Techniker Krankenkassen (or TK as it is also frequently referred to) is one of Germany’s largest public or so-called “statutory” health insurance companies. It is companies like TK that provide health insurance to 90% of the German population.
TK is also on the front lines of the medical cannabis discussion. In fact, TK, along with other public health insurers AOK and Barmer, have processed the most cannabis prescriptions of all insurers so far in the first year after the law change. There are now approximately 15,000 patients who have received both a proper prescription and insurance approval coverage. That number is also up 5,000 since the beginning of just this year.
In a fascinating first look at the emerging medical market in Germany, TK, in association with the University of Bremen, has produced essentially the first accessible report on approvals, and patient demographics for this highly stigmatized drug.
Because it is in German, but also contains information critical to English-speaking audiences in countries where the medical issue is being approached more haphazardly (see the U.S. and Canada), Cannabis Industry Journal is providing a brief summary of the most important takeaways from TK’s Cannabis Report.
Most Patients Are Women
This is not exactly surprising in a system where symptomology rather than ability to pay is the driver of authorizations and care. This is also exactly the opposite trend when it comes to gender at least, that emerged in Colorado on the path to medical legalization circa 2010-2014. While chronic pain is still the most common reason for dispensation, the drug is going mostly to women, not men, in their forties, fifties and sixties.
Even Chronically Ill Patients Are Still not Getting Covered
This data is super interesting on the ground for both advocates and those who are now pushing forward on “doctor education” efforts that are springing up everywhere. The only condition for which cannabis was approved 100% was for patients suffering from terminal cancer pain from tumours. In other words, they were also either in hospice or hospital where this kind of drug can be expedited and approved quickly. Other conditions for which the drug was approved were both at far lower rates than might have been expected (see only a 70% approval rate for Epilepsy and a 33% approval rate for Depression).
Expect approval rates to change, particularly for established conditions where the drug clearly helps patients, even if there are still questions about dosing and which form of cannabis works best, along with improved research, data and even patient on boarding.
Also expect interesting data to come out of this market for patients with ADHD (or ADHS).
Imported Cannabis Is Very Expensive
TK and other public health insurers are also on the front lines of another issue not seen in any other legalizing cannabis country at the moment. An eye-wateringly high cost per patient. The biggest reason? Most of the medical cannabis in the market is being imported. This will change when more cannabis begins to enter the market from other EU countries (see Spain, the Baltics and Greece) and, yes, no matter how many elements of the German government are still fighting this one when it begins to be cultivated auf Deutschland.
Most German Patients Are Still Only Getting Dronabinol
If there was one thing that foreign investors should take a look at, it is this. One year after legalization, just over 1/3 of those who actually qualify for “medical cannabis” are in fact getting whole plant medication or a derivative (like Sativex).
This means only one thing. The market is continuing to grow exponentially over at least the next five to ten years.
Cannabis extraction has been used as a broad term for what can best be described as cannabis processing. A well-thought-out cannabis process goes far beyond just extraction, largely overlapping with cultivation on the front-end and product development on the back-end1. With this in mind, four pillars emerge as crucial capabilities for developing a cannabis process: Cultivation, Extraction, Analytics and Biochemistry.
The purpose and value of each pillar on their own is clear, but it is only when combined that each pillar can be optimized to provide their full capacities in a well-designed process. As such, it is best to define the goals of each pillar alone, and then explain how they synergize with each other.
At the intersection of each pillar, specific technology platforms exist that can effectively drive an innovation and discovery cycle towards the development of ideal products.Cultivation is the foundation of any horticultural process, including cannabis production. Whether the goal be to convert pigments, flavors or bioactive compounds into a usable form, a natural process should only utilize what is provided by the raw material, in this case cannabis flower. That means cultivation offers a molecular feedstock for our process, and depending on our end goals there are many requirements we may consider. These requirements start as simply as mass yield. Various metrics that can be used here include mass yield per square foot or per light. Taken further, this yield may be expressed based not only on mass, but the cannabinoid content of the plants grown. This could give rise to a metric like CBD or THC yield per square foot and may be more representative of a successful grow. Furthermore, as scientists work to learn more about how individual cannabinoids and their combinations interact with the human body, cultivators will prioritize identifying cultivars that provide unique ratios of cannabinoids and other bioactive compounds consistently. Research into the synergistic effect of terpenes with cannabinoids suggests that terpene content should be another goal of cultivation2. Finally, and most importantly, it is crucial that cultivation provide clean and safe materials downstream. This means cannabis flower free of pesticides, microbial growth, heavy metals and other contaminants.
