Tag Archives: regulatory

Ask the Experts: Ensuring the Validity of Cannabis Lab Testing

By Cannabis Industry Journal Staff
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Cannabis testing laboratories are one of the major players in the industry for protecting public health. Ensuring that laboratory test results are reliable and valid requires a multipronged approach involving method validation, proficiency testing and performing frequent reviews of equipment and processes.

Cannabis testing laboratories often use a variety of different methods to conduct proficiency testing. Laboratories can either participate in programs run by ISO/IEC 17043-accedited proficiency testing providers or through intralaboratory comparison. Comparing different instruments, methods, technologies against pre-defined criteria is a must when validating methods for a specific type of test and ensuring the competence of the laboratory.

Beyond proficiency testing, there are a number of other stopgaps at a laboratory’s disposal for ensuring valid results, like using accredited certified reference materials, performing checks on measuring equipment frequently, reviewing reported results and retesting retained items. All of that and more is outlined in the ISO/IEC 17025:2017 standard, section 7.7.

labsphoto
What good is a test result if you cannot attest to its validity?

There’s a lot that goes into making sure laboratories provide valid results, much of which is detailed in the accreditation process. For more information, we sit down with Keith Klemm, senior accreditation manager for ANSI National Accreditation Board to learn about laboratory accreditation, method validation and other certifications and credentialing available in the cannabis industry.

Q: Why is method validation important for cannabis test methods? 

Keith Klemm: Because cannabis production, testing, and sales is regulated by each individual state, there are very few standard methods for testing cannabis and cannabis-derived products. Non-standard methods or methods developed by the laboratory must be validated to ensure the methods are fit for their intended purpose. What good is a test result if you cannot attest to its validity? There would be no confidence that the results are accurate. Additionally, while organizations such as ISO, AOAC and ASTM are developing standard methods for use in the laboratory, the wide range of products and matrices being tested require modifications to standard methods. Standard methods used outside their intended scope must also be validated, again to ensure the method remains fit for the intended purpose.

Q: We’re pretty familiar with laboratory accreditation. What other accreditations are available in the cannabis industry?

Klemm: Accreditation programs are available for product certification and personnel credentialing, in addition to laboratory accreditation. ANAB’s product certification program was launched in 2020 and is based on the requirements of ISO/IEC 17065. The program combines the requirements of this standard with specific scheme requirements to attest to the competency of certification bodies who then certify products within the scheme. Two schemes are in development specific to the cannabis industry: Cannabis Safety and Quality (CSQ) and PurityIQ. For personnel credentialing, a new Cannabis Certificate Accreditation Program (C-CAP) was developed and is based on ASTM D8403, Standard Practice for Certificate Programs within the Cannabis and Hemp Industries. It also includes any additional state Responsible Vendor Training requirements.

Q: What are the steps to becoming an accredited cannabis testing laboratory, product certification body, or C-CAP organization?

Klemm: The process begins with a request for quote. The organization prepares for the initial assessment by implementing the requirements of the applicable standards, regulatory requirements, and scheme requirements. ANAB believes in a partnership approach to accreditation with a focus on customer needs while ensuring accreditation requirements are met. Once the organization is ready, an initial document review is performed. The accreditation assessment is then performed on-site by technically skilled and knowledgeable assessors. If any nonconformities are encountered, the organization provides a response with cause and corrective actions. Once all nonconformities are resolved and technical review is completed, a scope of accreditation and certificate are provided to the organization. The technical review may vary depending on the accreditation that is being sought, but the general process of accreditation is the same. After accreditation is achieved, the organization moves into a cycle of surveillance and reassessment as defined by the accreditation program and any scheme requirements.

About Keith Klemm

Keith Klemm is a graduate of Manchester University with a B.S. in Biology.  Keith is an experience laboratory director and operations manager with 30 years’ experience in the laboratory environment and has worked as a senior accreditation manager for ANSI National Accreditation Board for the past five years.

Keith’s areas of expertise include:

  • Microbiological assays for food, medical device, and environmental test matrixes.
  • Environmental chemistry of water and wastewater.
  • Biocompatibility testing of medical devices.
  • ISO/IEC 17025:2017
  • AOAC International – guidelines for food laboratories program requirements
  • 21 CFR Part 58, GLP program requirements
  • EPA NLLAP program requirements
  • AAFCO program requirements
  • FDA ASCA Pilot program for Biocompatibility
  • Michigan Cannabis Regulatory Agency program requirements
  • ISO 20387 Biobanking

Bad Actors in CBD: How to Distinguish Quality Products From the Rest

By Joseph Dowling
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The success of reputable cannabis and CBD brands has inspired an influx of inexperienced and disreputable competitors in the market. These so-called “bad actors” in CBD advertise products that are not manufactured under current Good Manufacturing Practices (cGMP), which help to ensure that all products are consistently produced and controlled according to specified quality standards. cGMP helps guard against risks of adulteration, cross-contamination and mislabeling to guarantee product quality, safety and efficacy.

Joseph Dowling, Author & CEO of CV Sciences

CBD products without cGMP regulations are often inaccurately labeled and deceiving to consumers. In fact, in a test of over 100 CBD products available online and at retail locations, Johns Hopkins Medicine found significant evidence of inaccurate, misleading labeling of CBD content. The prevalence of such brands not only reduces consumer confidence in CBD but also limits the growth of the sector as a whole. Fortunately, CBD consumers and retailers can easily discriminate between a well-tested, reputable brand and inferior bad actors with a few straightforward, minimum requirements to look out for when selecting a product.

Why are “bad actors” a problem for consumers and the industry?

Bad actors in CBD sell products that are not produced under cGMP conditions and are typically not tested by third-party laboratories to ensure identity, purity, quality, strength and composition. This means they are not verified for contaminants, impurities, label claims and product specifications. This frequently results in misleading advertising with inaccurate levels of cannabinoids or traces of compounds not found on the label, like THC. To combat this, the FDA issues warning letters to actors that market products allegedly containing CBD—many of which are found not to contain the claimed levels of CBD and are not approved for the treatment of any medical condition. Still, bad actors manage to slip through the cracks and deceive consumers.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Bad actors that put anything in a bottle and make unsubstantiated medical claims hurt the reputable operators that strive to create safe and high-quality products. It is easy for consumers to be drawn to CBD products with big medical claims and lower prices, only to be disappointed when the product does not produce the advertised results. Inaccurately labeled products may contain unexpected levels of cannabinoids, including ingredients that consumers may not intend to ingest, like Delta-9 or Delta-8 THC. Along with unexpected levels of THC, many CBD products available now are not as pure as advertised, with one in four products going untested for contaminants like microbial content, pesticides, or heavy metals.

