Tag Archives: hemp

Milan Patel, PathogenDx
Soapbox

The Need for More Stringent Testing in Cannabis

By Milan Patel
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Milan Patel, PathogenDx

As the demand for legal cannabis continues to rise and more states come online, it is imperative to enact more rigorous and comprehensive testing solutions to protect the health of consumers. People use cannabis products for wellness and to find relief; they should not be susceptible to consuming pathogens and falling ill. Especially for immunocompromised consumers, the consequences of consuming contaminated cannabis or hemp are dire. Of course, there should be federal standards for pathogen testing requirements like we have for the food industry. But right now, as cannabis is not yet federally legal, testing regulations vary between states and in many states, testing requirements are too loose and enforcement is minimal. It is up to state legislators, regulators and cannabis operators to protect the health of consumers through implementing more stringent testing.

From the outset, the environmental elements needed to grow cannabis – heat, light, humidity, soil – make cannabis ripe for pathogens to proliferate. Even when growers follow strict sanitation procedures through the supply chain from seed to sale, contaminations can still occur. Cannabis companies need to be hypervigilant and proactive about testing, not just reactive. The lack of regulations in some states is alarming, and as the cannabis industry is highly competitive and so many companies have emerged in a short time, there are unfortunately unscrupulous actors that have skated by in a loose regulatory landscape, just in the game to make a quick buck, even at the expense of consumer health. And there are notable instances where states do not have enforcement in place to deter harmful manufacturing practices. For instance, there are some states that don’t mandate moisture control and there have been incidents of companies watering down flower so it has more weight and thus can be sold at a higher cost – all the while that added moisture leads to mold, harming the consumer. This vicious circle driven by selfish human behavior needs to be broken by stricter regulations and enforcement.

While in the short term, looser testing regulations may save companies some money, in the long run these regulatory environments carry significant economic repercussions and damage the industry at large, most importantly injury or death to customers and patients. Recalls can tarnish a company’s brand and reputation and cause sales and stock prices to tank, and since cannabis legalization is such a hotly contested issue, the media gloms onto these recalls, which opponents to legalization then leverage to justify their stance. In order to win the hearts and minds of opponents and bring about federal legalization sooner, we need safer products so cannabis won’t be cast in such a dangerous, risky light.

Certainly, there’s a bit of irony at play here – the lack of federal regulations heightens the risk of contaminated cannabis reaching consumers, and on the flip side recalls are used by opponents to justify stigmatizing the plant and keeping it illegal. Nevertheless, someday in the not-too-distant future, cannabis will be legalized at the federal level. And when that day happens, federal agents will aggressively test and regulate cannabis; they’ll swab every area in facilities and demand thorough records of testing up and down the supply chain; current good manufacturing practices (cGMP) will be mandated. No longer will violations result just in a slap on the wrist – businesses will be shut down. To avoid a massive shock to the system, it makes sense for cannabis companies to pivot and adopt rigorous and wide-sweeping testing procedures today. Wait for federal legalization, and you’ll sink.

Frankly, the current landscape of cannabis regulation is scary and the consequences are largely yet to be seen. Just a few months ago, a Michigan state judge reversed part of a recall issued by the state’s Marijuana Regulatory Agency (MRA) on cannabis that exceeded legal limits of yeast, mold and aspergillus, bringing contaminated cannabis back to shelves without even slapping a warning label on the packaging to inform consumers of the potential contamination. This is a classic case of the power of the dollar prevailing over consumer safety and health. Even in well-established markets, the lack of regulations is jarring. For example, before this year in Colorado, testing for aspergillus wasn’t even required. (Aspergillus inhalation, which can cause Aspergillosis, can be deadly, especially for people who are immunocompromised). Many states still allow trace amounts of aspergillus and other pathogens to be present in cannabis samples. While traces may seem inconsequential in the short term, what will happen to frequent consumers who have been pinging their lungs with traces of pathogens for 30 years? Consistently inhaling trace amounts of pathogens can lead to lung issues and pulmonary disease down the road. Look what happened to people with breathing and lung issues during the last two years with COVID. What’s going to happen to these people when the next pandemic hits?

We need state regulators and MSOs to step up and implement more aggressive testing procedures. These regulators and companies can create a sea of change in the industry to better protect the health and well-being of consumers. Just complying with loose regulations isn’t good enough. We need to bring shortcomings around testing into the limelight and demand better and more efficient regulatory frameworks. And we should adopt the same standards for medical and adult use markets. Right now, several states follow cGMP for medical but not adult use – that’s ridiculous. Potentially harming consumers goes against what activists seeking legalization have been fighting for. Cannabis, untainted, provides therapeutic and clinical value not just to medical patients but to all consumers; cannabis companies should promote consumer health through their products, not jeopardize it.

For best practices, companies should conduct tests at every step in the supply chain, not just test end products. And testing solutions should be comprehensive. Most of the common tests used today are based on petri dishes, an archaic and inefficient technology dating back over a century, which require a separate dish to test for each pathogen of interest. If you’re waiting three to five days to see testing results against fifteen pathogens and a pathogen happens to be present, by the time you see results, the pathogen could have spread and destroyed half of your crops. So, not only do petri dishes overburden state-run labs, but due to their inherent inefficiencies, relying on these tests can significantly eat into cannabis companies’ revenues. At PathogenDx, we’ve created multiplexing solutions that can identify and detect up to 50 pathogens in a single test and yield accurate results in six hours. To save cannabis companies money in the long run and to make sure pathogens don’t slip through the cracks, more multiplexing tests like the ones we’ve created should be implemented in state labs.

Right now, while the regulatory landscape is falling short in terms of protecting consumer health, better solutions already exist. I urge state regulators and cannabis companies to take testing very seriously, be proactive and invest in creating better testing infrastructure today. Together, we can protect the health of consumers and create a stronger, more trustworthy and prosperous cannabis industry.

Sports Sponsorships in Cannabis: The Long Legal Road Ahead

By Airina Rodrigues
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If legal cannabis isn’t already a key facet of American culture, it is well on its way. The multibillion-dollar industry is already ubiquitous in politics, and consumers are increasingly seeing various types of marketing from cannabis brands, from billboards to magazine ads to organic content on social media. It may not be long before sports fans see more of their favorite athletes talking up CBD products for pain management or even see a dispensary chain claim naming rights for a stadium.

The next big marketing frontier for cannabis brands is professional sports sponsorships. And in some respects, it makes sense that athletes might be natural brand ambassadors for an industry focused on pain management and mental health relief. But there are obstacles unique to the highly regulated cannabis market that, paired with the already legality-heavy proposition of sponsorship deals, mean a long road ahead. Here are some key considerations for cannabis and CBD brands looking to a future of sports sponsorships.