Extraction is best described as the conversion of target molecules in cannabis raw material to a usable form. Which molecules those are depends on the goals of your product. This ranges from an extract containing only a pure, isolated cannabinoid like CBD, to an extract containing more than 100 cannabinoids and terpenes in a predictable ratio. There are countless approaches to take in terms of equipment and process optimization in this space so it is paramount to identify which is the best fit for the end-product1. While each extraction process has unique pros and cons, the tunability of supercritical carbon dioxide provides a flexibility in extraction capabilities unlike any other method. This allows the operator to use a single extractor to create extracts that meet the needs of various product applications.
Analytics provide a feedback loop at every stage of cannabis production. Analytics may include gas chromatography methods for terpene content3 or liquid chromatography methods for cannabinoids 3, 4, 5. Analytical methods should be specific, precise and accurate. In an ideal world, they can identify the compounds and their concentrations in a cannabis product. Analytics are a pillar of their own due simply to the efforts required to ensure the quality and reliability of results provided as well as ongoing optimization of methods to provide more sensitive and useful results. That said, analytics are only truly harnessed when paired with the other three pillars.
Biochemistry can be split into two primary focuses. Plant biochemistry focuses back towards cultivation and enables a cannabis scientist to understand the complicated pathways that give rise to unique ratios of bioactive molecules in the plant. Human biochemistry centers on how those bioactive molecules interact with the human endocannabinoid system, as well as how different routes of administration may affect the pharmacokinetic delivery of those active molecules.
Each of the pillars require technical expertise and resources to build, but once established they can be a source of constant innovation. Fig. 1 above shows how each of these pillars are connected. At the intersection of each pillar, specific technology platforms exist that can effectively drive an innovation and discovery cycle towards the development of ideal products.
For example, at the intersection of analytics and cultivation I can develop raw material specifications. This sorely needed quality measure could ensure consistencies in things like cannabinoid content and terpene profiles, more critically they can ensure that the raw material to be processed is free of contamination. Additionally, analytics can provide feedback as I adjust variables in my extraction process resulting in optimized methods. Without analytics I am forced to use very rudimentary methods, such as mass yield, to monitor my process. Mass alone tells me how much crude oil is extracted, but says nothing about the purity or efficiency of my extraction process. By applying plant biochemistry to my cultivation through the use of analytics I could start hunting for specific phenotypes within cultivars that provide elevated levels of specific cannabinoids like CBC or THCV. Taken further, technologies like tissue culturing could rapidly iterate this hunting process6. Certainly, one of the most compelling aspects of cannabinoid therapeutics is the ability to harness the unique polypharmacology of various cannabis cultivars where multiple bioactive compounds are acting on multiple targets7. To eschew the more traditional “silver bullet” pharmaceutical approach a firm understanding of both human and plant biochemistry tied directly to well characterized and consistently processed extracts is required. When all of these pillars are joined effectively we can fully characterize our unique cannabis raw material with targeted cannabinoid and terpene ratios, optimize an extraction process to ensure no loss of desirable bioactive compounds, compare our extracted product back to its source and ensure we are delivering a safe, consistent, “nature identical” extract to use in products with predictable efficacies.
Using these tools, we can confidently set about the task of processing safe, reliable and well characterized cannabis extracts for the development of world class products.
 Sweeney, C. “Goal-Oriented Extraction Processes.” Cannabis Science and Technology, vol 1, 2018, pp 54-57.
 Russo, E. B. “Taming THC: potential cannabis synergy and phytocannabinoid-terpenoid entourage effects.” British Journal of Pharmacology, vol. 163, no. 7, 2011, pp. 1344–1364.
 Giese, Matthew W., et al. “Method for the Analysis of Cannabinoids and Terpenes in Cannabis.” Journal of AOAC International, vol. 98, no. 6, 2015, pp. 1503–1522.
 Gul W., et al. “Determination of 11 Cannabinoids in Biomass and Extracts of Different Varieties of Cannabis Using high-Performance Liquid Chromatography.” Journal of AOAC International, vol. 98, 2015, pp. 1523-1528.
 Mudge, E. M., et al. “Leaner and Greener Analysis of Cannabinoids.” Analytical and Bioanalytical Chemistry, vol. 409, 2017, pp. 3153-3163.
