Tag Archives: production

What Is Going On With Germany’s Cannabis Bid?

By Marguerite Arnold
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Germany is proceeding down the path to officially grow its own medical cannabis crops. Medical use became legal this year, along with a federal mandate for cheap access. That means that public health insurance companies, which cover 90% of Germans, are now firmly on the hook if not front line of the cannabis efficacy issue. As such, Germany’s medical market is potentially one of the most lucrative cannabis markets in the world, with a total dollar amount to at least challenge, if not rival, even California’s recreational market. Some say Canada’s too.

However, before “home grow” enthusiasts get too excited, this legislative move was an attempt to stymie everything but commercial, albeit medical production. Not to mention shut off the recreational discussion for at least another four years.

How successful that foray into legalization will be – especially given the chronic shortages now facing patients – are an open question. Not to mention other infrastructural issues – like doctor unfamiliarity with or resistance to prescribing cannabinoids. Or the public insurers’ so-far reluctance to cover it even though now federally mandated to do so.

Regardless, Germany decided to legalize medical use in 2017 and further to begin a sanctioned domestic cultivation for this market. The decision in the Bundestag to legalize the drug was unanimous. And the idea to follow UN regulations to establish this vertical is cautiously conservative but defendable. Very predictably German in other words.

Since then, however, the path has been far from smooth. Much less efficient.

Trouble in Germany’s Medical Cannabis Paradise

In April the government released its tender bid. And no matter how exciting it was to be in the middle of an industry who finally saw a crack of light, there were also clouds to this silver lining that promised early and frequent thunderstorms on the horizon.

By the time the tender bid application was due in June, it was already clear who the top firms were likely to beIn fact, by the end of the ICBC conference, which held its first annual gathering in Berlin at the same time the bid tender was announced, the controversy was already bubbling. The requirements of the bid, for a laughably small amount of cannabis (2,000 kg), mandated experience producing high qualities of medical marijuana in a federally legitimate market. By definition that excluded all German hopefuls, and set up Canada and Holland as the only countries who could provide such experience, capital and backlog of crop as the growing gets started.

The grumbling from Germans started then.

However, so did an amazingly public race to gain access to the German market directly – by acquisition or capital expenditures that are not refundable easily (like real estate or even buyouts). The common theme? They were large amounts of money being spent, and made by major Canadian Licensed Producers who had the right qualifications to meet the standards of the bid. In fact, by the time the tender bid application was due in June, it was already clear who the top firms were likely to be. They were the only ones who qualified under the judging qualifications.

And while nobody would commit publicly, news of the final decision was expected by August. Several Canadian LPs even issued press releases stating that they were finalists in the bid. But still no news was forthcoming about the official list.

Delay, Delay and More Delay

A month later, as of September, and there was still no official pronouncement. Nor was anybody talking. BfArM, the regulatory agency that is supervising this rollout as well as the regulation of all narcotic drugs (sort of like a German version of the FDA) has been issuing non-statement statements since the late summer. Aurora, however, one of the top contenders for cultivation here, was quietly issued an ex-im license by both Canadian and German authorities. Publicly, this has been described as an effort to help stem the now chronic cannabis shortage facing patients who attempt to go through legitimate, prescribed channels. On the German side, intriguingly, this appears to be a provisional license. Privately, some wondered if this was the beginning of a backdoor approval process for the top scoring bid applicants for cultivation. Although why that might be remains unclear.

Whispered rumours by industry sources that wish to remain anonymous, have suggested that the entire bid is still hanging in jeopardy. Late in the month, rumours began to fly that there were now lawsuits against the bid process. Nobody had much detail. Not to mention specifics. But CannabisIndustryJournal can now confirm in fact that there have been two lawsuits (so far).

The summary of the complaints? It appears that two parties, filing with the “Bundeskartellamt” (or regulatory office focusing on monopolies and unfair business practices) did not think the bid process or scoring system was fair. And both parties also lost.

But as of mid-October, there is still no public decision on the bids. What gives?

Whispered rumours by industry sources that wish to remain anonymous, have suggested that the entire bid is still hanging in jeopardy. Even though the plaintiffs failed, some have suggested that the German government might force a complete redo. Others hint that it will likely be slightly revised to be more inclusive but the regulatory standards must remain. If a redo is in the cards, will the German government decide to increase the total amount of yearly cannabis to be delivered? At this point, it is only calling for 2,000 kg per year by 2019. And that, as everyone knows, is far too little for a market that is exploding no matter the many other obstacles, like insurance companies refusing to compensate patients.

What Is Behind The Continued Delays?

There are several theories circulating the higher levels of the cannabis industry internationally right now even if no one is willing to be quoted. The first is that the total number of successful applicants, including the recent litigants, will be slightly expanded, but stay more or less the same. There is a high standard here for the import of medical cannabis that the Germans intend on duplicating domestically.