The Current Climate

Many leagues have already embraced sponsorship deals with CBD brands, from NASCAR to the United Soccer League. The four pillar sports in the U.S.—the National Football League, the National Basketball Association, the National Hockey League and Major League Baseball—have already relaxed their rules and testing protocols related to athletes and cannabis. In 2019, the NFL reached an agreement with the players’ union to study the pain management benefits of cannabis and in 2020, the NFL announced players will no longer be suspended for positive tests and increased the threshold of allowable THC for positive tests. And stars like powerhouse tight-end Rob Gronkowski and former Denver Nuggets Al Harrington in retirement have attached their names to cannabis and CBD brands.

After dismal profits through the COVID-19 pandemic, the “Big Four” sports leagues may want to consider opening an entirely new sponsorship category via cannabis and CBD. Additional pressure might come from athletes themselves, who want alternative treatments for pain and anxiety. As the public looked in from the outside as the MLB negotiated a new collective bargaining agreement and as leagues renegotiate CBAs generally, player pressure could continue to move the needle on league acceptance of cannabis products.

If sports leagues are expecting to allow cannabis sponsorships in the future, they are likely waiting for federal approval for cannabis

As much as this means less stigma for cannabis, it also illustrates the constant fragmentation that makes it difficult for cannabis businesses to operate like other companies. While the NFL, NBA, NHL and MLB have all eased up on players’ use of the substance, they haven’t embraced CBD sponsorships the same way other leagues have and currently won’t allow their athletes to seek CBD or cannabis sponsorship deals as individuals. Piecemeal state legalization, strict advertising rules, enduring federal prohibitions and a lack of FDA approval are the biggest barriers specific to the cannabis industry. And, while the “Big Four” leagues are not signatories to the World Anti-Doping Agency (WADA) Code, applying their own anti-doping policies, don’t look for cannabis sponsorships or endorsements of Olympic sports or athletes any time soon—WADA prohibits in-competition use of cannabis, although it is conducting a scientific review of the status of cannabis in 2022, indicating a softening may be forthcoming.

Paired with the issues typical to sport sponsorships generally, cannabis companies have much more to consider when seeking sponsorship deals.

Threshold Sports Sponsorships Considerations Relating to Cannabis and CBD 

As a threshold matter, if sports leagues are expecting to allow cannabis sponsorships in the future, they are likely waiting for federal approval for cannabis and specifically, FDA approval for CBD products. The agency decided not to allow companies to market full-spectrum CBD as a dietary supplement in August, and formal guidelines may be years away as medical and scientific data materialize either supporting or negating the health claims. In the meantime, companies and their spokespeople cannot claim certain health benefits in advertising without FDA approval.

Cannabis itself is also still a schedule 1 drug under the federal Controlled Substances Act and has historically been listed among most leagues’ anti-doping bans, although as discussed above, it appears attitudes might be beginning to shift. Even in states where adult use and medical cannabis are legal, taxes are high and advertising rules are incredibly strict. They also vary from market to market. When Connecticut legalized cannabis in 2021, state Attorney General William Tong moved to have all billboards advertising Massachusetts dispensaries removed for violating the state’s cannabis marketing restrictions. With a web of intersecting, and at times conflicting, state regulations at play, national marketing campaigns are highly challenging. The crisscrossing markets on game days and the national exposure of most athletes in the Big Four leagues will likely implicate multiple jurisdictions, and multiple sets of advertising regulations that don’t always mesh. And, even if a policy decision were made to allow some territory-restricted sponsorship deals in the cannabis space, it’s unclear if and how cannabis sponsors could exercise even local broadcasting rights—a key value driver for any sponsorship deal.

Specific Sponsorship Considerations Relating to Cannabis and CBD

In addition to the above, the host of legal and business issues generally applicable to sports sponsorships deals will likely take on a different flavor with respect to cannabis and CBD.

From a commercial perspective, one of the key issues in any sponsorship deal is whether a sponsor will receive exclusive rights in a category. It’s important that sponsors take a critical eye to how a league may have “sliced and diced” that category. For example, a would-be cannabis sponsor may not be expecting a competitor to take up rights in the CBD space. But without close attention to how the sponsorship category is defined, any oversight here could lead to sharing branding space with unwelcome neighbors.

One of the key issues in any sponsorship deal is whether a sponsor will receive exclusive rights in a category.

In highly regulated industry categories such as gambling/casino and sports betting, league policies mandate strict compliance obligations on the part of the sponsor. We should expect to see a similar approach if leagues approve cannabis sponsorships. For example, in gaming and sports betting, league requirements often demand that sponsors notify the team or league of any compliance issues—no matter how nonmaterial, and no matter if they affect any rights or activities in the sponsorship territory. If there are compliance violations, leagues and teams typically demand immediate termination rights. The compliance and disclosure obligations for a highly regulated sponsor can be onerous, and sponsors risk losing their sponsorship investment even for trivial issues that do not bear on the sponsorship. For example, should a minor casino compliance violation in Las Vegas result in termination of a sponsorship deal in New York? Similarly, if a dispensary in Seattle operating under an interstate brand receives a de minimus fine for an inadvertent sale to a minor, should that result in termination of that brand’s sponsorship deal in Colorado? While these types of compliance and termination provisions are typically negotiable to something approximating fairness, look for leagues to take a hard-line stance on compliance issues, and expect that some teams may mandate deal terms that are take it or leave it.

Similarly, leagues and teams often demand strict morals provisions allowing them to terminate if they determine, in their sole discretion, that the sponsor or its activities might cause reputational harm to the team. Although cannabis is rapidly destigmatizing, one might argue that the industry is at least historically aligned with illegality and perhaps inherently aligned with other “sin” industries like gambling, alcohol and tobacco. Teams and leagues know what they are getting into when they accept sponsorship money from these industries, and cannabis sponsors should demand that any such “morals” provisions be exercised by teams only reasonably, in good faith, and with an opportunity for the sponsor to cure any alleged issues.

Further, just like gaming and sports betting operators, cannabis businesses are restricted from marketing to minors. While state laws are a hodge-podge, sales to individuals under the age of 21 are generally prohibited, and cannabis businesses are also generally restricted from marketing to individuals under the age of 21, or even from publishing marketing materials that appeal to children—a subjective standard. These rules, of course, are likely to restrict the type of signage and activation that can occur in stadia. It also poses issues from a digital marketing and data-sharing perspective. Sponsors and teams often negotiate specific activations via social media, websites and email marketing lists. But the parties must keep in mind compliance issues regarding these activations, including taking care to scrub relevant marketing databases of users under the age of 21 and, possibly, “self-excluded” individuals. The gaming industry is familiar with self-exclusion sign-ups, which permit individuals to opt out of relevant marketing and be disallowed from entering gaming establishments. The cannabis industry may not be far behind. In 2020, the Illinois General Assembly introduced HB4134, which if passed would have permitted self-exclusion from targeting mailings, advertising and promotions and from entry into dispensaries. While this bill died, it’s conceivable that we will see efforts to pass similar bills.