 Biros, A. G., Jones, H. “Applications for Tissue Culture in Cannabis Growing: Part 1.” Cannabis Industry Journal, 13 Apr. 2017, www.cannabisindustryjournal.com/feature_article/applications-for-tissue-culture-in-cannabis-growing-part-1/.
 Brodie, James S., et al. “Polypharmacology Shakes Hands with Complex Aetiopathology.” Trends in Pharmacological Sciences, vol. 36, no. 12, 2015, pp. 802–821.
In a few short weeks, the regulations in California’s cannabis market will expand to include more laboratory testing. The previous exemption for selling untested product will be eliminated come July 1st, meaning that every product on dispensary shelves will have to be tested for a number of contaminants.
According to William Waldrop, chief executive officer and co-founder of EVIO Labs, the state is currently finalizing a revision to the existing emergency rules, which is designed to target the potential supply bottleneck situation. “To help alleviate the bottleneck, the state is eliminating the field duplicate test on every batch of cannabis or cannabis products,” says Waldrop. “This will give the labs additional bandwidth to process more batches for testing.” So one test per batch is the rule now and batch sizes will remain the same. This, of course, is contingent on the state finalizing that revision to the emergency regulations.
In addition to that change, the state will expand the types of testing requirements come July 1st. New mandatory pesticide testing, expanded residual solvent testing and foreign materials testing are added in addition to the other tests already required.
With July 1st quickly approaching, many in California fear the rules could lead to a major market disruption, such as the previously mentioned bottleneck. Waldrop sees the elimination of duplicate testing as a preventative measure by the state. “It is a good move for the industry because it allows labs to test more batches, hopefully reducing the bottleneck come July,” says Waldrop. Still though, with only 26 licensed laboratories in the state as of March, testing facilities will have to meet higher demand, performing more tests and working with more clients.
EVIO Labs is preparing for this in a number of ways. They already have a lab in Berkeley and are working to expand their capacity for more analyses. In addition to their lab in Berkeley, the company is working to get three more locations operational as quickly as possible. “Right now, EVIO Labs is expanding through the identification of new market locations,” says Waldrop. “We have announced the acquisition of a facility in Humboldt and we are outfitting it for state-mandated testing. We have secured a location in LA, and licensing for LA just began as of June 1stso we are going through the local licensing process at this time. We are still moving through the licensing process for our facility in Costa Mesa as well.”
“In the meantime, we have expanded capacity of personnel in our Berkeley facility to support our client base until these other locations come online,” says Waldrop. “We are refining our business, bringing on additional equipment and more resources.” While the rules haven’t been implemented yet, Waldrop says he’s seen an uptick in business with licensed operators requesting more testing for the new July 1st standards.
While some might feel a bit panicky about how the new standards could disrupt the market, Waldrop says his clients are looking forward to it. “Our clients are very happy with the proposed new rules, because it reduces the cost of testing per batch, which will inherently reduce wholesale costs, making cannabis more affordable for patients and recreational users.”
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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!
California’s regulated adult use cannabis market has been up and running for around four months now and rumors of a potential supply bottleneck on the horizon are beginning to circulate. There are a number of factors that could have an impact on the cannabis supply in the market, most of which stem from changes in the distribution channels now that the state is implementing new regulations.
Those include a slow rollout in licensing cannabis businesses, new testing requirements, the supply carryover period prior to January 1stas well as new labeling and packaging regulations. In this piece, we are going to examine some of those rumors, see if there might be some truth to them and provide some guidance for what businesses can do to prepare for this.
A Slow Start to Licensing
This one is perhaps the most obvious factor to impact the supply chain in California. Much of the delays in licensing cannabis businesses came from the issue of local control, where businesses needed to get approval from their municipality before getting a state license. In the first month of the new market, it took Los Angeles weeks longer than other counties to begin licensing dispensaries. Whereas San Diego retailers saw a massive influx of customers right away, forcing them to buy up product to meet the high demand. Smaller producers also had trouble getting licenses as quickly as some of the larger ones.
Basically it all boils down to a slow start for the new market, according to Diane Czarkowski, co-founder of Canna Advisors. “The state is requiring businesses to get their local licenses before they can get their state license and that will create a delay in operators being able to bring products to market,” says Czarkowski. She says this is pretty typical of new markets, or when a market experiences dramatic changes quickly. “It could be a brand-new market, like in Hawaii, where the operators were ready with product, but there were no labs to test the products, which caused delays.” In addition to the licensing roll out being slow to start, the temporary licenses initially awarded to businesses are set to expire soon, by the end of April.