The Comprehensive Economic Trade Agreement (CETA – the often controversial free trade alliance between Europe and Canada) is still in the final stages of approval.The second is that the German government will take its time on announcing the final winners and just open the doors to more imported product. This will not be popular with German insurers, who are on the hook to pay the difference. However with Tilray now on track to open a processing facility in Portugal and Canopy now aligned with Alcaliber in Spain, cross-continent import might be one option the government is also weighing as a stop-gap provision. Tilray, who publicly denied in the German press that they were participating in the cultivation license during the summer, just issued a press release in October announcing a national distribution deal to pharmacies with a German partner – for cannabis oil.

But then there is another possibility behind the delay. The government might also be waiting for another issue to resolve – one that has nothing to do with cannabis specifically, but in fact is now right in the middle of the discussion.

The Comprehensive Economic Trade Agreement (CETA – the often controversial free trade alliance between Europe and Canada) is still in the final stages of approval. In fact, on September 19, a prominent German politician, Sigmar Gabriel of the Social Democrats (SPD) made a major statement about his party’s willingness to support Germany’s backing of the deal. It might be in fact, that the German government, which is supportive of CETA, got spooked about the cannabis lawsuits as test trials against not cannabis legalization, but a threat to the treaty itself.

Quality control, namely pesticides when it comes to plant matter, and the right of companies to sue governments are two of the most controversial aspects of this trade deal. And both appear to have risen, like old bong smoke, right at the final leg of closing the cannabis cultivation bid.

Will cannabis be seen as a flagship test for the seaworthiness of CETA? On a very interesting level, that answer may be yes. And will CETA in turn create a different discussion about regulatory compliance in an industry that has been, from the beginning of this year, decidedly Canadian-Deutsch? That is also on the table. And of great concern to those who follow the regulatory issues inherent in all. Not to mention, of course, the industry itself.

Conclusions?

Right now, there are none to be had.

However at present, the German bid process is several months behind schedule as Canadian producers themselves face a new wrinkle at home – the regulation of the recreational crop in the provinces.

It is also clear that there are a lot of questions and not a whole lot of answers. Not to mention a timeline when the smoke will clear.

Canopy Growth and Spektrum Cannabis Form Alliance With Spanish Alcaliber

By Marguerite Arnold
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Canopy Growth (based in Ontario, Canada) and its subsidiary, Spektrum Cannabis GmbH (in St. Leon-Rot, Germany) have been making waves all year.

As of early September, Canopy and Spektrum also announced their next strategic European move. They have just entered into a supply license agreement with Alcaliber, S.A., a leading Spanish pharmaceutical company. Alcaliber specializes in research, as well as the development, breeding and preparation of plant-based and other raw materials into narcotic medicine. More significantly, it is already a leading company in the global pharmaceutical and narcotic space.

According to Bruce Linton, chairman and chief executive officer of Canopy Growth, the partnership opens a lot of doors. “This agreement gives us additional resources to aggressively enter the European market where federally permitted by law, while we continue to work to establish our own complimentary production footprint for cannabis cultivation, value-add oil extraction and Softgel production in the European Union,” says Linton.

Bruce Linton, CEO of Canopy Growth
Photo: Youtube, TSX

Alcaliber is one of the largest producers of morphine in the world (27% of global production) and supplies 18% of its codeine. Cannabis is also considered a narcotic drug in Europe. This kind of track record is exactly what governments are looking for as they figure out how to integrate cannabinoids as medical products into existing pharmaceutical production and distribution. They are equally excited about the possibilities this partnership brings, according to Jose Antonio de la Puente, chief executive officer of Alcaliber. “There is a clear demand for pharmaceutical cannabis produced in accordance with pharmaceutical standards and the expertise we have developed manufacturing narcotic derivatives for over 40 years,” says de la Puente.

The agreement is also the first of its kind between a Canadian cannabis company and a separate, established, international pharmaceutical company. The fact that Alcaliber is located in Spain (albeit Madrid and not Barcelona) makes this new alliance even more interesting, and for several reasons. Not just in Europe or even Canada for that matter.

In the EU? GW Pharmaceuticals, the only other existing pharmaceutical manufacturer and grower of cannabis in Europe, and based in the UK, just got major European if not global competition.

And then of course, there is what is going on Down Under. Australian and Tasmanian companies moving into the game now (with pharma connections, background in opioids and a global footprint) as the medical market in Australia begins to take shape, are about to go head to head with the Canadian-Spanish-German alliance now forming on the other side of the world.

Cross-Continental Plays Are Now Forming

Just as in the U.S., Europe is turning out to be literally a state-by-state chess game of legalization, regulation and supply. Unlike the U.S., however, European countries are bound by both European law and in some cases, sub-regional agreements – like what exists in the so-called Schengen States.

However, even here, the new world is graduating into federal and regional law. And how that will play out in Europe, where the focus is still largely on medical use, is going to be interesting.

What does this mean for Canada’s largest LP? A strong, multi-country presence in the medical cannabis space that, strategically, is par to none other. There are other Canadian LPs who are planning production facilities in other EU countries of course. And some Canadian companies who appear to see Europe as one giant export market. Germany is just one of them. However, the German-Spanish connection is interesting for several reasons: The two most interesting markets globally right now from both a strictly medical perspective with a clear pathway to much broader acceptance as it transitions into some kind of recreational reform, are Spain and Germany. While the former has not signed up for full-boat medical acceptance, the recent independent assertion by the Catalonian government that they would formalize the cannabis club system is seen here as one more step towards the inevitable. So are ongoing and significant Spanish medical cannabis trials.