Finally, in 2020-21, sponsors, teams and leagues collectively, and regardless of industry, combed through the thorny issues of the COVID-19 pandemic. We can expect to observe a continuing trend of extra scrutiny paid to force majeure and so-called “make good” provisions for missed games or unavailable benefits.

New York Launches Conditional Licensing Program

By Kristin Kowalski, CPA
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Progress and history are being made in New York for adult use cannabis. Recently, Governor Hochul signed an amendment to New York State Cannabis Law which permits the Office of Cannabis Management (OCM) to award conditional licenses to certain adult use cultivators and processors, allowing hemp farmers in New York to grow cannabis in the 2022 growing season. And now, the application period to obtain a conditional license is officially open and available for qualified candidates. New York is moving full speed ahead in the hopes of creating one of the most inclusive adult-use cannabis industries in the nation.

What Does a Conditional License Mean?

With this legislation, New York State is creating a new conditional adult use cannabis cultivator license, allowing hemp farmers to grow cannabis in the 2022 growing season – helping to fast-track the state’s adult-use cannabis program. Under the law, conditionally licensed cannabis farmers must meet certain requirements, including safe, sustainable and environmentally friendly cultivation practices.

Highlights of the Bill & Legislation

Industrial Hemp First

To qualify for an adult use cannabis conditional cultivator license, only companies and individuals currently licensed with the state for cultivation or processing of industrial hemp can apply for the conditional licenses. Applicants must have been an authorized industrial hemp research partner for the Department of Agriculture and Markets, and industrial hemp cultivators must have grown and harvested the crop during at least two of the past four years.

Growing Locations

Licensed cultivators will be authorized to grow indoors, outdoors, or a combination of both, subject to space and lighting limitations in the law. With a conditional adult use cannabis cultivation license, farmers can grow outdoors or in a greenhouse for up to two years from the issuance of the license. It also allows them to manufacture and distribute cannabis flower products without holding an adult use processor or distributor license, until June 1, 2023.

Expanding Abilities with License

Conditional licensees will have temporary authority to conduct additional activities not included in their license. Cultivators are allowed to both minimally process and distribute flower, and processors can distribute their products.

Requirements of Conditional License

Hemp farmers in New York could be licensed to grow cannabis for the 2022 growing season.

As listed in the bill, conditional licensees must abide by all regulations, including those issued after receipt of the license. Applicants must also participate in a soon to-be-developed mentoring program for individuals interested in joining the industry through the social equity component of the Marijuana Regulation & Taxation Act, as well as actively participate in an environmental sustainability program. And lastly, applicants must begin operations within six months of receiving their license, and grant OCM employees’ access to the premises for inspections to ensure all rules are being followed.

Future Outlook on Cannabis Industry in New York

With the opening of the application portal for conditional licenses, this advances the Governor’s first-in-the-nation Seeding Opportunity Initiative, which positions individuals with prior cannabis-related criminal offenses to make the first adult use cannabis sales with products grown by New York hemp farmers. While this news is a positive step, there remain many unknowns about how the conditional licensing process will unfold. Applications can be filed with the OCM for Conditional Cultivator Licenses through June 30, 2022, with a $2,000 non-refundable application and licensing fee. For hopeful applicants, gathering a team of professional advisors to plan for the application process and operating an adult-use business is essential. Consulting with an accounting team or financial advisors from a tax standpoint, will be critical to establish systems and controls to maintain separate accounting records for your industrial hemp and adult use activities.

Meet Looming Federal Cannabis Regulatory Compliance Management with Automation & Confidence

By Steven Burton
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Federal regulation of the cannabis and hemp sectors is coming sooner rather than later — and this is mostly good news for cannabis businesses and consumers. But cannabis producers already struggling to meet complex and ever-changing local regulations (where they exist) will be facing a new set of challenges with another level of regulatory oversight and compliance.

Navigating multi-jurisdictional regulatory compliance management requirements is near-impossible with legacy manual systems. That’s why it’s time to leverage the right enterprise resource planning (ERP) system, so that you and your team can meet these compliance management complexities with confidence and ease. Whether you manufacture flower, edibles, beverages, supplements or other dispensary products, here’s what you need to know to stay agile and profitable as more changes loom.

Federal Legalization is Coming

To date, there are 18 states with adult use cannabis markets, 37 with medical cannabis programs, and an additional 13 that have some level of decriminalization. At the federal level, there have already been several attempts at cannabis law reform, with even more on the table in the coming year.

One of the most promising is the Republican-led States Reform Act, filed in November 2021. The central tenant of this proposed legislation is to remove cannabis and cannabinoids from listing as a Schedule 1 Drug under the Controlled Substances Act.

Importantly, if this law passes, it would allow individual states to pursue their own cannabis policies and remove the current risks companies face when going against current federal anti-cannabis scheduling.

The States Reform Act also proposes a three percent federal tax on all cannabis sales and that all cannabis sales fall under the ​​Alcohol and Tobacco Tax and Trade Bureau’s (TTB’s) control. The States Reform Act would — finally — guide the regulation of hemp-derived products through the Food and Drug Administration (FDA).

US Senate Majority Leader Chuck Schumer has also been working on another reform bill, specifically the Cannabis Administration and Opportunity Act (CAOA), which he plans to introduce in April 2022 to further emphasize the criminal justice aspects of legal reform in the context of the War on Drugs.

While the government’s track record on cannabis regulatory reform hasn’t been as progressive as many would like, at this point there is widespread public support and proposed bills from both sides of the aisle. As a result, the US may finally see some movement on cannabis law reform in the very near future.

How to Prepare for Federal Regulatory Compliance Management

With federal regulation looming, it’s time for licensed producers to elevate their internal systems. Whether you work with tetrahydrocannabinol (THC) or cannabidiol (CBD), the regulatory protocols in an already complex marketplace are going to change.

This is especially paramount for those producing cannabis or hemp beverages, edibles and supplements. You will need comprehensive and efficient systems to facilitate this transition. An ERP should reduce compliance headaches and ensure your business is ready to scale when a national marketplace launches.

Automate Data Gathering

It is no longer cost effective to manage seed-to-sale traceability with manual data capture. With the thousands, if not tens of thousands, of data points required at most commercial facilities on a routine basis, data logging is by far the best way to start compliance automation.

Automated ERP systems, which capture essential information across your entire operation, ensure access to real-time data for forecasting, accounting, regulatory compliance reporting and traceability. That means using software that captures and logs intel from across your organization about quality control, inventory and traceability, all without arduous manual input.

The best and most successful ERP systems should be used by all employees to collect data, from sorters/pickers to fork lift drivers to supervisors to senior management. For this to happen easily, the solution must be accessible and user friendly for all employees. ERP systems that can be easily integrated with tablets and smartphones (as well as IoT devices) reduce the need for expensive terminals on the production floor and make data collection a straightforward part of daily operations.