Further, inaccurate labeling of products and their compounds also prevents consumers from establishing a baseline impact of CBD on their bodies, leaving them vulnerable to inconsistent future experiences. Such a poor experience can turn consumers off to the category as a whole, drawing their trust away from not only the bad actors but also the reliable, reputable brands on the market. The saturation of the market with these disreputable brands delegitimizes a category that has only just begun to break down the stigmas, creating stagnation rather than growth as consumers remain wary of low-quality products.

How can consumers identify bad actors in CBD?

There are several simple ways to identify a bad actor among CBD products and make certain that both consumers and retailers purchase quality, reliable and safe brands in legitimate sales channels. To start, consumers should avoid all CBD products that are marketed with unsubstantiated medical claims. This is a significant area of abuse, as brands that relate any form of CBD product to a disease state, like cancer, should not be trusted. The science to support such medical claims has not been completed, yet, product marketing is years ahead of the evidence to support such claims. Unsupported medical claims could also mislead consumers that may need more serious medical intervention.

Just some of the many CBD products on the market today.

Additionally, consumers must review the packaging, which should include nutrition information in the form of a supplement fact label. The label should include the serving size, number of servings per container, a list of all dietary ingredients in the product and the amount per serving of each ingredient. All labels should include a net quantity of contents, lot number or batch ID, the name and address of the manufacturer, and an expiration or manufacturing date. These signs of a reputable brand are easy to look for and can save consumers from the trouble of selecting the wrong CBD product.

What to look for when selecting a CBD product

With this in mind, products from reputable, tested brands can be identified by a few key factors. Reputable CBD companies are already compliant with the FDA regulations on nutritional supplements, including a nutritional or supplement fact panel on the packaging—just like vitamins. The information in this panel should include all the active cannabinoids in the product, both per serving and package. Clear potency labeling allows consumers to confidently select products that suit their needs and understand the baseline impact of CBD concentration on their bodies, thus helping them to tailor their experience with thoughtful product selection.

Reputable brands also include a convenient QR code on the packaging, linking the product to a certificate of analysis that details the testing results to demonstrate compliance with product standards and label claims. In terms of specific ingredients, consumers should be skeptical of high concentration levels of “flavor of the month” minor cannabinoids, which are often associated with unsubstantiated medical claims. Current scientific research has set its focus on major cannabinoids like CBD and Delta-9 THC, leaving additional research necessary for understanding minor cannabinoids. Minor cannabinoids are typically included in full spectrum products at concentrations found naturally in the cannabis plant, which is a safer approach to consuming CBD until more research is completed.

Consumers should not let the existence of unreliable, untrustworthy brands curtail their confidence in the CBD sector—there are many high-quality, safe and trusted brands on the market. With a knowledgeable and discerning eye, consumers and retailers can easily select top-quality CBD products that millions of consumers have found to improve many aspects of their health and well-being. Looking ahead, clear federal regulations for CBD products that require mandatory product registration, compliance with product labeling, packaging and cGMP will be crucial in weeding out bad actors and will allow compliant companies to gain consumer trust and responsibly grow the CBD category.

Financing the Cannabis Industry Part 1: A Q&A with AFC Gamma CEO & Partner Len Tannenbaum

By Aaron Green
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Business often require outside capital to finance operating activities and to enable scaling and growth. Financing in the cannabis industry is notoriously challenging with regulatory obstacles at the local, state and federal levels. Recent market dynamics pose additional challenges for both financiers and cannabis operators.

We sat down with Len Tannenbaum, CEO & Partner of Advanced Flower Capital Gamma (AFC Gamma, NASDAQ: AFCG) to learn more about AFC Gamma and to get his perspective on recent market trends.

Aaron Green: In a nutshell, what is your investment/lending philosophy?

Len Tannenbaum: AFC Gamma is one of the largest providers of institutional loans to cannabis companies nationwide in all aspects of production: cultivation, processing, and distribution. Cannabis companies, no matter the size, traditionally lack the lending opportunities that other enterprises have available, and that’s where AFC Gamma comes in. As an institutional lender, we provide financial solutions to the cannabis industry.

AFC Gamma is a commercial mortgage REIT that provides loans to companies secured by three pillars: cash flows, licenses, and real estate. We provide term loans, draw facilities, and construction loans. Each loan is unique and tailored specifically to meet the needs of our borrowers. This unique partnership approach with our clients allows us to find solutions to help them expand and grow alongside them.

Since starting AFC Gamma, we have completed almost $500 million of transactions. We provide capital to an industry that others do not and, in turn, allow these operators to build cultivation facilities, production facilities, and dispensaries.

Green: What types of companies are you primarily financing?

Len Tannenbaum, CEO & Partner of Advanced Flower Capital Gamma

Tannenbaum: AFC Gamma seeks to work with operators, ideally in limited license states. We make loans to companies secured by three pillars: cash flows, licenses, and real estate. We tend to lend to operators in regulatory-friendly states, such as: Ohio, Pennsylvania, New York, New Jersey, Maryland, Massachusetts, Arizona, New Mexico, Missouri, Illinois, Michigan, and Nevada. Traditionally, we shy away from states like California, Washington and Oregon given our approach to lending. We have 16 borrowers in 17 states, and what we look for are companies that we can grow with over the long term.

Green: What qualities do you look for in a cannabis industry operator or operating group?

Tannenbaum: We tend to work with three different buckets of operators. You have the large publicly traded multi-state operators (MSOs) we have lent to, such as Verano. Then you have the tier right below the top tier MSOs, where you have some public enterprises like Acreage, who is one of our borrowers, and then some private companies such as Nature’s Medicine and Justice Grown. The third tier are smaller operators. They’re single or two-state operators, and we’re typically coming in to help them build out licenses that they want or help them expand within that state. That’s why state-by-state dynamics are so important to us and why we typically only lend to limited license states.

We look at portfolio diversity on a step-by-step basis rather than a borrower-by-borrower basis. We tend to focus on deals in limited license states and also deals that have real estate as collateral. We have found that REIT loans give our clients the most flexibility, and we are able to finance more companies this way.

Green: Capital market dynamics have led to significant public cannabis company revaluations in 2022. How has this affected your business?

Tannenbaum: Although capital market dynamics have made an impact on a significant number of public cannabis companies’ revaluations this year, our overall business hasn’t been affected too much and that’s because the other lending options available right now are not ideal choices for most borrowers. One of the ways a lender can achieve credit enhancements or securities is by raising capital in the public markets. When the markets are more challenging, those companies have a harder time accessing capital when they may need it most. In turn, this could cause slow growth overall, more cash conservation and it removes one of the benefits to lenders. We’d like everyone to have more robust equity from that standpoint, but the flip side is, if equity gets too high in price, those borrowers won’t come to us lenders and they’ll raise capital in the equity markets since the equity is cheap. We’re definitely conducting a lot of business because the equity market is not available to cannabis companies. If that were to change, while our loans would be theoretically safer, they would choose equity instead of debt.

Green: Debt on cannabis companies balance sheets have increased significantly in recent years. What is your perspective on that?