This move also gives Canopy and Spektrum something else: access to much cheaper Spanish labour and production. This means that no matter where they grow their crops in Europe, or process them, the company now has a two-country supply system for a multi-country medical market that is just waking up. And that is highly valuable right now.

Why?

It gives Canopy direct market entry into several European states, with federally approved, medical grade cannabis and medical products. Those who are coming to the rest of Europe from a Spanish base only, will not at this juncture meet strict medical growing requirements for the German market for starters. On the Spanish side of things, this also means that cannabis clubs might be pressured to stop growing their own (at least outside of Catalonia) and rely on more corporate entities to actually grow and process the plant.

What Does This Mean For Euro Industry Development?

Canopy, strategically, has been at the forefront of interesting strategic plays in the global industry for at least the last 18 months to 2 years. They have eschewed the American market (unlike other Canadian competitors) in lieu of other game elsewhere. However their current expansion strategy, geolocationally, has clearly also been at least 12 to 18 months ahead of just about everyone else.

The cross-country chessboard game is also something that other Auslander (foreign or international) companies are clearly trying to play, particularly in Europe. This is true of both actual cannabis production and distribution entities as much as tech. The hop-scotching of both Leafly and Weedmaps across the continent in search of a business strategy that makes sense is just another face of this. Advertising rules in Europe, including online, and especially for cannabis, are a lot different from say, California state law.

However what Canopy appears to be doing is establishing both a brand and production presence in a way that guarantees not only European entry, but potentially dominance in the medical market as the market here continues to expand and open up.

What they are also doing with this announcement is telling the German government, for one, that they can supply patients in the EU with EU-sourced product, even if not grown or produced in Germany itself. This alone will help keep prices down as German cannabis production gets underway over the next several years.

It will also help Canopy deal with what is expected to be at least supply pressure as of next year as the Canadian recreational market gets underway. There is a very good chance that Spanish grown cannabis might end up not only in the rest of Europe but will also be shipped back to Canada if the supply problems there are severe enough.

Whatever the end result, this is an interesting alliance, and coming at an interesting time for not only the German cannabis industry, but a regional market as well. And further, it is also clearly a play with not only hemispheric implications but global ones.

JCanna Boot Camp Educates Portland Attendees

By Aaron G. Biros
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On Monday, August 28th, attendees of the Cannabis Science Conference descended on Portland, Oregon for a week of educational talks, networking and studying the science of cannabis. On Monday, Chalice Farms, an extracts and infused products company, hosted the full-day JCanna Boot Camp focused on a deep dive behind the scenes of a cannabis production facility. The Cannabis Science Conference, hosted by Josh Crossney, founder of JCanna, takes place August 28th to 30th.

Attendees touring an extraction setup

Attendees were split into five groups where they listened to a variety of educational sessions and toured the facility. A track focused on cultivation, led by Autumn Karcey, president of Cultivo, Inc., detailed all things facility design for cannabis cultivation, including an in-depth look at sanitation and safety. For example, Karcey discussed HVAC cleanliness, floor-to-ceiling sanitation and the hazards associated with negative pressure. These principles, while applicable to most cultivating facilities, applies particularly to commercial-scale grows in a pharmaceutical setting.

Sandy Mangan and Tristan DeBona demonstrating the grinding technique for sample prep

During one session, Sandy Mangan, accounts manager at SPEX Sample Prep and Tristan DeBona, sales specialist at SPEX Sample Prep, demonstrated the basics of sample preparation for detecting pesticides in infused products, such as gummies. That required using their GenoGrinder and FreezerMill, which uses liquid nitrogen to make gummies brittle, then pulverizing them to a powder-like substance that is more conducive for a QuEChERS preparation.

Joe Konschnik and Susan Steinike demonstrate the QuEChERS method

Joe Konschnik, business development manager at Restek, Susan Steinike, product-marketing manager at Restek and Justin Steimling, an analytical chemist at Restek, gave a demonstration of a full QuEChERS extraction of a cannabis sample for pesticide analysis, with attendees participating to learn the basics of sample preparation for these types of tests.

Following those were some other notable talks, including a tour of the extraction instruments and equipment at Chalice Farms, a look inside their commercial kitchen and a discussion of edibles and product formulation. Dr. Uma Dhanabalan, founder of Uplifting Health and Wellness, a physician with over 30 years of experience in research and patient care, led a discussion of physician participation, patient education and drug delivery mechanisms.

Amanda Rigdon, Emerald Scientific, showing some complex matrices in cannabis products

Amanda Rigdon, chief technical officer of Emerald Scientific, offered a demonstration of easy and adaptable sample preparation techniques for potency testing of infused product matrices. Rigdon showed attendees of the boot camp how wildly diverse cannabis products are and how challenging it can be for labs to test them.

