KIND Financial, a technology and compliance software solutions provider in the cannabis industry, is launching a new e-commerce and payment processing platform in Canada. According to the press release, they are partnering with a Canadian bank to launch the KIND Seed to Payment platform, which is essentially an e-commerce gateway integrated with their compliance software, KIND’s RegTech platform.
David Dinenberg, founder and CEO of KIND Financial, says this is an approach to help alleviate the cannabis industry’s banking woes. “We’ve been very focused on a global vision and taking a strategic approach towards solving the cannabis industry’s largest problem – banking,” says Dinenberg. “Not only have we built a broad portfolio of finance and compliance solutions with a high-level of technical sophistication, but we’ve made a strong commitment to security and compliance, which is evident through our partnership with Microsoft.” A little over a year ago, they entered a partnership with Microsoft to utilize their cloud-based solutions for government traceability software.
According to the press release, the software has regulatory and security features built in, such as age and identity verification, which can help companies comply with security and chain of custody regulations. “Our mission is to ensure business and technological growth for all constituencies within the cannabis industry while ensuring full compliance with evolving regulations, and that’s why we’re thrilled to make these services available to our great neighbors in the north,” says Dinenberg. “We understand compliance will be a critical issue for some time to come, but with our solution, all providers and their partners can focus on the job at hand while keeping in line with regulatory mandates.”
KIND Financial has not done much work in Canada previously, but this could be a sign of a greater push for international expansion. “We’re excited to be working in a new country to boost the Canadian cannabis industry in a safe and regulated manner, and we look forward to expanding into other markets overseas,” says Dinenberg. The press release says the new platform is designed to work with different languages and foreign currencies, including the euro and Australian dollar, which could help Canadian producers enter emerging markets.
In addition to their announcement of the KIND Seed to Payment platform, the company also announced they will be rolling out a mobile payment system called KIND Pay, a digital payment option for consumers that will accept Visa and MasterCard. They anticipate that KIND Pay will launch before the end of this year.
Demand for cannabis extracts, in particular vaping products, is at an all-time high. People want good oil, and they want to know something about the quality of it. It is therefore time to take a step back and consider the process from plant to cartridge. What is the current industry standard for cannabis extraction, what constitutes quality and where might we need to make some adjustments?
Right now, “clear” oil is hot. Customers have been led to believe that a pale gold extract is synonymous with the best possible cannabis concentrate, which is not necessarily the case. Producing a 95% pure THC extract with a translucent appearance is neither a great scientific feat nor a good representation of the whole cannabis flower. Moreover, it runs counter to the current trend of all-natural, non-processed foods and wellness products.
“My carrots are organic and fresh from the farmers market, my drink has no artificial sweeteners and my honey is raw, but my cannabis oil has undergone a dozen steps to look clear and still contains butane.”Cannabis is a fascinating plant. It is the basis of our livelihood, but more importantly, it enhances the quality of life for patients. The cannabis plant offers a plethora of medicinally interesting compounds. THC, CBD and terpenes are the most popular, but there are so many more. As of the most recent count, there are 146 known cannabinoids1. Cannabinoids are a group of structurally similar molecules2, including THC and CBD, many of which have shown biological activity3.
Then there are terpenes. These are the smaller molecules that give cannabis its distinct smell and flavor, over 200 of which have been identified in cannabis4. But wait, there’s more. The cannabis plant also produces countless other metabolites: flavonoids, alkaloids, phenols and amides5. All these components mixed together give the often-cited entourage effect6,7.
Current industry standards for cannabis oil extraction and purification stand in marked contrast to the complexity of the plant’s components. Due to an unsophisticated understanding of the extraction process and its underlying chemistry, cannabis oil manufacturers frequently produce oil of low quality with high levels of contamination. This necessitates further purifications and clean up steps that remove such contaminants unfortunately along with beneficial minor plant compounds. If one purifies an extract to a clear THC oil, one cannot also offer the full spectrum of cannabinoids, terpenes and other components. Additionally, claiming purities around 95% THC and being proud of it, makes any self-respecting organic chemist cringe8.
