Product safety isn’t an endpoint, it’s a journey. That’s what we told you in the 2021 series premiere, and it continues to hold true. In the last post, we revisited the Vaporizer Liquid Formulations portion of the NCIA’s policy council white paper to provide guidance to the industry. This time, we’re republishing the Vaporizer Delivery Devices section below. We’ve learned more about EVALI since its original publication, and while some of the specifics may be a little dated, the principles remain relevant to helping you understand vapor product safety.
Over the course of the next several months, we’ll bring you new content with the following working titles.
The Importance of Testing Vapor Products as a System
Edibles Stability – Microbial Growth Due to Insufficient Packaging
Terpene Limits Across Multiple Product Formats
So, while we wait with bated breath for this exciting new content, enjoy the excerpt below!
Excerpted from The Key To Consumer Safety: Displacing The Illicit Cannabis Market Recommendations For Safe Vaping. Access the full report and citations.
Background
While the technology used to vaporize cannabis extracts have been around for many years, advancements in vaporization technology and supply chains over the past decade have led to widespread adoption and growth of vaporization as a preferred method of cannabis consumption. Vaporizer devices offer the benefits of being discreet, allowing for metered consumption, and eliminating carbon associated with combusting cannabis flower. However, not all vaporizer devices are created equal and manufacturers should develop an understanding of the nuances of different vaporizer devices to ensure the delivery of a safe and high-quality experience. Aside from considering experiential qualities such as taste and the amount of vapor produced, manufacturers should consider at least the following three categories of issues that can present safety risks.
Physical Design Considerations
Vaporizer devices should be mechanically and electrically safe. This starts with relatively basic considerations that include ensuring the device is mechanically sound, does not leak alkaline or heavy metals, and is not configured in a manner that presents a safety hazard. In the early 2010s, there were many reported instances of vaporizer devices exploding. This was primarily due to improper electrical design and battery cell protection. Battery cells that are not protected from drawing current beyond their rated capacity or are allowed to drain too deeply present a safety risk. In fact, this risk led to the development of the UL 8139 standard for e-cigarette battery safety and the FDA recently relaxed its prohibition on e-cigarette battery changes in order to allow manufacturers to comply with this standard. UL 8139 is applicable to vaporizer devices and anyone who sources or develops a vaporizer device for the cannabis market should voluntarily comply.
Contamination by Hardware
Vaporizer device hardware should be tested for the presence of heavy metals. Currently, some manufacturers use Restriction of Hazardous Substances (RoHS) testing or rely on vendor representations that the components and materials being used are certified as FDA food-grade. The California Bureau of Cannabis Control mandated heavy metals testing standards for the three categories of cannabis products, including inhalable cannabis products, starting on December 31, 2018.
Vaporizer device hardware that comes into contact with cannabis formulation should also be free of other contaminants. It is important to consider both contaminants that could be immediately detectable in vaporizer devices as well as those that can be released or created over time. Vaporizer devices are designed using a variety of industrial manufacturing processes, some of which can leave residual oils, biological agents, or other substances in the device. It is important that device manufacturers clean incoming components, assemble them in a clean environment, then store and ship them in a manner that prevents re-contamination. Depending on the nature of the component, one or more of a cleaning bath or ozone treatment may be used for cleaning. After cleaning, assembly of vaporizer components should be performed in a cleanroom environment under appropriate current Good Manufacturing Practices (cGMP). Unfortunately, simply asking a device manufacturer whether it operates in such a manner is not sufficient to be certain that it does. There is no substitute for first-hand inspection of manufacturing processes. While it may not be practical for U.S.-based cannabis manufacturers to maintain a constant presence in the country of manufacture, it is possible to hire local agents who are skilled in audit practices and can perform unannounced inspections to verify that desired practices are implemented within the supply chain.
As noted above, hardware may also introduce contamination into the formulation over time, either through the process of leaching heavy metals or through chemical reaction. Leaching is a process whereby soluble constituents that may be present in materials dissolve into a formulation. A well-known example was the discovery that plasticizers present in certain plastic food and beverage containers were leaching and then being consumed. As a result, new types of plastics were developedfor improved food safety. Vaporizer components that contact cannabis formulations may present a similar issue and leaching may be tied to metals, ceramics, plastics, or other materials. In addition to leaching, certain materials may react with cannabis formulations, especially those with high terpene content which tends to be more volatile. Moreover, metal components in contact with formulations may be especially susceptible to leaching and lead to contaminants such as heavy metals in the formulation.
The good news is that it is possible to address this risk of leaching through the use of appropriate base materials and or plating. Base materials such as stainless steel are good candidates because of their low tendency to react with formulations. Plating other materials with corrosion-resistant metals is also possible; however, care must be taken to specify the right material and plating thickness while also ensuring the plating is not damaged during assembly.
With proper material selection and design, it is possible to reduce the risk of such contamination, including through conducting stability tests. In a stability test, a formulation is placed into the vaporizer device for a period of time, then removed and tested for contaminants. A good guide is to design the stability test to align with the desired shelf life of the product. That doesn’t necessarily mean the test needs to be as long as the rated shelf life. Typically, elevated temperature tests are used to determine stability and can cut the duration of the test to 50% or less of the desired shelf life. In addition, by taking measurements at intermediate intervals, stability can be better characterized and the point at which contaminants would exceed their respective limits can be projected.
Device Impact on Formulation: Control the Heat
The most fundamental, yet perhaps the most underappreciated aspect of vaporizer devices is how they vaporize cannabis formulations. Setting aside dry herb vaporizers, all liquid cannabis vaporizers basically work by bringing the formulation into contact with a hot surface in order to heat it and thus create vapor. While this may seem straightforward, there are a number of subtleties that affect the outcome. First, the temperature of the hot surface must be hot enough to heat the liquid, yet not so hot as to cause components of the formulation to degrade into byproducts that could be harmful. In fact, one study demonstrated how changing the voltage, and thus the temperature of an unregulated vaporizer device can affect the production of such degradants. While more advanced vaporizer devices attempt to control vaporization temperature by using heating elements made of specific materials that indirectly measure temperature and regulate the power delivered to the heating element, the majority do not.
Different formulations have different compositions and contain constituents that vaporize and degrade at various temperatures. This means that to fully control vaporization, the vaporizer device must be configured precisely to the requirements of the formulation in use. Second, many vaporizer devices do not heat uniformly. Rather, the heated surfaces heat unevenly, creating hot spots that can locally trigger thermal degradation. Temperature control circuits typically measure an average temperature and do not prevent such hot spots. Finally, the majority of vaporizer devices, whether they contain fiber wicks or ceramic, rely on capillary action to bring the formulation into contact with the heated area or surface. During a puff, capillary action is also what replenishes the formulation at the heated surface, and such capillary replenishment takes time. Depending on the viscosity of the formulation and the duration of the puff, a heated surface that was initially saturated with the formulation can become dry and hot during the course of a puff. Experienced users sometimes refer to this as a “dry hit,” which can be perceived when a cartridge runs dry or during a long puff. Dry hits can result in increased thermal degradation.
Armed with this understanding of the nuances of vaporizer devices, one can appreciate how the common business model of selling cartridges with a universal 510 threaded connection that can be used in conjunction with any number of batteries, any number of power settings, and filled with a variety of formulations makes it difficult to guarantee what is produced during vaporization. In order to understand and control the output of a vaporizer device, the system should be designed, configured, and tested as a whole; cartridge and battery, plus formulation. Closed systems with proprietary connectors and one-piece designs do not face the cartridge-battery mismatch challenge, but should still be tested in conjunction with the target formulation using a reasonable worst-case puff duration. And while new systems under development that employ non-contact heating methods may not present the same temperature control challenges, they too should be validated as a whole.
The Cannabis Manufacturing Committee (CMC) focuses on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers, and edibles, ensuring the manufacturing sector is helping shape its destiny.
Video: NCIA Today – March 19, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday here on Facebook for NCIA Today Live.
SAFE Banking Act Reintroduced in House of Representatives
Bipartisan bill would remove barriers for financial institutions to work with state-legal cannabis businesses
House passage expected after being approved three times since 2019
The Secure and Fair Enforcement (SAFE) Banking Act was reintroduced in the House of Representatives yesterday. This bill, which was introduced by Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY), and Warren Davidson (R-OH), would provide a safe harbor for banks and other financial institutions working with state-legal cannabis businesses
In the last Congress, this legislation was the first cannabis policy reform bill brought to the floor of the House in recent history – with 206 co-sponsors – and was the first to be approved by either chamber of Congress with an overwhelming bipartisan vote of 321-103 in September 2019. The bill moved to the Senate but consideration in that chamber was delayed due to the onset of the coronavirus pandemic. The House also approved two separate pandemic relief bills last year that included the legislation’s language.
“Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long,” said Rep. Perlmutter. “It is time to enact SAFE Banking to align federal and state laws and reduce the public safety risk in our communities. I appreciate the partnership of the cannabis industry and businesses across this country who have added their voice to this effort. The SAFE Banking Act is an important first step to treating cannabis businesses like legal, legitimate businesses and beginning to reform our federal cannabis laws.”
The SAFE Banking Act would protect financial institutions from federal prosecution for providing banking and other services to cannabis businesses that are in compliance with state law, as well as help address serious public health and safety concerns caused by operating in predominantly cash-only environments. The legislation would make traditional lending more accessible for the cannabis industry, helping alleviate the lack of access to capital that has presented major hurdles for smaller businesses. It would also mandate a study on diversity in the cannabis industry. The latest version makes clear that protections would extend to financial services providers working with the hemp industry as well.
“At a time when small businesses need all the support they can get, and after cannabis businesses specifically have been providing essential services and generating significant tax revenues for states and the federal government with little to no financial relief, it is more imperative than ever to get the SAFE Banking Act passed into law,” said Aaron Smith, co-founder and CEO of the National Cannabis Industry Association (NCIA). “Lack of access to banking services continues to create serious unnecessary issues for public safety, transparency, and access to traditional lending that smaller operators desperately need. These businesses are contributing billions of dollars to the national economy every year, and need to be treated like any other legal regulated industry. We are grateful to the sponsors of this legislation who have generated strong and consistent bipartisan support year after year, and we are confident that it has a clear path to approval again.”
Cannabis is legal for adults in 15 states as well as the District of Columbia and the territories of CNMI and Guam, and 36 states as well as several territories have comprehensive medical cannabis laws. The substance is legal in some form in 47 states. Virginia is poised to become the 16th state to pass adult use legislation when Gov. Ralph Northam signs a bill approved by the legislature into law.
Committee Blog: Crafting a COVID-19 Vaccination Policy for Your Cannabis Company
By NCIA’s Human Resources Committee
COVID-19 vaccine policies are just the latest challenge for employers as the world continues to adapt to life after coronavirus. COVID-19 has forced employers to be much more actively engaged in monitoring our employees’ health and your company’s approach to a vaccine policy may continue to reflect the unusually intimate partnership between employers and employees in protecting the health of our communities.
Business owners may be eager for operations to return to normal after nearly a year of intense focus on disruptive business practices made necessary while we responded to the COVID-19 pandemic and its implications for the workplace. While a widely vaccinated public has been promoted as the light at the end of this tunnel, over a third of Americans are reluctant to get the vaccine. This is where employers can make a difference in the trajectory of our national vaccine project by encouraging, and even requiring, employees to be vaccinated. Cannabis industry operators should be especially concerned about crafting a careful approach to vaccine policy as many of our workers have been declared essential throughout the pandemic and we provide services to some of the most vulnerable in our communities including those with chronic illness, the elderly, or those with compromised immune systems. Yet, in many states, cannabis business owners and human resources departments continue to struggle with unclear guidance about when our employees will be able to get the vaccine.
What role do cannabis employers play in vaccination against COVID-19?
Employers will have to navigate a number of competing interests and obligations to craft a sound and responsible vaccine policy. On the one hand, employers are obligated to provide a workplace that is “free from recognized hazards” (OSHA General Duty Clause), i.e. persons infected with the coronavirus. On the other hand, employers are generally more hands-off when it comes to personal health decisions like whether or not to get vaccinated against certain illnesses, and indeed we have an obligation to protect our employee’s privacy and right to refuse vaccination due to a religious objection or medical condition. There is no shortage of advice available to cannabis companies but much of this advice fails to explore the real-world challenges that HR practitioners and business owners will face as they navigate vaccine issues with employees on the ground over the coming months, partly because we are wading into uncharted waters. Below is a brief summary of what information is available to guide employers right now.
Employers must be prepared to take a position on vaccines
The Equal Employment Opportunity Commission has provided guidance for employers navigating their approach to vaccination at the workplace. In general, the EEOC supports employers’ right to encourage or require employees to get vaccinated against COVID-19, as well as take other precautionary measures recommended by the Centers for Disease Control. There is a persuasive business necessity to, at a minimum, encourage employees to get vaccinated against COVID-19, and cannabis companies may find that their employees are relatively prioritized in many state vaccine distribution plans due to the prevalence of designating cannabis workers as essential, though guidance specifically pertaining to cannabis workers is slow-coming and vaccine availability has gotten off to a rocky start with an uncertain supply of vaccines. At least for the time being, multi-state employers will have to continue to adapt to a patchwork of various approaches to state vaccine distribution plans just as they have for managing the workplace throughout the pandemic.
Be ready to accommodate legitimate objections
Employers must also proceed cautiously when responding to employees who refuse vaccination. Some employees who resist vaccination will have a legitimate right to be accommodated due to a sincerely held religious belief or a medical condition that prevents them from taking the vaccine. Employers must be ready with a flexible policy that allows qualified personnel to engage in an interactive process with these employees to discover and document the nature of their objection and then to negotiate a reasonable accommodation. For those positions that have already been eligible for temporary work from home arrangements, for example, an extension of this arrangement might be a reasonable alternative to vaccination. Other accommodations can be made for employees who must interact with the public or their coworkers to perform their essential job functions, such as leave of absence, but how soon such an employee would be excluded from the workplace given the scarcity of vaccine availability and under what conditions this employee would be allowed to return to the workplace are still open questions.