The JCanna Canna Boot Camp is a good example of an educational event catered to the cannabis industry that offers real, hands-on experience and actionable advice. Before the two-day conference this week, the boot camp provided a bird’s eye view for attendees of the science of cannabis.

Uruguay Becomes First Country to Implement Legal Cannabis Sales

By Aaron G. Biros
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According to an article on Reuters, Uruguay’s pharmacies opened for recreational cannabis sales on Wednesday for those over the age of 18. Uruguay beginning recreational sales marks an important milestone as the first country to fully legalize cultivation, sales and recreational use of cannabis.

The country legalized cannabis more than three years ago, but it has taken a while for the government to work out and implement their regulatory framework. Only two companies, Symbiosis and Iccorp, received government licenses for growing, packaging and distribution, according to Reuters.

Uruguayan flag Photo: Jimmy Baikovicius, Flickr

Consumers are required to register with the government and are only allowed to purchase up to 40 grams of cannabis per month. 5-gram packages are the only products for sale currently at $6.50 a piece. As of now there are only two types of cannabis that consumers can purchase: “Alfa 1”, and indica, and “Beta 1”, a sativa. According to Reuters, neither has a particularly high concentration of THC.

The government says they will carefully monitor production and registrations to prevent diversion and cannabis leaving the country. Only citizens of Uruguay over 18 are permitted to register to buy cannabis. With over 3.4 million people residing in Uruguay, less than 5,000 have registered by Wednesday. All sales must go through a pharmacy, according to the Reuters article.

Organic Cannabis Association & Ethical Cannabis Alliance Announce Merger

By Aaron G. Biros
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The Organic Cannabis Association and Ethical Cannabis Alliance announced today they are merging into one organization, the Cannabis Certification Council (CCC), according to a press release. The new third-party certifications include “Organically Grown” and “Fairly Produced”, granting producers a seal for marketing if they achieve the certifications.

Ashley Preece, executive director of the Cannabis Certification Council

According to Ashley Preece of the Ethical Cannabis Alliance, now executive director at CCC, they plan on starting with the “Organically Grown” certification as first certification to market. “We are launching with Organically which will include robust labor standards as well as standards that go beyond [USDA] Organic,” says Preece. “The USDA Organic standard is watered down and we want to expand on proper horticulture practices so it relates directly to cannabis producers.” The process of designing that certification involves using that USDA Organic certification as a building block to draw from but not directly adopt.

“We will start by pulling from Organic and Fair Trade standards, then we will have a technical advisory committee (TAC), made up of multi-stakeholder agricultural industry and cannabis industry professionals to give input and adjust the standard accordingly,” says Preece. “From there we will have a pilot program, engaging with producers abiding by the standards’ requirements. After the pilot phase, we make final adjustments before bringing it to market.” In order to make sure their certification works across the board, Preece says they are engaging with stakeholders around the country and eventually globally. “We need to engage each different community to make sure this is applicable on a national level.” Preece also says they plan staying abreast of other standards, such as ASTM International’s, but those are geared more towards production safety. “We are looking towards more robust Organic and Fair Trade standards, and ‘cannabinizing’ them,” says Preece.

Photo courtesy of L’Eagle Services

David Bronner, a prominent advocate of drug policy reform and CEO of Dr. Bronner’s, a top-selling soap brand in the US market place, will be providing seed funding and a matching grant to the CCC. “We are committed to making socially and environmentally responsible products of the highest value, and we are excited for the CCC to begin driving that ethos in the cannabis industry,” says Bronner. “The Cannabis Certification Council (CCC), with its unique mission, is a perfect vessel for us to support our values in the cannabis space.”

Preece says the “Fairly Produced” labor certification is going to be based off of Fair Trade practices. “That will include living wages per community and taking options of ownership into consideration, including different business models where employees might have shares or partial ownership,” says Preece. “As we know, this industry has come from the illicit market, where we saw a lot of inappropriate working environments, gender relations and pay schedules. So we want to ensure that workers have contracts in place, they are treated fairly just as any other industry and we want to mitigate any strange encounters that might have seeped into this regulated market.” Founding board members include Laura Rivero of Yerba Buena Farms; Amy Andrle of L’Eagle Services Denver; Nick Richards of Dill and Dill and Vicente Sederberg; and Ben Gelt of Par, with Ashley Preece as executive director. “This is a huge step for the cannabis industry,” says Preece. “Our collaboration reflects the priority of the mission ingrained in both parties, and together we will immediately be greater than the sum of our parts.”

Implementing a HACCP Plan in Cannabis Processing

By Aaron G. Biros
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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.

Dr. Markus Roggen, vice president of extraction

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.”

One of the cultivation facilities at Outco

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.

Dr. Roggen’s team identified worker safety as a potential hazard

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.

Gloves, protective clothing, eyewear and respirators are required for workers in the extraction process.

“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.

