 2,000 kgs of production total by 2019 and 6600 kgs by 2022.
Who Is ABCann?
ABcann has been in business since 2014 in Canada, when it received one of the first cultivation licenses issued by the Canadian government. It has also been aggressively positioning itself in the German and European market this year – and in multiple ways. It got itself listed on both American and German stock exchanges by summer. The company established a subsidiary headquarters in Schönefeld as of August 2017. As late as October, the company also was appearing at industry conferences, like the IACM medical conference in Cologne, as an expected finalist in the first bid.
However, the company’s plans to build a $40 million, 10,000 square meter plant somewhere in Lusatia are now also reportedly on hold. The exact location of the plant is unknown, per German government requirements that grow facilities remain secret. That said, with a year and a half to complete construction, if given the green light even by early next year, it may be that this was the reason the company has apparently not made the cut. Or perhaps the German government did not believe the company was adequately funded. A September exercise of warrants netted the company an additional $45 million in operating cash. But with expansion plans in not only Canada and Europe, but Australia too, did the company pass the German test for liquidity?
Management changes are also afoot. As of October 1, Barry Fishman, a former Eli Lilly executive took over as CEO of ABCann Global. Ken Clement, founder of the company, announced in mid-October that he was stepping down from his position as Executive Chair of the Board to be replaced by Paul Lucas a former President and CEO of GlaxoSmithKline Canada. John Hoff, the Geschäftsführer (or CEO) of ABcann’s German subsidiary, has also recently left the company. When asked by CannabisIndustryJournal about his reasons for doing so at the Cannabis Normal conference in Berlin at the beginning of November, Hoff cited “management and creative differences” with ABcann Canada as the impetus for his recent departure.
However with the news of ABcann’s apparent loss of a front-runner position in the pending bid, such news appears to herald a bit more of a shakeup at the company, if not a refocussing of overall global strategy.
A source within the company who wished to remain anonymous also said this when contacted directly by CannabisIndustryJournal. “Our top priority currently is to acquire an import license. We also fully intend to pursue all of our plans in the German market, but we have no firm dates on the construction front.”
The State of Medical Cannabis Reform Auf Deutsch
The German medical cannabis question has certainly jerked forward over the past several years through several rough patches. This year it has gotten even stranger. And nobody is quite sure where it will end up.
The news about ABcann is also the latest episode in a very strange story that has continued to develop mostly out of sight of the public.
That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.Germany began moving forward quietly on the cannabis issue in the first decade of the century. Patients could only access the drug in basically trial mode. Most patients who qualified with a doctor’s prescription and a special permit to take the drug, could also access only Sativex (which is very expensive) or the synthetic form of the drug, dronabinol, manufactured domestically in a facility near Frankfurt. All bud cannabis was imported from Holland by Bedrocan. Strictly controlled not by German, but rather Dutch law on cannabis imports.
In 2014, the first German patients successfully sued the government to grow their own plants if their insurance companies refused coverage of the drug and they proved they could not afford alternatives.
This year, in January, the German government voted unanimously to change the law to mandate public health insurance. The law went into effect in March. Mainly driven by a desire to halt home-grow, the rules changed again. Post March 2017, patient grow rights have now been revoked. Now patients are theoretically allowed to get cannabis covered under public health insurance. In reality, the process has been difficult.
In April, the German government created a new “Cannabis Agency” under the auspices of BfArM. And BfArM in turn issued a tender bid for the country’s first domestic licences in April.
That bid process, which was expected to announce the winners by late summer, has now dragged on through the fall.
When Will The Winners Be Announced?
That too is unclear. It is very likely that the final announcement will not be made by the government until the beginning of the year – after the new government is formed. The so-called “Jamaica Coalition” – of the mainstream CDU, the Greens and the liberals (FDP) is under major pressure to address the issue of access. So far Chancellor Angela Merkel has signalled her resistance for additional changes to the new cannabis law. That said, the current situation in Germany, which is untenable for patients and doctors, as well as companies trying to enter the market and investing heavily, is unlikely to hold for even the next several years.
Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise.In late October, the news broke that two legal complaints had been unsuccessfully filed against the bid itself. Both parties’ complaints were dismissed. Yet there also appears to have been a third complaint that has actually devolved in to a real Klage – or lawsuit. Lexamed GmbH’s claim directly addresses issues expressed by many German-only firms this year. Namely that they were unfairly left out of the bid process because of a supposed lack of experience. As such it is likely to be closely watched by other existing German hopefuls.