Build Systems to Facilitate Growth from the Start

A rigid ERP system that can’t grow with you is not a smart long-term investment. An adaptable multi-platform system evolves with your company and constantly changing regulatory compliance requirements. A solution that provides access to the entire facility, instead of being limited to individual users, ensures that growing teams can easily contribute to data quality from the plant floor all the way up to the executive office for actionable insights.

Markets are opening up across the country and quite soon, many companies will be looking to expand their operations nationally. As a result, you’ll need systems that can scale, cover additional facilities, keep up with increased production, and even work across different jurisdictions.

Having instant access to detailed operational information delivers greater business oversight at the micro and macro levels – insight that is crucial for expansion, profitability, and cost-cutting measures. Companies with the right systems in place will effectively manage the resulting federal complexities to deliver on regulatory expectations and capture a competitive market share.

Leverage Regulatory Frameworks and Technology from the Food Industry

The Canadian example demonstrates clearly that the regulatory frameworks from the food and beverage industry are the most applicable to the cannabis sector – more so than for pharmaceuticals, nutraceuticals or alcohol. This is most obvious in lucrative value-added markets like edibles and extracts, which are actually also food products.

Issues like dosage standardization, controlling common hazards, managing traceability chains and inventory, and introducing quality standards (including third party certifications like organic and SQF) are all crossovers from the food industry.

Just as the compliance automation wave has hit the food industry in recent years, manufacturers of infused products and extracts can then use the same technology to reduce safety and quality control costs as well as documentation and administrative costs. The lesson? Cannabis industry leaders don’t need to totally reinvent the wheel.

Cannabis Producers Need an ERP System Tailored to Their Needs

In Canada, cannabis manufacturers have learned all too well what a few little mistakes can do to reputation and profitability. MJBiz Daily reported in 2021 that the Canadian government had issued more than CDN $1.3 million (USD $1 million) in fines since legalization. That’s a lot of regulatory compliance issues. Considering there are nearly 500 compliance fields to fill out for monthly reporting, mistakes are difficult to avoid, especially if you rely on a manual system.

FDAlogoThe story is similar in the United States. State regulatory compliance management requirements are complex and arduous for individual companies and employees. When federal regulation does come, US-based producers will very likely face even more strenuous reporting requirements to multiple jurisdictions.

Cannabis companies will need a data-driven system in place to align with the FDA’s Cannabis-Derived Products Data Acceleration Plan. Finding food safety and traceability software that makes reporting easier, automatic, and less prone to human error is paramount to success. As you prepare for the looming federal legislation, look for an ERP system that covers all the bases, including one that:

  • Improves Market Agility: Expedites opening new facilities in new markets as they come online
  • Evolves with Regulatory Changes: Facilitates the transition from unregulated markets into federally regulated ones
  • Automates Reporting: Protects you from regulatory compliance management bumbles stemming from manual input and human error
  • Reduces Workload: Optimizes workflow and reduces labor costs associated with manual input
  • Is Comprehensive: Covers all bases, including food safety, quality control, traceability, production management, and even occupational health and safety

If you aren’t automating the capture of essential information across the entire operation, you won’t be prepared for the regulatory burdens likely to come with federal cannabis legislation. To stay compliant and on top of what will likely be an incredibly competitive marketplace, you are going to need real-time data — data that will provide precise seed-to-sale traceability, product recall capability, and reporting.

Digitizing safety, traceability and complex production management through one state-of-the-art ERP system allows cannabis companies to reap the rewards of data-driven, automation technology almost immediately without the significant capital expenditure on large-scale equipment or robotics. From there, navigating regulatory complexity becomes not only streamlined and operationalized, but an actual market advantage for future growth.

USDA’s Hemp Testing Rules: Fast Track Your Lab’s Preparedness with Digitization

By Martha Hernández
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The United States Department of Agriculture (USDA) issued a Final Rule (FR) on hemp testing that went into effect on 22nd March 2021. Consequently, all hemp testing laboratories must familiarize themselves with what is stipulated in the FR and do all that is required to comply.

The 2014 Farm Bill put to an end to years of hemp prohibition, at least to some extent. It also paved the way for the 2018 Farm Bill that brought hemp at par with other agricultural crops. States, through their departments of agriculture and institutions of higher learning, were allowed to cultivate industrial hemp for research purposes, under what was called the hemp pilot programs. Some states also allowed individuals to cultivate hemp to investigate the economic and agronomic viability of the crop. This increased the acreage of industrial hemp from zero to about 90,000 by 2018 when the Agricultural Act that legalized hemp was passed. Some of the states that participated in this program included Colorado, Kentucky, Montana, and Oregon.

As expected of a new project, some challenges cropped up, including:

  • Inconsistency in the quality of hemp produced for research
  • Varying hemp laws between states
  • Maintaining regular supplies of inputs such as seeds and pest control
  • Lack of appropriate knowledge and technology

The 2018 Farm Bill addressed some of these challenges through the Hemp Farming Act that proposed to remove hemp from Schedule 1 of the Controlled Substances Act. Hemp, in this case, refers to cannabis sativa that contains less than 0.3% THC by “dry weight.” Proposals in the hemp act were incorporated into the 2018 U.S. Farm Bill and it became law in December 2018, thus making hemp legal at the federal level.

Unlike other agricultural commodities, hemp is a highly regulated crop because of its close association with cannabis which is still under Schedule 1 controlled substances. Once hemp exceeds the 0.3% THC threshold, it becomes classified as cannabis and is, therefore, governed under a different set of regulations.

The next step after the legalization of hemp was to roll out a nationwide hemp cultivation and distribution program. Consequently, the U.S. Food and Drug Administration (FDA) was instructed to develop a national framework to regulate the production of hemp in the U.S. An Interim Final Rule (IFR) was published in October 2019 to set the ball rolling. A final rule was published as an improvement of the IFR in January 2021. The Final Rule was created based on public comments received during the period as well as direct lessons learned in the 2020 growing season. The Final Rule took effect on 22nd March, 2021.

A schematic representation of the key federal rules for hemp testing laboratories (Figure courtesy of CloudLIMS)

The USDA requires that all hemp be tested by a third-party laboratory to ensure that quality is maintained and that the THC threshold is not exceeded. The Final Rule made significant changes to the USDA’s hemp testing rules that will affect how laboratories carry out their operations. While the guidelines were issued on January 15, 2021, they went into effect on March 22 of the same year. If you are a hemp-testing laboratory, here are the most important changes that you should brace for.

Nine Changes Hemp Testing Labs Must Comply With

  1. Changes in sampling 

Previously, samples to be tested were restricted to the top third portion of the hemp plant. With the Final Rule, samples can be taken anywhere from 5-8 inches from the main stem (including the leaves and flowers). This provision offers greater flexibility and reduces the chances of “hot” hemp.