Soapbox

Quality Controls and Medical Cannabis: What We Can Learn from Pharma

By Dr. Ginette M. Collazo
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When we discuss growing and producing medical cannabis, we must think of it as a medicine. By definition, it is a substance intended to assist you with a medical condition, to help you feel better and not harm you. Drugs produced in the pharmaceutical industry go through extensive quality controls to ensure a level of safety for the consumer or patient. Yet when we talk process and quality controls in medical cannabis production, there is still a lot to learn.

Are we waiting for the wake-up call? Well, ring! Recently Health Canada, the regulatory body overseeing Canada’s medical cannabis market, decided that “It will begin random testing of medical marijuana products to check for the presence of banned pesticides after product recalls affecting nearly 25,000 customers led to reports of illnesses and the possibility of a class action lawsuit.”

Proper quality controls help protect businesses from unforeseen issues like those massive recalls in Canada. These can assure that the product is safe (won’t harm you), has integrity (free of contamination), and that the product is what it says it is (identity). To achieve this important goal, we must have robust systems that will guarantee product quality. Why is this important? Quality controls can ensure a safer and more consistent product, helping build patient and consumer trust and brand loyalty, preventing a public relations nightmare like a recall due to pesticide contamination.

Food processing and sanitation
Product recalls due to manufacturing errors in sanitation cause mistrust among consumers.

The FDA, among other regulatory bodies, has established excellent guidelines to implement these controls. So there is a lot we can learn from the pharmaceutical industry and that FDA guidance regarding quality controls and assurance. After all, we are all interested in the same thing: a safe and effective product.

So, let’s take a look at some of the controls included in the CFR (Code of Federal Regulation), Part 211 , which include Good Manufacturing Practices (GMPs) for finished products, and how you can implement them in the growing business of growing cannabis.

  1. Personnel selection and training: The GMPs establish that “Each person engaged in the manufacture, processing, packing, or holding of a drug product shall have education, training… to enable that person to perform the assigned functions.” These include the creation of specific curricula per position and the establishment of requirements for specialized tasks. We all want to be successful so training, in this case, is what we call the vaccine for mistakes.
  2. Facilities: “Any building or buildings used in the manufacture, processing, packing, or holding of a drug product shall be of suitable size, construction, and location to facilitate cleaning, maintenance, and proper operations.” This requirement includes segregation of spaces to avoid cross-contamination, housekeeping, the cleaning process and detergent types, material storage conditions, humidity levels, temperature, water, and even ventilation requirements to prevent contamination with microorganisms. All with the intention of protecting the product.
  3. Pest control: “There shall be written procedures for the use of suitable rodenticides, insecticides, fungicides, fumigating agents, and cleaning and sanitizing agents. Such written procedures shall be designed to prevent the contamination of equipment, components, drug product containers, closures, packaging, labeling materials, or drug products and shall be followed.” There have been many issues pertaining this requirement. In 2010, Johnson & Johnson received many complaints claiming that the product had a musty, moldy odor. Later, the firm identified the cause of the odor to be a chemical, called 2, 4, 6-Tribromoanisole or TBA; a pesticide used to treat wooden pallets. One of the specific requirements of this section is to avoid the use of wooden pallets, but if you decide to use them, the method of sterilization by heat treatment seems like the only safe option for sterilizing wooden pallets and wood cases.
  4. Equipment/Instrumentation: “Equipment used in the manufacture, processing, packing, or holding of a drug product shall be of appropriate design, adequate size, and suitably located to facilitate operations for its intended use and its cleaning and maintenance.” The intention is to not alter the safety, identity, strength, quality, or purity of the drug product beyond the official or other established requirements. What would happen if lubricants/coolants or any other substance, not intended to be part of the product, comes in contact with the product?
  5. Procedures and documentation: “There shall be written procedures for production and process control designed to assure that the drug products have the identity, strength, quality, and purity they purport or are represented to possess. Such procedures shall include all requirements of this subpart. These written procedures, including any changes, shall be drafted, reviewed, and approved. When we have followable, well written, clear, and specific procedures, we avoid possible errors that can get us in trouble.
  6. Defects Investigation: “Written production and process control procedures shall be followed in the execution of the various production and process control functions and shall be documented at the time of performance. Any deviation from the written procedures shall be recorded and justified.” We want to be successful, for that we need to learn from failures, understanding the root causes, correcting and preventing re-occurrence is what will keep you competitive. As you can see this requirement is essential for, quality, business and to evidence that such deviations did not adulterate the product.
  7. Process controls: Besides written procedures and deviations management, operation controls are pivotal in guaranteeing the quality as well as complete documentation of your process. These controls will vary depending on your technology and your product. If you do alcohol (ethanol) extraction, for example,  you want to keep an eye on the temperature, dissolution time, and even have color standards to be able to quickly and correctly identify possible abnormalities, while you can still correct the mistake. In-process product testing will allow you to monitor “performance of those manufacturing processes that may be responsible for causing variability in the characteristics of in-process material and the final product.”

Regardless of federal regulatory guidance, quality controls can be that one factor which can make or break your business. Why re-invent the wheel?