Stricter Rules to Come
The same logic goes for the testing regulations. New testing and labeling requirements, according to the Bureau of Cannabis Control regulating the market, will be phased in throughout 2018.
The state has already phased in cannabinoids, moisture content, residual solvent, pesticide, microbial impurities and homogeneity testing to some extent. On July 1st, the state will add additional residual solvent and pesticide testing as well as foreign material testing. At the end of 2018, they plan on requiring terpenoids, mycotoxins, heavy metals and water activity testing. All of those tests cost money and all of those tests could impact suppliers’ ability to bring product to market. “Oftentimes regulations require different types of testing to be done to products without recognizing that adequately completing those tests requires different methods, equipment, and standards,” says Czarkowski. “Most labs do not have all of the necessary components, and they are very costly. Producers could wait weeks to get test results back before they know if they can sell their products.”
Back when we spoke with Josh Drayton, deputy director of the California Cannabis Industry Association, about the upcoming changes to the California market, he voiced his concerns with the coming testing rules. “A lot of testing labs are concerned they are unable to test at the state’s threshold for some of these contaminants and pesticides; the detection limits seem very low,” says Drayton. “The testing portion will take years to work out, I am sure we will remove and add different pesticides and contaminants to the list.” California’s testing industry is, however, capable of adapting to changing rules, as they’ve done in the past on more than one occasion. It should be noted that many labs in the state are on the cutting edge of testing cannabis, working with The Bureau to implement the new rules.
Cannabis products made prior to December 31st, 2017, did not need to comply with the stricter testing rules that are coming in the next few months. This carryover period allowed dispensaries to have products on the shelves when the new market launched in the beginning of 2018. Retailers knew this rule meant they needed to stockpile product in the event of a supply bottleneck, and it appears much of that product is now sold and running out, according to Roy Bingham, founder and chief executive officer of BDS Analytics. “The true impact of licenses is starting to be felt since the carryover from December buying prior to the licensed market has been sold,” says Bingham. “Some of the major brands have consciously not applied for licenses. Some of that has to do with the flexibility the government has given them to wait.”
A fourth reason for a potential bottleneck could also come from packaging and labeling rules. “There will have to be many modifications to products to ensure they follow the new potency regulations, and many formulations will have to be modified in order to meet new regulations,” says Czarkowski. Distributor licenses, according to The Bureau, have a number of compliance documentation requirements, such as arranging for all product testing, quality assurance and packaging and label accuracy. Everything has to be packaged before it gets to a dispensary, which is a new rule California businesses need to comply with.
Pricing is the Indicator
There are a handful of reasons why prices could increase; some of them are more defined than others, the biggest factor being the tax burden passed on to consumers, where reports showed up to a 40% increase from last year. A price increase in the future could also come from The Bureau implementing testing regulations throughout 2018, as mentioned previously.
If prices were to surge enormously and very quickly, that might be an indicator that a shortage is fast approaching. A dramatic increase in price over this year could squeeze margins for smaller producers, forcing retailers to pass that burden on to consumers as well.“So yes, the rumors are true.”
According to Roy Bingham, there has been a significant increase in pricing in all categories at the retail level. “In January and February, we are seeing about 10% increases per month in average retail prices,” says Bingham. “If we look at concentrates in California during 2017, they averaged about $34 by the end of the year, whereas it was about $31 at the start of 2017. So in January, prices have increased up to $38, which is a bit above trend, but in fact we were seeing a trend upwards before January 1st as well.” Comparing that with edibles pricing, Bingham says we see a clear jump at the start of 2018. “It was basically flat in 2017, averaging $14 roughly almost straight-line across, dipped in December, then in January it jumped to $17 and then to $18 in February, a big increase and significantly more than concentrates,” says Bingham. He also says flower was hovering around $9 per gram in December 2017, but surged above $10 in February 2018.
According to Cannabis Benchmarks, the California wholesale averages surged in the summer of 2017 up to $1,631 by September, then reached their lowest point in December, with their spot index at $1,368. The Cannabis Benchmarks report underlines some important reasons for the changes in pricing, but they also attribute it to the new licensing system.
“Increasing operating expenses for businesses preparing to enter California’s licensed system in 2018 were key to propping up supply side rates in the first six months of 2017. New compliance requirements were being instituted to varying degrees by local governments, while market participants warily eyed draft regulations from state officials for guidance as to how to prepare their sites and facilities to meet under-construction regulatory mandates.”