The labor-intensive, multi-step extraction process is also contrary to “the clean-label food trend”, which “has gone fully mainstream”9. Exposing the cannabis flower and oil to at least half a dozen processing steps violates consumer’s desire for clean medicine. Furthermore, the current practice of calling supercritical-CO2-extracted oils solvent-less violates basic scientific principles. Firstly, CO2 is used as a solvent, and secondly, if ethanol is used to winterize10, this would introduce another solvent to the cannabis oil.
We should reconsider our current extraction practices. We can offer cannabis extracts that are free of harmful solvents and pesticides, give a better, if not full, representation of the cannabis plant and meet the patients’ desire for clean medicine. Realizing extracts as the growth-driver they are11 will make us use better, fresher starting materials12. Understanding the underlying science and learning about the extraction processes will allow us to fine-tune the process to the point that we target extract customized cannabis concentrates13. Those, in turn, will not require additional multi-step purification processes, that destroys the basis of the entourage effect.
The cannabis industry needs to invest and educate. Better extracts are the result of knowledgeable, skilled people using precise instruments. Backroom extraction with a PVC pipe and a lighter should be horror stories of the past. And only when the patient knows how their medicine is made can they make educated choices. Through knowledge, patients will understand why quality has its price.
In short, over-processing to make clear oil violates both the plant’s complexity and consumers’ desires. Let us strive for pure extracts, not clear. Our patients deserve it.
 Prof. Meiri; lecture at MedCann 2017
 ElSohly, Slade, Life Sciences2005, 539
 Whiting, et. al.,JAMA.2015, 2456
 Andre, Hausman, Guerriero, Frontiers in Plant Science2016, 19
CanPay, a debit payment solution for the cannabis space, announced today their partnership with Harborside, the largest medical dispensary brand in the United States. The partnership will allow Harborside’s more than 200,000 patients to use a mobile debit app when purchasing cannabis through their delivery service, instead of bringing cash.
For deliveries, patients would use the CanPay app on their device “to generate a secure, single-use payment token that includes no personal identifiable information,” according to the press release. A Harborside delivery employee scans the token and the money is transferred from the patient’s checking account to Harborside. This allows for delivery employees to make less cash transactions and affords patients the luxury of not having to take out cash to get their medicine.
Harborside, founded in 2006, is recognized as the largest nonprofit cannabis dispensary in California, and the United States. They were reportedly the first dispensary to lab test their products. Being an advocate for patients and their safety, they offer a variety of free health and wellness services. “It’s important to us that we stay on the forefront of patient care and access to the products our community needs to improve their quality of life,” says dress wedding, co-founder of Harborside. “CanPay enables us to continue delivering on those goals by normalizing the payment process for our patients and staff.”
CanPay launched last year in November and has since expanded to over 50 dispensaries and six different states. The premise of their system is a secure and safe transaction for customers or patients of dispensaries. “To ensure privacy and security, all purchases are made using non-identifiable, single-use, and random payment tokens generated in the CanPay App,” reads the press release. CanPay is currently serving businesses in Washington, California, Colorado, Maine, Florida, and Oregon.
“Patients who rely on cannabis for preexisting medical conditions should not have to be inconvenienced or have their safety put at risk by a cash-only model,” says Dustin Eide, chief executive officer of CanPay. “Delivery is a mainstream solution and payments should be able to keep up with the industry. By partnering with Harborside, we are providing their patients the benefits of more secure, transparent transactions.” According to Eide, their service is compliant with federal medical cannabis policy and guidance. “CanPay’s service operates under compliance programs built around the Cole Memo and FinCEN Guidance issued by the Department of Justice and the Treasury, respectively, and updated on Feb. 14, 2014 which provided guidance to financial institutions on the conditions with which they can provide banking services to the state regulated cannabis industry without incurring federal action,” says Eide. “Also, CanPay utilizes the Automated Clearing House (ACH) network to affect our services in full transparency. While Visa and MasterCard have established clear rules prohibiting cannabis transactions on their networks, the ACH network relies on the individual financial institutions to determine what type of transactions may occur.” Because of that, Eide says, there’s no need to hide transactions, unlike services that use Visa or MasterCard that require using an obscure legal entity name or a financial intermediary’s name.