Understanding Dissolved Oxygen in Cannabis Cultivation

By Aaron G. Biros
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Oxygen plays an integral role in plant photosynthesis, respiration and transpiration. Photosynthesis requires water from the roots making its way up the plant via capillary action, which is where oxygen’s job comes in. For both water and nutrient uptake, oxygen levels at the root tips and hairs is a controlling input. A plant converts sugar from photosynthesis to ATP in the respiration process, where oxygen is delivered from the root system to the leaf and plays a direct role in the process.

Charlie Hayes has a degree in biochemistry and spent the past 17 years researching and designing water treatment processes to improve plant health. Hayes is a biochemist and owner of Advanced Treatment Technologies, a water treatment solutions provider. In a presentation at the CannaGrow conference, Hayes discussed the various benefits of dissolved oxygen throughout the cultivation process. We sat down with Hayes to learn about the science behind improving cannabis plant production via dissolved oxygen.

In transpiration, water evaporates from a plant’s leaves via the stomata and creates a ‘transpirational pull,’ drawing water, oxygen and nutrients from the soil or other growing medium. That process helps cool the plant down, changes osmotic pressure in cells and enables a flow of water and nutrients up from the root system, according to Hayes.

Charlie Hayes, biochemist and owner of Advanced Treatment Technologies

Roots in an oxygen-rich environment can absorb nutrients more effectively. “The metabolic energy required for nutrient uptake come from root respiration using oxygen,” says Hayes. “Using high levels of oxygen can ensure more root mass, more fine root hairs and healthy root tips.” A majority of water in the plant is taken up by the fine root hairs and requires a lot of energy, and thus oxygen, to produce new cells.

So what happens if you don’t have enough oxygen in your root system? Hayes says that can reduce water and nutrient uptake, reduce root and overall plant growth, induce wilting (even outside of heat stress) in heat stress and reduce the overall photosynthesis and glucose transfer capabilities of the plant. Lower levels of dissolved oxygen also significantly reduce transpiration in the plant. Another effect that oxygen-deprived root systems can have is the production of ethylene, which can cause cells to collapse and make them more susceptible to disease. He says if you are having issues with unhealthy root systems, increasing the oxygen levels around the root system can improve root health. “Oxygen starved root tips can lead to a calcium shortage in the shoot,” says Hayes. “That calcium shortage is a common issue with a lack of oxygen, but in an oxygen-deprived environment, anaerobic organisms can attack the root system, which could present bigger problems.”

So how much dissolved oxygen do you need in the root system and how do you achieve that desired level? Hayes says the first step is getting a dissolved oxygen meter and probe to measure your baseline. The typical dissolved oxygen probe can detect from 20 up to 50 ppm and up to 500% saturation. That is a critical first step and tool in understanding dissolved oxygen in the root system. Another important tool to have is an oxidation-reduction potential meter (ORP meter), which indicates the level of residual oxidizer left in the water.

Their treatment system includes check valves that are OSHA and fire code-compliant.

Citing research and experience from his previous work, he says that health and production improvements in cannabis plateau at the 40-45 parts-per-million (ppm) of dissolved oxygen in the root zone. But to achieve those levels, growers need to start with an even higher level of dissolved oxygen in a treatment system to deliver that 40-45 ppm to the roots. “Let’s say for example with 3 ppm of oxygen in the root tissue and 6ppm of oxygen in the surrounding soil or growing medium, higher concentrations outside of the tissue would help drive absorption for the root system membrane,” says Hayes.

Reaching that 40-45 ppm range can be difficult however and there are a couple methods of delivering dissolved oxygen. The most typical method is aeration of water using bubbling or injecting air into the water. This method has some unexpected ramifications though. Oxygen is only one of many gasses in air and those other gasses can be much more soluble in water. Paying attention to Henry’s Law is important here. Henry’s Law essentially means that the solubility of gasses is controlled by temperature, pressure and concentration. For example, Hayes says carbon dioxide is up to twenty times more soluble than oxygen. That means the longer you aerate water, the higher concentration of carbon dioxide and lower concentration of oxygen over time.

Another popular method of oxidizing water is chemically. Some growers might use hydrogen peroxide to add dissolved oxygen to a water-based solution, but that can create a certain level of phytotoxicity that could be bad for root health.

Using ozone, Hayes says, is by far the most effective method of getting dissolved oxygen in water, (because it is 12 ½ times more soluble than oxygen). But just using an ozone generator will not effectively deliver dissolved oxygen at the target levels to the root system. In order to use ozone properly, you need a treatment system that can handle a high enough concentration of ozone, mix it properly and hold it in the solution, says Hayes. “Ozone is an inherently unstable molecule, with a half-life of 15 minutes and even down to 3-5 minutes, which is when it converts to dissolved oxygen,” says Hayes. Using a patented control vessel, Hayes can use a counter-current, counter-rotational liquid vortex to mix the solution under pressure after leaving a vacuum. Their system can produce two necessary tools for growers: highly ozonized water, which can be sent through the irrigation system to effectively destroy microorganisms and resident biofilms, and water with high levels of dissolved oxygen for use in the root system.