Vaccines remain one of many tools employers have to reduce risk
The Society for Human Resources Management (SHRM) published research earlier this month revealing that the majority of employers plan to encourage but not require their workforce to be vaccinated against COVID-19. This approach seems to dodge some of the more troubling aspects of rolling out a mandatory vaccine program and reflects the reality that many employers can use a combination of other means to reduce the risk of transmitting the virus such as the continuation of work from home policies, virtual services, contactless product delivery, etc. A mandatory program would force a confrontation between those employees who are unwilling to get vaccinated and the company’s managers tasked with tracking vaccination, avoids potential workers compensation claims that might arise from adverse reactions to the vaccine, and provides relief for the potential administrative burden of tracking employees’ proof of vaccination. A voluntary vaccine policy also restores some of the onus for making an informed decision about vaccines on the employee rather than the employer assuming all the responsibility, and potential liability, for forcing a decision to become vaccinated on the workforce. Keep in mind that even under mandatory vaccination policies, some employees will inevitably not get vaccinated and the company will need to work with those individuals on a case by case basis to determine what reasonable accommodations, if any, can be made for those workers. Employers who mandate vaccines as a condition of employment will also likely need to pay for vaccination if there is a cost in the future as well as provide paid time off for employees to go to vaccine appointments. A voluntary policy may make it easier for the employer to be flexible and compassionate toward the varying needs and attitudes of our employees while navigating the continually evolving state of vaccine availability and public health advice.
Expect to adapt to new information
Throughout the pandemic, employers have operated with ambiguity and uncertainty. This (hopefully) final stage of the pandemic will be no different. As we craft our vaccine policies, we should be prepared to deal with the unexpected and adapt to change as new information is available or revised. This is where I believe that cannabis companies have a real advantage. In this industry, flexibility and innovation are essential skills and we as professionals in this industry are well-practiced at pivoting with little notice. I am confident that cannabis operators will rise to the challenge of navigating vaccine distribution while protecting our workers and our customers with the same aplomb that has helped our industry thrive during the challenging last 12 months.
Melissa Hafey is the Director of Human Resources for Blackbird. Blackbird is a software and services company that provides marketing tools and transportation solutions for cannabis operators. Melissa is a passionate advocate for creating meaningful work in rewarding work environments. Her experience includes change management, benefits administration, HRIS implementation, recruiting, workplace diversity initiatives, and human resources management across multiple states including California.
Video: NCIA Today – March 12, 2021
Join NCIA Deputy Director of Communications Bethany Moore as she checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
Download NCIA’s New Mobile App
by Vince Chandler, NCIA’s Digital Content Strategist
Staying up-to-date with the ever-changing trends, rules, and regulations in cannabis can be a job in itself. For the busy cannabis entrepreneur, it can seem overwhelming to absorb all of the information always being added to our zeitgeist, much less figuring out which of the new information can be trusted.
Keeping you well-informed with cutting-edge, responsible, and accurate industry updates has long been a priority of NCIA and now there’s an all-new way to keep up-to-date with the white papers, articles, webinars, and more that the thought-leaders and pioneers of our membership creates. Scroll less, experience more, all on your phone, from anywhere.
Download the NCIA Mobile App today to stay informed on the latest industry news, NCIA announcements, and the most important cannabis events happening across the country. From D.C. to Oahu and everywhere in between, there is always something coming from our committees that could help your business thrive wherever you are.
Now going mobile, NCIA members have exclusive access to our members-only forum, Connect, and the ability to send direct and group messages to other members right inside the NCIA Mobile platform. Bring your Clubhouse conversations behind closed doors with experts that have been vetted by continuing them on Connect.
Never miss a thing with custom push notifications about important news, resources, and conferences the moment they are released, all customizable to keep you as in-the-know as you want. As we gear up to return to in-person events you’ll be able to track panelists, speakers, and of course the after-hours parties all from one convenient place… the palm of your hand.
Committee Blog: Property Insurance – The Good, the Bad, and the Ugly.
How a Hardening Market is Limiting Coverage and How to Be Prepared.
2020 was one heck of a year. The insurance industry has experienced more claims this year than in the history of insurance with over a billion dollars in intentional property destruction alone. With the catastrophic claims from COVID-19, record-setting wildfires, civil unrest, and theft, expect property insurance rates to spike this year — and even more so if you’ve experienced a property claim.
Should an insured party that does not have a loss on their record expect an increase in their premium upon renewal? Simple answer, YES.
What is “commercial property”?
In the insurance world, commercial property is a lot more than just physical property — like cultivation equipment or a brick building. Commercial property coverage also includes (but is not limited to): loss of income, equipment breakdown, business property or equipment, inventory of others and finished stock that has been processed, packaged and ready for sale.
Commercial property insurance is not required but is highly recommended — your business could close due to a fire, theft, natural disaster, or other catastrophic loss. If your brand-new cultivation facility burns to the ground, you don’t want to be the one paying to build a new one out of your own pocket.
Property insurance is still an essential component of your insurance portfolio. There are many forms of property insurance that need to be considered. Property coverages include but are not limited to:
loss of income (sometimes known as business interruption),
tenant improvements,
real property such as the building,
business personal property,
manufacturing equipment,
cannabis inventory,
signage,
and property of others (in this case, any cannabis stock or equipment you may hold for another licensed operator).
Also, it’s important to understand the different forms of coverage available in property insurance. You can learn and understand the forms by looking at the property declaration page. There is basic, broad and special. Here is a breakdown of what each form generally covers:
Broad: Covers basic perils and more – fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion, aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse, volcanic action), plus the following additional perils: falling objects; weight of snow, ice, or sleet; water damage (in the form of leakage from appliances); and collapse from specified causes.
Special: This is considered all risks coverage: coverage for loss from any cause except those that are specifically excluded. This is the BEST form of property insurance.
What people often don’t realize is that when you buy property coverages, these differences between Basic, Broad, and Special determine if you have coverage or not for your loss based on the peril that caused the loss.
Example: In a brush or fire area, getting Special coverage is almost impossible which is exactly what an operator in that environment needs. But when an insured asks for coverage, they usually are required by a lender or lease to have property coverage. They are usually not requiring a special form, just property coverage per the specific limits per the contract. At this time, the insureds are not concerned about Basic coverage, but that is all that they can get due to brush zones caused by recent fire areas throughout the U.S. Fire is covered, but not much else.
Any defense you can provide your property when located in these high brush areas is essential to surviving in these harsh environments. Clearance of 100 feet minimum from all structures is always recommended where possible. Water storage and proper access throughout the property is also recommended. This will help with personal defense and help support the efforts of your fire department in case a fire comes your way.
Wind and Hail coverage is another example that you need to address concerning property in the Midwest and East coast. Make sure this is addressed in your property policy if you live in these areas. These policies will have either a flat deductible or a % deductible based on the policy that is written. A flat deductible could be $5K-100K and the deductible will range from 1-5% of property coverage based on the geographics and coverage written for the policy.
Knowing it’s a hard market with higher pricing shouldn’t steer you away from purchasing this coverage — but that knowledge should make you more aware of the initial costs to properly safeguard your property.
The reason why property insurance is getting pricier isn’t that the insurance companies are out to get you… it’s that they’re busy paying for your neighbor down the road whose dispensary was targeted by criminals or whose building burnt up in a wildfire. With that in mind, savvy insurance customers are taking steps to reduce their risk profile (and their corresponding insurance premiums). If you haven’t already, take some time to check out your property and do what you can to protect yourself from fire, theft, hail, or other local worries.
Content provided by Jesse Parenti of PCF Insurance Services- Nine Point Strategies, Stephanie Bozzuto of Cannabis Connect Insurance Services, Helkin Berg of Strimo, Michael DeNault of Charles River Insurance, Summer Jenkins of Cannasure Insurance Services, and Matthew Johnson of QuadScore Insurance Services on behalf of NCIA’s Risk Management & Insurance Committee.
Member Blog: Should Business Decisions Be Based on Data or Intuition?
The business world is a complicated place. At any given time, your company’s performance is influenced by various factors in both local and national economies. The business world’s inherent volatility is further exasperated in the cannabis industry – where opportunity always seems to be counterbalanced by excessive risk.
To find business success today, entrepreneurs pay careful attention to data related to consumer behavior, sales performance, and competitor analysis. While this logical approach to business seems like a surefire road to success, many people feel there is more to the story. Some of the most iconic entrepreneurs in history have followed their intuition as opposed to data.
Whether you are operating a new startup business or managing a well-established company, it’s always a good idea to reassess your approach to decision-making. In the cannabis industry and beyond, it is worth asking yourself: “should business decisions be based on data or intuition?”
Trusting Your Gut for Business Decisions
The notion of “trusting your gut” extends far beyond the business world. In fact, for time immemorial, people have trusted their instincts to ensure survival. As we have evolved into the modern world, people apply their gut instincts when making difficult business decisions.
Whether it be in the tech industry or the cannabis space, modern society celebrates visionary risk-takers who disrupt the norm. Of these impassioned entrepreneurs, there is perhaps no better example than Apple Founder Steve Jobs. The website Business.com quotes Jobs as saying, “You have to trust in something, your gut, your destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
One of the exciting elements of intuitive decision-making is that this approach sometimes leads to excessive risk-taking. Importantly, in the business world and gambling, the mantra “the larger the risk, the larger the reward” rings true. Therefore, following your gut is an excellent method if you are looking to disrupt the cannabis industry with a game-changing product or service. This approach certainly paid off for Steve Jobs with Apple products such as the iPod, iPhone, and iPad.
Using Data for Decision-Making
As the legal cannabis industry continues to mature, we amass data on critical elements such as consumer behavior, business trends, and investor relations. Even more, as we carefully track the performance of companies around the nation, we uncover a good deal of data on what makes successful cannabis businesses “tick.”
Looking at the cannabis industry of 2021, there are near endless datasets that can be acquired in developing a logical roadmap to success. In an industry built on the unstable foundations of hyper-localized legalization and ever-changing regulations, this hard data often serves as a guiding light in the volatile waters of startup culture.
Data-driven decision-making also has its fair share of high-profile supporters. According to the Harvard Business School website, Google, Starbucks, and Amazon have relied heavily on data to develop their businesses’ essential parts. These fact-based business decisions have led to successful real estate acquisitions for Starbucks and industry-defining e-commerce practices at Amazon.
Unlike intuitive decision-making, using data to guide your choices often leads to less risky behavior. Yet, following the guidance of the risk/reward ratio, such conservative, data-driven decision-making will likely yield smaller financial rewards. Nonetheless, a stable cannabis business will continuously pay steady dividends far into the future.
The Hybrid Approach
While it would be nice to have a clear-cut answer on whether intuition or data is best for making business decisions, the world doesn’t work that way. To this end, there will always be situations where you should follow your gut. However, as a modern business owner, you will have difficulty staying ahead of the curve without paying careful heed to data.
To ensure the best possible course of action for your cannabis business, we recommend a hybrid approach to decision-making. With this synthesis of intuitive thought and logical analysis, you can develop a business plan that balances creativity with stability.
A great example of a hybrid approach to business decision-making can be seen with a new cannabis dispensary. This business should unquestionably follow as much data as possible with critical elements such as consumer behavior and product pricing. In turn, this hard data will inform conservative decisions that lead to sustained profits and increased stability.
After the dispensary has been operating for a while, it could be an excellent time to start thinking about more intuition-based decisions. Maybe you had a hunch that more grassroots marketing could set your dispensary apart from competitors? Or, perhaps it’s a good idea to try growing a new cannabis strain that nobody else has in your given market? Whatever your intuition tells you, it’s likely best to implement riskier business decisions only when you first develop some stability.
Conclusion
The business world is complex, and the cannabis industry is always changing. It’s impossible to implement one “blanket” solution for all decision-making scenarios. As such, we should pay careful attention to our predecessors to learn what types of solutions might work for our businesses.
Whether you are an intuitive risk-taker like Steve Jobs or a data-driven corporate entity such as Starbucks, you can always learn and evolve. In the end, the business world will always love and applaud those iconoclasts who overturn industries by shunning logic. Yet, we rarely hear about the thousands of entrepreneurs who’ve taken such risks and failed.
The cannabis industry further complicates notions of decision-making in the business world. With much uncertainty looming in the industry at all times, many cannabis companies value stability above all else. To this end, data-driven decision-making may veer beyond the realm of preference and into the realm of a necessity for most cannabis operators.
Jon Monk is the Managing Director at MOST, a marketing and consulting company that serves the cannabis, hemp, and related industries. He has a proven track record of leadership and business development in the marketing, finance, retail, and consumer products sectors. Jon can be reached at jmonk@mostcg.com for questions about marketing, advertising, and other aspects of cannabis business.
Member Blog: Cannabis Partnerships – The Importance of Building a Successful Business
The grass roots of the cannabis industry fostered, often through necessity, a strong sense of community and encouraged innovation and sharing of techniques and methods to cultivate the various strains of cannabis. Learning from what has come before and working together in a sense of community is still as applicable today as the industry becomes more commercialized across the globe. The pioneers of this community have evolved into a more diverse group of entrepreneurs, across many dimensions that provide a rich base of skills and knowledge that has been shared and cultivated into a matrix of businesses and relationships.
Applied DNA Sciences entered into the cannabis space in 2018. We joined NCIA and exhibited at our first NCIA trade show, Cannabis Business Summit & Expo, in San Jose that year. I wasn’t sure what to expect and the type of conversation that may occur. The doors opened on the first day, and our molecular spaying chamber attracted attendees, which led to an engaging discussion about the platform and its benefits. The surprising aspects were the various businesses at the show, researchers-PHD level, cultivators, processors, dispensaries owners, new license holders, state government, and others. They also represented a range of how many years they are involved in cannabis, from over 20 years to just getting involved, and there to learn. This first show demonstrated how important it is to be very engaged in the industry and associations like NCIA, but equally important are the partnerships that you need to form to provide solutions that are required to meet the needs of industry and consumers alike.
Partnerships form across many aspects of the cannabis business. While our technology may have been at first intimidating, as we shared our vision with this expanding network we have been fortunate to find businesses, entrepreneurs and subject matter experts who share our passion about what this industry needs to become. We have teamed up with several companies ranging from cultivation specialists, software platforms providers, business and government consulting entities, just to mention a few. The key to these agreements is the complementary nature both entities can provide to address business needs such as regulatory compliance, material and product traceability, brand differentiations, IP protection, risk mitigation, anti-counterfeiting and diversion, proof of origin, and a host of others.
As the industry continues to grow we know not every partner will remain static in their business goals, or even if they can survive the ever-changing landscape of regulation or the fluctuations of the market. The key to strategic alignment however comes from working with partners who share the vision of what the industry can be; safe for everyone, transparent in both chain-of-custody and financials, and most importantly accessible for those who need it. Companies in this space must be nimble, adapt to both the present conditions but remain steadfast in their ultimate goals.
