Ahead of the state’s implementation of their full adult use legalization in early 2018, California is working on improving their public outreach. Last week, the California Department of Public Health launched “Let’s Talk Cannabis”, a website dedicated to consumer education.
About two weeks ago, the Bureau of Cannabis Control, California’s state regulatory body for the cannabis industry, launched a rebranding effort of their own, with a new logo, website and even an Instagram account. Their “Cannabis Portal” is a website dedicated to helping those in the industry get updated information on licensing, new regulations and other news and events.
The Bureau’s upgraded website will better help business owners stay up-to-date on upcoming regulations and licensing applications, according to a press release. Judging by their Facebook (@bccinfo.dca), Twitter (@bccinfo_dca) and Instagram pages, the regulatory body seeks to have a more public presence online than other states’ regulatory bodies.
The state’s three regulatory bodies are featured on the portal. The Bureau of Cannabis Control is just one regulatory arm of the government, basically responsible for licensing dispensaries, distributors and laboratories. The Manufactured Cannabis Safety Branch, a division of the California Department of Public Health (CDPH), will presumably regulate manufacturers of infused products. CalCannabis Cultivation Licensing is under the California Department of Food and Agriculture (CDFA), which will oversee regulating growers of medical and adult use cannabis. That regulatory body is also in charge of the state’s seed-to-sale traceability software system.
The Department of Public Health’s “Let’s Talk Cannabis” website is more of a consumer-focused educational tool. It features frequently asked questions, some links to other resources, information on legalization and information for the youth, parents and pregnant and breastfeeding women. That consumer-facing website offers tips for parents on storing cannabis and keeping it out of reach of children, in addition to advice for responsibly consuming cannabis.
It will be interesting to see how they plan on using those social media pages in the future. At first glance, they could be excellent tools for regulators to communicate with licensees, to help explain common regulatory compliance errors or to provide tips and tricks for staying compliant. The consumer-facing portal could also be a great means for communicating product recalls or public health and safety alerts, things that Colorado and Oregon currently struggle with.
Currently, there are no lab testing regulations for Florida’s medical cannabis market. Chris Martinez, co-founder and chief operating officer of EVIO Labs Florida, a veteran-owned business, is looking to change that.
When Martinez co-founded EVIO Labs Florida, he saw the need for a dedicated cannabis lab to ensure safety and quality of medicine for patients in the state. Partnering with EVIO Labs to accomplish this goal, Martinez secured a 5,500 sq. ft. facility in Broward County to test for potency, pesticides, microbial contaminants, terpenes, residual solvents and heavy metals. Their lab, a first of its kind in the industry, qualifies as a true pharmaceutical-grade clean room. This week, Martinez also secured their 2nd laboratory location in the City of Gainsville, where they will test for potency, microbials, terpenes and residual solvents. And he isn’t doing it on the cheap. “Our Broward lab is powered by Shimadzu with over $1.2M in the latest testing equipment utilizing LCMS technology with the world’s fastest polarity switching time of 5 m/sec and scan speeds of 30,000 u/sec with UF Qarray sensitivity 90 times that of previously available technologies,” says Martinez.
Martinez, an entrepreneur at heart, started the lab with a team of experts to become the first completely cannabis-focused laboratory in Florida. Jorge Segredo, their head chemist and quality assurance director, has over 18 years of experience in the development of nutraceutical and pharmaceutical products under ISO and FDA accreditation. Segredo has helped launch three independent FDA-accredited laboratories and has extensive knowledge of HPLC, GCMS, LCMS, ICPMS technologies and development/validation of testing methods and procedures. Cynthia Brewer, their director of operations, was an active participant in the 2017 state legislative session and has been an advocate for medical cannabis, working with legislators on a suitable framework to increase patient access to cannabis.
EVIO is one of the nation’s leaders in cannabis testing, research science and advisory services. It is an evolving network of laboratories with nine EVIO cannabis laboratories operating in five different states: Oregon, Colorado, Massachusetts, Florida and California. “After speaking with industry chemists around the country for months, the EVIO name was constantly brought up in conversation,” says Martinez. “When we spoke with the EVIO Team it was an easy decision for us to partner.” He says Lori Glauser, chief operating officer of EVIO, and William Waldrop, chief executive officer of EVIO, are truly visionaries in the cannabis industry.
According to Martinez, their licensing agreement with EVIO Labs (OTC:SGBYD) marked a first for the publicly traded company with exclusivity in the Florida market. The agreement includes proprietary testing methodologies, operating procedures, training and support.
In addition to testing cannabis for safety and quality, they are launching a technology platform called MJ Buddy, essentially a software tool that takes efficacy feedback from patients and uses testing and genetic data they gather from EVIO Labs across the country. “This will provide real data to the cannabis industry as to the medical benefits for thousands of patients in relation to the genotype and cannabinoid profiles of their medicine,” says Martinez.