Their report highlights some very important aspects of the supply chain. “Again, it is likely that the increased costs faced by operators up and down the supply chain exert some upward pressure on wholesale rates, preventing them from steep year-over-year declines that were observed in some of the other major Western markets,” reads the Cannabis Benchmarks report.
So How Can Businesses Prepare?
Well to start, producers should make sure their operations and product are clean and safe. Making sure your product will pass a pesticide test should be top of mind. Dispensaries should also be wise in selecting their suppliers, performing supplier quality audits or some form of verification that they meet your standards is key in a consistent supply chain.
Dr. Jon Vaught, chief executive officer of Front Range Biosciences, believes tissue culture could be a viable solution for some California producers. Using tissue culture, as a form of propagation instead of mothers and clones can be cleaner, cheaper and more efficient, thus allowing growers to keep up with demand and prevent a shortage.
Dr. Vaught says growers could look to tissue culture as a means to “mitigate risk to their supply chain and mitigate the risk of potential loss and improve their ability to efficiently grow their plant.” Maintaining a disease-free, sterile environment is a huge advantage in the cannabis market. “The real use of tissue culture is to provide disease free, clean, certified material, that has gone through a QA program,” says Dr. Vaught. “In greenhouses, the ability to control your environment is also critical because your margin of error is high. Variations in sunlight, weather, humidity all of these things have an impact in your plants. Technology can help monitor this.”
We’ve covered the basics of tissue culture previously on CIJ, with Dr. Hope Jones chief science officer of C4 Laboratories. She echoes many of Dr. Vaught’s points, firmly believing that, having existed for decades, tissue culture is an effective propagation tool for advanced breeders or growers looking to scale up.It is a complex supply chain that requires systems thinking.
It is important to note they don’t think growers should try this at home. Work with professionals, get the necessary funding, the training and facilities required if this is a project that interest you. “There’s a pretty big barrier to entry there,” Dr. Vaught urges. “The ability to manage thousands or millions of plants in a greenhouse increases risk, whereas in the lab, you’ve got a safe, secure, sterile environment, reducing risk of disease, making things easier to manage. The producers most successful at large scale are controlling those variables to the T.”
Ultimately, one segment of the market can’t prevent a bottleneck. It is a complex supply chain that requires systems thinking. Regulators need to work with producers, manufacturers, retailers, distributors, patients, consumers and laboratories to keep an eye on the overall supply chain flow.
Diane Czarkowski says the California market should prepare for this now if they haven’t already. “We have seen supply issues in every market going through a change. Other potential bottlenecks will occur because former distribution channels will be required to change,” says Czarkowski. “So yes, the rumors are true.”
Earlier this week Capitol Analysis Group, a cannabis-testing laboratory based in Lacey, Washington, announced they are conducting a “data-driven Lab Transparency Project, an effort to improve accuracy of cannabis testing results in the state through transparency and a new third-party auditing process,” according to a press release. They plan to look through the state’s traceability data to find patterns of deviations and possible foul play.
The project launch comes after Straightline Analytics, a Washington cannabis industry data company, released a report indicating they found rampant laboratory shopping to be present in the state. Lab shopping is a less-than-ethical business practice where cannabis producers look for the lab that will give them the most favorable results, particularly with respect to higher potency figures and lower contamination fail rates.“Lab shopping shouldn’t exist, because it is a symptom of lab variability,”
According to the press release, their report “shows that businesses that pay for the highest number of lab tests achieve, on average, reported potency levels 2.71% higher than do those that pay for the lowest number of lab tests.” They also found labs that provide higher potency figures tend to have the largest market share.
The goal of The Lab Transparency Project is to provide summaries of lab data across the state, shining a light in particular on which labs provide the highest potency results. “Lab shopping shouldn’t exist, because it is a symptom of lab variability,” says Jeff Doughty, president of Capitol Analysis. “We already have standards that should prevent variations in lab results and proficiency testing that shows that the labs are capable of doing the testing.” The other piece to this project is independent third party auditing, where they hope other labs will collaborate in the name of transparency and honesty. “Problems arise when the auditors aren’t looking,” says Doughty. “Therefore, we’re creating the Lab Transparency Project to contribute to honesty and transparency in the testing industry.”