This lawsuit has now formally delayed the announcements on the bid decision until at least after December 20th of this year, when the oral arguments will be heard in the case. A decision about the bid will go forward when this has been decided, by the beginning of 2018.
In the meantime? Cannabis imports are starting to enter the country. In late summer last year, Spektrum Cannabis, formerly MedCann GmbH, located just south of Frankfurt, received the first import licenses from the German government to bring medical cannabis into Germany from Canada. Both Aurora and Tilray were granted import licenses this fall.
There are 16 different kinds of cannabis on the market right now. And about 170 kilos of cannabis were imported into the country in the last year. There are also currently about 1,000 patients although this number is artificially low. Problems with finding doctors and medical reimbursement under insurance have kept this patient population from growing the way it would otherwise. There are easily a million patients in Germany right now who would qualify for cannabis if the system worked as it was originally intended in the legislation passed in January.
That said, despite the recent news that ABcann is “out” – at least for this round– apparently the pan-European bid process is still very much alive, despite many recent rumours that it was dead in the water. And plans also seem to be afoot for a separate and additional cultivation licensing round potentially as soon as next year. Details however are unclear and nobody either in the industry or the government is willing to be quoted or give any further information.
I recently attended the CannaGrow Expo held in Denver, Colorado. It was a fantastic event, per usual, and I was pleasantly surprised to see a number of presentations by industry experts where the central themes were sustainability and environmental stewardship. I was particularly struck by Adam Maher’s presentation, where he discussed the merits of micro grid technologies and the ease in which they can be coupled with renewable energy modalities, such as solar. His sentiments really resonated with me, particularly with respect to the long-term implications of cannabis cultivation sweeping across North America.
Considering that cannabis represents the new frontier of modern medicine and its societal acceptance is rapidly spreading, there is a growing impetus for cannabis professionals to implement technologies that will enhance the sustainability of their operations. These pertain to, but are not limited to, power generation and lighting, both of which are integral components to any indoor cannabis cultivation facility. Not only can the utilization of energy efficient technologies (i.e., solar panels and LED lights) help our planet that is struggling mightily to neutralize the influences of anthropogenic climate change, but it can also add value to the bottom line. That’s right: environmental stewardship, product quality and financial success are not mutually exclusive in the cannabis industry. For example, the utilization of solar panels and/or a micro grid can have a relatively rapid payback (<6 years), while the hardware itself adds inherent value to any cannabis property/operation. This is particularly relevant in an emerging market where acquisitions are common and the management of asset value is a harbinger of success. Secondarily, the use of LED lighting technologies to produce ultra-premium cannabis is another piece of low-hanging fruit that can be picked to add value. For example, 1st and 2nd place in Arizona’s 2017 ERRL Cup were awarded to flower that was grown under LED lights designed by the Tall Trees LED Company, where the total cannabinoid levels exceeded 32% and a wide variety of terpenes were detected. These results, coupled with the fact that LED lights can provide full spectrum light that requires less energy and produces less heat than HPS lights, make the adoption of LED lights a simple choice for the environmentally conscious and financially savvy operator.
As we continue to move towards more states becoming cannabis powerhouses, and a potential federal rescheduling, the industry must continue pushing the operational equilibrium towards more resourceful technologies. Of course there is always going to be a perceived activation energy or threshold that must be transcended before the adoption of new technologies can be successfully accomplished with confidence. This is completely normal and is usually associated with the initial capital that is required to acquire such technologies, and/or fears that such an investment won’t bear fruit. However, there is currently enough data to indicate that technologies like solar panels and LED lights are a smart financial choice for any cultivation facility where there is sunlight and electrical outlets.
In summary, I would strongly encourage any operator to evaluate the sustainability and environmental stewardship of their business, especially if they anticipate spreading the holistic gospel of cannabis medicine for many years to come. You are already doing a tremendous service for those who depend on cannabis medicine and now is the time to continue your noble pursuit while taking care of Mother Earth and paying it forward to our subsequent generations.
After a delay due to their proficiency testing program roll out, the Colorado Marijuana Enforcement Division (MED) will now require all medical infused products and concentrates be tested for potency and homogeneity, starting November 1st, 2017.
After November 1st, all production batches of concentrates from medical product manufacturers will need to have a potency test before being sold, transferred or processed. The same goes for medical infused products, such as edibles and topicals. The homogeneity test refers to making sure THC or other active ingredients are distributed evenly throughout the product.