Tannenbaum: When equity markets were free and the valuations were high, cannabis companies raised money in the equity markets rather than take on debt. Now that the equity markets have been somewhat closed and valuations are much lower, we see their debt has increased over the past two years.

Green: How does the lack of institutional investor participation in the cannabis industry affect your business?

Tannenbaum: Right now, we are one of the biggest lenders in cannabis. Looking to the future, though, if the SAFE Banking Act passes, we could see an influx of institutional capital that would increase competition amongst cannabis-specific and mainstream lenders. From the outset, most of the competition will come from hedge funds, not big banks. This competition will drive down interest rates and attract borrowers like MSOs.

Green: What would you like to see in either state or federal legalization?

Tannenbaum: The Senate passing the SAFE Banking Act. Should this happen, lenders, including AFC Gamma, will be able to borrow cheaper, which will, in turn, allow lenders to lend cheaper. It will be a net positive for all operators. It could also be positive for lenders assuming they have the infrastructure and capabilities to scale and decrease the cost of capital once the money starts flowing and more deals are being made.

Green: What trends are you following closely as we head towards the end of 2022?

Tannenbaum: The most important trend we’re following is state by state trends. We’re excited to see new states getting their act together like New York. We’re excited about Georgia. We’re also looking forward to Missouri going rec. On the flip side, we’re also watching Virginia issue more than 400 licenses, diluting down the limited license states into basically an unlimited license state, which personally doesn’t make sense.

The other trend we’re watching across the country is cannabis prices. There is definitely a gray and legacy market that goes across border that should be enforced. That flow of cannabis product is depressing prices, especially in the unlimited license states. I believe there is a chance that trend starts reversing as many grows are now inefficient. The low end of inefficient grows are going to start closing, which may increase prices going into next year.

Commissioner Maria Del Cid-Kosso to Keynote CQC

By Cannabis Industry Journal Staff
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PARSIPPANY, NJ, October 17, 2022 – The Cannabis Quality Conference & Expo (CQC) just announced the newest addition to the event’s agenda. Commissioner Maria Del Cid-Kosso of the New Jersey Cannabis Regulatory Commission will deliver a keynote presentation at 1:00 PM EST on Monday, October 17.

Commissioner Maria Del Cid-Kosso of the New Jersey Cannabis Regulatory Commission

Commissioner Del Cid is an inaugural commissioner of the NJ Cannabis Regulatory Commission, the government body overseeing regulating the state’s new cannabis industry. Prior to being appointed by Governor Phil Murphy in February of 2021, she was the Director of Policy and Legislative Services at the New Jersey Department of Health. She was awarded the Union County Women of Excellence Award in Government, the Hazel Frank Gluck Award from the Eagleton Institute of Politics, Urban League of Union County Young Professionals Award in Government, and has been recognized as Insider NJ’s 2021 Top 6 Millennial; Insider’s 100 Cannabis Leaders; Insider’s 50 under 30; and Insider’s Top 100 Millennials (2018, 2019, and 2020).

Following Commissioner Del Cid’s keynote presentation, a panel discussion on The Future of East Coast Cannabis: Social Equity, Justice & Legalization will take place in the afternoon. Following that will be a panel on The Standardization State of the Union: Science-Based Resources for Driving Cannabis Safety with an overview of the New Jersey cannabis marketplace to end the first day.

The second day will kick off with a Keynote titled Centering Equity in Cannabis Policy, Quality & Business with Toi Hutchinson, President & CEO at Marijuana Policy Project. Other agenda highlights include:

  • The State of the State: An Update on New Jersey Legalization by Steven M. Schain, Esquire, Attorney at Smart-Counsel, LLC
  • Tri-State Cannabis: Pro Tips for Winning Applications by Sumer Thomas, Director of Regulatory Affairs and Russ Hudson, Project Manager at Canna Advisors
  • Navigating Cannabis Testing Regulations for Multi-State Operations by Michael Kahn, President & Founder of MCR Labs
  • Keynote by Edmund DeVeaux, President of the New Jersey Cannabusiness Association
  • A Guide to Infusion Technology | Design Experiences that Inspire and Innovate with Cannabis Ingredients by Austin Stevenson, Chief Innovation Officer at Vertosa
  • Valuable Analysis Ahead of Asset Acquisition by Matthew Anderson, CEO of Vanguard Scientific

Registration options are available for in-person, virtual and hybrid attendance.

Event Hours

  • Monday, October 17: 12 pm – 6:30 pm (ET)
  • Tuesday, October 18: 8 am – 5:45 pm (ET)
  • Wednesday, October 19: 8 am – 12 pm (ET)

Cannabis industry professionals also interested in the food industry can attend the Food Safety Consortium, which begins on Wednesday, October 19 – Friday, October 21.

About Cannabis Industry Journal

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference & Expo

The Cannabis Quality Conference & Expo is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

The Cannabis Quality Conference & Expo Brings Education, Networking to New Jersey

By Cannabis Industry Journal Staff
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PARSIPPANY, NJ, October 17-19, 2022 – The Cannabis Quality Conference & Expo (CQC) heads to New Jersey October 17-19 this year. The agenda features three tracks of educational talks, panel discussions, keynotes and breakout sessions.

At this year’s event, the conference will debut two new features of the program: Lunch & Learn sessions and Happy Hour Roundtables. Matthew Anderson, CEO of Vanguard Scientific, will sit down with two experts in cannabis law for interviews during the lunch hour:

Investigations & Enforcement: A Former Federal Prosecutor’s Perspective

  • Matthew Anderson will interview Barak Cohen, Chair of the Cannabis Industry Group at Perkins Coie, to discuss federal investigations, Justice Department prosecutions and white-collar offenses. This Lunch & Learn will take place 12:00 to 12:25 PM on Tuesday, October 18.

Compliance is Key: Best Practices for Your New Jersey Cannabis Business

  • Matthew Anderson will interview Casey Leaver, Director of Regulatory Compliance at Vicente Sederberg, to discuss compliance culture, quality controls, New Jersey regulations and more. This Lunch & Learn will take place 12:35 to 1:00 PM on Tuesday, October 18.

Following the conference agenda on Monday, October 17 and Tuesday October 18, attendees are invited to join the cocktail reception for Happy Hour Roundtables. From 4:45 to 5:45 PM, subject matter experts will be available to chat, answer questions & offer guidance on the following topics:

  • Regulatory Compliance: Jason Thomas, Precision Quality & Compliance
  • Banking, Finance & Real Estate: Steve Schain, Esq., Smart-Counsel LLC
  • Licensing: Russ Hudson & Sumer Thomas, Canna Advisors
  • Certifications & Controls: Tyler Williams, CSQ
  • Compliance Solutions: Doug Plunkett & Zach Cicconi, ProCanna
  • Standards in Cannabis: David Vaillencourt, The GMP Collective
  • Social Equity & Justice: Ernest Toney, BIPOCANN

The conference will begin with a panel discussion on The Future of East Coast Cannabis: Social Equity, Justice & Legalization. Following that will be a panel on The Standardization State of the Union: Science-Based Resources for Driving Cannabis Safety with an overview of the New Jersey cannabis marketplace to end the first day.