According to Dustin Eide, CanPay is designed to be a long-term solution for the cannabis industry’s cash transaction woes. “At approximately 2% fees to the dispensary (and no cost to the consumer), CanPay will be a low cost payment service compared to Visa and MasterCard when they do enter the market, which we’ve been told by our contacts at the companies that this won’t be until federal law changes,” says Eide. He thinks that when MasterCard and Visa begin working with cannabis businesses, they will charge higher transaction fees in the 3-4% range, given the high-risk nature of the market. “CanPay’s challenge is to gain sufficient breadth of coverage with dispensaries and adoption among cannabis consumers to be able to offer that value on a wide scale prior to Visa and MasterCard’s entry into the market.”
Looking to the future, Eide hopes the partnership with Harborside will lead to more business. “CanPay couldn’t ask for a better partner to enter into the California cannabis market, which is expected to top $20 billion by 2020, than Harborside, one of the world’s most respected and well-known cannabis organizations,” says Eide. “It is an honor to be chosen by Harborside, who has their pick of services for the cannabis industry, to facilitate their cashless delivery payments and enhance the safety and convenience of purchasing medicine from Harborside for both their patients and their employees.”
The Pennsylvania Department of Health announced today the first 12 winners of growing and processing permits for the state’s medical cannabis program. At first glance, it appears those who won the permits have teams with experience in successful cannabis operations elsewhere in the country. The permit winners now have six months to become operational, according to a press release.
According to that press release, John Collins, director of the Pennsylvania Office of Medical Marijuana, received 457 applications in total, with 177 prospective grower/processors and 280 for dispensaries. “With today’s announcement, we remain on track to fulfill the Wolf Administration’s commitment to deliver medical marijuana to patients in 2018,” says Collins. “The applications from the entities receiving permits were objectively reviewed by an evaluation team made up of members from across commonwealth agencies.”
In the populous Southeast region of Pennsylvania, grower/processor permits were awarded to Prime Wellness of Pennsylvania, LLC, and Franklin Labs, LLC. Prime Wellness is a Connecticut-based enterprise. According to Steve Schain, Esq., attorney at the Hoban Law Group, Franklin Labs includes team members from Garden State Dispensary, a successful medical cannabis operation in New Jersey.
Two of the businesses that won permits are actually from Illinois, not Pennsylvania. GTI Pennsylvania, LLC (Green Thumb Industries), has a strong presence in Illinois and Nevada. AES Compassionate Care LLC lists their business state as Illinois as well.
“Based on the first phase award of grower/processor licensees both the strength and weakness of Pennsylvania’s program has been highlighted,” says Schain. “Many licensee recipients are affiliated with existing national marijuana-related businesses with excellent track records for operating in a transparent, compliant and profitable manner.” The applications were rated on a scorecard out of 1,000 points. “Unfortunately missing from this initial phase license winners are purely regional enterprises who may have been unable to compete with national concerns’ resources and checkbooks.” According to Schain, some of the more significant areas on the scorecard reflect a diversity plan, community impact statement, business history and capacity to operate, capital requirements and operational timetable. Capital requirements are the applicants’ demonstrable financial resources comprised of at least $2 million in capital and $500,000 in cash. All of the growers are required to grow indoors, not in a greenhouse or on an outdoor farm.
There is also a ten-day appeals process for scorecards that will undoubtedly be utilized by companies that were not successful in their bids. The next phase, according to Schain, of Pennsylvania’s Medical Marijuana Program regards “Clininical Registrants” in which grow/processor and dispensary licensure will be awarded to eight applicants, which, if able to satisfy requirements including demonstrating $15 million in capital, will be authorized to open up to six dispensary locations.
Hazard analysis and critical control points (HACCP) is a robust management system that identifies and addresses any risk to safety throughout production. Originally designed for food safety through the entire supply chain, the risk assessment scheme can ensure extra steps are taken to prevent contamination.
The FDA as well as the Food Safety and Inspection Service currently require HACCP plans in a variety of food markets, including high-risk foods like poultry that are particularly susceptible to pathogenic contamination. As California and other states develop and implement regulations with rigorous safety requirements, cannabis cultivators, extractors and infused product manufacturers can look to HACCP for guidance on bolstering their quality controls. Wikipedia actually has a very helpful summary of the terms referenced and discussed here.