Dr. Jim McRae, founder of Straightline Analytics, and the author of that inflammatory report, has been a vocal critic of the Washington cannabis testing industry for years now. “I applaud Capitol Analysis for committing to this effort,” says McRae. “With the state’s new traceability system up and running following a 4-month breakdown, the time for openness and transparency is now.” Dr. McRae will be contributing to the summaries of lab data as part of the project.
According to Doughty, the project is designed to be a largely collaborative effort with other labs, dedicated to improving lab standards and transparency in the industry.
Recorded 4/24/18, this webinar, dives into the regulatory environments surrounding cannabis testing, as well as terpene, residual solvent and heavy metals testing. Are you finding it difficult to keep up with changing regulations for the cannabis industry? Are you looking to reduce hands-on analysis time? Speed up sample processing? Have less waste? Possibly reduce the number of individual tests running in your laboratory? Hosted by PerkinElmer and CIJ.
When processing cannabis, in any form, it is critical to remember that it is a product intended for human consumption. As such, strict attention must also be paid to food safety as well. With more and more states legalizing either medical or recreational cannabis, the potential for improper processing of the cannabis triggering an illness or death to the consumer is increasing.
The FDA Food Safety Modernization Act (FSMA) is the new food safety law that has resulted in seven new regulations, many which directly or indirectly impact the production and processing of cannabis. Under FSMA regulations, food processors must identify either known or reasonably foreseeable biological, chemical or physical hazards, assess the risks of each hazard, and implement controls to minimize or prevent them. The FSMA Preventive Controls for Human Foods (PCHF) regulation contains updated food “Good Manufacturing Practices (cGMPs) that are in many cases made a requirement in a state’s medical or recreational cannabis laws. These cGMPs can be found in 21 CFR 117 Subpart B.
It is imperative that cannabis manufacturers have a number of controls in place including management of suppliers providing the raw material.Food safety risks in cannabis processing could originate from bacteria, cleaning or agricultural chemicals, food allergens or small pieces of wood, glass or metal. The hazards that must be addressed could be natural, unintentionally introduced, or even intentionally introduced for economic benefit, and all must be controlled.
It is unlikely that high heat, used in other food products to remove bad bacteria would be used in the processing of cannabis as many of its desirable compounds are volatile and would dissipate under heating conditions. Therefore, any heat treatment needs to be carefully evaluated for effectiveness in killing bacterial pathogens while not damaging the valuable constituents of cannabis. Even when products are heated above temperatures that eliminate pathogens, if the raw materials are stored in a manner that permits mold growth, mycotoxins produced by molds that have been linked to cancer could be present, even after cooking the product. Storage of raw materials might require humidity controls to minimize the risk of mold. Also, pesticides and herbicides applied during the growth and harvesting of cannabis would be very difficult to remove during processing.
It is imperative that cannabis manufacturers have a number of controls in place including management of suppliers providing the raw material. Other controls that must be implemented include proper cannabis storage, handling and processing as well as food allergen control, and equipment/facility cleaning and sanitation practices. Processing facilities must adhere to Good Manufacturing Practices (GMP’s) for food processing, including controls such as employee hand washing and clothing (captive wear, hair nets, beard nets, removal of jewelry, and foot wear) that might contribute to contamination. A Pest Control plan must be implemented to prevent fecal and pathogen contamination from vermin such as rodents, insects, or birds.
Processing facilities must be designed for proper floor drainage to prevent standing water. Processing air should be properly filtered with airflow into the cannabis processing facility resulting in a slightly higher pressure than the surrounding air pressure, from the clean process area outwards. Toilet facilities with hand washing are essential, physically separated from the process areas. Food consumption areas must also be physically separate from processing and bathroom areas and have an available, dedicated hand sink nearby. Employee training and company procedures must be effective in keeping food out of the processing area. Labels and packaging must be stored in an orderly manner and controlled to prevent possible mix-up.Cleaning of the processing equipment is critical to minimize the risk of cross contamination and microbial growth.
Written food safety operational procedures including prerequisite programs, standard operating procedures (SOP’s), etc. must be implemented and monitored to ensure that the preventive controls are performed consistently. This could be manual written logs, electronic computerized data capture, etc., to ensure processes meet or exceed FSMA requirements.
A written corrective action program must be in place to ensure timely response to food safety problems related to cannabis processing problems when they occur and must include a preventive plan to reduce the chance of recurrence. The corrective actions must be documented by written records.
Supply chain controls must be in place. In addition, a full product recall plan is required, in the event that a hazard is identified in the marketplace to provide for timely recall of the contaminated product.