According to Alex Valvassori, author of a regulatory compliance-focused blog post on Complia’s website, these new testing requirements could lead to a surge in pricing, passed on to patients. He also recommends dispensaries take a close look at labels coming in from suppliers. They need to make sure potency data is listed clearly on the label to stay compliant.
Production batches created before November 1st are not required to meet the new testing regulations, but any and all batches after that date will be required to perform those tests.
Maintaining an environment that supports cultivation and keeps plants healthy is not an easy task. In cannabis growing, there are a variety of factors that greenhouse managers and personnel must monitor to ensure that their plants are in a healthy environment that fosters growth and development. Temperature, humidity, lighting and CO2 levels are a few of the conditions that need to be tailored to each cannabis greenhouse operation. However, it can be difficult to constantly monitor the status of your equipment and the greenhouse environment, especially after hours or during the off-season.
A remote monitoring system that’s properly selected and installed can help greenhouse managers keep their cannabis plants healthy, multiply their yields and increase return on investment. This type of system also helps operators identify patterns and trends in environmental conditions and get insight into larger issues that can prevent problems before they arise.
Here are some tips on key conditions to monitor and what you need to consider when selecting a monitoring system for your cannabis greenhouse operation:
Temperature plays a crucial role in any cannabis grow operation. The climate in your greenhouse must be warm enough to nurture photosynthesis and the growth of cannabis plants. Setting the incorrect temperature will significantly impact the potential yield of the plant and the rate at which it develops. A temperature too low will slow the growth of the cannabis, but too hot can lead to heat stress for your plants. The ideal temperature for a standard greenhouse is between 70 and 80 degrees Fahrenheit. However, depending on the stage of plant and desired growth densities, the temperature of the greenhouse needs to be adjusted accordingly.
Humidity directly affects plant photosynthesis and transpiration, so controlling humidity is vital in greenhouse growing. The ideal relative humidity (RH) for cannabis growth is around 60%. A low humidity level can cause water to evaporate too quickly for photosynthesis, while a humidity level that is too high can cause poor growth and possible mold and fungal disease. Monitoring the moisture content in the air of your greenhouse will help the plants during the transpiration process, increasing absorption of nutrients and overall health of the cannabis.
Your cannabis may be getting an abundance of natural light during the summer months, but maintaining adequate sunlight during the winter months can be a challenge. As a solution to this, many greenhouse managers equip their facilities with additional lights to supplement natural light during off-seasons or off-hours. To achieve the best possible yield, a cannabis plant in the budding stage should receive twelve hours of light each day, while other stages could require additional lighting. For example, the growth stage could require your cannabis to be exposed to sunlight for up to eighteen hours a day.
Like any other plant, cannabis requires CO2 to breathe. Greenhouse managers must set and monitor the CO2 levels in their facility to make sure that there is an adequate amount for the plants to develop, grow and be healthy. The amount of carbon dioxide required for your cannabis depends of the size of the facility and the amount of light the plants are receiving. However, a standard grow area for cannabis can maintain a CO2 range from 1000 to 1500 parts per million (PPM). A level below that threshold can result in slower growth of the plants, while a level above would lead to unused and wasted CO2.
Irrigation and Soil Moisture
One way to ensure a good yield from your cannabis is to water it regularly and monitor your soil moisture. Overwatering your plants can have the same effect, if not worse, than letting the soil become too dry. Plants’ roots need oxygen to survive, unlike leaves that breathe CO2, and when the soil is waterlogged the roots can’t provide their function. The lack of oxygen interferes with the roots’ nutrient uptake and photosynthesis causing the cannabis plant to wilt. The exact moisture content of the soil depends on the size of your greenhouse, temperature and humidity. Whether you hand water or are using a drip irrigation system, being aware of your soil moisture is vital to the long-term health of your cannabis.
Your greenhouse environment should mimic the ideal conditions in which cannabis plants flourish. With an indoor facility, you have the ability to control air circulation by venting hot air out and blowing fresh air in. Creating a circulation of air inside your greenhouse will increase your cannabis plant’s growth speed and yield. Additionally, an exhaust system helps control the temperature and humidity, while also preventing the invasion of mold and pests that thrive in hot, stagnant air.
When growing something of value, like cannabis, there will always be a threat of intruders. Whether your greenhouse is in a populated area or around hungry wildlife, any intruder could be detrimental to your overall yields and profit. Remote monitoring systems can give you peace of mind and instantly alert you when there is an unwanted presence in your greenhouse.