The HACCP system consists of six steps, the first of which being a hazard analysis. For Dr. Markus Roggen, vice president of extraction at Outco, a medical cannabis producer in Southern California, one of their hazard analyses takes place at the drying and curing stage. “When we get our flower from harvest, we have to think about the drying and curing process, where mold and bacteria can spoil our harvest,” says Dr. Roggen. “That is the hazard we have to deal with.” So for Dr. Roggen and his team, the hazard they identified is the potential for mold and bacteria growth during the drying and curing process.
The next step in the HACCP system is to identify a critical control point. “Correct drying of the flower will prevent any contamination from mold or bacteria, which is a control point identified,” says Dr. Roggen. “We also have to prevent contamination from the staff; it has to be the correct environment for the process.” That might include things like wearing gloves, protective clothing and hand washing. Once a control point is identified, the third step in the process is to develop a critical limit for those control points.
A critical limit for any given control point could be a maximum or minimum threshold before contamination is possible, reducing the hazard’s risk. “When we establish the critical limit, we know that water activity below 0.65 will prevent any mold growth so that is our critical limit, we have to reach that number,” says Dr. Roggen. The fourth step is monitoring critical control points. For food manufacturers and processors, they are required to identify how they monitor those control points in a written HACCP plan. For Dr. Roggen’s team, this means using a water activity meter. “If we establish the critical control point monitoring, water activity is taken throughout the drying process, as well as before and after the cure,” says Dr. Roggen. “As long as we get to that number quickly and stay below that number, we can control that point and prevent mold and bacteria growth.”
When monitoring is established and if the critical limit is ever exceeded, there needs to be a corrective action, which is the fifth step in a HACCP plan. In Dr. Roggen’s case, that would mean they need a corrective action ready for when water activity goes above 0.65. “If we don’t have the right water activity, we just continue drying, so this example is pretty simple,” says Dr. Roggen. “Normal harvest is 7 days drying, if it is not dry enough, we take longer to prevent mold or bacteria growth.”
The sixth step is establishing procedures to ensure the whole system works. In food safety, this often means requiring process validation. “We have to double check that our procedure and protocols work,” says Dr. Roggen. “Checking for water activity is only a passive way of testing it, so we send our material to an outside testing lab to check for mold or bacteria so that if our protocols don’t work, we can catch those problems in the data and correct them.” They introduced weekly meetings where the extraction and cultivation teams get together to discuss the processes. Dr. Roggen says those meetings have been one of the most effective tools in the entire system.
The final step in the process is to keep records. This can be as simple as keeping a written HACCP plan on hand, but should include keeping data logs and documenting procedures throughout production. For Dr. Roggen’s team, they log drying times, product weight and lab tests for every batch. Using all of those steps, Dr. Roggen and his team might continue to update their HACCP plans when they encounter a newly identified hazard. While this example is simplistic, the conceptual framework of a HACCP plan can help detect and solve much more complex problems. For another example, Dr. Roggen takes us into his extraction process.
Dr. Roggen’s team, on the extraction side of the business, uses a HACCP plan not just for preventing contamination, but for protecting worker safety as well. “We are always thinking about making the best product, but I have to look out for my team,” says Dr. Roggen. “The health risk to staff in extraction processes is absolutely a hazard.” They use carbon dioxide to extract oil, which carries a good deal of risks as well. “So when we look at our critical control points we need to regularly maintain and clean the extractor and we schedule for that,” says Dr. Roggen.
“My team needs respirators, protective clothing, eyewear and gloves to prevent contamination of material, but also to protect the worker from solvents, machine oil and CO2 in the room.” That health risk means they try and stay under legal limits set by the government, which is a critical limit of 3,000 ppm of carbon dioxide in the environment. “We monitor the CO2 levels with our instruments and that is particularly important whenever the extractor is opened.” Other than when it is being opened, Dr. Roggen, notes, the extractor stays locked, which is an important worker safety protocol.