  1. Laboratories shall use specific testing methods

According to the Final Rule, hemp-testing laboratories must use reliable methods to test for THC concentration. This includes methods such as post-decarboxylation; they take into consideration the conversion of THCA to THC after decarboxylation. Currently, methods that meet these requirements include gas chromatography and liquid chromatography.

The USDA also expects that laboratories demonstrate consistent testing reliability and validity. The test methods used must have high specificity for THC and other tested compounds.

  1. Negligence limit raised to 1% THC

Negligence limit refers to the extra wiggle room that is advanced to hemp farmers in regards to THC testing. In the IFR, hemp that tested above 0.3% THC but lower than 0.5% was considered negligence and not a violation of federal laws. This limit for negligence has now been pushed from 0.5% to 1%. As much as the Final Rule has maintained the THC limit for hemp at 0.3%, growers now have a wider margin of error to work with.

For hemp-testing laboratories, all samples that test above 0.3% THC are still considered hot hemp and must be destroyed or remediated. However, samples testing below 1% THC are considered a negligent violation and not a criminal offense.

  1. All hemp testing laboratories need to be DEA registered

The Final Rule made it mandatory for all hemp-testing laboratories to be registered with the Drug Enforcement Agency (DEA). Getting this registration is time intensive and the number of registered laboratories is few. With this in mind, the USDA had extended the registration deadline to the last day of 2022. After the expiry of this period, laboratories that are not registered with the DEA will be barred from conducting hemp testing.

  1. Laboratories to calculate Measure of Uncertainty (MU)

With the Final Rule, laboratories are expected to calculate and include the MU when reporting test results. The Guide to the Expression of Uncertainty in Measurement (GUM) defines MU as “a parameter, associated with the result of a measurement, which characterizes the dispersion of the values that could reasonably be attributed to the measurand.”

While there is no upper or lower limit for the MU, it is controlled using performance standards such as AOAC Standard Method Performance Requirements. Organizations such as ISO and Eurachem also provide guidelines for calculating MU. Hemp testing laboratories can refer to those guidelines as well.

  1. Adherence to the ISO 17025 standards

While this is not an enforceable rule, the USDA strongly recommends all hemp testing laboratories be ISO 17025 compliant.

  1. Laboratory SOPs

Testing laboratories must have an internal SOP for testing and retesting hemp. This SOP should be available upon request by state sampling agents or other responsible agents. Laboratory managers should ensure that all staff members follow the SOPs.

  1. Reporting of THC

Once a laboratory has completed the test, whether failed or passed, they should share the results with all stakeholders:

  • The licensed producer
  • The appropriate State Department of Agriculture or Tribe
  • The USDA using AMS Form 22.
  • The THC should be reported on a “dry weight” basis.
  1. Remediating and retestingof hot hemp

Once a laboratory finds a sample that has tested above 0.3% THC, it has to flag it as “hot” hemp. Previously, all hot hemp had to be destroyed but with the FR, parts of the hemp (excluding the flowers) can be salvaged.

A Laboratory Information Management System (LIMS) to manage multi-analyte test results and flag hot hemp (Figure courtesy of CloudLIMS)

The licensed producers (LP) are required to shred the hemp into biomass and send a sample back to the laboratory for retesting. The laboratory shall use the same procedure to retest the biomass and report the results back to the LP and the USDA.

The hemp final rule took full effect on the last day of 2021. The only extended deadline is the one requiring that all hemp-testing laboratories be registered with the DEA that still has a few more months to go.

Fast Track Your Laboratory’s Preparedness with a LIMS

Becoming compliant with USDA’s hemp testing rules can be quite challenging for a laboratory simply because there’s too much to keep up with. A laboratory must monitor samples, analyze and report test results, and at the same time maintain internal quality protocols.

Fortunately, digitization can help streamline processes and accelerate the preparedness of laboratories for the new federal rules. A cloud-based Laboratory Management Information System (LIMS) takes the hard work out of compliance by keeping track of compliance processes seamlessly and in real-time.

A LIMS enables laboratories to:

  • Track samples through their lifecycle
  • Automatically share results with stakeholders
  • Flag hot hemp samples
  • Generate certificates of analysis (COAs) in prescribed formats
  • Meet regulatory compliances
  • Manage SOPs, staff training, and QA/QC protocols

Hemp that tests above the 0.3% THC mark is considered cannabis and is therefore illegal under federal law. Consequently, hemp testing is a highly sensitive process that is strictly regulated. Hemp-testing laboratories must optimize their processes to ensure efficiency at all times and assure the validity of their test results. This can be made possible with a LIMS.

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SC Laboratories Partners with Agricor & Botanacor

By Cannabis Industry Journal Staff
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This week, three companies in the cannabis testing space announced a partnership: Agricor Laboratories, its sister company Botanacor Laboratories and SC Laboratories will join forces to work together on comprehensive cannabis and hemp testing throughout the United States. The press release says that this partnership creates the foundation for a national testing network, offering comprehensive cannabis and hemp lab testing.

Agricor and Botanacor laboratories, founded in 2014, are sister companies headquartered in Denver, Colorado. SC Labs, founded in 2010, is based out of Santa Cruz, California. They say the partnership will bring value to cannabis and hemp industry stakeholders by offering a broader range of testing resources, better data collection and delivery, instrument redundancy, increased testing capacity and improved turnaround times.

“Agricor, Botanacor, and SC Laboratories have well-earned reputations for delivering high-efficacy results, through a ‘science-first’ approach to product quality, safety, and compliance,” says Dr. Carl Craig, CEO of Agricor and Botanacor. “With operations in Colorado, California, and Oregon, the newly combined operation is uniquely positioned to support multi-state cannabis operators, as well as hemp producers within the U.S. and throughout the world.”

Each lab is ISO 17025 accredited and have become known as leaders in the hemp testing market, offering a wide range of tests to meet state regulations in every corner of the United States. Last year, SC Labs debuted their comprehensive hemp testing panel, claiming they could meet testing standards in every state in the country.

“This combination creates the largest specialized resource in North America that is committed to delivering exceptional testing results that empower smarter growing, manufacturing, and consumer decision making,” says Jeff Gray, CEO of SC Labs. “By combining these reputable science organizations, we’ve taken major steps toward creating a laboratory network that is dedicated to improving the safety of cannabis products for all consumers, globally.”

According to Gray and the press release, the team is setting their sights on the global market, beyond just the United States. “The organization is focused on continued expansion via acquisition and organic entry to new markets – all with the focus on best serving customers’ needs across North America and supporting a growth market where testing can help deliver confidence to consumers,” reads the press release.

New York Expands Medical Access, Prepares for Adult Use

By Cannabis Industry Journal Staff
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Now entering its sixth year of medical cannabis legalization, the Empire State is well on its way to expanding the market considerably. When New York first legalized medical cannabis, it had some of the strictest rules in the country. Dispensaries needed to have pharmacists and doctors with special training on staff, they couldn’t sell flower and there was a very small list of qualifying conditions for getting a cannabis prescription.