So you think you found a strategic partner, who shares your vision. Now what? The complicated patchwork of U.S. legalization does not make your next steps as easy as it should be. Especially when you are considering moving your brand or differentiated products into new states and territories. The great hands-on experience, craftsmanship, and care of what makes your product special cannot be transported beyond the narrow lines of where it has been licensed, so often you are rebuilding or replicating with a partner in a new market. Possible of course, but often met with unforeseen issues in supply chain control and distribution. Even in the case where you are using technology unrelated to the physical product (cultivation systems, seed to sale, or logistics), each state or even county may require a different tracking system, API, or competing system to connect with. The multifaceted mosaic that makes up the community of growers, farmers, and entrepreneurs in the cannabis community is a hotbed of passion and innovation, finding opportunity is not the problem, translating this to success is the work.
Outlining a list of mutually agreed-upon goals and milestones is critical to success. Establishing a set of metrics to evaluate the progress of the partnership allows for quick adjustments if required. A critical tactical approach that may seem insignificant is to have a set weekly status call to help with relationship building and reviewing the progress plan will help keep the momentum moving forward. Also, having executive leadership involved provides quick decision-making, adjusting strategies, and deploying both human and financial resources effectively against prioritized engagements.
The cannabis industry is maturing each year and will see faster advancements when regulations sort out over the next several years. It’s essential to establish your partnering strategy now, so you can get critical relationships in place with solid execution plans and prepare to implement your joint solutions with minimum friction.
John Shearman is Vice President of Marketing and Cannabis Business Lead at Applied DNA Sciences, and has over 30 years of deep enterprise and advertising agency experience across all marketing, sales and IT disciplines. John’s experience allows him to advise on structuring sound strategies that address business goals and objectives. His extensive technology background stems from working with several leading technology companies throughout his career. John spearheads Applied DNA Sciences Cannabis vertical leading the vision, strategy, and product development for this emerging market. John also oversees the marketing for the entire company driving the marketing strategy for its other core verticals.
In thriving cannabis markets, demand exceeds supply. For successful cultivation businesses, expansion is the logical next step — either through organic growth or the acquisition of operational cultivation assets. Before moving forward with an expansion project, entrepreneurs should carefully determine when is the appropriate time to expand. There are a number of market indicators that can help entrepreneurs decide if expansion is right for them — such as market demand, growth of market, and the potential for adult-use sales.
Current market demand for your product
What is the overall market demand for cannabis, and, more importantly, what is the demand for the cannabis that you cultivate? The answers to this question should be reflected in your sales volume and price point, and it should help influence a company’s decision on whether or not to expand. If you’re wholesaling your product to dispensaries for re-sale, or to large oil extractors of raw cannabis biomass, are you currently selling everything that you grow? Are customers calling you looking for product before it’s even harvested? Or, are you spending hours on the phone trying to unload product before the next harvest? How does your product sell at the dispensary, compared to your competitor? Does it fly off the shelf or frequently find itself discounted as the weekly special?
The price at which you’re selling your dried cannabis flower should be an excellent indication of whether or not expansion makes sense. Do you spend much time haggling over money, or can you name your price? In hot new markets, where there are few suppliers and great demand, wholesale cultivators can charge up to $4,000 per pound for indoor-grown cannabis. In more seasoned markets with multiple cultivators, wholesale prices are closer to $1000 to $1500 per pound. The closer your sales are to $4,000 per pound, the more it makes sense to expand.
Figure 9.2 Wholesale prices across the U.S. as of April 2020. Copyrighted by Marijuana Business Daily, MJBizDaily.com. Used with permission.
Size and growth of market
The size and growth rate of a medical cannabis market is a good indicator of whether or not a business should consider expanding. In regions with a medical cannabis program, the percentage of the adult population registered as medical cannabis patients is an excellent indicator of the current size of the medical market. However, a cannabis business considering an expansion should be less concerned with how big the market is today, and more focused on how large it may be tomorrow instead.
In most U.S. states, about two percent of the adult population become medical cannabis consumers. A rate of lower than one percent is rare. This typically occurs when there are few doctors willing to prescribe cannabis, or there’s a very restrictive list of medical conditions for which cannabis can legally be prescribed. In Oklahoma, more than seven percent of adults are registered cannabis patients, while in Ohio only 0.6% of the adult population have registered as medical patients. If the percentage of adult medical patients in your area is above two percent, it’s a good sign that the medical cannabis industry is thriving. Markets with more patients are more attractive for cultivators to expand.
Figure 9.3 The top three and bottom three U.S. medical cannabis markets by percentage of registered adult patients. Source: Marijuana Policy Project
The rate of new patient registrations is a much better indicator of a given market’s potential for growth. Single-digit increases in new patient registrations year-over-year are not positive indicators. Cultivation businesses considering expansion want to be in states where the number of medical patients is increasing by at least twenty percent annually. This kind of growth would indicate a widespread adoption of medical cannabis and few barriers to receiving a medical cannabis prescription. Florida is an example of a thriving medical cannabis market, where patient registrations increased fifty percent during 2019 alone to over 300,000 patients.This kind of positive growth gives cultivation businesses a good reason to expand.
Competition
However, a robust cannabis market may not make the best expansion opportunity if there are numerous cultivators competing for the same customer base. California and Colorado are established cannabis markets — both medical and [adult-use] — servicing millions of customers each year. That’s exactly the reason expanding in those states may not be as lucrative as opportunities presented by less populated states. In 2019, California sold an estimated $3 billion in recreational cannabis — but there are nearly 3,000 licensed recreational cultivators in the state. In saturated cultivation markets, wholesale flower is quickly relegated to a commodity. Large, established markets, like California and Colorado, don’t hold the same potential value for expansion as a state that may have fewer consumers but is on the cusp of legalization.
Competition doesn’t only come from other licensed commercial cultivators, but from caregivers as well. Caregivers are home growers that are permitted to cultivate plants for medical cannabis patients. Consumers appreciate the personal touch that caregivers offer their clients, and the growers have more flexibility on pricing than do dispensaries. In medical markets, a thriving caregiver industry can seriously hamper retail dispensary sales and lessen the need for wholesale cultivators to supply them. Cultivation businesses should be cautious of expanding into markets with a strong caregiver presence. Coupled with competition from other commercial cultivators, this may not be as lucrative an expansion opportunity as other markets without such a caregiver network.
Adult-use cannabis is coming
The biggest influencing factor for cultivation companies considering expansion should be impending adult-use legislation. Servicing adult-use markets is much easier and more profitable than servicing medical cannabis markets. There are no patients, doctors, or prescriptions involved, and there’s a robust customer base on the very first day of sales. There is no need to develop a demand for recreational cannabis, because it already exists — everywhere! It’s only a question of transitioning paying customers from the illicit market to the legal market.
The ideal situation for expansion is a cannabis business operating a cultivation facility in a medical cannabis market where there’s good reason to believe there will be a transition to recreational cannabis soon. Medical dispensaries are often the first to receive permission to commence recreational sales, since they already have the infrastructure and processes in place. However, these dispensaries never have enough product to meet demand. In an attempt to protect their medical patient base, most fall woefully short of supplying the adult-use market. Expanding cultivation activities in anticipation of recreational use can place a cannabis business in an excellent position to service this new market.
This situation can be even more lucrative if the state that legalizes recreational sales is bordered by states with only medical cannabis laws, or no cannabis legislation at all. Adult-use stores sell to individuals from out of state that are 21 years of age or older, and cross-border traffic contributes substantially to a state’s total recreational cannabis sales. In the first four months of Illinois’ recreational cannabis program, transactions from out-of-state customers accounted for twenty percent of total state sales.
Excerpt from From Seed to Success: How to Launch a Great Cannabis Cultivation Business in Record Time by Ryan Douglas. Douglas is founder of Ryan Douglas Cultivation, a cannabis cultivation consulting firm. He was Master Grower from 2013-2016 for Tweed, Inc., Canada’s largest licensed producer of medical cannabis and the flagship subsidiary of Canopy Growth Corporation.
Member Blog: It’s Still Snowing – But is Jersey’s Grass Finally Green?
by Charles J. Messina, Esq., Jennifer Roselle, Esq., and Daniel Pierre, Esq. of Genova Burns LLC
The seeds are planted: Earlier this week, Governor Murphy finally signed the enabling legislation for adult use into law. Although voters approved a referendum to legalize adult use of cannabis back in November, lawmakers’ efforts to draft the enabling legislation often went up in smoke. Until recently, the governor’s office and legislative leaders couldn’t decide how to address underage possession and use of cannabis. Now, lawmakers agree that minors should be subject to a three-tiered warning system in lieu of hefty fines.
But for adults, the Governor’s signature does not allow for immediate access to or use of recreational cannabis. Even with the passage of the recreational use law, residents cannot grow their own cannabis at home or legally purchase it without a medical marijuana card. Presently, there are no dispensaries authorized to sell adult-use cannabis.
Medical dispensaries, however, are expected to be the first access point for the adult-use cannabis market. There are 13 medical dispensaries serving the 100,000+ medical patients in the Garden State, and 24 new medical marijuana licenses are expected to be announced soon, many of which will be designated as dispensaries. Once the existing medical dispensaries demonstrate to the CRC that they have satisfied the medical needs of their patients, and that they have municipal approval for adult-use sales, they should be the first to sell to adults 21 and over.
In order for the Garden State to grow a recreational market, the CRC requires the appointment of two more members. Once all five members of the CRC are appointed, it has a specific timeframe to promulgate the rules that will regulate New Jersey’s recreational use industry. The CRC must, for example, fully develop the criteria and application process for the following six classes of recreational licenses that applicants can apply for:
Class 1 Cannabis Cultivator license — permits growing, cultivation or production of cannabis in New Jersey. Cultivators are also permitted to sell and transport cannabis to other cultivators, manufacturers, wholesalers or retailers, but not to consumers.
Class 2 Cannabis Manufacturer license — permits the manufacturing, preparing and packaging of cannabis and selling it to other cannabis manufacturers, wholesalers, retailers, but not to consumers.
Class 3 Cannabis Wholesaler license — permits the storage and sale of cannabis strictly for resale to another wholesaler or retailer, but not to consumers.
Class 4 Cannabis Distributor license — permits the intrastate transportation of cannabis in bulk from one licensed cannabis establishment to another licensed cannabis establishment. Distributors may also engage in the temporary storage of cannabis as necessary to carry out transportation activities.
Class 5 Cannabis Retailer license — permits the sale of cannabis directly to members of the public from a retail store. Cannabis retailers may also operate cannabis consumption areas for consumers.
Class 6 Cannabis Delivery license — permits courier services for consumer purchases of cannabis by a cannabis retailer directly to consumers.
Once established, we anticipate applications for licensing to be announced. This will certainly happen after the epic snowfall melts, but many New Jerseyans and others are already starting to get their fertilizer ready…
Charles J. Messina is a Partner at Genova Burns LLC and Co-Chairs the Franchise & Distribution, Agriculture and Cannabis Industry Groups. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.
Jennifer Roselle is Counsel with Genova Burns LLC and Co-Chair of Genova Burns’ Cannabis Practice Group. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.
Daniel Pierre is an Associate in Genova Burns’ Newark, NJ office and a member of the Cannabis and Labor Law Practice Groups. In addition to labor work, he likewise assists clients in the cannabis industry, from analyzing federal and state laws to ensure regulatory compliance for existing businesses to counseling entrepreneurs on licensing issues.
For over 30 years, Genova Burns has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.
Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.
Senate Confirmation Hearings: Cannabis Edition
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Photo By CannabisCamera.com
You may have seen this week that there were a number of Senate confirmation hearings, and cannabis was a topic of discussion in some! But what are confirmation hearings, and what happened in them this week?
In Article II, Section 2, Clause 2 of the Constitution is the Appointments Clause, which empowers the President to nominate and, with the advice and consent of the Senate, appoint public officials. In layman’s terms, advice and consent essentially means confirmation.
As of publication, cannabis was brought up before two nominees this week: Attorney General nominee Merrick Garland, and Deputy Secretary of Treasury nominee, Adewale Adeyamo.
On Monday, President Biden’s nominee for Attorney General, Merrick Garland, appeared before the Senate Judiciary Committee. Before this, Garland’s position on cannabis was relatively unknown — he had ruled in a 2012 federal lawsuit case over DEA’s denial of a marijuana rescheduling petition and was one of three judges in the U.S. Court of Appeals for the District of Columbia Circuit panel that upheld the denial.
However, Garland’s position on cannabis became more clear this week — at least in how he views the Department of Justice’s role in enforcement and arrest disparities. While before the Senate Judiciary Committee on Monday, Garland was asked about marijuana arrest disparities by notorious cannabis champion Sen. Cory Booker (D-NJ). Sen. Booker asked:
“One big thing driving arrests in our country is marijuana arrests. We had in 2019 more marijuana arrests for possession then all violent crime arrests combined. When you break out that data and segregate along racial lines it’s shocking that an African-American has no difference in usage or selling than someone who is white in America, but their likelihood of being arrested for doing things that two of the last four presidents admitted to doing is three to four times higher than somebody white. Is that evidence that within the system there is implicit racial bias, yes or no?”
Garland responded: “It is definitely evidence of disparate treatment within the system, which I think does arise out of implicit bias. Unconscious bias may be, sometimes conscious bias.”
As Sen. Booker continued to question Garland about bias in the criminal justice system, Garland proactively brought marijuana back up, saying:
“The marijuana example is a perfect example. Here is a nonviolent crime that does not require us to incarcerate people and we are incarcerating at significantly different rates in different communities. That is wrong and it’s the kind of problem that will then follow a person for the rest of their lives. It will make it impossible to get for — to get a job and will lead to a downward economic spiral.”
Garland later continued:
“We can focus our attention on violent crimes and other crimes that put great danger in our society and not allocate our resources to something like marijuana possession. We can look at our charging policies and stop charging the highest possible offense with the highest possible sentence.”
But that wasn’t the only time the likely-soon-to-be Attorney General talked about cannabis. Freshman Senator Jon Ossoff (D-GA) asked Garland about equal justice, and highlighted the fact that “Black Americans continue to endure profiling, harassment, brutality, discrimination in policing and prosecution, sentencing, and incarceration.” While responding as to how his Justice Department would combat this, Garland said:
“One important way I think is to focus on the crimes that really matter, to bring our charging and arresting on violent crime and others that deeply affect our society. And not have such an overemphasis on marijuana possession, for example, which has disproportionately affected communities of color and damaged them far after the original arrest because of the inability to get jobs.”
During the “lightning round” of questions, Sen. Booker brought cannabis up again — this time, about enforcement and the now-rescinded Cole Memo. The Senator asked Garland, “Do you think the guidance in the Cole Memorandum should be reinstated, that the Justice Department respects states’ decisions?” Garland responded:
“I do remember it and I have read it. This is the question or prioritization about resources and prosecutorial discretion. It does not seem to me a useful use of limited resources that we have to be pursuing prosecutions in states that have legalized and are regulating the use of marijuana either medically or otherwise. I don’t think that is a useful use.”