The second day will kick off with a Keynote titled Centering Equity in Cannabis Policy, Quality & Business with Toi Hutchinson, President & CEO at Marijuana Policy Project. Other agenda highlights include:

  • The State of the State: An Update on New Jersey Legalization by Steven M. Schain, Esquire, Attorney at Smart-Counsel, LLC
  • Tri-State Cannabis: Pro Tips for Winning Applications by Sumer Thomas, Director of Regulatory Affairs and Russ Hudson, Project Manager at Canna Advisors
  • Navigating Cannabis Testing Regulations for Multi-State Operations by Michael Kahn, President & Founder of MCR Labs
  • Keynote by Edmund DeVeaux, President of the New Jersey Cannabusiness Association
  • A Guide to Infusion Technology | Design Experiences that Inspire and Innovate with Cannabis Ingredients by Austin Stevenson, Chief Innovation Officer at Vertosa
  • Valuable Analysis Ahead of Asset Acquisition by Matthew Anderson, CEO of Vanguard Scientific

Registration options are available for in-person, virtual and hybrid attendance.

Event Hours

  • Monday, October 17: 12 pm – 6:30 pm (ET)
  • Tuesday, October 18: 8 am – 5:45 pm (ET)
  • Wednesday, October 19: 8 am – 12 pm (ET)

Cannabis industry professionals also interested in the food industry can attend the Food Safety Consortium, which begins on Wednesday, October 19 – Friday, October 21.

About Cannabis Industry Journal

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference & ExpoCannabis Quality Conference & Expo logo

The Cannabis Quality Conference & Expo is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

Dennis Bielik

Attract Employees by Offering a 401(k) Plan

By Dennis Bielik
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Dennis Bielik

Even for the soaring cannabis industry, recruitment and retention of a qualified workforce remains a significant challenge in 2022. Although a tight labor market was not a new situation for many industries, the COVID-19 pandemic made it much worse and widespread, and the pain has yet to subside. In 2021, 47 million workers voluntarily left their jobs and nearly half of small businesses are experiencing worker shortages.

About 43% of workers who quit their jobs cited inadequate benefits as a factor in their decision. Among workers who cited benefits as a top concern, more than three-quarters said retirement plans are a “must-have” benefit. Most small businesses in the U.S. (74%) of 50 employees or fewer, however, do not check that box on a potential hire’s requirements list.

Offering a 401(k) plan, therefore, can help any company attract and retain workers. Even companies in emerging fields like cannabis can add 401(k) retirement savings plans to the roster of benefits for its employees.

In addition, there are tax benefits for the company should it offer a 401(k) plan and also match employee contributions. Employer contributions are deductible on the employer’s federal income tax return, so long as those contributions stay below the limitations described in section 404 of the Internal Revenue Service’s Internal Revenue Code.

Given the complexity of the cannabis industry and its hazy legal status in the U.S., however, it can be more challenging for cannabis companies to find benefits providers willing to create a program. Finding the right partners to navigate the process will help cannabis companies provide this significant employee benefit package.

Cannabis organizations have run into similar roadblocks finding banks and payroll providers willing to partner with them, and some large financial firms that offer retirement plans often decline to work with cannabis companies as well. But a growing number of boutique firms offer 401(k) programs and other benefits for this industry — it just requires the right partners to find the right plan.

Four tips for creating a 401(k) for cannabis workers

These four tips can help cannabis companies offer a 401(k):

  • Plan Structure and Objectives: Outline the goals of the 401(k) plan and how it will be set up, including how employees will be rewarded for participation. Consider developing a formal investment policy statement that includes monitoring the plan.
  • Matching Contributions and Auto-enrollment: Offering to match employee contributions tends to increase participation in retirement plans and increase employee satisfaction. There are a wide variety of paths the company could follow, but a good example would have the company matching 50% of salary up to 6%. Regarding automatic enrollment of employees into the plan, such a policy has shown to increase both participation and engagement.
  • 401(k) 101: The company may need to educate its employees on the basics of a 401(k) plan if one was not offered previously. Employees may be unfamiliar with how these plans work and how to optimize their investment choices. Cannabis companies need to offer clear information on the benefits of the program, including information on managing their portfolio. This approach will make workers feel more comfortable with their investments and encourage engagement.
  • Partner with 401(k) Experts: Emerging industries like cannabis can be complex. Cannabis companies that want to implement a 401(k) should partner with consultants who understand the intricacies of the sector and know what retirement benefits companies cater to the industry.

2022 Cannabis Extraction Virtual Conference: September Program

By Cannabis Industry Journal Staff
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2022 Cannabis Extraction Virtual Conference: September Program

Sponsored by Vanguard Scientific 

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Click here to see all available CIJ events and webinars

Agenda

Solvent Remediation – The Last Step for Safe, Clean Hemp Extraction

  • Tom Bisbee, Production Director, EcoGen Biosciences

Attendees can expect to learn:

  • Understanding solvent remediation technology and processes
  • Residual solvents present huge risks
  • Consumers deserve transparency

Advancing Cannabinoid Therapeutics Through Regulated Drug Discovery

  • Matthew Anderson, CEO, Vanguard Scientific
  • Nick Herbst, VP of Engineering, Vanguard Scientific
  • Brian Brandley, Ph.D., Laboratory Director, Biopharmaceutical Research Co.

A panel discussion with Dr. Brian Brandley, the CSO of Biopharmaceutical Research Company, a DEA-licensed pharmaceutical company that is pioneering the legal cannabis space in the U.S. through the development of federally compliant active pharmaceutical ingredients (API) for plant-based therapeutics, and Nick Herbst, VP of Engineering at Vanguard Scientific, and the Lead Engineer for the Company’s MIDAS SCCO2 Extraction Program. During this 45-minute round table discussion moderated by Vanguard’s CEO Matthew Anderson, the panelists will provide an overview of what it takes to make ‘pharmaceutical-grade’ cannabis products. The conversation will range from facility requirements, methods development, equipment qualification, process validations and more.

GMPs for Cannabis Extraction: Don’t Overcomplicate it

  • Andrew Cole, Director, Client Delivery Audits, Cannon Quality Group

Attendees can expect to learn:

  • Understanding the basics in plain English.
  • Learn what you need to do to meet minimum Industry expectations for Quality and Scalability.
  • Implementation Strategies – Keep it simple.

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Cannabis Beverage Distribution: A Q&A with Jason Vegotsky, CEO of Petalfast

By Aaron Green
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The cannabis beverage market is expected to reach $2 Billion by 2026 and is growing at a rapid pace. In Canada, the market share of infused beverages grew nearly 850% since 2020, according to a recent Headset report, the trend is expected to follow in the States. Some traditional beverage companies are hesitant to jump in due to the niche branding and supply chain models needed to capture significant market share. Other adult beverage companies such as Vita Coco and Pabst are dipping their toes into the cannabis beverage market to capture early market opportunities.