While New York legalized adult use cannabis back in March of 2021, the actual market is still probably about a year away from launching. The bill immediately decriminalized possession up to certain amounts and set up the Office of Cannabis Management (OCM), New York’s regulatory body now overseeing the medical, adult use and hemp markets.

Over the past six years since the state legalized medical cannabis, the rules have eased incrementally, with more licenses awarded, more doctors participating, more qualifying conditions approved and a larger variety of products on dispensary shelves. Back in 2017, they added chronic pain to the list of qualifying conditions, which was seen as a big effort at the time for expanding patient access.

Just a few weeks ago on January 24, 2022, the Office of Cannabis Management, dropped all qualifying conditions. That means patients with more common ailments and really any type of condition, like anxiety or sleep disorders, can get a prescription for cannabis.

“Launching the new patient certification and registration system and expanding eligibility for the Medical Cannabis Program are significant steps forward for our program,” says Chris Alexander, executive director of the OCM. “We will continue to implement the MRTA and ensure that all New Yorkers who can benefit from medical cannabis have the access they need to do so. It’s important for New Yorkers to know that even as we shift the medical program to the OCM, your access will not be disrupted and the program will continue to expand.”

New York City
Image: Rodrigo Paredes, Flickr

In addition to dropping qualifying conditions, the state took a number of other measures to increase access and allow the market to expand further. For example, dispensaries can now sell flower, more physicians like dentists, podiatrists and midwives can participate, the OCM removed the patient registration fee and they increased the amount of cannabis patients can purchase at a time.

Beyond the medical market, New York is making strides in launching their hemp program as well as preparing for the eventual launch of the adult use market. Back in November, the state’s Cannabis Control Board approved new regulations for the hemp program, establishing standards for manufacturing, lab testing, packaging and labeling.

On the adult use front, delays are the name of the game. According to a publication called The City, delays to launch the new market have been made worse by former Governor Andrew Cuomo’s resignation following sexual harassment allegations. They say the state might not see the launch of the adult use market until early 2023 at best. Decisions on licensing, standards and rules are to be made by the Cannabis Control Board, a five-member commission tasked with overseeing the OCM. So far, the Board has not addressed a timeframe for when they will begin adult use sales.

A Q&A with Brandon Barksdale, CEO of Dalwhinnie Enterprises LLC

By Cannabis Industry Journal Staff
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Dalwhinnie Enterprises is a cannabis brand that started in Ridgeway, Colorado. Based in the San Juan Mountains in Western Colorado, the company includes brands like Dalwhinnie Farms Cannabis, Shift Cannabis, Ridgway Hemp Company and the Dalwhinnie Farms Boutique in Aspen, Colorado.

Brandon Barksdale has about a decade of experience in cannabis. He has worked for small startups and large multi-state operators. Most recently, he has worked with CohnReznick’s Advisory Practice. At CohnReznick, he worked alongside the Dalwhinnie team, helping them launch their boutique in Aspen. Since joining the team as their new CEO, Barksdale has shifted his focus to expansion, scalability and operational excellence, using things like GMPs and other certifications to improve quality and consistency.

We caught up with Barksdale to learn about his experience, his new role, entrepreneurship, social equity and what it means to be a minority leader in the cannabis space.

Cannabis Industry Journal: You have an impressive background before joining the cannabis industry full time. What made you take the leap into this space? Tell us about your background.

Brandon Barksdale: The majority of my background is driven around transforming businesses cross functionally, specifically in operations and finance. When it comes to the cannabis industry, it still lacks maturity; so being able to apply key performance indicators, benchmarking, controls and analytics can drive the industry, and more specifically, our organization, to operational excellence.

Brandon Barksdale, CEO of Dalwhinnie Enterprises LLC

While I was in the professional service space, I was an advisory leader within our cannabis industry group. I was able to be involved and work with organizations at differing levels of maturity, guiding corporate strategy and functional and operational improvement before fully jumping in to lead this organization. Dalwhinnie was the perfect opportunity to use my previous experience to instill value to the company as it continues to scale and grow.

CIJ: With a such a big portfolio of cannabis clients, why leave all that behind to take the reins at Dalwhinnie?

Barksdale: Simply put, I was eager to roll up my sleeves and drive a single organization through its growth lifecycle. When you’re working with and cycling through multiple clients, you’re supporting them from a strategic perspective and providing value and direction but the execution is left to the operational teams internally to follow through. No matter how detailed the plan or deeply you are involved you are still third-party. During scope changes and ramping up and down there’s always some momentum that gets lost. I want to focus on one company, to really tie myself to its DNA, so that I can better be in the driving seat toward success and operational excellence.

Dalwhinnie stands out because of their unwavering focus on quality and the integrity of the brand. To that end, I want everyone within the organization to succeed and to nurture a healthy company ecosystem that allows for professional development, training and being an industry leader. We have a really big opportunity here to set the standard for what quality looks like going forward and what it means to really care about the product that you’re putting out into the marketplace.

CIJ: Dalwhinnie Farms has a cool location in Ridgway, Colorado at the base of the San Juan Mountains and sustained by the snowmelt from the Uncompahgre River.  How does this make Dalwhinnie cannabis different?

Barksdale: There is no doubt that growing at a high elevation with different seasonalities is a challenge. However, every region on Earth presents its own benefits and challenges as it relates to cultivation. You can use the comparison to different regions of wines. Wine from Bordeaux and wine from Napa are going to have different profiles because of all the unique factors of climate, water, humidity, aging practices, etc.

Dalwhinnie Farms in the Sun Juan Mountains

This is one of the things that will make the future of cannabis very interesting. There are multiple elements and variables that help tell the story of the product through its experience of growth. Just like there are tons of wine regions and varietals, there are hundreds of cannabis strains and exponentially more crosses where one can discuss multiple facets of what makes that particular product unique. It is one of the things that will continue to evolve in the cannabis market and one of the most exciting components—knowing that we are still on the way to creating a unique and original marketplace!

CIJ: The Dalwhinnie Farms retail store in Aspen is a unique cannabis dispensary. What is the retail strategy moving forward?

Barskdale: Every cannabis wholesaler, and most markets, are feeling the pressure of price volatility and retail is one of the best-known ways to help stabilize an organization. Our strategy is to stay as nimble and creative as we can, focusing on continuing to build out the success of our flagship Aspen dispensary as well as partnering and entertaining retail expansion opportunities. Our strategy is not to ignore that fact, but to act as perceptively as we can to broaden our retail footprint.

The Dalwhinnie Boutique in Aspen, CO

CIJ: Tell us about your short-term goals for Dalwhinnie.