Cleaning of the processing equipment is critical to minimize the risk of cross contamination and microbial growth. The processing equipment must be designed for ease of cleaning with the minimum of disassembly and should conform to food industry standards, such as the 3-A Sanitary Standards, American Meat Institute’s Equipment Standards, the USDA Equipment Requirements, or the Baking Industry Sanitation Standards Committee (BISSC) Sanitation Standards ANSI/ASB/Z50.2-2008.
Serious food borne contaminations have occurred in the food industry, and cannabis processing is just as susceptible to foodborne contamination. These contaminations are not only a risk to consumer health, but they also burden the food processors with significant costs and potential financial liability.
Anyone processing cannabis in any form must be aware of the state regulatory requirements associated with their products and implement food safety programs to ensure a safe, desirable product for their customers.
With the state led legalization of both adult recreational and medical cannabis, there is a need for comprehensive and reliable analytical testing to ensure consumer safety and drug potency. Cannabis-testing laboratories receive high volumes of test requests from cannabis cultivators for testing quantitative and qualitative aspects of the plant. The testing market is growing as more states bring in stricter enforcement policies on testing. As the number of testing labs grow, it is anticipated that the laboratories that are now servicing other markets, including high throughput contract labs, will cross into cannabis testing as regulations free up. As the volume of tests each lab performs increases, the need for laboratories to make effective use of time and resource management, such as ensuring accurate and quick results, reports, regulatory compliance, quality assurance and many other aspects of data management becomes vital in staying competitive.
Cannabis Testing Workflows
To be commercially competitive, testing labs offer a comprehensive range of testing services. These services are available for both the medical and recreational cannabis markets, including:
Detection and quantification of both acid and neutral forms of cannabinoids
Screening for pesticide levels
Monitoring water activity to indicate the possibility of microbiological contamination
Moisture content measurements
Residual solvents and heavy metal testing
Fungi, molds, mycotoxin testing and many more
Although the testing workflows differ for each test, here is a basic overview of the operations carried out in a cannabis-testing lab:
Cannabis samples are received.
The samples are processed using techniques such as grinding and homogenization. This may be followed by extraction, filtration and evaporation.
A few samples will be isolated and concentrated by dissolving in solvents, while others may be derivatized using HPLC or GC reagents
The processed samples are then subjected to chromatographic separation using techniques such as HPLC, UHPLC, GC and GC-MS.
The separated components are then analyzed and identified for qualitative and quantitative analysis based on specialized standards and certified reference materials.
The quantified analytical data will be exported from the instruments and compiled with the corresponding sample data.
The test results are organized and reviewed by the lab personnel.
The finalized test results are reported in a compliant format and released to the client.
In order to ensure that cannabis testing laboratories function reliably, they are obliged to follow and execute certain organizational and regulatory protocols throughout the testing process. These involve critical factors that determine the accuracy of testing services of a laboratory.
Factors Critical to a Cannabis Testing Laboratory
Accreditations & Regulatory Compliance: Cannabis testing laboratories are subject to regulatory compliance requirements, accreditation standards, laboratory practices and policies at the state level. A standard that most cannabis testing labs comply to is ISO 17025, which sets the requirements of quality standards in testing laboratories. Accreditation to this standard represents the determination of competence by an independent third party referred to as the “Accreditation Body”. Accreditation ensures that laboratories are adhering to their methods. These testing facilities have mandatory participation in proficiency tests regularly in order to maintain accreditation.
Quality Assurance, Standards & Proficiency Testing: Quality assurance is in part achieved by implementing standard test methods that have been thoroughly validated. When standard methods are not available, the laboratory must validate their own methods. In addition to using valid and appropriate methods, accredited laboratories are also required to participate in appropriate and commercially available Proficiency Test Program or Inter-Laboratory Comparison Study. Both PT and ILC Programs provide laboratories with some measure of their analytic performance and compare that performance with other participating laboratories.
Real-time Collaboration: Testing facilities generate metadata such as data derived from cannabis samples and infused products. The testing status and test results are best served for compliance and accessibility when integrated and stored on a centralized platform. This helps in timely data sharing and facilitates informed decision making, effective cooperation and relationships between cannabis testing facilities and growers. This platform is imperative for laboratories that have grown to high volume throughput where opportunities for errors exist. By matching test results to samples, this platform ensures consistent sample tracking and traceability. Finally, the platform is designed to provide immediate, real-time reporting to individual state or other regulatory bodies.