Knowing all the possible threats to your cannabis greenhouse helps you evaluate your specific needs, and ultimately identify the proper remote monitoring system.
Selecting the Right Monitoring System
Other factors to consider when choosing a monitoring system right for your operation include:
Base unit and sensors
Wireless or hardwired sensors
Communications to your site (Phone, cellular, Wi-Fi, etc.)
Programming and status checks
Return on investment
Base Units and Sensors
Each condition in your greenhouse that you want to monitor requires its own input on the base unit of the monitoring system. You must match your needs with the number of inputs available. A good fit for a smaller cannabis greenhouse may be a lower-cost, non-expandable monitoring system. However, larger facilities have many monitoring points and more people to alert when there’s a problem. If your cannabis operation is poised for growth, purchasing an expandable system could add value to the initial purchase because you wouldn’t have to replace your entire system in the future.
Your monitoring system should also have an internal rechargeable battery backup to ensure continuous monitoring and alerts in the event of a power outage. It is also recommended to have each base unit in a sheltered enclosure to protect it from moisture, dirt and other hazards.
Placement of sensors is also crucial. For example, temperature sensors in your greenhouse should be placed throughout the facility. They should be next to your thermostat and in the center of your greenhouse, preferably away from direct sunlight.
Wireless or Hardwired Sensors
Remote monitoring systems offer the option to have sensors hardwired directly to the base unit or sensors wirelessly connected. A hardwired monitoring system connects the sensors to the base device with wires. Generally, trenching long distances for wires is time consuming and costly. So alternatively, a wireless system uses built-in radio transmitters to communicate with the base unit. Some monitoring systems can accommodate a combination of hardwired and wireless sensors.
Communications to Your Site
Monitoring devices that use cellular communications must be registered on a wireless network (like Verizon or AT&T) before you can send or receive messages. Because cellular devices perform all communications over a wireless network, it is important that there be sufficient signal strength at the greenhouse. It is a good idea to check the signal quality in the area before purchasing a cellular product. If the cellular network has less than desirable coverage, it is possible to install an external antenna to help increase cellular signal.
When monitoring systems identify a change in status, they immediately send alerts to people on the contact list. If you don’t want all of your personnel to receive notifications at the same time, certain devices can be programmed to send alerts in a tiered fashion. It is important to consider the reach of the communications, so that you’ll be notified regardless of your locations. Multiple communications methods like phone, email and text provide extra assurance that you’ll get the alert. Also, note of the number of people the system can reach and if the system automatically cycles through the contact list until someone responds. Make sure the system allows for flexible scheduling so that it doesn’t send alarms to off-duty personnel.
Programming and Status Check
If you’re responsible for maintaining a commercial greenhouse facility, you want a system that will provide real-time status of all monitored conditions on demand. There are a few different ways to access your sensor readings. Options include calling to check status, viewing a web page, either on a local network or on the cloud, or accessing the information via an app on your mobile device. With a cloud-based system, the devices supervise themselves. This means if the internet or cellular connection goes down, the device will send an alarm to alert the appropriate personnel.
If you don’t select a cloud-based system, you will be limited to logging in through a local area network, which will allow you to make programming changes, access status conditions and review data logs. If internet connectivity is not available at your location, you will want to choose a cellular or phone system rather than Ethernet-based option.
Data history is valuable in identifying patterns and trends in your cannabis greenhouse conditions. Manually monitoring and recording environmental parameters takes a significant amount of personnel time and detracts from other important workplace demands. However, many monitoring systems automatically save information, recording tens of thousands of data points, dates and times. Cloud-based logging provides an unlimited number of records for users to view, graph, print and export data trends.
Analyzing data samples may lend insight to larger issues and prevent problems before they arise. For example, if the data log shows power fluctuations occurring at a regular time, it could be indicative of a more serious problem. Or, if the data shows signs of a ventilation fan or supplementary lighting beginning to malfunction, they can be repaired or replaced before total failure occurs.
Return On Investment
When deciding how much you should pay for a remote monitoring system, tally up the entire cost, fully installed with additional peripherals and sensors and any labor fees for installation. Then consider the value of your cannabis plant inventory and greenhouse equipment. Finally, factor in the cost of downtime, should an environmental event shut down your operation for a period of time.
Choosing the right greenhouse monitoring system and sensors could mean the difference between life and death for your cannabis plants. Understanding the conditions you need to watch and monitoring systems’ capabilities are they best way to protect your investment.
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