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Quality From Canada

Cannabis in Canada: 6 Key Considerations for Recreational Legal Distribution

By Tegan Adams
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Canada has been undergoing many changes in the cannabis marketplace, most notably in the last two years. Originally, the system began with increasing access to cannabis for those with medical conditions under a “grow your own” model, the Medical Marihuana Access Regulations (MMAR). After running for a while, our regulatory authority, Health Canada, decided that among other faults, the MMAR program could pose a security risk to individuals growing at home. Following the dissolve of the MMAR, later released was a set of regulations, called Marihuana for Medical Purposes Regulations (MMPR) to license commercial producers now called Licenced Producers (LPs). While some MMAR patients were grandfathered in, the MMPR began as the mainstream cannabis production platform. MMPR LPs are inspected with high security and quality standards to produce and distribute cannabis exclusively to medical patients with a doctor-prescribed medical document. Patients register with one LP exclusively and receive cannabis by a mail-order system, and mail order only.

Why mail order with a medical document? What about all the dispensaries selling cannabis across Vancouver and Toronto? Where is all this cannabis coming from, if the MMPR LPs can only distribute direct to a patient through mail order?

These are good questions. And they are questions you should be asking. There are a few different factors contributing to the vast array of consumer confusion across borders in the Canadian system. People are passionate about cannabis, as well as their own personal freedom to have it. Some are passionate for medical reasons, others for the pure punch of liberation. Either way these passions have resulted in an interesting series of court decisions including a more recent one that deemed the MMPR unsuitable to provide enough access to cannabis for those in need. Effective close to the end of August this year in 2016, the MMPR as it is currently written will cease to be in effect and require revisions or a new system entirely for the legislation to be accepted and continued with.

There are a few different critiques of the MMPR which include: not enough variety, no ability to “see and feel” products before purchase, limitations on supply sources, limitations on dosage formats (i.e. oil and dried flowers only) and some might try to argue the rise in cost. While cannabis remains illegal to traffic without adequate controls across Canada, it is low on the priority list for the RCMP to spend resources on. Depending on which town and situation you are caught carrying it in, you would be hard pressed to be charged for carrying cannabis unless you ask for it. So, Canada has seen a surge in retail dispensaries, licensed or not, at the municipal level to the point where hundreds of them now exist across the country, distributing hundreds of millions of dollars of cannabis products per year.

Dispensaries vary in degree of professionalism, prices and strains available. Some have over sixty strains while others hold only four or five. Because Health Canada does not require laboratory testing of these products, most do not know their cannabis’ potency or that it is safe from bacteria, moulds, pesticides and aflatoxins. If they wanted to know, they could not find out since those with Narcotics Licences for testing are unable to accept their products under any regulatory framework.

We have seen false and unaccredited labs pop up on street corners accepting the unregulated products, but what we have not seen is information on the methods these labs are using, how they are validated and whether or not they are accurate. Regardless, the general consumer base does not seem to mind. Many of these locations have been reportedly selling $20,000-$30,000 CAD per day per 5,000 square feet or less of an operation. That is on average $600,000 per month and if continued for a full year as some have done, around $7.2M per year. All unregulated, and all up until recently tolerated by our RCMP and local policy authorities.

Finally, given the industrial-scale distribution that was not just occurring in the black market anymore, different neighbourhoods that did not like cannabis complained. LPs complained. And other regulated product industry members complained. They all complained that the unregulated distribution of cannabis was negatively affecting them in one way or another. And so, Canada saw raids. Hundreds of dispensaries raided, and many people were arrested if only temporarily. Products were seized. However, these raids generally proved ineffective and we saw most of these dispensaries open the next day. While the daily amounts seized might have sounded like a lot, they were only about one day’s sales for most of these locations, providing the authorities with a better glimpse into just how much diversion of the supposedly controlled substance was going on.

Given that cannabis is promised for recreational legalization in the spring of 2017 in Canada, many are wondering about what sort of business opportunities there might be on the horizon. We know that while control of production will probably remain similar to how it is now, our distribution models will change. Here are a few points Health Canada is considering in their latest discussions:

  1. A phased-in approach to distribution will probably be necessary. First, continuing with the mail-order system would be the easiest phase in approach.
  2. Regulated storefronts as an alternative to the current dispensaries. It is doubtful that dispensaries operating as they are will continue. There are rumors floating around that Shopper’s Drug Mart and other pharmacies will be able to help with distribution. Time will tell if these rumors evolve.
  3. Provincial and Territorial uniqueness. Distribution could be altered at regional levels and different models could be developed across the country, similar to liquor regulations in effect. Some of our provincial liquor distribution entities have inquired to become distributors.
  4. Keep cannabis away from minors. Health Canada is considering a look at locations, hours of operation, density of retailers and producers and consumption of cannabis outside of personal dwellings all as factors in the new system.
  5. Guarding against impaired driving. Our regulators want to make sure they have enough tools to monitor those who may have been driving after consumption of cannabis.
  6. Sound product packaging and labeling. A focus on understanding THC & CBD potencies as well as appropriate health warning messages. Packaging and Labeling, and effectively sound testing, will all be necessary.