Sales and marketing agencies like Petalfast, with a core team stemming from the natural foods and beverage industries, have already started cracking the code for cannabis brands by implementing systems straight out of those industry’s playbooks. This includes disrupting the CA market by becoming the first to implement a traditional three-tier distribution model. 

We caught up with Jason Vegotsky, CEO of Petalfast to learn more about the cannabis beverage distribution market. Prior to Petalfast, Jason was Chief Revenue Officer at KushCo Holdings (now Greenlane Holdings), a role he took on after selling his butane supply company to KushCo.

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

Jason Vegotsky, CEO of Petalfast

Jason Vegotsky: I began my career in wine and spirits distribution, but I always knew I wanted to work for myself. My first foray into launching a business, raising capital and brand building was through my beef jerky company, Lawless Jerky, which I built and sold after five years. Drawing on my food and beverage experience, I quickly entered and understood the cannabis market. I launched a company called Summit Innovations that sold butane to producers making oil. I eventually sold Summit to KushCo Holdings, Inc. (now known as Greenlane Holdings, Inc.) and became their President and Chief Revenue Officer. Through that experience, I began to notice gaps in the cannabis distribution model. Petalfast was built to fill that gap, providing clients with exceptional go-to-market strategies, leading to increased revenue and customer loyalty.

Green: How does experience in natural foods and traditional beverages translate to the cannabis industry?

Vegotsky: The route-to-market strategy is similar to that of cannabis, and the industry can benefit from the knowledge and experiences of those who work in natural foods and beverages. The extensive regulatory history and long-standing distribution models of these industries can provide a framework that those in the cannabis industry can capitalize on.

Green: What is the current distribution model for the majority of cannabis beverage companies today?

Vegotsky: Cannabis beverage companies face significant regulatory hurdles regarding distribution. Transportation restrictions, state-by-state differences in THC serving sizes and packaging requirements, retail display and storage limitations, and consumer adoption are just a few examples of what cannabis beverage brands run into when looking to enter, compete or scale in a given market.

At Petalfast, we offer a tiered distribution model, and our clients get phenomenal distribution through our logistics partner, Nabis. Products are circulated to all of California’s dispensaries and delivery services, allowing brands to focus on what matters most: creating the highest quality cannabis products on the market.

Green: What is a three-tier distribution model? Why do you think the cannabis beverage market is ripe for this model?

Vegotsky: The three-tier distribution model is commonly deployed by alcohol and other traditional food and beverage companies as it provides each tier to scale their operations and focus on their specific services. The three tiers include the brand, the wholesaler (sales + distribution), and the retailer in this distribution model. Because cash flow is such a significant challenge in the cannabis industry, adding an extra tier by separating your distribution and sales is advantageous to brands as it decreases overhead and allows brands to have the ability to scale.

Green: What are the opportunities for smaller brands looking to carve out a niche?

Vegotsky: One of the benefits of working in an emerging market is the opportunity to get in on the ground floor, learn as much as possible about the industry and find where gaps exist. Brand building in this space requires a deep understanding of the consumer and the overall culture — something that most brands are still trying to crack. If a smaller brand can effectively target a base within a distinct product category, it can be very effective in scaling within its niche.

Green: With big players from adult beverages dipping their toes in the cannabis beverage space, is consolidation inevitable? 

Vegotsky: At a certain level, yes. Well-established companies will seek out acquisitions of smaller, successful companies, especially ones that are capital constrained, but buyers need to be aware that capital alone will not be enough. The culture of cannabis is very different from alcohol or other adjacent beverage categories, so the success of these big players in adult beverages will be linked to their ability to locate and understand the consumer and implement branding strategies accordingly. Adult beverage companies entering the cannabis market must also realize that the flow of product to retailers is not the same as in alcohol, so they will need to adjust accordingly. The cannabis-infused beverage market is expected to reach $2 billion by 2026, so alcohol companies looking to join this movement should start exploring their options now.

Green: What trends are you following in cannabis beverages? What does the future of cannabis beverages look like?

Vegotsky: Canna-tourism has grown to a $17 billion industry. With the rise in cannabis-infused beverages, we’re seeing an increase in creative consumption offerings, from tastings and food and beverage pairings to dispensary tours and bud-and-breakfasts.

Cannabis beverages are attractive to newcomers as they allow for easier control of the effects. Businesses that provide an experience similar to that of a wine or brewery tour can capitalize on new consumers looking to explore the benefits of cannabis in a controlled environment.

The modern consumer is also more health conscious, and with the increased availability of legal cannabis, many are replacing alcoholic beverages with the plant. There has been a reported decrease in alcohol consumption since the 1980s, and many now believe cannabis is safer than alcohol. This belief is especially prevalent among younger generations, leading to more users incorporating cannabis-infused beverages into their daily lives. How we socialize or unwind at the end of the day will start to look different, and brands will become market leaders by speaking to the varied needs of consumers.

Green: How does the industry get there?

Vegotsky: For one, federal decriminalization and removing cannabis as a Schedule I drug on the controlled substances list would help. Cannabis companies don’t have access to the traditional marketing playbook to promote their brands due to TV advertising and social media restrictions. To build brand awareness, businesses should focus efforts on the retail level. Engaging with consumers in-store allows brands to grab their attention and drive faster sales until other avenues open up. At Petalfast, we decided to invest in field and trade marketing to bring brands to life at the retail level. We do this better than anybody else, and we do it at scale.

MedicineManTechGrow

Twelve Tips for Scaling Your Cannabis Business

By Eric Schlissel
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MedicineManTechGrow

We know a thing or two about scaling a cannabis business. While we don’t own a plant-touching business ourselves, we have helped companies like Tokyo Smoke, Superette and Northern Helm to open dozens of dispensaries in less than 3 years as their IT company. Here are some of the things we’ve learned along the way.

Find reliable partners

You can’t do it all alone. Especially when you’re trying to grow fast in a new industry like cannabis. Find reliable external partners you can depend on in areas like construction, design, staffing, financing, legal, real estate, accounting, HR, IT and security. If you’re just starting, consider dividing the work between competing firms, then committing to the one that performs the best.

Maintain consistency

You don’t want to reinvent the wheel with every new location. Develop standardized processes, procedures and equipment as early as possible. This is critical for aspects of your business like efficiency, profit margins and brand awareness.

We work with our clients to develop a standard IT stack (all the same hardware, software and configurations). This makes setups quicker and cross-location management easier and can make you eligible for bulk purchasing discounts.

At the same time, if any of them don’t work out, switch them out as soon as possible. Don’t compound the error by sticking with what isn’t working.

Develop standardized processes, procedures and equipment as early as possible.