This was, without a doubt, the most “cannabis positive” response from an Attorney General nominee in history! But the Judiciary Committee wasn’t the only one curious about cannabis this week!
Next, we move to the Senate Finance Committee, where Deputy Secretary of the Treasury nominee Adewale Adeyamo was being questioned Tuesday. During this hearing, Sen. Catherine Cortez Masto (D-NV) asked, “Do you believe Treasury should seek to update FinCEN’s 2014 guidance on the Bank Secrecy Act’s expectations for financial institutions that provide services to cannabis related industries, and if so, what changes do you recommend?” Adeyamo responded:
“Senator, I look forward, if confirmed, to talking to my colleagues at Treasury about this important issue and thinking through what changes may be needed and doing this in a way that’s consistent with the agency and the President’s guidance. In doing that I look forward to consulting with you and members of this Committee on our path forward.”
To be blunt, this is a really big deal! These questions show that the upper chamber of Congress is taking cannabis policy seriously, and expects the topic to be taken up by various agencies over the next four years. You can continue to count on the NCIA team to keep you updated, advocate on your behalf, and work with Congress and the Biden Administration to create a flourishing, responsible, diverse, and equitable cannabis industry.
Beware of Scams: NCIA Never Shares or Sells Your Contact Information
It’s come to our attention that various scams are going around offering to sell our event attendee and membership lists. As a reminder, we never sell or give away their contact info.
NCIA members and supporters have been the target of some groups that are trying to take advantage of our growing association.
Please note that NCIA and its vendors DO NOT sell exhibitor or attendee lists. Companies that do this are not affiliated with NCIA or any or our partners, in any way. Do not click on any links from emails from these types of accounts or from any that look suspicious.
If you receive a solicitation from a third party or from any person or business that claims to be an authorized vendor or makes it seem as though they are affiliated with NCIA, we ask that you forward the information to info@thecannabisindustry.org.
Member Blog: How Can Influencer Marketing Help Your Cannabis Business?
By Lindsey Griffith, Creative Content Specialist at ThrivePOP
It’s no secret: cannabis marketing is hard. Without federal legalization, many forms of digital advertising like Facebook, Instagram, and Google are nearly impossible. For years the industry has had to find creative ways to market cannabis while also staying compliant with current rules and regulations. As technology began to grow, influencer marketing began to take over social media platforms and rapidly became one of the most popular ways to promote your product or service.
From Kendall Jenner to Bella Hadid, major influencers and celebrities got paid in product or cash to promote to their large following. Evidence shows that for every $1 spent on an influencer marketing strategy, businesses will receive a return of over $5, more than doubling their revenue.While this was extremely popular for many years, the yearning for authenticity shifted the focus to smaller influencers. Here, we’ll discuss how that shift can be used as a pivotal tool in your cannabis marketing strategy.
Why Micro-Influencers Have The Most Power
After grasping what an influencer does and how they benefit your marketing strategyyou may be asking yourself: What’s the difference between a micro-influencer and a macro-influencer? Essentially, a micro-influencer is a social media personality with a following between 1,000 to 10,000 people. While macro-influencers generally have an audience ranging anywhere from 15,000 followers to millions of followers.
When researching a potential campaign, it’s important to consider your own cannabis brands target age, gender, lifestyle traits, and more. After identifying these demographics, now you can begin to research local influencers that you believe will best speak to that audience. Some interesting statistics that you should consider when you begin implementing your influencer marketing strategy:
84% of Micro-Influencers recommend products or services at least once a week.
77% of Micro-Influencers create content every day.
Micro-Influencers have over 7 times higher engagement rate than Macro-Influencers.
63% of marketers intend to increase their influencer marketing budget in the next year.
54 percent of influencers say they will work with brands who respect them as they would any other publisher.
91% of millennials trust online reviews as much as friends and family.
68% of bloggers prefer to work directly with a brand instead of an agency or network
When marketing a product or service you’re always striving towards building trust and authenticity. One of the biggest advantages micro-influencers have in promoting products or services to their audience is that they are deemed trustworthy sources, as opposed to a macro-influencer.
While trust in major influencers began to wane over time, it proceeded to plummet after several major scandals that caused users to question these social profile’s credibility and whether or not their recommendations were genuine. Fyre Festival anyone? This is when people started to look at smaller influencers to speak about products or services they truly valued, and to share that value with a smaller audience. No matter the marketing campaign, establishing transparency and credibility is the key to success.
Create Relationships
Collaborating with influencers doesn’t just help you create new relationships with potential customers, but it also helps grow your relationships with long-term brand partners. Once you’ve found an influencer that is the best fit, one of the best ways to build and maintain those relationships is to find ways to enrich further collaborations.
In order for your campaign to be successful, both parties need to be clear about expectations on benchmarks to measure. Disagreements and fights that come about when there is a miscommunication on the success of an ad campaign can permanently tarnish not only your relationship but can also put your brand authenticity at risk. Some of the items you need to determine before starting a campaign include:
Content imagery and verbiage.
Posting frequency and schedule.
Posting platforms and unique content curation/platform.
Establish payment (monetary or gifting product.)
Requested campaign outcome (gains of followers, purchases, engagement, etc.)
How To Reach Out
Now that you know everything it takes to rock your cannabis marketing with social influencers, it’s time to get started! If your cannabis business is ready to take a deep dive first make your dream influencer list. Once this dream list is “established” now it’s time to reach out! Consider finding an official contact email first as opposed to sending a direct message to the influencers page (this DM box is likely full and your inquiries may get lost). Make sure your message is proofed, professional, and carefully crafted. A sample collaborative email to an influencer may look something like:
“Hi [Insert Influencer Name],
I love your post(s) about [insert topic here] on Instagram. [Insert another sentence or two relating to their feed that adds a human element]!
My name is [insert name here] and I work for [insert company name]. We [insert what you do or your mantra]. I am reaching out because [insert what you saw in their feed, posts and what they are passionate about and relate it to your brand’s purpose]. We would love it if you would collaborate with us [insert any collaboration specifics in mind]!
Please let me know if you are interested and I will send more details.
No matter where you’re at within the industry, it’s no secret that cannabis marketing is both difficult and time-consuming. Consult with the movers and shakers in the marketing industry to help guide you in the best direction moving forward. Consider joining social media groups or joining cannabis business clubs within your community to learn from one another and to help grow.
Lindsey Griffith is the Creative Content Specialist at ThrivePOP, a West Michigan-based Digital Marketing Agency. As a copywriter, Lindsey has experience in creating and implementing content across several digital platforms including podcasts, webinars, blogs, and social media profiles. During her cannabis career, she has worked with several cannabis manufacturers on search engine optimization through blogging to drive traffic to their website and assist in organic social strategies to gain new followers. Lindsey received her Bachelor’s Degree In Marketing from Grand Valley State University and her work has been published across several cannabis industry platforms.
Committee Blog: Manufactured Product Safety – 2021 Series Premier
by NCIA’s Cannabis Manufacturing Committee
Product safety isn’t an endpoint, it’s a journey. And let’s face it, there is years-worth of research left to do on the safety of cannabis products. That’s why it’s important to stay up to speed on the latest thinking from leaders in the industry. In 2021, the National Cannabis Industry Association’s Cannabis Manufacturing Committee intends to help you do just that by providing information and approaches aimed to help you continue to improve the safety of your manufactured cannabis (marijuana and hemp) products while providing your customers with increasingly trusted experiences. This Manufactured Product Safety Series will consist of blogs, podcasts, and expert panel discussions focused on providing insight into topics relevant to a wide range of manufacturers.
Over the course of the next several months, we’ll bring you content with the following working titles.
Vapor Liquid Formulations
The Importance of Testing Vapor Products as a System
Edibles Stability – Microbial Growth Due to Insufficient Packaging
Terpene Limits Across Multiple Product Formats
But while we’re busy crafting these new pieces, we want to take advantage of our past publications to keep important safety topics front and center. Back in January of 2020, in response to the then-emergent EVALI outbreak, NCIA’s Policy Council created a whitepaper to provide guidance to the industry and regulators. We’re republishing portions of this whitepaper starting with the Vaporizer Liquid Formulations section below. We’ve learned more about EVALI since its original publication, and while some of the specifics may be a little dated, the principles remain relevant to helping you understand product safety.
Disseminating our knowledge of this topic also helps promote better regulation. Examples of what can go wrong are the Oregon Liquor Control Commission’s (OLCC) recently adopted regulations that effectively ban the use of propylene glycol (PG). Granted, they were addressing a difficult issue and made some good decisions, but had they read this piece, they might have better understood that PG “degradation has been shown only with temperatures in excess of what is typically produced by well-controlled hardware.” Even in studies where the temperature was not well controlled, thermal degradants were detected in amounts that are lower in the vapor stream when compared to combustion and inhalation of plant products, such as cannabis flower. And given that PG has been “used at up to 90% concentration in e-cigarette products for the past decade without reports to date of significant health issues,” it is unwise to ban an ingredient option that may turn out to have a better safety profile than even certain native terpenes, some of which may have to be added at abnormally high concentrations in order to achieve the desired viscosity, without further research.
So with that in mind, stay tuned for the next piece in the series and enjoy the excerpt below!
Excerpted from THE KEY TO CONSUMER SAFETY: DISPLACING THE ILLICIT CANNABIS MARKET RECOMMENDATIONS FOR SAFE VAPING
The cannabis-derived ingredient in cannabis oil vaporizers is a concentrate that is produced by extracting the cannabinoids and other compounds from the plant. With the exception of supercritical CO2 extraction, most other common extraction methods use butane, alcohol, or hexane as solvents for the extraction of cannabis oils used in vape pens. Extraction processes using these solvents may result in a small presence of the solvent in the extracted oil. Any residual solvent must ultimately be removed prior to any product being sold to consumers. States that have legalized and regulated cannabis typically have specific requirements regarding allowable concentration levels of these solvents. These states also require full analytical testing by licensed independent labs, including reporting of residual solvents, to ensure that only safe levels of any solvents are present in the final formulation of cannabis vape products.
The type of cannabis concentrate used in a vaporizer is important to consider. Some require diluents or other additives to be effectively vaporized while other types of concentrates (eg: live resin) have the appropriate viscosity to be used in vaporizers without adding any diluting non-cannabis ingredients.
Similar to what we are seeing in the commercial e-cigarette industry, some manufacturers of cannabis extract-containing vape pens choose to add ingredients that help adjust the viscosity of the cannabis oil. This allows the oil to flow evenly through the atomizer when heated. Some of these additives may also contribute to a vapor “cloud” when exhaled. PG, VG, and PEG are the most commonly used cosolvents or diluents. PG and VG are on the FDA’s Inactive Ingredient List for inhalable drug products and are allowable only at fairly low concentrations in drug products, but have been used at up to 90% concentration in e-cigarette products for the past decade without reports to date of significant health issues. PEG is not on the FDA’s list and less is known about its inhalation toxicity. Therefore, PEG should be viewed with more caution, even at lower concentrations.
The state of Colorado has paved the way for the industry on forward-thinking cannabis regulations and remains an industry leader. Governor Polis, his cannabis advisor, and the Marijuana Enforcement Division should be commended for creating an environment in the state that fosters business development while simultaneously protecting consumers. After discussions between Colorado regulators and stakeholders about additives, and given the lack of sufficient safety reviews of these ingredients, the state of Colorado prohibited Polyethylene glycol (PEG); Vitamin E Acetate; and Medium Chain Triglycerides (MCT Oil) in inhalable concentrates and products effective January 1, 2020. Colorado further banned non-botanical terpenes, any additive that is toxic, and any additive that makes the product more addictive, appealing to children, or misleading to patients or consumers. Other states should consider following Colorado’s lead.
The creation of degradants through overheating is also an important consideration. For example, overheating PG and VG may result in their degradation into molecules with established toxicity profiles such as glyceraldehyde, lactaldehyde, dihydroxyacetone, hydroxyacetone, glycidol, acrolein, propanal, acetone, allyl alcohol, acetic acid, acetaldehyde, formic acid, or formaldehyde. However, this degradation has been shown only with temperatures in excess of what is typically produced by well-controlled hardware. Because PEG is a polymer of glycerin, its degradation upon heating is similar to that of VG and it forms the same unwanted toxic molecules.
Vitamin E Acetate and Tocopherols Inhalable Safety Profile Has Not Been Evaluated
Investigators at the FDA and CDC recently found that some cannabis-containing vape products from the illicit market contain a molecule called vitamin E acetate (VEA), also known as Tocopheryl acetate. Vitamin E is a common name for several similar types of chemicals called “tocopherols.” Vitamin E occurs naturally in certain foods, such as canola oil, olive oil and almonds, but also can be made synthetically. Tocopherols are used as nutritional supplements, and manufacturers put tocopherols in food and cosmetics. VEA is the acetic acid ester derived from vitamin E and is also not known to cause harm when ingested as a supplement or applied to the skin.
VEA’s safety when inhaled has not been evaluated. Numerous published studies indicate that the inhalation of vaporized oils, including certain tocopherols, are harmful to the lungs and numerous cases of lung injury after their inhalation have been documented since 2000. Tocopherols such as VEA adhere to an important fluid in the lungs called lung surfactant. Lung surfactant enables oxygen to transfer from air into your body. Studies have shown that tocopherols impair gas transfer in the lungs. Currently, it is believed that inhalation of significant amounts of certain tocopherols can lead to the death of lung cells and initiate a massive inflammatory reaction that can further contribute to lung damage and functional impairment. Accordingly, VEA should not be used as an additive in any inhaled product. Following the FDA and CDC’s investigation, Colorado added VEA to their list of prohibited ingredients in inhalables to their regulations effective January 1, 2020.
Artificial Flavorings Have Not Been Fully and Scientifically Evaluated.
Some manufactures of cannabis extract-containing vape pens choose to add flavoring agents to the cannabis oil to give them a distinctive flavor, similar to products in the electronic cigarette industry. These additives tend to produce flavorings that are appealing to some consumers. While a number of flavorings have been used for many years without incident, the safety of the majority of flavorings when added to vaporized products – alone or in combination with cannabis extracts – have not been fully and scientifically evaluated.