Barksdale: When I came onboard with Dalwhinnie, I hit the ground running. I had some history with Dalwhinnie and the family of companies so I was lucky to have a head start and insight toward necessary changes. Short term goals included attention to production expansion initiatives, operational changes that moved us closer to excellence, and fine-tuning our GMPs. My eye is also focused on company culture, performance management, and constantly pushing the envelope on quality. While always of importance, we want to continue as a pioneer on cultivation and manufacturing standards as it relates to quality in organics.

CIJ: And what are your long-term goals for the company?

Barksdale: Mentioned as a short-term goal, I want to move toward GMP and GACP manufacturing standards and create a continual cycle of improvement as we move through our expansion and growth plans. In the future, multi-state operations and partnerships are also a big part of our strategic direction. We aim to continue to provide an elevated cannabis retail experience at our flagship location and to expand our retail footprint in the marketplace.

CIJ: There’s been a focus on racial disparities in the cannabis space and the need to improve social equity and opportunities for minorities. How do you hope to support equity and help drive change?

Barksdale: We are at a turning point in the industry where substances are becoming legal, yet so many people are still suffering from nonviolent, non-serious offenses related to cannabis. It is unavoidably apparent and it is something that deserves significant attention and commitment. Every company that is operating in this space should take a level of responsibility to help address or support reparations in some fashion whether that be through jobs, access, and/or partnerships.

There should be an obligation to support some type of social equity improvement project as it relates to the cannabis industry. Some legacy states and now new states coming online, are attempting to course correct by making it a part of the compliance or access components for licenses.

There is still a lot of work to be done. I am working through the strategies that work for us as a company. I am actively exploring how to incorporate opportunities into our operating and business model.

As a women-owned company and myself being a minority leader, it is on the forefront of our priority list to come up with a comprehensive plan and commitment to supporting social and equities in this space.

2021 Cannabis Labs Virtual Conference: December Program

By Cannabis Industry Journal Staff
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2021 Cannabis Labs Virtual Conference: December Program

Sponsored by ANAB, Hardy Diagnostics and MilliporeSigma.

Click here to watch the recording

Agenda

Cannabis Laboratory Accreditation Panel

  • Tracy Szerszen, President & Operations Manager, PJLA
  • Mohan Sabaratnam, Vice President, IAS
  • Kathy Nucifora, COO, COLA
  • Chris Gunning, General Manager for Accreditation Services, A2LA
  • Aaron Biros, Editor, CannabisIndustryJournal.com

In this session, the panel answers attendee questions related to ISO 17025:2017 accreditation for cannabis testing labs. Learn some of the common challenges labs face when seeking accreditation and learn about sampling protocols, security issues, statements of conformance, calibration and much more.

TechTalk: ANAB

  • Melanie Ross, Technical Products Developer, ANSI National Accreditation Board

R & D Lab Testing: Ensuring Success with Results

  • Mark Carter, president of MC Squared Enterprises

Learn how R&D lab testing can help you, prepare for compliance batches, successfully launch new products and amp up your quality control.

TechTalk: MilliporeSigma

 

USDA’s Hemp Testing Rules Have Changed: Accelerate Your Lab’s Preparedness

  • Arun Apte, CEO, CloudLIMS

This presentation takes a deep dive into understanding the requirements for USDA hemp testing, the operational changes hemp testing laboratories need to make to comply with the new hemp testing rules and the regulatory compliance framework and quality standards the testing labs need to meet.

TechTalk: Hardy Diagnostics

  • Jessa Youngblood, Food & Beverage Market Coordinator, Hardy Diagnostics

Bringing a National Hemp Testing Panel to Market

  • Josh Wurzer, Co-Founder & President, SC Laboratories

Without clear direction from the FDA, states are filling the void by developing their own quality standards and testing requirements for hemp derived CBD products. Unlike their THC based counterparts, hemp derived CBD products are being sold across state lines raising the demand for a single testing panel that will be compliant in every state. Attendees will learn:

  • The current state of regulations nationally
  • The issues that hemp product manufacturers need to be educated on to ensure compliance,
  • The challenges labs face in offering customers a truly comprehensive panel.

Click here to watch the recording

Leaders in Cannabis Formulations: Part 4

By Aaron Green
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Natural cannabinoid distillates and isolates are hydrophobic oils and solids, meaning that they do not mix well with water and are poorly absorbed in the human body after consumption. Cannabinoid oils can be formulated into emulsions to form a fine suspension in water to improve bioavailability, stability and flavor. Vertosa is a cannabis infused ingredients company specializing in emulsion technologies. Their technology can be found in a range of CBD and THC containing beverages found on shelves today.

We spoke with Austin Stevenson, chief innovation officer at Vertosa, to learn more about emulsification technology and some of the challenges in testing cannabis infused beverages. Stevenson joined Vertosa in 2019 after spending time as a cannabis advisor at CanopyBoulder as an entrepreneur in residence. Prior to Vertosa, Stevenson ran the hemp and CBD analytical testing laboratory business unit for Eurofins.

Aaron Green: How did you get involved in the cannabis industry?

Austin Stevenson: I got involved in the cannabis industry nearly seven years ago, when I was an advisor to an accelerator in agriculture technology in Africa. I went to the MIT Innovation Laboratory, and I saw a whole bunch of farmers cultivating green leafy vegetables in the middle of the Kalahari Desert, which piqued my curiosity. I learned that it was all done via hydroponic indoor cultivation and freight containers. I got back to the US and put my detective hat on, and learned that it was really the cannabis industry that was driving innovation in terms of indoor and sustainable agriculture. At that point, I took it as an opportunity to dive in and started, again, as an advisor at an accelerator in Colorado. From there, I’ve been on the amazing cannabis journey.

Green: And how did you get involved with Vertosa?

Austin Stevenson, Chief Innovation Officer at Vertosa

Stevenson: I became an advisor at CanopyBoulder to a few software companies and got on the founding team there as well as at a few cultivation companies and other license types across the supply chain. Immediately before Vertosa, I ran the business unit for hemp and CBD testing at Eurofins, one of the world’s largest analytical chemistry laboratories, specializing in Ag Pharma. My clients were your traditional retailers: CVS, Kroger. Our team analyzed thousands, maybe hundreds of thousands of SKUs of infused products.

At one point I had to tell one of my clients at Eurofins, that all of their beverage SKUs were failing potency tests. Their supplements, OTC products, some of the confections, cosmetics, were all passing, but the beverages were failing potency testing. Cannabinoid ingredients were floating to the top, sinking to the bottom, even leaching into the can liners. It just wasn’t working, so we had to tell them that those beverages could not go to market. On this same day, I happened to run into my longtime friend and business partner in the industry (now Vertosa CEO) Ben Larson at a conference in Oakland, who was running the Gateway Incubator at the time, but had met our other partner and founder, Dr. Harold Han. Ben told me, “I have this PhD chemist, a surface chemist from BioRad. He’s been experimenting with techniques, taking cannabis oils and turning them into fast acting emulsions for beverages. I’d like for you to check it out because I’m considering building a business around this.” I said, “Alright, show me the technology. Let me take it back to the lab, analyze it, verify it, and then try it. See if it works.” Lo and behold, it did. I fell in love with the product. I saw the problem firsthand at my lab and now I saw a solution, so I knew that the next part of my cannabis journey would be to join Ben and Harold in building a business together focused on being the number one technology solving the problem of stability and potency for the infused beverage market.