Also don’t be afraid to try new things here and there or make each location unique in more subtle ways. Our clients at Superette are a great example of keeping their brand consistent enough across their locations that you know it’s a Superette store just by looking at it; at the same time each store is just a little bit different so that each location is a unique experience.

Leverage multi-site tech

Most cannabis software is web-based and lets you manage multiple different locations in a single platform. Make sure to make good use of this and not use different software for different locations.

This goes for a lot of non-cannabis-specific software too, like Sage, Office 365, Google Workspaces and Solink (a platform that lets you manage all your surveillance systems in one dashboard, and integrates with your POS or ERP).

Use compliance and licensing software

Cannabis regulations can vary widely not only state by state but city by city. Keeping up with all these regulations can be difficult even if you already have a legal expert to rely on.

Compliance software like Simplifya, ProCanna and BuildMySOP let you quickly figure out what the regulations are in a given area, which can make it easier to find a good location, get set up and stay compliant. These applications, along with licensing trackers like Cannabiz Media, can also help you find where cannabis license opportunities are available and send you alerts whenever a state or city is accepting new applications.

Buy materials ahead

This is especially important now with the supply chain crisis still going on, but in general it’s a good idea to start gathering all the materials you need as soon as you’re certain about expanding. In IT in particular, pretty much everything including cash drawers, receipt printers, tablets, POS terminals, firewall appliances and laptops has been in pretty short supply. We’ve heard that it’s the same for just about all materials that go into setting up a new cannabis location whether it’s a dispensary, cultivation, distribution or manufacturing facility.

Lab technicians use the Hunter device during a test process. InstantLabs manufactures the Hunter system as well as test kits for food pathogens and species identification such as the catfish testing commercialization agreement outlined with the FDA.
In IT in particular, pretty much everything has been in short supply.

We’ve stayed on top of it and avoided delays by buying months ahead, purchasing a surplus of product and maintaining close communication with our vendors and distributors; we suggest you do the same for any products you’re purchasing internally.

If you’re buying online and the store says “in-stock,” you may want to contact the store/vendor to double-check that it’s accurate. Sometimes you buy it and you find out that “in-stock” means its parts are “in-stock” in a factory in Asia somewhere and your product is still months away from being manufactured, shipped and delivered to you.

Promote from within

When you’re growing is a good time to promote the all-stars already on your team, giving them a chance to expand their skills and take on greater responsibilities. We’ve seen this with some of our clients where they promote their star budtenders to shift leads or managers at their new stores, and store managers to district managers in new territories. It works out for everyone – the employee gets a raise and a step up the ladder, and you ensure you maintain your company’s culture and fill important positions with people you already know and trust (not to mention it’s often more cost-efficient to hire from within like this than to bring in someone new).

Hire from without when necessary

Sometimes promoting from within isn’t an option, like when you need someone with a particular skillset or level of experience.

Maybe your current COO has done a great job opening and operating 5 stores, but what about 50? If you want a sure thing, you’ll want to hire someone that’s already shown they can handle 50 or more stores, and most likely you’ll have to look outside the cannabis industry to find it.

You’re seeing this more and more in the cannabis industry – some are promoting from within, but many are also hiring experts from other companies and from outside the industry, including lots of people with strong retail, food manufacturing, merchandising, packaged goods and highly regulated goods (especially alcohol) backgrounds.

This can be more expensive than promoting from within and can potentially have a negative influence on company culture and morale, but on the other hand you’re getting valuable expertise that can help you take your cannabis business to the next level; and plus, you may even be able to hire these people at a relative bargain since there are many out there that are eager to work in such an exciting, new and high-growth industry.

Be ready for things to break down

Even if you’re fully prepared, you should still expect some kind of hiccup or hurdle with any new location rollout. It’s just the way it is on projects with an ambitious timeline and a lot of moving parts. The usual culprits are routine construction delays, cable companies and other utilities screwing up, storms, and having to adjust your schedule according to government inspectors on short notice. On some of our jobs in Canada, for example, we’ve run into a few blizzards and cameras and wires getting knocked out/frozen over; and on one occasion we were moderately inconvenienced setting up a store just up the street from the 2022 Ottawa trucker protests.

Don’t panic, don’t get frustrated. Your careful planning will at least ensure that most things go right, giving you the flexibility to react to the things that don’t.

Consider avoiding unlimited license markets

MedicineManTechGrow
Even if you’re fully prepared, you should still expect some kind of hiccup or hurdle with any new location rollout.

There’s a reason many MSOs avoid unlimited license markets like Oklahoma and Oregon. Limited license markets provide protection against competition. Unlimited license states are often free-for-alls and a race-to-the-bottom on pricing. They’re much tougher markets.

Have a vision

Rather than just wanting to grow and make a lot money, it can be helpful to have a unique, compelling and somewhat clear vision for your company, like Superette’s “making buying cannabis as fun as using it.” This helps you motivate your team, maintain your focus and cohesiveness as you add lots of new people, and differentiate yourself in a crowded market.

Consider franchising where it’s legal and makes sense

Our client Tokyo Smoke has opened over 80 locations in just over 3 years of operations. If that seems like too much growth for one company, you’re sort of right – some of Tokyo Smoke’s stores aren’t company-owned, they’re actually separately owned and managed franchises.

Now franchising a cannabis business isn’t legal everywhere at the moment, but where it is legal it’s a time-tested method of growing your brand and company footprint fast, and establishing dominant mindshare and market share that can’t easily be challenged or reversed.

Consider M&A

Sometimes M&A is the only option for breaking into a new market, like if the market is already oversaturated or not accepting new applications. Established cannabis businesses can start at $1-$10 million per location depending on the situation. Don’t quote us on it, but with some markets becoming saturated and sales declining in areas like Oregon and Canada, you may be able to get a good deal from someone that wants out of the business before things gets worse – assuming you’re bullish on a market rebound or think you can perform better in the market than the current owner.

Warren Bobrow, CEO & Co-Founder of Klaus

An Interview with Warren Bobrow, CEO & Co-Founder of Klaus, The Gnome

By Aaron Green
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Warren Bobrow, CEO & Co-Founder of Klaus

California is the fastest-growing cannabis beverage market, according to a recent Headset report. The count of beverage product offerings in California has grown quickly, nearly doubling from 2020 to 2021. As of December 2021, there were approximately 530 distinct cannabis beverage offerings.

Mocktails have been a growing product category within the cannabis beverage segment. Klaus, headed up by Warren Bobrow, the “Cocktail Whisperer,” recently entered the California market with their ready-to-drink THC cocktail, Mezzrole, a unique terpene-forward beverage with three simple culinary-grade ingredients.