Want to know more, or see for yourself? Check out Health Canada’s latest discussion document.

Curious to know what this will mean for packaging and labeling? Get in touch with me to better understand what Eurofins-Experchem currently tests for with our Licensed Producers. Contact me at 416 665 2134 ext 252 or teganadams@eurofins.com

Cultivation facilitiy

A Case for Compartmentalization: Problems with Perpetual Harvest Models in Cultivation, Part I

By Adam Koh
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Cultivation facilitiy

When newspapers and television run a cannabis story, it is frequently accompanied by photos or video of vast, cavernous warehouses filled with veritable oceans of plants. Photos used to illustrate stories in the New York Times and Denver Post serve to illustrate this point.

Cultivation facilitiy
Photo credit: Lawrence Downes

This type of facility design is sometimes referred to in the cannabis industry as a “perpetual harvest” model. This is because plants are harvested piecemeal – one row at a time, for example – with new plants ready to flower replacing the recently harvested ones. In this model, flowering plants of various ages occupy the same space and the room is never completely harvested and empty, hence the “perpetual” moniker. This is in contrast to more compartmentalized facility designs, in which flowering plants are segregated in smaller groups in various rooms, which are then harvested completely before the room is cleaned and new plants ready to flower replace the previous ones.

The perpetual harvest setup appears impressive and lends itself well to portraying the volume of production being achieved in large facilities. This is likely why I have seen such models, or similar ones, copied in other states. Prospective entrants to the industry have also approached my firm with such designs in mind for their cultivation facilities. However, we generally advise against the perpetual harvest facility model, as this type of design imposes serious difficulties upon operators. Problems arise primarily in the areas of pest and contamination mitigation, ability to properly observe pesticide use and worker safety guidelines, and inefficiencies in lighting and HVAC usage. The problems noted are linked to the perpetual harvest design and can be mitigated with increased compartmentalization. Before getting to my recommendations, however, lets run down the issues created by the perpetual harvest model.

AdamKohcultivation
Photo credit: Denver Post

Lighting and HVAC Inefficiencies

In many photos I see of perpetual harvest facilities, the ceilings are extremely high, as are the light fixtures in most cases. This is likely the result of one of the main perceived advantages of such spaces, which is that they require minimal construction prior to getting up and running. There are no walls to be put up or ceilings lowered, and the lack of compartmentalization makes running wires and ducting much easier.

However, whatever capital was saved in initial construction will likely be burned up by increased ongoing operational costs. High ceilings such as those in the above photos mean more cubic footage that climate control systems must cool or heat. Additionally, due to the great height of the light fixtures, plants are not getting the most bang for their buck, so to speak, compared to designs that allow lights to be lowered appropriately to provide optimal intensity and spectrum. Double-Ended High Pressure Sodium (DE HPS) lamps are probably the most common type of lighting in use for flowering by commercial cannabis cultivators today, and they are ideally situated about four feet above the canopy when running at full capacity.

For businesses aiming for a no-frills production model with minimal attention to the light management needs of individual cannabis cultivars (or strains, as they are commonly referred to), then this consideration may be moot. However, those operations attempting to produce the highest-quality flower and plant material know the value of proper light management, as well as the fact that some cultivars respond differently than others to intense light. Indeed, I have observed cultivars that produce more when light intensity was decreased, while others thrived under intense light that would have seriously damaged others. This makes the one-size-fits-all approach to light management I’ve seen in most perpetual harvest designs generally detrimental to the quality of the final product, in addition to using the same amount of energy, or more, to achieve that lower quality result.

Difficulties in Pest and Contamination Mitigation

Such a design makes it easy for a small pest incursion to become a full-blown infestation. Because plants about to be harvested are sharing space with plants just beginning their flowering process, this means that both current and future harvests will be affected, or even lost entirely if the pest problem is severe. Having plant groups of different ages share the same space is generally unadvisable. This is because older plants, particularly those close to harvest, are weaker and more susceptible to pests by virtue of the fact that their life cycles are nearing an end. On the other hand, a more compartmentalized facility design provides physical barriers that can contain mites and mildew spores to some extent, limiting the damage done by individual pest incursions.

One of the essential tasks in an indoor cultivation operation is sterilizing just-harvested spaces to ensure that the subsequent run gets off to a clean start. This task could conceivably be performed in a perpetual harvest model; say, for example, trays, trellis frames, and other equipment are scrubbed after a row has been cut down and removed for drying or processing. However, due to the fact that there are always other plants in the room, it seems impossible for any plant group to get an assuredly clean start, as other plants may be harboring bugs, mold spores, or viruses, despite not showing signs or symptoms. The presence of plants also eliminates the possibility of using cleaning agents such as bleach, which gives off harmful fumes, but is sometimes necessary to completely sterilize an area that might have previously experienced some amount of powdery mildew or botrytis.

In Part II of this series, I will discuss some problems with pesticide use and worker safety regulations as well as provide recommendations for compartmentalization in cultivation facilities. Stay tuned for Part II of A Case for Compartmentalization: Problems with “Perpetual Harvest” Models in Cultivation, coming out next week.