Of the states that have legalized some form of cannabis, a large number of them have some lab testing regulations on the book, with some more comprehensive than others. Martinez says he hopes the Florida Department of Health, Office of Medical Marijuana Use follows some of the more thorough state programs, such as Oregon. His team has compiled a set of documents for regulators with recommendations for regulating the lab testing industry.
Without any regulations on paper, it is up to businesses to produce safe and quality medicine, without any oversight. EVIO Labs Florida follows FDA Good Laboratory Practices, has an ISO 17025:2005 accreditation pending, and is working on TNI 2016 accreditation.
When discussing what he wants to see happen with Florida’s regulatory framework, Martinez says the rules need to be specific to Florida. For example, due to the climate being so humid, microbial contaminant testing for things like yeast and mold will be particularly imperative. Because processing methods like butane and alcohol extraction are legal, he emphasizes the need for comprehensive residual solvents testing. “The most important regulation would be to have the laboratories select the samples at the MMTC facility and have the state randomly verify laboratory results to ensure accurate unbiased testing,” says Martinez.
In addition to that, he hopes their pesticide thresholds will be realistic and based on actual science. “We believe the public should receive carcinogenic data for products that are inhaled,” says Martinez. “Chemicals may be introduced into the processing of cannabis to vape liquid that may cause harm. This is important information for public health and communication of the risk related to exposure to such materials.” Martinez says EVIO Labs Florida was founded on the belief that through technology and science we can increase safety and patient outcomes.
Josh Drayton, deputy director of the California Cannabis Industry Association, has an extensive career in local and state-level politics, with his origins in Humboldt County as a political organizer. As a coffee shop owner about ten years ago in Humboldt, he let city council candidates use his space for community engagement, which eventually steered him towards a career in politics. As a heavily involved resident of Northern California and an advocate in local and state matters, he came to understand cannabis as a strong economic driver for the region and beyond.
Drayton saw firsthand how local economies benefit from cannabis as a source of income, economic activity, and providing occupational opportunities for many families in Humboldt County. After running a handful of local campaigns in the Humboldt region, Drayton served as deputy director for a state senate campaign in Riverside.
Towards the end of his tenure with the Democratic Party in California, the state legislature began working on medical cannabis regulations. “As we saw those regulations moving through, cities and counties began to ban cannabis throughout the state, which was a very unintended consequence,” says Drayton. “The goal was to put regulations forward that would create a framework for the industry to survive and function under, but they were not very fond of cannabis at the time. It was clear that we had a lot of work to do.” Politicians shying away from cannabis issues and a lack of real representation in the legislature for those stakeholders drove him to leave the state’s senate for the California Cannabis Industry Association (CCIA).
In January of 2016, he jumped on board with the CCIA as their deputy director. Ahead of the California Cannabis Business Conference, September 21-22 in Anaheim, we sit down with Drayton to hear his take on the future of California’s cannabis regulations.
CannabisIndustryJournal: Give us a quick update on the regulatory framework in California and the changes we should expect.
Josh Drayton: One of the biggest challenges that California has faced has been the reconciliation of medical regulations with adult use regulations. Although California had medical cannabis legalized in 1996, we did not get those regulations put forward until 2015. That was called the Medical Cannabis Regulation and Safety Act. That was approved by the state legislature and signed by the governor into law. It was created in the legislature. When Prop 64 passed, the Adult Use of Marijuana Act, in November of 2016, it was passed through by a voter initiative. Any time that a piece of legislation goes to the voters, it trumps any legislation or regulations written by the state legislature. The real work has been to reconcile these two pieces of legislation into one regulatory structure. With that being said, we saw the initial trailer bill, attempting to reconcile these regulatory structures. That trailer bill is meant to address the new framework. Currently, we are waiting for the second viewing of the updated trailer bill SB 94 with all current amendments. Then we are anticipating those in the next couple weeks and we will see the regulations that will affect all these changes by November.
CIJ: How strong will local and municipal control be in the future?
Josh: It is incredibly strong and it is meant to be. I will say that California is like its own country. In Northern California, what they are willing to accept is very different in comparison to Southern California. Every city and county still has the ability to fully ban adult use and they can create and draft their own ordinances and regulations as long as it doesn’t go above state requirements. They can craft an ordinance to fit the needs of their city or county. Lets say you are in a rural area, delivery services might be important for patient access. Some areas might not allow brick and mortar dispensaries, and all that control lies in the cities and counties.
CIJ: Will there be a dosing limit for patients buying infused products? What about for adult use?
Josh: For adult use, there is going to be a limitation. Every edible has a maximum potency of 10mg of THC. For example, a chocolate bar can have a maximum of 100mg [of THC] but must be perforated in to 10mg pieces.