We caught up with Warren to learn more about his path to the cannabis industry and his inspiration for Mezzrole. Warren is a multi-published author of six books including “Cannabis Cocktails, Mocktails, and Tonics” and has contributed to publications such as Forbes and Skunk Magazine. After the loss of his fresh pasta business in Hurricane Hugo, he worked in banking for 20 years before reinventing himself and following his passions—becoming a bar back to bartender and master mixologist and penning his six cocktail-focused books. Warren crafted Klaus with knowledge gained from years of experience in the mixology and culinary worlds and with his strong enthusiasm for cannabis.

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

Warren Bobrow: It was a happenstance, and it was something that I never considered before. I was working in the traditional liquor industry, and because liquor is inherently a poisonous substance, I was slowly poisoning myself and my mind with the alcohol. I made a conscious decision back in July of 2018 – I was down to Tales of the Cocktail in New Orleans – and I said, “this is my last drink.” I was halfway through a Hemingway, which is absolutely my favorite cocktail to have and that’s what I was known for. That’s the drink that paved the way to a wonderful career on-premises and off-premises doing brand ambassadorship and being a named person within the liquor industry. As with all great careers, this one had to come to an end, or I was going to die because liquor was poisoning me. I was probably about 75 pounds heavier than I am right now. I just didn’t feel myself and I was going to be sick.

So, I decided to take my knowledge of cannabis, which was something that I’ve enjoyed since I was 12 years old – I am 61 now – and put it to use for me in this book, Cannabis Cocktails, Mocktails and Tonics. My first book, Apothecary Cocktails, really did pave the way. I wanted to include cannabis in my early books, but my publisher wouldn’t let me. It just wasn’t time until 2015 when I wrote Cannabis Cocktails, which is all based on the early apothecary. The inspiration for writing the book certainly was from being down in New Orleans and going to the Pharmacy Museum. They had an exhibition of cannabis in the early apothecary, and I knew immediately what I was going to do with the rest of my life. There you have it!

Green: It seems like it was a sharp cut off with the alcohol industry

Bobrow: Yes, like one day to the next, literally. It was absolute. I made the decision; I came back to New Jersey, and I never drank again. I drink a little beer and wine, but I haven’t had a distilled drink in years.

Green: How did the concept for Klaus come about? Was it something that you always had in the back of your mind?

Bobrow: The idea for creating a cannabis infused beverage came from being incarcerated in New York City for smoking cannabis in the street and being taken out of commission for 48 hours, I knew that if I was drinking a cannabis infused beverage like Klaus, which is the one that I created in California, no one would know my business. Of course, when this happened, it was in the early 2000s, so the technology and the pretense just weren’t available yet. But it did put something in my mind. If I was to create a cannabis-infused beverage using my knowledge and experience as a master mixologist, the fear of consuming cannabis would be diminished.

If you look at the book, Cannabis Cocktails, and you see the recipes, they’re not for the meek. They’re really meant for a medical community – someone who needs to really eliminate pain, if you will. Cocktails in the book started at about 250 milligrams of THC, whereas with Klaus they’re 10 milligrams, Two different stories completely!

Warren Bobrow, CEO & Co-Founder of Klaus

My inspiration for creating Klaus certainly was from the gnome [Warren displays Klaus, The Gnome]. He’s a star and he’s been all over the world with me. I don’t know why I first started traveling with him. Maybe it’s because he was sitting up there up on my mantle and he told me that he wanted to go out on the road with me. I was traveling all over the world as a rum judge for the Ministry of Rum and for Rum XP. We just show up at food events. I’m a trained chef, I love going to the Fancy Food Show in New York City, and I’d meet people and they invite me out to see their places. Then I started writing for Forbes and I don’t know, my career has been up and down. I’ve tried to follow my dreams ever since I left the corporate world in May of 2009.

Green: Let’s talk about the product.

Bobrow: I just have one SKU right now, which is the Mezzrole named for Mezz Mezzrow, Louis Armstrong’s weed dealer. You can’t make this stuff up. It’s all real.

Green: First, how did you land on the flavor profile?

Bobrow: For someone who’s a rum head like myself, we used to drink rum for breakfast. That’s how you become a rum head. The Mezzrole is based on a Ti’ Punch, which is the national drink of Martinique. Ti’ Punch is usually made in Martinique with rum Agricole, which is a sugar cane-based rum rather than a molasses-based rum. It’s the freshly pressed sugar cane rum before it ferments so it has a lovely floral quality and it’s 100 proof. There’s nothing weak about it!

A Ti’ Punch is freshly squeezed lime quarters, the 100 proof Agricole – one or two ounces – and cane sugar syrup stirred usually with your finger like my old friend Gaz Regan, who’s no longer with us, used to do it. He was known for his finger stirred negronis. I would do it preferably in a clean glass and there’s no ice involved because if you’re on a sailboat, you probably don’t have ice anyway. So, it’s potent. It’s a very potent drink. That’s the basis of the Mezzrole.

The Mezzrole contains a single strain of cannabis. We used a craft, land-raised strain called Hippie Crasher. It’s an indica leaning hybrid that is terpene forward. The Mezzrole utilizes the terpene aromatics of the cannabis strain. So, we have this gorgeous French lime puree that I get made from limes that are sourced down in Martinique. They have a certain oily quality to them and they’re very pungent. They’re very citrus forward and very flavorful.

Then, I’m using a ginger syrup that’s made in what I would say is a Great Britain or Jamaican style called Picketts. It’s from Denver, Colorado. My old friend Matt Pickett, and his late brother Jim created it. Jim was the bartender for Malcolm Forbes on his yacht, the Highlander, when they had it in the waters between me and Palm Beach, or wherever they happened to be on the island. Jim crafted this incredible ginger syrup, which is really authentic. And in later years, it became the Pickett’s ginger syrup that I would use in this beverage because I’m paying homage to Matt’s brother by using his extra hot and spicy ginger syrup in here along with the French lime purée.

The final element – there are only three flavor elements [besides the cannabis] – is rice vinegar. Rice vinegar in this case is something called mirin. There are two different types of mirin. There’s the sweet mirin and then there’s the dry mirin, and Mezzrole utilizes the dry mirin. I didn’t want to add any sugar. Mezzrole is six tenths of a gram of sugar for the entire can, which is eight ounces, 16 calories.

So, to recap, each can of Mezzrole is eight fluid ounces, six tenths of a gram of sugar, ginger, lime and rice vinegar with THC infusion. And it’s not a seltzer!

Green: What was special to you about the Ti’ Punch?

Bobrow: My family had a yacht, and we would go places in the Caribbean. One of the places we would go in the Caribbean was Down Island and they would have drinks like the Ti’ Punch. I remember that it was emblazoned in my brain. It was a drink that got me drunk. It was what sailors did; they got drunk. And you would get drunk on drinks that go back to the days of the pirates, because they probably didn’t have ice on the sailing vessels. So, why should a couple million-dollar yacht make any difference? We had icemakers, but you drink the drink without ice. You drink it like it was drunk in the age of sailing.