In one study, certain chemicals that are used in flavorings for vanilla, cherry, citrus, and cinnamon can create compounds called acetals when they are mixed with solvents such as PG and VG. Acetals are known to cause irritation when inhaled and can lead to chronic inflammation in the lung. The long-term
effects of these flavoring agents on lung function are unknown. A separate study showed that some popular flavorings may increase the risk of cardiovascular disease when inhaled, although several other studies show no negative effects.
As approximately 17 million Americans use vape products, many of which contain flavors, and only around 2,000 cases of e-cigarette, or vaping, product-use associated lung injury (EVALI) are currently being reported, it appears unlikely that all flavoring agents in all hardware devices are linked to EVALI. However, until more detailed safety studies have been completed on these product lines, manufacturers should proceed with caution.
Some Terpenes are Safe (GRAS); Some Can be Harmful When Heated
Terpenes are a class of molecules found in many plants, including cannabis, that are responsible for the aroma of the plant. Plants evolved to make terpenes to attract pollinators and to deter herbivores and unwanted pests. Terpenes are biologically active and help contribute to many of the physiological effects of inhaled cannabis. Isolated terpenes have been widely used as fragrances in perfumes in the cosmetic industry and in medicine, such as aromatherapy. Although many terpenes are considered “Generally Regarded As Safe” (GRAS) by the FDA, some terpenes are toxic when inhaled/ingested at high concentrations. While most cannabis goods on the market contain levels of terpenes similar to those that occur naturally in the cannabis plant (~1-5%), some products contain terpenes at much higher concentrations (upwards of 25%). High levels of terpenes and other molecules can also occur if chemical procedures such as distillation are used to concentrate cannabis or hemp oil.
In general, terpenes are benign at low concentrations; however, overexposure to concentrated terpenes has the potential to lead to negative effects, including hypersensitive (allergic) reactions in chemically sensitive people. Additionally, some vape pens do not have the means to adequately control the temperature and can heat the cannabis oil to a very high temperature. In certain instances, this has been shown to lead to thermal decomposition of some molecules in cannabis extracts, such as terpenes, resulting in the formation of new molecules with established toxicities. It is also worth noting that even when these new molecules have been shown to form, they have beendetected in amounts that are lower in the vapor stream when compared to combustion and inhalation of plant products, such as cannabis flower, or tobacco leaf.
Cannabis-derived Terpenes
Cannabis contains terpenes, such that cannabis oil extracts used in vape products typically also contain these molecules, depending on the extraction method. Typically, the distillation process causes a loss of terpenes. Some vape manufacturers now recover cannabis-derived terpenes during the distillation process and then re-introduce them back into the final formulated product. Because of poor process control, one potential safety concern from this procedure is that these cannabis-derived terpenes have an undefined molecular composition and the specific concentration of any terpene in the crude mixture likely varies from batch-to-batch due to numerous experimental variables. For example, many manufacturers that are producing large volumes of vape products by necessity must make the oil extracts from a mixture of cannabis strains. Since every cannabis strain contains different terpene profiles, this means that formulated products made from these strains will also vary in their terpene profiles from batch-to-batch.
The potential for terpene profiles changing during the manufacturing process could pose a potential safety concern. Additionally, new isomers, oxidative by-products, or degradative terpenes may be present in these captured terpenes, which could possibly present hazards never presented by merely combusting and smoking the cannabis plant. Some states that have regulations on cannabis require analytical testing of formulated products, including the reporting of terpene concentrations, but this is not yet the universal standard. Vape manufacturers must exercise caution and be required to analyze terpene profiles of products they make in order to begin to develop a better understanding of this subject. Adhering closely to terpene concentrations known to be present in cannabis flower is a good practice.
Non-Cannabis Derived Terpenes Can Contain Residual Solvents and Pose Dangers
One widespread misconception in the cannabis vape industry is that cannabis-derived terpenes are somehow safer or better for you than non-cannabis-derived terpenes. There are few cannabis-specific terpenes because most terpenes are also present in other plants. Most cannabis vape manufacturersthat operate at a large scale, therefore, prefer to use terpenes isolated from non-cannabis sources to introduce into their formulated products. There are several reasons why this is popular in the industry. High purity terpenes (e.g. >99% pure) are sold by numerous retailers, which allows these terpenes to be re-introduced into cannabis vape products at defined and safe concentrations. Also, the cost of using non-cannabis-derived terpenes is far lower than the cost of isolating and using cannabis-derived terpenes.
For example, the terpene D-Limonene is present at extremely high levels in citrus fruits, and therefore can be isolated to high purity easily and inexpensively from them. In contrast, in most cannabis strains D-Limonene is only found at relatively low concentrations, and therefore one would have to use massive amounts of cannabis material to isolate significant quantities of this terpene required for companies that are operating at scale.
The origin and concentration of non-cannabis-derived terpenes that manufacturers use in their formulations is nevertheless important. Non-cannabis-derived terpenes from overseas often have several residual solvents in them, including ethanol, hexane, xylenes, benzene, butane, and toluene. Moreover, some retailers of non-cannabis-derived terpenes do not list the actual concentration or purity of terpenes in their products. It is imperative that cannabis vape manufacturers purchase and use non-cannabis derived terpenes that are accompanied by a COA that reports the purity of the terpene, any solvent(s) that may carry the terpene, and be required to adhere to the same purity standards and mandatory analytical testing requirements as cannabinoids. Reputable companies will also supply a safety data sheet (SDS) that describes the known toxicities of that terpene by different routes of ingestion, including inhalation.
Cannabis manufacturers that make formulated vape products should be aware of any toxic liabilities of non-cannabis-derived molecules introduced into these products. Vape products should also undergo analytical testing for cannabinoids, terpenes, and contaminants. Finally, analytical tests for aerosolized cannabis, similar to those used in the e-cigarette industry, should be developed, implemented, and mandated to address safety concerns. The industry needs to build the volume of inhalation safety data required for all of these ingredients, hardware, and end product combinations.
State of the States – Cannabis Policy Reform in the Current Legislative Sessions
by Morgan Fox, NCIA Director of Media Relations
The last few weeks have seen quite a bit of excitement for the possibility of comprehensive federal cannabis policy reform being closer than it has ever been, but what about the states?
Historically, the vast majority of progress has been made at the state level, and this year is shaping up to be another one full of victories for legalization advocates as state governments struggle to support their economies, create new tax revenue and job sources, and tackle long-overdue criminal justice reforms.
The overwhelming approval by New Jersey voters of a referendum to make cannabis legal for adults last year has put the spotlight firmly on the Northeast and mid-Atlantic regions. With state legislative sessions already underway, a number of states are already prioritizing legalization much more heavily than in years past even as New Jersey lawmakers struggle to pass enacting legislation to carry out the will of the voters in a fair and equitable manner. It is pretty clear that New Jersey’s neighbors don’t want to be left behind when it starts reaping the benefits of regulated cannabis markets.
Early this year, New York’s Gov. Andrew Cuomo released a statement outlining his plan to make cannabis legal in the state, and just recently added amendments that would allow delivery, clarify the tax system, and reduce penalties associated with some cannabis activities. There are still some concerns with this plan, including the amount of funding that would actually go toward repairing the disparate harms caused by prohibition and the lack of legal home cultivation. Regulated cannabis in New York could be worth more than $3.5 billion and create more than 60,000 jobs, making it one of the largest state cannabis markets in the country.
Meanwhile, in Delaware, a legalization bill that was approved in the state House in 2019 is slated to be reintroduced by the sponsor in the coming weeks. This bill would come on the heels of a report released last month by the state auditor which estimated that Delaware could take in $43 million annually with a 20% excise tax, and create more than 1,400 jobs over a five year period. In what seems to be a disturbing trend in some state legislatures this year, this bill is not expected to initially include home cultivation either.
In Connecticut, however, a new adult-use bill has been introduced that would center on restorative justice and social equity in the industry and would allow adults to grow limited amounts of cannabis in their homes. This bill has strong support in the state legislature but may soon have to compete with Gov. Ned Lamont’s proposal, which is expected to be released soon.
Nearby Pennsylvania is likely to consider adult-use legislation this year, with Gov. Tom Wolf (along with the incredibly supportive and newly internet-famous lieutenant governor) urging lawmakers to address the issue and – earlier this month – calling it a priority for his state’s annual budget proposal. Rhode Island lawmakers are expected to consider legalization again this year as well, and with the departure of Gov. Raimondo, it is more likely that the emphasis will shift away from a state-run model and back to regulating private businesses.
Farther South, Virginia made headlines this month by becoming the first state in 2021 to have both chambers of its legislature approve adult-use bills. Lawmakers are committed to ironing out the differences between the two bills this month during an extended session. With Gov. Ralph Northam in full support, Virginia stands poised to become the 16th state overall to make cannabis legal for adults and the first state to do so in the South, and it would be only the third to regulate cannabis through its legislature.
Adult-use legislation has also been introduced in Maryland, with supporters and cosponsors optimistic that it could be passed this year, though lawmakers there are not as far along in the process as their neighbors in Virginia. And in medical news, advocates in South Carolina are taking another shot at passing a medical cannabis bill there.
There are signs of progress from elsewhere in the nation as well. After running out of time in an emergency session last year, New Mexico’s governor and lawmakers wasted no time in getting back to legalization efforts this year. There are currently several bills being considered, and it appears very likely that some form of adult-use will be approved there this year.
This is just a snapshot of the momentum and positive movement we are seeing at the state level this year. If you are interested in up-to-date information about all cannabis-related state legislation in the U.S., please consider subscribing to Marijuana Moment’sbill tracker.
Unfortunately, the news isn’t all good.
In South Dakota, where voters approved both medical and adult-use initiatives in November by wide margins, advocates have suffered a temporary setback on the adult-use front. After a pair of law enforcement officials sued to have the adult-use bill thrown out because it addresses too many issues for a constitutional amendment, a circuit court judge ruled in their favor earlier this month. This situation is extremely disheartening and outrageous: the will of the people was overturned by a judge who was appointed by a governor who not only actively campaigned against the ballot initiative but also paid for the lawsuit to overturn it with taxpayer money! However, supporters have appealed the decision to the state Supreme Court.
In Montana, where voters also passed an adult-use initiative in November, supporters are faced with another lawsuit on similar grounds that was filed by opponents. However, observers are skeptical of that suit being successful, and lawmakers are moving ahead with developing enacting legislation.
And in Idaho, where a medical cannabis initiative was prevented from getting on the ballot last year, prohibitionist lawmakers are moving forward with a bill that would prevent any future legislation to make cannabis or any other currently illegal substance legal. If passed, this bill would be put before the voters in 2022, where it could very well be on the same ballot as a medical cannabis referendum.
Despite efforts to overturn progress and maintain failed and harmful cannabis policies, things are generally looking up and we expect several states to pass laws to stop arresting cannabis consumers and establish legal, regulated marketplaces in the near future.
by Madeline Grant, NCIA’s Government Relations Manager
There is momentum brewing in Congress as we enter the 117th session. With Democrats controlling the House of Representatives, Senate, and White House, we certainly feel a hopeful shift in Washington that is exciting for the cannabis community. Last Congress, we saw various cannabis reform bills move through the legislative process on the House side, however, those efforts were then stalled in the Republican-controlled Senate. As we enter a new year, there’s also a new congressional dynamic and that gives us hope, for some different outcomes.
Last Friday, our Government Relations team met virtually with Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chair Ron Wyden (D-OR), Sen. Cory Booker (D-NJ), and various stakeholders and advocates. These three key Senators are preparing to release new progressive, comprehensive cannabis legislation sometime in the early part of this year. The group discussed a wide variety of topics related to reform and focused primarily on cannabis justice and removing marijuana from the Controlled Substances Act. We, the National Cannabis Industry Association, are here to be a resource as Congress moves the ball forward and we’re proud to represent your business in Washington, D.C.
On February 1, the three Senators released a joint statement. They stated, “The war on drugs has been a war on people — particularly people of color. Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country. But that alone is not enough. As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the war on drugs.”
“With the launch of our DEI initiatives, NCIA is committed to ensuring that restorative justice and opportunities for Black and brown entrepreneurs in the burgeoning cannabis industry are at the center of our work,” said Tahir Johnson, NCIA’s Business Development Manager, and DEI Program Manager. “As the industry’s leading trade association, we’ve taken strides to ensure that not only our membership but also the Board of Directors and thought leadership is representative of that work. Through our policy and government relations work, we aim to make certain that social equity remains at the forefront of legislative conversations this session.”
Undoubtedly, there is a lot of work that needs to be done, and as a unified front, we can accomplish this successfully. As the government relations team discussed cannabis policy in a virtual meeting last Friday, we saw an open discussion for all organizations, advocates, and others. The Senators underscored the importance that we are united in our efforts to pursue reform.
Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations, attended the virtual meeting. She said, “The meeting with Leader Schumer and Senators Wyden and Booker was phenomenal. Beyond that, it was historic. I’m looking forward to working with those offices on issues like tax policy, regulations, and creating a diverse and equitable industry that allows businesses of all sizes to thrive. I’m also honored to work alongside the other stakeholders included on the call (and others) this session to pass exciting, groundbreaking legislation.”
The NCIA Government Relations team hopes to hear from you, our members, about any questions or concerns you have. As we continue to meet with lawmakers, we will keep you attuned to policy reform moving forward. If you haven’t checked out NCIA Connect, our online platform for networking with your fellow NCIA members, make sure you log in today to stay even more inspired, informed, and connected.
Member Blog: As Cannabis Sales Rise, So Do Questions About Privacy and Security
Frank Nisemboum, Vice President of ERP Sales at c2b teknologies
Legal cannabis is a big business that handles big data. From personalized data to protected health information to cannabis information that requires regulatory compliance with cybersecurity and data privacy laws–the entire cannabis industry faces data privacy and cybersecurity challenges not faced by other sectors.
But wait, other sectors have to navigate data concerns, too right? Cannabis is different. Aside from adhering to all the typical privacy concerns, cannabis data comes with a layer of complexity for cannabis operators due to industry-specific data collection and mandatory retention requirements surrounding it.
Growing Cannabis Data Collection
A cannabis customer provides a vast amount of personally identifiable information every time they buy legal marijuana products. These individuals present a government-issued ID card to confirm they are at least 21 for adult-use purchases or prove they have a prescription to access medical marijuana. The data collected on each transaction includes customer or patient name, date of birth, address, phone number, driver’s license or medical ID card numbers as well as email addresses and signatures.
Cannabis dispensaries also provide equally large amounts of operations data to METRC (Marijuana Enforcement Tracking Reporting Compliance), used in 13 states and the District of Columbia. METRC is not the only government reporting company used to maintain cannabis compliance. For example, California relies on the CCTT (California Cannabis Track-and-Trace) system to report the inventory and movement of cannabis and cannabis products throughout the cannabis supply chain.