The obvious corrective action for them is to have workers leave the room whenever carbon dioxide levels exceed that critical limit. “We just wait until the levels are back to normal and then continue operation,” says Dr. Roggen. “We updated our ventilation system, but if it still happens they leave the room.” They utilize a sort of double check here- the buddy system. “I took these rules from the chemistry lab; we always have two operators working on the machine on the same time, never anyone working alone.” That buddy check also requires they check each other for protective gear. “Just like in rock climbing or mountain biking, it is important to make sure your partner is safe.” He says they don’t keep records for employees wearing protective gear, but they do have an incident report system. “If any sort of incident takes place, we look at what happened, how could we have prevented it and what we could change,” says Dr. Roggen.
He says they have been utilizing some of these principles for a while; it just wasn’t until recently that they started thinking in terms of the HACCP conceptual framework. While some of those steps in the process seem obvious, and it is very likely that many cannabis processors already utilize them in their standard operating procedures and quality controls, utilizing the HACCP scheme can help provide structure and additional safeguards in production.
If you are in the business of growing cannabis, you should be aware of the common reasons for production losses, how to address root causes and how to prevent future occurrences in a sustainable way. Human error is the number one root cause identified in investigations for defects in the cultivation business. Sadly, little is known about the nature of these errors, mainly because our quest for the truth ends where it should begin, once we know it was a human error or is “someone’s fault.”
Yes, human error usually explains the reason for the occurrence, but the reason for that error remains unexplained and consequently the corrective and preventive actions fail to address the underlying conditions for that failure. This, in turn, translates into ineffective action plans that result in creating non-value added activities, wasting resources and money as well as product.
So after investigating thousands of human error events and establishing systems to improve human reliability in manufacturing facilities, it became even clearer to me, the need to have good, human-engineered standard operating procedures (SOPs).
In the cannabis growing process, there are different types of mistakes that, when analyzed, all can be addressed in the same manner. For example, some common errors that we see are either overwatering or nutrient burn, which can occur when the plant is overfed. The same is true in the opposite scenario; underfeeding or under watering lead to problems as well. If your process is not automated, the reason for these failures was most likely human error. Now, why did the person make that mistake? Was there a procedure in place? Was the employee trained? Is there a specific process with steps, sub-steps, quantities and measures? Were tools available to be able to do the task correctly? There is so much that can be done about these questions if we had clear, well-written and simple, but specific instructions. The benefits greatly outweigh the effort required.
Also, besides providing step-by-step instructions to avoid commission errors (to perform incorrectly as opposed to omit some step), there are other types of errors that can be avoided with SOPs.
Decision-making is another reason why we sometimes get different results than the ones expected. If during your process there are critical, knowledge-based decisions, workers need to be able to get all the information to detect as well as correct situations. Some decisions are, for example, when (detection) and how (steps) should I remove bud rot? Is there a critical step in the process (caution) to avoid other plants from becoming affected? Any information on the what, how, when, where and why reduces the likelihood of a decision error, later described as obvious.
When we face manufacturing challenges like nutrient deficiency in a particular stage, mold, fungus, gnats or even pollination of females, we want to do whatever we can to prevent it from happening again. So consider that from avoiding to detecting errors, procedures are a critical factor when improving human performance.
Here are some guidelines when writing procedures to prevent human error.
Use them. Enforce the use of procedures at all times. As humans, we overestimate our abilities and tend to see procedures as an affront to our skills.
Make sure it is a helpful procedure and users are involved in the process. People that participate in writing rules are more likely to follow them.
Make sure they are available for their use.
All critical activities should have a procedure.
The procedure needs to be clear, have a good format, clear graphics, appropriate level of detail and specific presentation of limits.
Make sure that facts, sequence and other requirements are correct and all possible conditions are considered e.g. “what if analysis”.
Human error won’t be eradicated unless we are able to really identify what is causing humans to err. If eliminating or “fixing” the actual individual eliminates or potentially reduces the probabilities of making that mistake again, then addressing the employee would be effective. But if there is a chance that the next in line will be able to make the same mistakes, consider evaluating human factors and not the human. Take a closer look and your process, system and ultimately your procedures.
Kush Bottles, a packaging provider specific to the cannabis industry, recently launched the product BudGloves aimed at reducing the amount of human contact to cannabis products. The company is known for their child-resistant, regulatory compliant packaging.
The product BudGloves is the first glove of its kind engineered specifically for cannabis. The nitrile gloves do not contain any powder and are designed to prevent any transfer of resin, latex or powder to the cannabis. They are also slightly thicker than most other gloves to avoid getting caught or tearing, extending their life to withstand the typical shift of a trimmer or processor.