I wanted to reinterpret the Ti’ Punch and bring credence and life to that drink by bringing it to life in the Mezzrole. But the Mezzrole has another story behind it entirely. That’s because Mezz Mezzrow, who was a jazz head during the jazz era, brought between two and 4,000 pounds of cannabis up from Mexico, and sold it in Detroit, Chicago and Harlem during the early days of jazz. He made quite a name for himself. At the time, cannabis was not illegal on a national level yet. If you were to ask for a joint or reefer, you might become detained by the police, especially if you were Black.  Not only were the police at that time incredibly anti-jazz and anti-Black and anti-cannabis, but they were just anti people having fun! So there had to be code names and a well-rolled cannabis cigarette was known as a “Mezzrole” and that’s what I named the cocktail after.

I’m paying homage to Louis, and I’m friendly with Louis’ daughter, Sharon. She’s the daughter that no one ever knew about. It’s a very interesting story. We’re hopefully going to do something together. I find great inspiration in jazz, and we wanted to pay homage to the role of characters in jazz by creating a beverage that hopefully wouldn’t get us arrested.

Green: Can you walk me through your choice of strain for the beverage?

Bobrow: I work with a company named Vertosa. They are the magicians in the world of nanotechnology emulsions. They’re scientists like yourself, who are upper intellects who dream in color. And the colors that they’ve chosen are the colors of the plant. So, they’ve enlivened the plant chemically through their process. I’m not privy to that process, but I’ll tell you it works. Their emulsion is gorgeous stuff. I just chose the emulsion for my next two SKUs and it’s exactly what I was looking for. It’s slightly bitter, it has depth and character, and we haven’t even added the terpenes in yet. So, it’s well balanced, and it will work exceptionally well with the craft ingredients that I’m working with. I don’t use industrialized ingredients, these are all bartending ingredients, if you will. We do 5,000 can production runs with bartending ingredients. It’s incredible food science. I love it.

Green: What was behind your decision in adding the terpene flavors?

Bobrow: What makes that interesting is no one else is doing it. So, we’re the first again! Not only did I write the first book on cannabis, and cocktails, and tonics, and all that stuff, but I created the first beverage that actually smells like cannabis. So, when you’re drinking one of my beverages, and you drink down maybe a quarter inch, and you put your nose right over the top and smell it, it smells just like the plant along with that ginger and the lime and that tangy quality of the mirin. And it’s spicy. It has an herbaceous quality to it. It’s really uncanny.

Green: Were there any challenges in working with terpenes in a beverage?

Bobrow: Yes, there’s always challenges. First off, I’m here in New Jersey, and the company that I’m working with is in California, so they can’t send me anything. So, I work very closely with a food scientist named Chris Anderson who did my scalability, and he’s absolutely brilliant. His palate mimics my own. I don’t want a sweet beverage. I want a tangy beverage. I want something that has balanced quality and fun and it makes you want to dance. I’m not looking for something to put me to sleep. That’s not my goal in life. Life is very short, and you want to have a beverage that is talkative and doesn’t get you totally destroyed. There are beverages out on the market that have 500 milligrams of THC called syrups. They’re absolutely delicious, but they’re so destructive because they want you to put them in a sugary beverage and drink the whole thing down.

I’m not a kid anymore and I don’t drink like a kid. I drink with sophisticated flavors and make beverages that are memorable. People come to me – and have since the early part of 2009 – and they say things like, “That’s the best cocktail I’ve ever had in my life. How do you do that?” My aim in life is to ruin people for their bartender because I expose all the things that our bartenders are doing to rip them off.

I started as a bar back and I worked my way up. I went to this guy named Chris James, who was working at The Ryland Inn running their beverage program. I needed a job, and he hired me as this bar back for a year and they kicked my butt. After that I could write about this stuff with knowledge and not just with something I read in a book. There’s a lot to be said for education and going to bartending school. There’s also a lot to be said for cutting your own ice and squeezing your own juice and taking out the trash.

Green: What are some of the challenges you are facing at Klaus?

Bobrow: We’re hoping to do a Series A round of financing. I wonder who would be interested in lending to us or giving us money or investing in us. I always wonder why anyone would be interested in any of this! But I have a talent and a passion, and I know that it will take me to the next step in life. I’ve waited and been very patient. I have massive shoes to fill, and I’m so committed to being ambitious.

I was an executive assistant in a Trust Bank for 20 years. I put my life on hold for others because they wanted to make an example out of me. I never became the person that my parents wanted me to become. They wanted me to become a lawyer and I didn’t have the aptitude for that. I had the aptitude for being a creative soul and a creative mind. It just took me 20 years longer to be able to achieve that.

I consider myself the luckiest man in the world because I did work for the C-suite and for the top of the house and I sold wine to them when I worked on the nights and weekends in a wine store. My customers were the presidents and “kingmakers of the world.” Here in Northern New Jersey, if nothing else, it’s pretty affluent. So, I’ve long been accustomed to coming from that environment. I know what that environment means and the importance of that environment. I had to figure out how to make it myself because I was, in polite parley, “disowned.” So, I am self-made, and I have a great product that I’ve created out of nowhere. It’s hopefully going to allow me to figure out what the next step will be in my life. I want to make this a national name.

Green: What trends are you following in the cannabis beverage space?

Bobrow: I’ve had some good ones. I’ve had some okay ones. And I’ve had some that are just, I don’t know. I’m a cook. I’m a saucier. I love flavors. I’m trained in France. I cook. It’s a lifelong thing. I started as a dishwasher, and I worked my way up. I’ve traveled the world eating.

I’ll tell you, if you don’t know flavors, you can’t put anything together. And if you don’t know what goes into making a beverage that’s different than what anyone else is doing in the world, then you don’t deserve to be in this business because it’s highly competitive and people play for keeps. If I only get one chance to capture people’s imagination, it comes with this beverage right here [Warren holds up a can of Mezzrole].

Green: What’s next for Klaus?

Bobrow: I hope to be doing Klaus Nein. It’s a terpene forward, non-cannabis infused craft beverage. It doesn’t have any THC, so I can sell it everywhere. I caught the travel bug years ago, when I was traveling all over the world for the rum business. And I got it back again. I hate that the world became such a small place during COVID. Because it really is a big place. And it’s a place that I need to explore more of. Stay tuned!

Green: What are you most interested in learning about?

Bobrow: You know, it’s funny. I think everyone that I come across I can learn something from. My teachers at Emerson and later at MIT, where I spent a fitful year, taught me that I wasn’t the smartest person in the room, but I certainly was the most inquisitive. So, I want to be known as someone who has pretty good listening skills. I also have great skills in the way of trying to draw out answers from people. So, I have a lot to learn and I’m excited about the opportunity of learning. If I can share a little bit of my knowledge with other people within the industry and they respect me for what I’ve achieved, then I’ll be a much happier person. I’m already happy. I’m very lucky. I am the luckiest guy in the room.

Green: Thank you Warren. That concludes the interview!