Green: What is the core technology of Vertosa?

Stevenson: Our focus at Vertosa is being the best delivery mechanism for cannabinoids. That means that we have a portfolio of different technologies that we’re using to take cannabis oils and turn them into fast-acting liquid emulsions, as well as powder-based APIs. When we began, we were using nano-emulsification. We are using nanotechnology in the food space, with a few different methods for creating those nano-emulsions, to infuse a diverse range of different products – everything from seltzer waters to dealcoholized wines and teas.

Green: So, it’s a portfolio of products with the basic idea of encapsulating the oil into smaller components. Can you highlight some of the challenges when you were first developing the product with testing? My assumption is that it was relatively new for testing labs. How did you support method development with them so that you are accurately reporting cannabinoid content?

Stevenson: The biggest problem that we faced at Vertosa is that there’s no one size that fits all. The chemistry of an infused seltzer water is different than the chemistry of a dealcoholized wine. The reason is because, quite literally, the ingredients are different. They’re different products. When we’re making the emulsions for these beverages, all the ingredients have to be compatible – the ingredients in the emulsion as well as the ingredients in the beverage. We’ve had to design a portfolio of different emulsions for different beverage types to ensure compatibility in any scenario, otherwise there could be instability, causing separation between the emulsion and the ingredients.

Additionally, we’ve seen challenges in the packaging type as well as the manufacturing techniques, specifically sterilization, thermal processing, chemical treatment, or the lack thereof. These three core variables (ingredients, packaging, and manufacturing technique) are where all the challenges in potency testing arise. For example, you have an infused beverage that is going to be packaged in an aluminum can. There is a polarity between cannabinoids and the can aligners that ultimately could create leaching, or an absorption type of effect.

At Eurofins, we would see beverages that were supposed to contain CBD in the can but were testing at 0 milligrams, despite manufacturers confirming that they had added the CBD. All the CBD had been absorbed into the can liner. Our teams of method development chemists and management had learned to acid rinse the can liner so that we would be able to capture the cannabinoids and identify them. That was a step that we had to learn through trial and error, and we were able to bring this over and build upon this at Vertosa.

Here at Vertosa, the biggest challenge in the lab currently is that there aren’t consistent methods for analyzing beverages. Every lab has different standards, and the instrumentation hasn’t always been calibrated. To ensure that these low dose beverages are measured properly, you have an accurate LOQ to identify the cannabinoid content. Part of the challenge is that the analytical chemistry community has only started to collaborate here recently, literally in the last few months as the AOAC made a call to action for methods for beverage.

At Vertosa, we’ve had to work together with the labs and ask if they have a method for developing beverages. It’s a three-step approach: we send a lab the oil, the emulsion, and the finished product, and ensure that the accurate cannabinoid profile is being diluted across the entire chain to make sure that each step the instrumentation has been calibrated the correct way. We want to make sure that they calibrate it into the HPLC and that the correct cannabinoid profile is always consistent in the finished product. It’s a lot of intimate hand-holding with the labs.

Green: So, you took it upon yourself to go out and get the methods validated, anticipating the need for finished goods testing with your customers and partners?

Stevenson: That’s right. From the beginning, we understood that the problems we are setting out to solve are consistent potency testing and accurate dosing. We wanted to be able to say confidently that when you work with us, you’re going to pass potency tests every time. And if you don’t, we’re going to uncover the reasons why.

For us, we have been able to provide that consistent and reliable ingredient. And yes, there’s been stumbles along the way, but those stumbles are the learnings that make us better. In the beginning, we had just one formula but the chemistries of different beverages vary too much for that to work. We also know that packaging type and manufacturing processes play a role. So, we now have a portfolio of different emulsions, such as conventional, natural, and organic, that can work with any given varibale and that have verifiable potency.

We anchor ourselves to the promise that our clients will pass potency, because that’s the biggest problem most brands have.We know the ingredients inside and out – knowing how heat plays a role, how polyphenols play a role, how oxygen plays a role, and helping the labs and our brand partners succeed while minimizing all the risk and pain that they go through with failed potency. You’d be surprised how many people are using the wrong product in formulation. A new client will come to us frustrated after adding CBD isolate powder to their beverage and seeing it fail potency tests. That’s where we’re able to come in and correct the course.

Green: Someone comes in with a magic wand. What do they solve for you?

“Efficacy research is the most interesting aspect of industry research to me.”Stevenson: If I had a magic wand, I would use it to accelerate efficacy research to validate and verify specific cannabinoids/terpene formulas for targeted effects. In other words, I’d love to have a peer-reviewed, scientifically validated cannabis formula for any desired effect, like anxiety or pain relief, aid in sleep, or increased energy, for example. At Vertosa, we’re currently investing in third party academic research to empower our clients with validated information; however, it takes a lot of time, money, and effort conducting research and clinical trials. It’s a long but essential and beneficial process!

Green: What trends are you following in the industry?

Stevenson: In the world of edibles and ingestibles, I’m extremely interested in exploring onset times and bioavailability technologies, as well as trends in ingredients. More of our clients are interested in rapid onset times so that consumers feel the effects within minutes of consumption, removing some of the stereotypical hesitation around edibles and wondering when “it’ll hit.” It’s also fascinating to explore and integrate minor cannabinoids as well as active and functional ingredients and how they interact together in an ingestible.

I’m also extremely interested in keeping up with changing regulatory policy around consumption lounges and access in recently recreational states. Open consumption lounges are a fantastic solution to further normalizing cannabis usage and decentralizing alcohol in our culture, as consumer behavior is increasingly reflecting a move away from alcohol towards more health-conscious choices.

Green: What are you most interested in learning about?

Stevenson: Efficacy research is the most interesting aspect of industry research to me. Most of us cannabis professionals are passionate about the plant, and anecdotally know how cannabis can be used to improve quality of life. However, the scientific and academic community needs to see hard evidence. As we build the industry in a post-prohibition era, there is more access to research grants to evaluate the efficacy and safety of cannabis. The National Institute of Health (NIH) has identified four (4) key areas of cannabis research eligible for grant funding: (1) cannabinoid research (2) cannabidiol research (3) endocannabinoid system, ECS research, and (4) therapeutic effects of cannabinoids. It’s the latter two, ECS and therapeutic effects, that really spark my curiosity. At VERTOSA, we’re spending a lot of time and resources with our Scientific Advisory board to help accelerate this research, and I’m personally excited about the forthcoming discoveries we make, which will help our entire industry grow and thrive!