Cannabis legalization is expected to spread across the country to all 50 states now that adult-use cannabis is permitted in 11 states and Washington D.C. and 36 states allow medical marijuana. Many of those states require all cannabis licensees, both annual and provisional, to use METRC to track marijuana products through the entire supply chain.
Cannabis cultivators, manufacturers, retailers, distributors, testing labs, and micro-businesses need to manage and maintain those records for a minimum of seven years. It’s a tremendous amount of valuable data for cannabis companies to track, the precious data cybercriminals and hackers seek out, including combinations of protected personal and health data like social security numbers and diagnoses with supplemental information like addresses, copies of ID cards.
If a cannabis company dispenses medical marijuana to patients or supports one who does, they fall into the regulatory oversight of the Health Insurance Portability and Accountability Act (HIPAA) and the Office of Civil Rights (OCR).
Safeguarding Cannabis Data
Legal cannabis and the data security issues it creates form multi-prong challenges from a legal and technological perspective. The cybersecurity and data privacy requirements don’t come with a roadmap cannabis operators can borrow from other industries due to the massive repositories of personalized data that require regulatory compliance with cybersecurity and data privacy laws.
The collection, storage, and security of all this valuable data raise many privacy and security concerns, especially when guidelines for collecting the information vary by state. For example, Ohio and California must house personal data using third-party software to track inventory and retail point-of-sales, whereas Illinois dispensaries cannot store any personally identifiable information onsite and instead use cloud or other off-location services.
Healthcare companies make attractive targets for hackers and often suffer data breach more often due to their huge storage of protected health information (PHI). Medical dispensaries and supporting companies handle PHI too, but PHI is not all a cybercriminal may want from a cannabis operation.
Employee records often contain background checks and financial data along with personally identifiable information such as name, date of birth, and SSN, all in one nice package. And cannabis data has been breached several times in recent years.
Cannabis Data Breaches Happen
Even as a newly legitimized industry, cannabis organizations have already experienced high-impact data and security breaches. In early 2020, a database breach that impacted almost 30,000 people connected to the marijuana industry resulting from an unsecured Amazon S3 data storage bucket was reported. The data breach included scanned versions of government-issued ID cards, purchase dates, customer history, and purchase quantities.
In 2019, a Canadian cannabis company exposed the electronic medical records of over 34,000 customers.
Between 2016 and 2018, the cannabis-tracking software provider MJ Freeway endured significant data breaches where over 1,000 dispensaries in 23 states were hacked. Less than six months later, hackers stole a portion of MJ Freeway’s source code and posted it publicly to social media.
Prior to that, Nevada’s Medical Marijuana Program database was breached in 2016, exposing sensitive personal data of over 11,000 people involved in the Nevada cannabis industry. This breach included names, social security numbers, race, as well as home and business addresses.
Cannabis Operators Short on Cybersecurity Budgets
Cannabis companies are responsible for securing their data to protect their customers and staff. To prevent data leakage, point-of-sale machines need endpoint protection, encryption, secure backups with proper network segmentation.
Unfortunately, some cannabis organizations fall short of installing appropriate cybersecurity measures that could have far-reaching effects on a cannabis user. Leaked personal data could have negative personal and professional consequences for the cannabis patient whose workplace prohibits cannabis use.
To avoid becoming an easy target, cannabis companies need to focus on data privacy and security just as much marketing and sales. The penalties from having a customer or employee’s personally identifiable information and cannabis-related data exposed can be too expensive to ignore and fail to give confidence that their data is secure.
Vice President of ERP Sales, Frank Nisemboum,is a trusted advisor at c2b teknologies who has guided organizations of all sizes enabling them to establish a technology presence and expand their business through technology. His proven ability to analyze the current and future plans of a company and work with team members to subsequently bring technology solutions to the organization result in improved processes and controls that assure continued growth and profitability.
Frank has worked in the ERP and CRM software selection, sales and consulting industry for almost 25 years. His strong ability to understand, interpret and match the needs of an organization to the right solution make him an asset to all of his clients.
c2b teknologies integration and engineering experts have partnered with leading cannabis industry experts to develop a software solution that provides a complete cannabis operations system. The best-in-class solution not only handles tracking of seed-to-sale activities but encompasses your entire cannabis operations with compliance needs handles along the way. Our passion for solving problems drives us to deliver innovative solutions for everyone we work with. Visit c2btek.com for more information.
Member Blog: Growing Beyond THC – Terroirs and Terpenes Are The Future Of Premium Cannabis
I’m a serial entrepreneur and my roots in Napa Valley run deep. I’ve been a cultivator in this beautiful terroir for over 40 years, initially as a wine guy from a family of growers and makers, and now as the Co-Founder and CEO of a premium seed-to-sale cannabis company. I see a lot of similarities between wine and cannabis, comparisons that paint a bright, accessible, and profitable future for our industry.
Wine + Cannabis Offer Interesting Comparisons
Both are agricultural products that are highly regulated, though cannabis far more so given the industry is still in its infancy. 40 years ago, when my family started in the wine business they experienced similar business challenges, or as I like to call them – opportunities.
Like wine, cannabis comes in a variety of strains and formats. Also, like wine, cannabis is extremely well suited to the growing conditions of California’s terroirs, especially those where I live in Northern California. If you think about the wide variety of wine varietals – Cabernet, Pinot, Sauvignon Blanc, Rieslings, and so on – there is an even greater variety of cannabis strains – Lemon Sour Diesel, Double Chem OG, Budzilla, Bogota Berry, etc. There is something for every palette, which pre-legalization, I am not sure many people really paid attention to. This is all to say, that just as there are many different ways to enjoy wine depending on your tastes, your budget, or your intentions and preferences, the same is true for cannabis.
There’s so much more. If you’ve ever had a great wine or even a decent wine, you know that there are all these flavors and aromas that layer on each other and evolve over time, interacting in different ways to create this wonderful sensory experience that’s both about taste and smell. The same goes for cannabis. Premium cannabis is as complex as the most complex wine. Both wine and cannabis contain terpenes and it’s the variety of different terpenes in each of them that determines the flavors, aromas, and overall experience. Coming from wine, this is something I understand and I think as people explore cannabis without the stigma of prohibition, they will begin to seek out terpene-rich strains, just as they now seek out complex wine profiles – perhaps unknowingly given how wine is such a normalized product in today’s society.
Of course, there are obvious differences between cannabis and wine. The plants themselves are very different. One’s an annual plant and one’s a perennial vine. But, they both produce very similar compounds that make the sensory experience of their flower and fruit so much richer.
Let’s Talk Terpenes
You’ve probably been hearing a lot more about terpenes lately. They’re kinda the new ‘it’ thing in our industry. Terpenes are organic compounds in plants responsible for the unique smells and tastes of your favorite plants, flowers, and fruits. Most people don’t know this but with both wine and cannabis, most of what you think you’re tasting is actually what you’re smelling. It’s these terpenes that give your favorite wines and cannabis strains their signature scents.
Some of them overlap — there are some of the same terpenes in both cannabis and wine grapes like limonene and myrcene. And then there are some terpenes that are more unique to one plant or the other. But it’s the same compounds and so coming out of wine, it was such a natural thing for me to say, I’m not in this to build the strongest, highest-THC-get-you-wasted product. I wanted to develop something that honored the terroirs I’ve come to know and love. A premium product offering, with the same wonderful components of the wines I’ve been creating and the same rich variety of flavor profiles as the grapes I’ve been growing for all these years.
As chemicals go, terpenes offer delicate but very distinctive aromas but they are volatile and, if you’re not careful, will disappear quite quickly. You have to work to maintain them to keep them from evaporating from your flower as from your wine. Taking the time and care to capture and preserve these aromas and flavors that are truly unique to each strain and varietal makes for a much richer experience than the extreme high that some people chase, the cannabis equivalent of Night Train. With cannabis, quickly harvesting the flower and getting it into a temperature and humidity-controlled drying room helps maintain these volatile compounds as does the way you cure and store the flower after the initial drying. In wine, we preserve the terpenes with careful barreling and bottling.
The best way to enjoy terpenes is to use a flower vaporizer. Just heating it up enough to release everything without burning it and without burning rolling paper that covers up the subtle aromas of the terpenes.
Outdoor Growing Enriches the Final Product
The cannabis plant has been growing outside for millennia and our hypothesis at Napa Valley Fumé is that growing outdoors creates a wider range of terpenes and a richer, more nuanced consumption experience. A plant, like a human being, is a holistic entity, it’s a being of a sort. If you took a person — like in The Truman Show — and never let them outside, what would that do to that being?
In truth, we don’t really know what indoor growing does to the plant. But what I think is that these plants are meant to be grown outside. That’s where they do their best. They have to contend with elements that make them stronger, and other factors like pests, which over time create resistance, again making them stronger. They are also receiving full-spectrum sunlight that changes each day of the year. As the year goes on, the color spectrum starts to vary. It is bluer in the spring and redder in the fall. So while I get the efficiency of indoor growing, I believe that all of these environmental elements together with the heating during the day and cooling at night and the fact that different growing regions have different climates and terroirs, you get the best, most interesting plants when you grow outdoors.
Terroir: As Important to Cannabis as They are to Wine Grapes
Terroir is a great word because it’s not just about one element, it’s about everything in a given place. The altitude, the soil, the mineral content of the water, the directional exposure to the sun. In Napa where we’re based, the terroir is affected by the fog that comes up from the Bay. We measure the temperature days over the course of the whole growing season, assessing the total heat that the plant received. All of these things contribute to the terroir and the terroir informs and enriches the sensory experience of the resulting fruit and flower.
Plants, whether you’re talking about grapes or cannabis, will perform differently in different terroirs and will express themselves in different, nuanced ways. For me, this suggests a bright future for sun-grown cannabis with a wide variety of strains each displaying the unique signature of their terroir. The same seed grown across different terroirs expresses really differently, resulting in a distinct profile in the flower and an enhanced consumption experience.
Bottom Line: Terpenes, Terroirs, and Outdoor Growing Paint a Bright Future
This plant has so much to offer and is so expressive. While there’s a place for both indoor and outdoor, it seems to me that the most expressive form of this plant, with the most interesting aromas and flavors, comes when you grow in the full spectrum of sunlight outdoors. To attain the same rich variety in your cannabis experience as you do with wine, you want to do it outdoors, you want to tend them for the greatest terpene expression, you want to pick your strains at the beginning for that. Optimizing for terpenes doesn’t just have a flavor effect, it also shapes the psychoactive effect of the flower. The right terpenes and compounds can make the resulting high sleepier or more energetic, as well as providing other health benefits that are currently supported by anecdotal evidence and will likely be born out in the research that is currently underway.
As with the trajectory of the wine industry, we believe that educating consumers about terpenes and terroirs and offering them a wider variety of products and consumption experiences, will expand the category, creating a bright future for all of us. I’m excited and encouraged by articles like this one from Wine Magazine that suggest that we’re on to something.
Eric Sklar is an entrepreneur, Napa Valley vineyard owner and public official. He and his family have been growing grapes in Napa Valley for 40 years and he planted his first licensed cannabis garden in 2018. Eric is the CEO and co-founder of Napa Valley Fumé, LLC, a cannabis management and branding company that has launched brands such as LAKE GRADE with a few others in the works. He is also the co-founder of the Napa Valley Cannabis Association and the President of California Fish and Game Commission, a position he has held since 2016.
In 2005, Eric founded Alpha Omega Winery in Rutherford, CA and was managing partner until 2013. He’s held positions on the Board of the Napa Valley Vintners, as well as Napa Valley Vintners’ Community and Industry Issues Committee. In 1989, he founded Burrito Brothers’ Inc., a restaurant chain based in Washington, DC, which he sold in 1999. Eric was also an adjunct professor at Georgetown University’s School of Business where he taught courses in entrepreneurship, business strategy and marketing. He has held several other political positions including Assistant Press Secretary to Vice Presidential candidate Geraldine Ferraro in 1984.
Eric received a Bachelor of Arts degree in Political Science at the University of California at Berkeley in 1984, a Diploma in Business Studies at the London School of Economics in 1986, and a Master of Business Administration at Georgetown University in Washington, D.C. in 1997.
Video: NCIA Today – 117th Congress, New Scorecard, DEIC Update, and more!
Host Bethany Moore, NCIA’s Deputy Director of Communications and host of NCIA’s weekly Podcast ‘NCIA’s Cannabis Industry Voice‘ brings you an in-depth look at what is happening across the country in federal cannabis policy reform and with NCIA.
From the top, Bethany discusses the “cautious optimism” bouncing around the D.C. Government Relations office, as the 117th Congress begins to get to work with GR Director, Mike Correia.
We check in with Mike Lumoto, Committee Organizer for NCIA’s Diversity, Equity, Inclusion Committee on the incredible growth they saw in 2020 and the plans taking off in the new year.
Don’t forget to download the new NCIA Mobile App and never miss the latest cannabis news.
NCIA Welcomes New and Returning Members to Board of Directors
NCIA, the country’s largest cannabis trade association and industry advocacy organization, will be seating its newly-appointed Board of Directors today.
The board also conducted its 2021 officers election today.
Khurshid Khoja and Kris Krane were re-elected as the board’s Chair and Vice Chair, respectively.
Narbe Alexandrian was re-elected as Treasurer and Chris Jackson was elected to the position of Secretary.
Henry Wykowski will continue to serve as the board’s General Counsel.
The organization’s Nominating Committee brought on four new board members.
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Seun Adedeji is the CEO of multi-state cannabis retailer Elev8 Cannabis with operations in Massachusetts and Oregon, and the youngest African-American dispensary owner in the United States.
Kimberly Cargile is the CEO of A Therapeutic Alternative, a California-based cannabis retailer, and a long-time advocate for medical cannabis patients.
Rebecca Colett is the CEO of Calyxeum, a licensed cannabis cultivation company based in Michigan, and has years of experience in the legal cannabis industry championing minority inclusion, veteran access programs and workforce development.
Cody Stross is the CEO of Northern Emeralds, a cannabis cultivator based in Northern California, and has significant experience in many areas of the cannabis industry as well as being a founding member of a cannabis trade association representing businesses in the Emerald Triangle.
Two incumbent Board members were also re-elected for another term: Kris Krane, current vice-chair of NCIA’s Board of Directors, and president and co-founder of 4Front Ventures; and Taylor West, partner at Heart + Mind Media.