Personnel Management: Skilled scientific staff in cannabis-testing laboratories are required to oversee testing activities. Staff should have experience in analytical chromatography instruments such as HPLC and GC-MS. Since samples are often used for multi-analytes such as terpenes, cannabinoids, pesticides etc., the process often involves transferring samples and tests from one person to another within the testing facility. A chain of custody (CoC) is required to ensure traceability and ‘ownership’ for each person involved in the workflow.
LIMS for Laboratory Automation
Gathering, organizing and controlling laboratory-testing data can be time-consuming, labor-intensive and challenging for cannabis testing laboratories. Using spreadsheets and paper methods for this purpose is error-prone, makes data retrieval difficult and does not allow laboratories to easily adhere to regulatory guidelines. Manual systems are cumbersome, costly and lack efficiency. One way to meet this challenge is to switch to automated solutions that eliminate many of the mundane tasks that utilize valuable human resources.. Laboratory automation transforms the data management processes and as a result, improves the quality of services and provides faster turnaround time with significant cost savings. Automating the data management protocol will improve the quality of accountability, improve technical efficiency, and improve fiscal resources.
A Laboratory Information Management System (LIMS) is a software tool for testing labs that aids efficient data management. A LIMS organizes, manages and communicates all laboratory test data and related information, such as sample and associated metadata, tests, Standard Operating Procedures (SOPs), test reports, and invoices. It also enables fully automated data exchange between instruments such as HPLCs, GC-FIDs, etc. to one consolidated location, thereby reducing transcription errors.
How LIMS Helps Cannabis Testing Labs
LIMS are much more capable than spreadsheets and paper-based tools for streamlining the analytical and operational lab activities and enhances the productivity and quality by eliminating manual data entry. Cloud-enabled LIMS systems such as CloudLIMS are often low in the total cost of acquisition, do not require IT staff and are scalable to help meet the ever changing business and regulatory compliance needs. Some of the key benefits of LIMS for automating a cannabis-testing laboratory are illustrated below [Table 1]:
Barcode label designing and printing
Enables proper labelling of samples and inventory
Follows GLP guidelines
Instant data capture by scanning barcodes
Facilitates quick client registration and sample access
3600 data traceability
Saves time and resources for locating samples and other records
Inventory and order management
Supports proactive planning/budgeting and real time accuracy
Promotes overall laboratory organization by assigning custodians for samples and tests
Maintains the Chain-of-custody (CoC)
Accommodates pre-loaded test protocols to quickly assign tests for incoming samples
Accounting for sample and inventory quantity
Automatically deducts sample and inventory quantities when consumed in tests
Package & shipment management
Manages incoming samples and samples that have been subcontracted to other laboratories
Electronic data import
Electronically imports test results and metadata from integrated instruments
Eliminates manual typographical errors
Generates accurate, customizable, meaningful and test reports for clients
Allows user to include signatures and additional sections for professional use
21 CFR Part 11 compliant
Authenticates laboratory activities with electronic signatures
ISO 17025 accreditation
Provides traceable documentary evidence required to achieve ISO 17025 accreditation
Audit trail capabilities
Adheres to regulatory standards by recording comprehensive audit logs for laboratory activities along with the date and time stamp
Centralized data management
Stores all the data in a single, secure database facilitating quick data retrieval
Promotes better data management and resource allocation
Enables modification of screens using graphical configuration tools to mirror testing workflows
State compliance systems
Integrates with state-required compliance reporting systems and communicates using API
Adheres to regulatory compliance
Creates Certificates of Analysis (CoA) to prove regulatory compliance for each batch as well as batch-by-batch variance analysis and other reports as needed.
Data security & confidentiality
Masks sensitive data from unauthorized user access
Cloud-based LIMS encrypts data at rest and in-transit while transmission between the client and the server
Cloud-based LIMS provides real-time access to laboratory data from anytime anywhere
Cloud-based LIMS enhances real-time communication within a laboratory, between a laboratory and its clients, and across a global organization with multiple sites
Table 1. Key functionality and benefits of LIMS for cannabis testing laboratories
Upon mapping the present day challenges faced by cannabis testing laboratories, adopting laboratory automation solutions becomes imperative. Cloud-based LIMS becomes a valuable tool for laboratory data management in cannabis testing laboratories. In addition to reducing manual workloads, and efficient resource management, it helps labs focus on productive lab operations while achieving compliance and regulatory goals with ease.
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