Nick Kovacevich, chief executive officer of Kush Bottles, wants to see a standard for preventing human contact with cannabis products to reduce the risk of contamination or loss in quality. Whether it is during cultivation, trimming, inspection, processing, transferring cannabis to instrumentation or even at the point of sale, it is important to minimize human contact to the cannabis.
“In California, we see bud tenders in dispensaries actually reach in a jar and grab cannabis to show the patient without gloves, which is a terrible standard operating procedure,” adds Kovacevich. “I would want all bud tenders to handle cannabis with gloves on.”
Particularly when handling food-grade products, most health code regulations require the use of gloves like these. According to Kovacevich, oils and extracts can be at a greater risk of contamination. “It is imperative that concentrates and extracts, especially those with activated THC, are handled with gloves to prevent any outside materials or contaminants from sticking to them,” says Kovacevich. The gloves are manufactured to meet stringent quality standards. To promote safety and quality of cannabis, reducing human contact with the product should be an important part of any company’s employee manual.
With an estimated 8 million to 12 million servings of edible marijuana already sold in Colorado, there is cause for concern over food safety testing, and how manufacturers will tackle challenges like regulatory compliance and quality assurance.
When Colorado made history this year by legalizing recreational marijuana use, lawmakers were tasked with creating a regulatory framework for the production, sale, and use of the previously illegal substance. While Colorado has addressed issues such as taxation and cultivation of the plant, the state has struggled to provide clear guidelines for food safety, testing, and lab certification regarding marijuana edibles, causing difficulties for regulators and manufacturers alike.
Federally, USDA and FDA are reluctant to regulate the nascent industry because marijuana is still considered a Schedule I narcotic by the DEA. The Colorado Department of Public Health and Environment is unwilling to regulate marijuana edibles out of fear of jeopardizing their federal funding.
In lieu of the Department of Public Health and Environment’s oversight, the state allows the Marijuana Enforcement Division, under the Department of Revenue, to handle food safety and lab certification. It appears this regulatory agency may be in over its head as concerns grow over potency testing and labeling in the wake of two deaths allegedly involving the overconsumption of marijuana edibles. Adding insult to injury, the Denver Department of Environmental Health cited 58 violations at 24 edible marijuana establishments this past month.
Still, with an estimated 8 million to 12 million servings of edible marijuana already sold in Colorado, there is an immediate cause for concern in food safety testing. As the edible marijuana industry grows, so do worries over how manufacturers will tackle challenges like regulatory compliance and quality assurance.
Ben Pascal, Co-Founder and Chief Business Officer of Invisible Sentinel, feels that there is a lot more the government should be doing right now. “This is a growing trend that will continue in the United States; these products will continue to gain market share and there should be some sort of guidance on how and when to regulate the safety of these products,” explains Pascal.
With a rapidly growing industry, more producers of pot edibles are finding it harder to meet regulatory compliance goals. “Larger accredited labs in the US find that there is risk in conducting testing for marijuana edibles,” says Pascal. He believes that Invisible Sentinel’s rapid molecular diagnostics product,Veriflow, can help solve some of these issues.
“We make molecular testing more accessible with low cost, ease of use, robust technology, and the ability to bring all of this testing in-house, helping to eliminate risk factors for clients,” describes Pascal. While Veriflow has the capability to alleviate some quality assurance worries, Pascal points to the lack of regulatory oversight as the main issue.
“If you are not going to be regulated by the federal government, holding you to a safety standard, then smaller groups will not make the proper investments to ensure the safety of their product,” Pascal explains. “It is not about cost, it is about the lack of education and knowledge surrounding the implications of food safety issues in this industry.”
After some of these smaller regulatory hurdles are cleared within the state, then we can start to look toward future food safety standards in the marijuana edibles industry on a national level. Colorado’s experiment in legalization foreshadows some of the issues we will face when marijuana is accepted at a federal level.
As this trend continues, we should act preemptively to alleviate regulatory headaches before they are exacerbated, Pascal adds. The nation’s agencies need to be ready to embrace the legalization of marijuana and related food products in order to prevent real safety issues from surfacing.