“We are pleased to welcome these new and returning Board members for the next term as we enter what is arguably the most exciting time for cannabis policy reform in history,” said Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association. “With their invaluable contributions and insight, NCIA will be well-positioned to improve the legal and regulatory landscape for the cannabis industry, lead it into new frontiers, and continue to be the most broadly representative proponent of cannabis businesses in the United States.”
The full list of Board members and their bios is available here.
Outgoing members include founding board members Troy Dayton and Etienne Fontan as well as Aaron Justis and Mark Passerini.
“On behalf of myself and the rest of the NCIA community, I want to extend my heartfelt gratitude to the Board members who are relinquishing their positions for their unwavering support of our efforts over the years to end prohibition and help the cannabis industry and its association grow,” said Smith. “We look forward to continuing our work with them in many capacities during this time of unprecedented opportunity.”
Committee Blog: Trust In Cannabis – Why It Matters More Now Than Ever
As a country, the U.S. is experiencing what can best be described as the “age of distrust.” While public distrust in institutions has been escalating for at least a decade, according to the annual Edelman Trust Barometer which has tracked trust in media, governments, businesses, and nonprofits since 2000. Social unrest and a global pandemic have escalated this distrust. Never has the public eyed institutions or businesses with such suspicion.
Meanwhile, in our industry, the vaping crisis of summer 2019 hit our industry below the belt, aided by some bad actors knowingly flooding the illicit market with products that couldn’t meet stringent state testing. That crisis created a crisis of confidence in the overall cannabis industry-leading it into a bleak period which was only partially buoyed by the declaration that dispensaries were considered “essential businesses” during the COVID-19 pandemic, pro-cannabis outcomes in both voting booths and Congress, many thanks to NCIA’s national and local efforts. By supporting NCIA, you’re signaling industry commitment and that you value growing trust within the industry.
Now, against the national backdrop of distrust and a COVID-19 vaccine that offers a glimmer of hope, it’s time to evaluate ourselves and our industry’s actions. Never has it been more crucial for all brands, but particularly our industry, to lean into actions and communications which consistently and powerfully earn the trust of investors and consumers. As an industry, we’re on an important precipice, what we do next will either ensure our credibility or tarnish it for years to come.
Consumers (and therefore investors) are looking at brands in a more holistic manner. Trust will be the single most valuable brand attribute.
Trust is defined on two spectrums: competence and ethics.
For CEOs, CMO’s, and experts in our industry, the time is now to act and communicate from a place of authentically aligned communications. This alignment will require hyper levels of empathy and a constant pulse on the state of affairs affecting your customers. Consumer behavior is in flux now.
The COVID-19 pandemic has changed consumers and now is the time for brands to align. According to the Edelman Barometer special report, Brands Amidst Crisis:
The role of brands in reflecting the consumer’s desire to be viewed as a tastemaker or trendsetter has decreased 9%
Up 38% is spending time with family
86% of consumers expect brands to solve both societal and personal problems, including proper treatment of employees and making product in a domestic market
The only values more important than trust to consumers are price and quality
Because consumer behavior is in flux, it’s never been more important to ensure internal and external values and communications align. Ironically, ensuring alignment supports the flexibility needed to respond quickly to changing behaviors or unexpected upheaval.
Aligned communications means we act internally and externally in a consistent and emotionally intelligent manner that earns trust. It’s not just good for our industry, trust in brands has very real bottom-line implications including increased sales, increased investor opportunities, and reduced customer acquisition costs. In fact, according to Edelman Trust Barometer, high trust consumers have 75% more brand loyalty.
Outstanding packaging and even quality products are the minimum expectations for today’s brands. But even those choices come under scrutiny from consumers if they don’t mirror consumer expectations and lifestyle. Therefore, earning trust starts at the very beginning. The earliest choices are powerful signals to consumers about brand values.
It isn’t enough to simply sponsor a campaign or align with a social movement. While those choices can be powerful quivers in your trust arsenal, it feels and sounds hollow when the brand is suddenly thrusting itself into a conversation without looking at itself first. Consumers are increasingly aware of “trust washing.”
92% of employees expect their employer’s CEO to speak up for issues ranging from income inequality to diversity and training for future jobs. An aligned trust-based strategy starts on the inside. Take a solid look at the ethos and ethics within your own company.
What are your company’s values?
What do you stand for?
How do you signal trust internally and how do you reward it?
Does your internal communication stand for your values?
The reason this internal step is critical is no matter what, your brand ethos is distilled into consumer interactions and communication, whether those communications are with dispensary workers or directly to the consumer, the experience will always stay with the brand. Imagine a dispensary worker making recommendations to a new-to-cannabis buyer, naturally, the dispensary worker has a huge amount of influence on the consumer’s impression of a new brand. And new-to-cannabis buyers are most likely to be loyal to their first brand, assuming the product meets expectations.
Personal experience is the number one way to build trust with consumers. 59% of customers say personal experience matters the most.
What consumer interactions signal trust?
How do you manage poor reviews?
How do you handle customer inquiries?
How does your owned media reflect not only your brand values but those of your customers?
Personal experience is absolutely about product experience and brand interactions. Brand interactions at events will take on more importance in cannabis. Consumers will want to engage in an experiential way with cannabis brands and it won’t be at cannabis events exclusively, consumers will expect to see cannabis brands in all the same places they see alcohol brands, even if sales and sampling aren’t available, which means experiences will need to be multi-sensory and strongly personal. Choose your experiences carefully based on your brand audience and ethos.
Earned media is second only to personal experience incredible trust-building. During the COVID-19 pandemic, trust in publications increased by 7%. Brands should look for opportunities in earned media that reflect their values. Branded content is another area where brands can use the credibility of publications.
Experts are still considered credible sources (52%) and they far surpass celebrities (35%) and influencers (36%). As you consider brand strategies in 2021, take a careful look at who you’re leveraging and what role they play. Choose your experts carefully and ensure they are fully vetted. NCIA’s Marketing and Advertising Committee is developing an “experts directory” of carefully vetted industry professionals, this will be a key resource not only to event organizers, but CEOs and CMOs looking for credible, authentic experts.
Our industry has so much to offer consumers, we provide very real opportunities for consumers to enhance their lives. We have been active on numerous social justice fronts from the very beginning. We may come from a historical place of rebellion, but often, even that rebellion came from a place of empathy and not just income. Consumers today are responding to companies who double down on trust and an aligned brand value system. There’s every reason to think the cannabis industry can do this better than anyone. Together, let’s lean into our values and seed trust not just in our companies, but in our industry.
*All statistics come from Edelman Trust Barometer 2020, unless otherwise noted.
Tara Coomans is the CEO of Avaans Media (formerly known as Primo PR), which has been working with hemp and THC brands and services since 2015 from startup through IPO. Founded in 2008, Avaans Media brings a digitally forward and purpose-driven perspective to public relations. Avaans Media is based in Los Angeles with clients and team members distributed around the country including Washington D.C., New York and Denver.
Coomans is on NCIA’s Marketing & Advertising (MAC) committee and leads the MAC Experts Directory subcommittee for 2021. Coomans is a frequent writer and speaker on public relations, marketing, and social media topics.
Valentine’s Day is coming. To some, it will be a wonderful day filled with candy and gifts and expressions of devotion. To others, it feels like an obligation designed to enrich greeting card companies, jewelry stores, and florists.
Whichever side of the fence you fall on, the fact is, this is one of the most important periods for retailers. According to the National Retail Federation, Valentine’s Day spending in 2020 totaled about $27.4 billion.
And with all this spending, brands really matter.
For instance, who wouldn’t want to get a silver or white gold necklace from Tiffany? Truthfully, it’s not that different from other necklaces on the market that are just a fraction of the price, but those don’t come with the Tiffany name and that iconic powder blue rigid box packaging.
The Unboxing Makes It Special
Beautiful packaging provides the foundation for companies to build a luxury brand and command higher prices in the marketplace. It’s how Harry and David can charge $40 for the box of 9 pears I received for the holidays.
I know their fruit is top of the line quality, but I just checked and I can get pears for about a buck each at my local Whole Foods. That’s more than just a bit of a difference!
What makes the price palatable and the product premium is the packaging.
Steve Jobs knew this and insisted that Apple products were always creatively packaged. “Packaging can be theater,” he said. “It can create a story.”
A beautiful package leaves a lasting impression. When a consumer has a hard time throwing away the box a gift came in, it’s a sign your brand is on the right track. How many of you kept the box your iPhone came in? I know I did and probably still have it.
Whether it is the precise fit of Apple’s packaging that makes you wonder how all those items fit so perfectly inside, or the fresh-off-the-farm feeling you get when opening a gift from Harry and David, luxury brands rely on premium packaging to help convey the idea that they are truly special and worth the higher price.
Cannabis Love
While Valentine’s Day isn’t as big a holiday in the cannabis world as 420, it does generate an impressive boost in sales.
Point-of-sale data from the cannabis software firm Flowhub and analytics company Headset found that Valentine’s Day spending increased among recreational consumers with sales jumping 20-32 percent over a typical day. Infused “mocktails” had the largest jump with sales rising 596 percent above normal.
Bath products and salts increased by 186 percent. Massage oil and lubricant sales rose by 88 percent.
Infused chocolates increased 33% and infused gummies rose 43%.
And the single most important factor in purchasing decisions, whether in the mainstream or the cannabis sector, is branding.
An article in Civilized said that cannabis products can be made exceptional and more valuable by communicating their distinctive properties through the branding process.
“Branding in the cannabis industry is what makes an agricultural product and the business that refines the plant more distinctive,” the article stated. “Branding creates an emotional connection, and when done effectively, branding can prevent products or services from failing.”
And with limited options to build a cannabis brand through traditional media, the packaging becomes even more vital to the product’s success.
The importance of packaging cannot be overstated. It is one of the strongest factors that influence a purchasing decision. It provides the first impression of the product to the consumer and it is the last thing they see before making their selection.
Not only can good quality packaging grab a consumer’s attention, but it can also communicate a brand’s messaging and convey key competitive differences. Conversely, some otherwise excellent products fail due to inferior packaging.
Therefore, it is vital that packaging is carefully designed so that it builds the brand, stimulates sales, conveys key messaging, and generates consumer loyalty.
So, this Valentine’s Day, whether you celebrate with cannabis or candy or not at all, remember that brands matter. People want gifts from the brands they know, trust, and aspire to own.
Personally, I am hoping to luxuriate in a tub filled with infused bath salts while opening a special little blue box (Jon, are you listening?).
Happy Valentine’s Day!
Kary Radestock, CEO, launched Hippo Premium Packaging in March 2016 offering an array of services to the cannabis market, including: Marketing Strategy, Brand Development, Social Media, Public Relations, Graphic and Web Design, and of course, Printing and Packaging. Radestock brings over 20 years of award-winning print and packaging expertise, and leads a team of the nation’s top brand builders, marketers and print production experts. Hippo works with businesses looking for a brand refresh or an entire brand development, and specializes in helping canna-business get their products to market in the most beautiful and affordable way possible. Radestock’s Creative Collective of talent and experts, allows her to offer world-class solutions to support the unique needs of the Cannabis Industry.
Committee Blog: The Language Of the Cannabis Industry – Developing A Commercial Manufacturing Glossary
The language of the cannabis industry is crude. It’s not that the cannabis industry relies on vulgar or offensive words, but rather that modern cannabis vernacular remains raw, unrefined, incomplete, and sometimes contradictory, even in mature markets. Perhaps most generously described as “imprecise” or “fluid,” the current lexicon is changing as quickly as the industry, but not always for the better. Consistent and universal terminology are hallmarks of strong industries. As the cannabis industry (including both high-THC “marijuana” and low-THC “hemp”) continues to grow and prove its legitimacy, it is critical that everyone is speaking the same vocabulary.
Defining the issue
Out of necessity, the language of the cannabis industry took root in the dark. Decades of prohibition followed by state-led regulation has resulted in a fractured vocabulary where terms-of-commerce have fuzzy boundaries. The current landscape of murky terminology can inject ambiguity into everyday transactions and, in the worst of circumstances, mislead consumers. As some industry terms coalesce in particular regions, for example, other terms take on different meanings around the country. It is not a problem unique to the cannabis industry, but with its regulatory history, rapid product advancements, and diverse consumer base, the NCIA’s Cannabis Manufacturing Committee (“CMC”) felt it time to start a conversation about the words that define the industry.
With legalization comes a mass-consumer base and new forums to joust for consumer attention. Retail shelves, product packaging, and commercial advertising are the new arenas where cannabis companies try to describe their product to consumers and differentiate their brands from others. Out of this scrum comes a new marketing jargon that can be difficult to decipher. Shatter, crumble, butter, wax, sauce, diamonds, distillate, isolate, broad-spectrum, full-spectrum, partial-spectrum… and that is just in one section of the dispensary. Indeed, a huge swath of cannabis consumers fall into the infrequent or casual consumer demographics for which these terms mean next to nothing.
What’s the problem?
This linguistic haze is felt acutely in the manufacturing link of the supply chain. Manufacturing is the relatively nascent segment of the industry that converts raw cannabis plants into various medical, adult-use, and industrial products. In just the past two decades, new technologies have produced a glut of new products, each of which needs to be called something. But those new terms have ambiguous definitions that are easy vehicles for confusion. And where confusion is prevalent, both consumers and companies suffer.
For many cannabis customers, trying to decode a dispensary menu is like reading in an alien language. They frequently must rely on budtenders and marketing materials to understand some products’ basic characteristics. And even if they manage to become fluent in one dispensary’s menu, they may still find it difficult to predict how that menu will translate to other retailers across the country. The lack of vocabulary standardization would be untenable in the food or beverage industries. In the cannabis industry, where patients may rely on specific products for medical treatment, consumers should have a uniform vocabulary to describe products.
That challenge is not limited to retail consumers. Language is critical to the smooth functioning of intra-industry business relationships. As in any other industry, cannabis business relationships are far more successful when the parties’ expectations are aligned. When a dispensary orders tens of thousands of dollars in shatter, crumble, distillate, and tincture, they have certain expectations about the products they will receive. Even experienced extractors, operators, and executives have different understandings of where some products end and others begin.
Ambiguity in the commercial arena can lead to big problems. Among the best-case scenarios, a miscommunication results in a dissatisfied customer. More serious disagreements may require costly replacement shipments or refused deliveries. Of course, if the stakes are high enough and both parties are adamant in their positions, a linguistic quarrel may become a courtroom duel. Some advertising litigation, such as for “Refined Live Resin” vape cartridges, is already working its way through the court system. When it comes to cannabis terminology, fuzzy boundaries are not a standard the industry should embrace. But leaving cannabis industry terminology to the mercy of courts and regulators also holds little appeal.