We have been advocating for, and what has been a priority for CCIA, is a lift of any sort of limits on medical infused products. Many patients have a higher threshold or tolerance and they may need 100mg and we don’t want them eating an entire chocolate bar to get that. We are anxiously awaiting the new trailer bill to see if we have been able to lift that concentration limit.
CIJ: Some have said the first draft of lab testing rules is extreme and overreaching. Can you speculate how those have been modified?
Josh: The lab testing is a huge educational issue for the industry and regulators. No state right now has been able to fully analyze the effects of different pesticide levels for a product that is smoked. We are basing all of our standards currently on food consumption. 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. The testing portion will take years to work out, I am sure we will remove and add different pesticides and contaminants to the list. But again, the data and research isn’t fully there. There is a big push across the board that we will be able to do more research and testing so that the future of regulations can reflect reality, and ensure that consumer safety is priority.
CIJ: What do you think of the lack of residency requirement? When Oregon lifted it, outside investors flocked to the market. How might that impact local, California ownership and smaller businesses?
Josh: Well I do think that is a concern across the board. That is something that cities and counties have been adding to their requirements for the matrix of items needed to get a license. I think there is a very gray area when looking at investors opposed to operators. At what threshold does an investor become an owner? And if that person is from outside the state, how will that reflect on the evolution of the industry? It is a concern. Keeping limitations on the size of outdoor cultivation might help limit folks from outside the state coming into that arena. After living in Humboldt County for years, and living next to Mom and Pop growers for a long time, I don’t want to see them displaced by businesses coming from another area. We have been doing this a long time and I believe we have the best operators in the world.
CIJ: How is the CCIA helping businesses gear up for changing regulations?
Josh: Well one of our biggest areas of focus is education. Educating our own industry is one of the biggest parts in making sure the industry will be successful in this regulated market. Our legislative committee will take a position of support or opposition, which goes to our board, and those recommendations go to the state. The manufacturing committee has worked very closely with Lori Ajax [director of the Bureau of Cannabis Regulation] and her office, to educate on a variety of areas, guiding the way for state departments on how to properly regulate the industry. We have a Diversity and Inclusion Committee, Retail/Delivery, Testing, Distribution and Agricultural committees; across the board our committees create white papers that we submit to the regulatory departments of the state. We take regulatory officials on tours of facilities to get a hands-on view of what they are regulating. They have been speaking with scientists and growers, who often have a better understanding of current industry standards. We see these tours as very helpful. We have brought groups of regulators from LA County, Long Beach, Napa, Alameda and many others on tours of Bay Area commercial manufacturing facilities, dispensaries and nurseries. They have a lot of questions and we want to make sure we are a resource for them. Putting folks in touch with the right people and, in moving forward with this process, in an educated manner. Cannabis is a foreign language to many people and I get that.
CIJ: If you have one recommendation for regulators, what would that be?
Josh: My recommendation to regulators: do not over-tax this industry. Do not make taxation the priority for regulation. Over-taxation will strengthen the illicit market and that is not the goal. We need to make sure the taxes are reasonable to encourage businesses to operate in this market, not in the illegal one. If cities decide to ban, they need to know they can be hubs for illicit activity. Cities with bans might draw the illicit market because illegal operators won’t have to pay taxes or license fees. It is a long play, but responsible taxation is the best path to draw people out of this illicit market. We want to help protect public safety and health, safe medicine, safe products and keep cannabis out of the hands of children.
Last week, the American Society for Testing and Materials (ASTM International) approved the formation of a committee to develop standards for the cannabis industry. ASTM International is a standards development organization that develops voluntary consensus-based standards for industries. United States regulatory bodies and the World Trade Organization have recognized the organization’s standards in other industries.
On March 1st, the non-profit announced the formation of a committee for ““creating technical standards and guidance materials for cannabis and its products and processes.” So now that the vote has passed, what is the next step? They will begin the process of member training, appointment of leadership and writing the bylaws. ASTM will have two online briefings before their official meeting for the cannabis committee (D37) in June. Those meetings will discuss how the committee was formed and how it’ll be structured. The first official meeting of the cannabis committee will take place June 11th and 12th in Toronto.
Voluntary consensus-based standards means there is a balance of interests, an appeals process and an overall consensus has been reached. The areas of focus for the cannabis standards include indoor and outdoor horticulture and agriculture, quality management systems, laboratories, processing and handling, security and transportation, and personnel training, assessment and credentialing. Many standards will be developed under each of these broad categories. A large component of consensus-based standard development is openness…so anyone who wants to participate in the development of the standards is welcome and encouraged to do so. They are still looking for participants from the cannabis industry and those interested can register here.
Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), says this is terrific news for the cannabis industry. “To have a global organization like ASTM, that federal governments actually work with and respect, is a huge stride forward for the cannabis industry,” says Engelking. “FOCUS is thrilled to be working with ASTM.” FOCUS and ASTM International have a derivative work license agreement that provides ASTM the FOCUS standards to use as a baseline for developing their standards. “FOCUS will continue to certify cannabis businesses to the FOCUS standards, but we will be able to add in the ASTM standards to our certification platform,” says Engelking. “It helps us expand our depth and reach in tools for our clients.”
FOCUS standards and ASTM standards are both voluntary consensus-based, meaning it is the businesses and stakeholders participating that ultimately write the standards. The organizations’ staff does not actually contribute to and develop the standards; they are more like a vehicle for the industry and stakeholders to come to a consensus, according to Engelking. “ASTM does the same thing that we do for the cannabis industry, just on a much larger scale,” says Engelking. “Its role is to fulfill the development, not actually develop it.” Because of that, ASTM and FOCUS standards can work in harmony.
According to a press release, the State of Delaware has chosen BioTrackTHC as their partner in seed-to-sale tracking software. Delaware’s Department of Health and Social Services (DHSS) signed a contract with BioTrackTHC for the tracking and patient registry software.
In 2016, Delaware issued a request for proposals for “the Delaware Enterprise Consolidated Cannabis Control System,” which encompasses the statewide patient registry and seed-to-sale traceability systems. “Our sincerest thanks to DHSS for choosing Team BioTrack,” says Patrick Vo, CEO of BioTrackTHC. “DHSS has been wonderful to work with throughout the contracting process, and we look forward to partnering with them to provide the tools and data they need to continue overseeing the industry and protecting their patients.” BioTrack’s software was selected as the winner of a number of government contracts in other states previously for the same role.
Their software is currently used in government traceability systems in Washington, New Mexico, Illinois, Hawaii, New York and the city of Arcata, California. The press release states regulators will have the ability to view the retail data “including plant counts and usable inventory, lab results, transportation, and point-of-sale data—to perform periodic audits and ensure compliance.” The patient registry will also provide better patient accessibility through the new software with a faster turn around time and automated application processing.
BioTrackTHC provides technology solutions for businesses and governments to tracking products throughout the supply chain to the point of sale. The software systems help businesses remain compliant with regulations and monitor data for things like inventory management.
Election Day brought a renewed sense of vigor to the market with voters in eight states legalizing forms of cannabis. California, Nevada, Maine and Massachusetts passed recreational cannabis measures, making legalization’s momentum seem exponential.
But November 8th also gave Donald Trump the presidency, and his cabinet appointments, namely Sen. Jeff Sessions as Attorney General, gave many a feeling of uncertainty for the future of federal legalization. Adding insult to injury, the DEA repeatedly stood by their antiquated and ludicrous judgment for cannabis to remain a Schedule 1 narcotic.
A lot of the fervor surrounding public safety could be described as overdramatic or somewhat unwarranted. 2016 was the year of misinformation. Fake news spread like wildfire with people sharing stories like this or this that turned out to be very misleading or just downright false.
States with legal cannabis came under heavy public scrutiny and addressed problems like consumer education, public safety and lab testing. Pesticides became a highly publicized and persistent issue in a number of areas, with some states regulating it heavily and addressing public health concerns. Plenty of new rules were formed surrounding labeling and testing, with Oregon, Colorado and Washington experiencing some regulatory growing pains.
Those growing pains shed light on the need for regulators to craft rules that allow for changes, adding rules where necessary and getting rid of cumbersome rules that might thwart market growth. Rules need to be able to adapt as the industry grows, much like businesses need to adapt to a changing market climate to stay afloat. This is all the more reason why cannabis businesses need to make their voices heard and work with regulators to move things forward.
With so much uncertainty surrounding the future of legal cannabis in America, the word of the year for 2017 should be resiliency. In a social-ecological context, resiliency is “the capacity of a system to absorb or withstand perturbations and other stressors such that the system remains within the same regime, essentially maintaining its structure and functions. It describes the degree to which the system is capable of self-organization, learning and adaptation.”
Self-organization, learning and adaptation are three very important attributes of a resilient system. Without knowing what will happen when Trump’s cabinet takes the reigns of federal agencies, it is important to prepare for the unexpected. Adhering to standards like FOCUS allows cannabis businesses to prepare for unexpected events like recalls or product safety failures.
Those standards could also become the law down the road, as government officials often look to an industry’s voluntary consensus-based standards when deciding how to regulate it. In 2017, a number of state governments will embark on the heavy undertaking of writing the regulatory framework for legal cannabis.
2017 will bring opportunities and challenges to the cannabis industry. The industry’s rapid growth juxtaposed with political, economic and regulatory uncertainties create a climate that requires resilience to be built into the system at all levels. It is critical, now more than ever, that cannabis businesses build strong relationships with industry groups, advocacy groups and regulators to craft the institutional capacity and mutual trust needed to weather the uncertainty ahead.