And so…
…the CMC set out to create a working glossary. The goal of this document is to get the industry on the same page with published terminology standards as best understood by the NCIA’s Cannabis Manufacturing Committee. These standards are intended to facilitate commerce within the cannabis industry by increasing consistency and decreasing confusion.
The CMC developed a list of the most common terms that are currently utilized in the manufacturing segment. While the committee included some broad terms applicable to the industry at large, the focus was on those terms that most directly relate to cannabis extraction and refinement. From that list of industry terms, the committee drafted definitions that attempt to capture how those terms are currently being used throughout the legal cannabis industries. The CMC then shared those draft definitions with as many practitioners as it could to get a broad selection of perspectives. Wherever possible, the CMC sought to be inclusive of regional variations and note instances where terms are exceptions to a generally understood meaning. But the CMC understands that neither this process nor any other is guaranteed to represent all corners of an increasingly complex industry.
The document is not meant to be the ultimate word on cannabis terminology, but rather a snapshot in time and the starting page for a discussion about what the words of the cannabis industry should mean. Importantly, these definitions are the CMC’s attempt to capture how the terms are currently used, not how they should be used. Indeed, there are several well-qualified bodies debating the future of cannabis nomenclature, including ASTM’s D37 committee and the Emerald Conference.
Along with publication of this glossary, the NCIA’s Cannabis Manufacturing Committee is inviting comments from the entire cannabis community. Your constructive comments are a crucial part of forming the vocabulary of an industry. The CMC’s intent is to revisit these definitions approximately every calendar quarter, adding, revising, and annotating as new terms are invented and meanings inevitably shift.
Paul Coble is the founder and CEO of Thalo Technologies, a veteran intellectual property attorney, Vice-chair of the NCIA’s Cannabis Manufacturing Committee, and Chair of the Nomenclature Subcommittee.
The CMC focuses on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers, and edibles, ensuring the manufacturing sector is helping shape its destiny.
Member Blog: 6 Human Resource Tips For Your Cannabis Company
The cannabis industry has been growing exponentially over the last few years and plenty of job opportunities are coming with it. As businesses grow, they need to increase staff… and that takes time and money.
Not only do companies have to find and interview clients, because of all the legal matters tied to the industry, they also have to run background checks. The onboarding process and paperwork is another important matter to be dealt with.
Cannabis businesses must stay on the right side of the law by making sure their hiring process is done correctly, and that’s where human resources comes in. Here are some human resource tips you should be aware of when you are hiring to meet your company’s needs.
Considering Partnering with an HR Company
If you don’t have an HR department, hiring one comes with its own set of complications. Instead of bringing on yet more employees, considering partnering with an HR company that offers these services.
There are many HR companies that specialize in working with cannabis companies. They are familiar with all the legal requirements and they will make sure that all your I’s are dotted and your T’s are crossed. They also have advanced software to ensure processes are as efficient as possible.
Know About Upcoming Changes in Federal Banking and Payroll
For years, the legal gray areas associated with cannabis companies kept them from having access to federal banks, mortgaging and financing. Now federal policymakers are coming closer to passing legislation to give businesses access to federally insured banks. Once that occurs payroll processing will become easier.
It is advisable to partner with an HR company that is aware of what the new legislation will entail so they can make the transition as seamless as possible.
Each Employee Should Know What’s Expected of Them
Every company should communicate with employees so they know exactly what’s expected of them. This is especially important in a cannabis company where there are stricter rules and regulations. If an employee does not follow the proper procedures, the company may have to deal with legal issues.
An employee should be aware of their responsibilities early on. This should be clearly explained in the job description and it should come into play in the training. Additional materials and meetings should be provided if updates are made.
Run Background Checks and Make Sure I-9’s are Filled Out
When an employee is hired, he or she must complete an I-9 Employment Eligibility form. This ensures their identity and ability to work in the United States. It is necessary in every industry. The form must be held on to for a few months and it may be asked for during an audit.
A background check is not always necessary but it’s a good move, especially in the cannabis industry. A clean background check gives you the confidence in knowing your employee will be honest and competent.
Classify Employees Correctly
A cannabis industry typically has a variety of employees that can include part-time, full-time, 1099 contractors, seasonal, interns, and so on. Seasonal jobs are especially common as trimmers and holiday sales reps may not work for the company year-round.
It is important to know how each employee should be classified so you can give them the proper paperwork during the onboarding process.
Here are some steps you should take to ensure you are classifying your employees correctly.
Know the Difference Between Employees or Independent Contractors: If you are not sure how to tell the difference, there are resources available that can provide you with information.
Know the Difference Between Exempt and Nonexempt Employees: Exempt employees are entitled to overtime while nonexempt employees are not. Their status depends on the type of work they do and how much they make. Different states handle this differently.
A good HR company will help you classify your company correctly to keep you from incurring penalties.
Encourage Employee Retention
The hiring process takes time and money. In order to avoid hiring new employees, companies should integrate fair practices within the workplace. This includes:
A Smooth Onboarding Process: Employees should be made to feel welcome during the onboarding process and they should be well trained so they know what’s expected of them.
Create an Employee Handbook: This will provide additional clarification concerning an employee’s duties and the workforce procedures.
Pay a Fair Salary: Compensating workers fairly will boost retention.
Offer Opportunities for Upward Mobility: Workers should be given opportunities for promotion as well as training that can help them advance in their career field.
The cannabis industry is growing in leaps and bounds. If your company is expanding, these tips will ensure that your hiring and payroll processes are above board. Which practices do you enforce to avoid penalties in your cannabis business?
Jacob Carlson is the Co-Founder and CEO of EzHire Cannabis. EzHire is a talent engagement platform designed for the cannabis industry. Jacob is a serial entrepreneur having previously co-founded a corporate event service (Just Enjoy!) and social media automation tool (RapidCrowd), and he is primed for scaling his next venture with his team of technology veterans.
Hiring in the cannabis industry is hard, EzHire Cannabis makes it easy. We help businesses in the cannabis, CBD and hemp post jobs, review qualified candidates profiles with video interviews and share them among their team. If you are tired of weeding through thousands of unqualified applicants or struggling to find someone with specific experience, we can help
Committee Blog: Future-Proofing Your Business – 2021 Series Premier
The future is coming and the cannabis (marijuana and hemp) industry is uniquely positioned to offer innovative approaches to best management practices in its manufacturing sector. In 2021, the National Cannabis Industry Association’s Cannabis Manufacturing Committee formed a new group focused on addressing sustainable practices, legal protections, and policy considerations to future-proof your cannabis manufacturing business. The series, Future-Proofing Your Business, will consist of blogs, podcasts, and expert panel discussions focused on providing insight into the coming regulations, processes, facilities, and consumable products.
Extracts
With the coming vaping emissions and vape product potency regulations, the Future Proofing subcommittee will offer their expertise on what to expect and what manufacturers can do to support compliance and help protect the environment and public health. The outbreak of vaping-related respiratory illness in late 2019 demonstrated the damage a few bad actors can do in a marketplace where regulated and unregulated producers compete for consumer dollars. The committee will discuss these issues and more as manufacturers and regulators work together proactively to protect consumer health.
Processes
Manufacturing processes are evolving as the scientific understanding of cannabis consumables and their various effects and treatments deepens. In their efforts to protect environmental and worker health both inside and outside of the processing area, manufacturing best practices are changing. Regulators are also beginning to determine the standardization of these various processes in an effort to retain product quality without jeopardizing human and environmental health and safety. And new forms of competition will demand an increased focus on protecting intellectual assets. This second part of the Future-Proofing Your Business series will unpack sustainable manufacturing process design including software, equipment, and materials offering recommendations for regulatory approaches.
Facilities
Building on the processes deployed in the future of manufacturing cannabis (marijuana and hemp) products, facilities will also need to consider more efficient design strategies to reduce the use of energy & waste, increase product safety, and safeguard worker and community health. The rapid pace of energy efficiency technologies development for all utilities means most industries, not just cannabis, are playing catch up. Automation is redefining the best practices surrounding product and employee safety. Increasingly stringent testing standards are demanding greater care for waste and community health. The committee will offer their insights into the technologies and practices that are becoming popular in this multi-industry-wide push for sustainability.
Biosynthetic Manufacturing
The final topic to be addressed by the new Future-Proofing subcommittee in their 2021 series, will take a detailed look into the future of manufacturing techniques, specifically the use of biosynthetic manufacturing and how this will impact the industry. Tune in to learn more about bioreactors and their application for the concentrate market and genetic modification to cannabis (marijuana and hemp) consumable products.
Prepare to check out the first part of this integral Future-Proofing Your Business series brought to you by the Cannabis Manufacturing Committee.
Coming, February 2021.
NCIA Condemns Recent Insurrection and Some GOP Lawmakers’ Attempts to Undermine American Democracy
The National Cannabis Industry Association condemns the actions of violent extremists last week in their efforts to undermine a free and fair election, fomented by the divisive and patently false rhetoric of the President and numerous elected officials.
We are still trying to process the madness we saw unfold mere steps from our office on Capitol Hill. Like many Americans, we watched this attempted coup in horror and worried about the future of our country, our Constitution, and the safety of our loved ones and fellow staff.
We mourn the lives lost in this violent attack brought to our nation’s capital. We also hope this entirely avoidable tragedy will serve as the day of reckoning for all those who for too long have sought to divide our nation in order to serve their own political interests and those who have enabled them.
Just as appalling was the disparity in the reaction from law enforcement to a horde of violent seditionists, which included no small number of avowed white supremacists, when compared to the treatment of people around the country speaking out for racial justice. While we don’t condone the wanton use of police force against demonstrators, there is simply no comparison between peaceful protests against ongoing systemic racism and police brutality and an armed insurrection against our democracy. The stark contrast in how these groups have been treated by authorities in the months and years leading up to the deadly storming of the Capitol is a clear indicator of the racial bias that persists in the United States. NCIA stands committed against this and all other forms of racial discrimination.
Make no mistake: we are no strangers to dissatisfaction with our government, and intense, furious opposition to its actions. The pain and injustice inflicted upon cannabis consumers and providers, not to mention their families and communities, is incalculable and ongoing. But we are an organization that represents an industry — and a movement — built on peaceful protest, civil disobedience, and cooperative nonpartisan efforts to change our laws and policies through an open and democratic system governed by the rule of law. Those who use misinformation to undermine confidence in our democratic processes or attempt to subvert them, such as the President and certain Republican lawmakers have done by spreading lies about our election for months, have no legitimate role in our republic.
There is no place in our country for what we saw last Wednesday. As a nation, we can — and must — do better to respect each other, settle our differences, and not succumb to mob mentality. We cannot allow our actions to be dictated by the thirst for power or the passions of the moment if our democracy and our freedom are to survive.
Member Blog: A Whole New World On Zoom – 5 Tips To Look And Sound Like A Pro
2020 will be remembered as “unprecedented.” A raging pandemic, a divided country resulting in a contentious election, an economy on the brink, but for cannabis, it was huge. The MORE Act and the SAFE Banking Act pass the U.S. House of Representatives, and the end of prohibition of cannabis is becoming more of a reality than a dream. Throw in five more states using the ballot box to legalize adult use of cannabis, and while 2020 was a nightmare for many, for cannabis, it was monumental. However, for many of you in the now “essential” cannabis industry, there was one development that many in the cannabis industry had to deal with, a fear of being on ZOOM on a daily basis!
Whether you are running educational webinars as part of your marketing efforts to stay in touch with your clientele or creating videos that allow you to control that message to your database. You have probably spent more time on camera over the past 10 months than you ever expected. As humans we are all our own toughest critics when it comes to hearing our voices recorded. (Do I sound like that? I thought I had a good voice. Yuk!)
When it comes to seeing ourselves on camera, we think we all look 10 pounds heavier. Or is it just a bad hair day? Or is the whole world looking at that minuscule zit on my face? The toughest part of getting over a fear of anything is facing it, especially when it’s facing your own image!
The cannabis industry, like so many businesses in the U.S., have had to adapt to a new way of doing business from sales calls externally to communicating with staff internally. The water cooler break for some office politics chit chat, is a thing of the past. Now that our regular commutes have moved from 30 minutes to 3 seconds, working from home has become the norm. That means you better get used to seeing yourself on camera.
So here are a few basic tips for those of you who are regular users of ZOOM, Facetime, Facebook Live, YouTube Live, Stream Yard, Google Hangouts, or WebEx from Cisco.
First some basic lessons about “face-to-face” communication. Eye contact is pretty important, isn’t it? It’s a sign of respect. It’s the single most important connection we can make without touching each other, and since that’s been banned thanks to the “vid,” maintaining eye contact with that little camera is paramount,
When you were younger, did you ever play the staring game? Look into a friend’s eyes. Try to maintain eye contact for as long as you can. Why? When you are on camera, as soon as you avert your eyes, or look at something else, you break your connection with the person you are talking to. This is true whether you are talking on ZOOM or talking to someone face to face.
Tip #1
Make sure your camera is at eye level. Put your device on a shelf, or prop up your laptop on books. In Hollywood, they shoot actors low to high in order to give more of a powerful presence on screen. (Tom Cruise is 5’7” but always appears taller on screen because of this!)
Tip #2
Don’t position your camera with a bright window behind you! That’s called backlighting. Since you are the subject on camera, you should have the most light on you. This is especially true if you have black or brown skin. Get a ring light or a really bright desk lamp and position it behind the camera facing you.
Tip #3
Sound. There are some really good built-in microphones in Apple computers, but even the microphone attached to an external set of earbuds is better than their built-in microphones. High ceilings are a nightmare for sound, empty rooms with no carpet or furniture will make your sound hollow and can create an echo. So find a carpeted room with furniture, and better yet, invest in an external microphone.
Tip #4
The rule of thirds. In any introductory film or graphics course, one of the first things you learn is how to frame your subjects. Each frame in a horizontal 16:9 aspect ratio is divided into 9 cells. Where the vertical and horizontal lines meet is where your focal points should be.
On ZOOM you are the only subject, so sit back in your chair and position the camera so that you fill up 2/3 of the frame with your head and shoulders. The top of your head should be in the middle center cell (2). Your neck and shoulders and arms should be touching 4-5-6 plus 7-8-9.
Tip #5
For those of you who don’t even turn the video on during the ZOOM call: get over it! You are human. You are not a supermodel. People will accept you as long as you can accept yourself.
Now, for those of you who are uncomfortable with their looks and don’t even put your camera on during a ZOOM call, I guarantee that at some point in the morning, you have looked at yourself in a mirror (perhaps even examined the various pores on your face), and after brushing out your bed head hair, you’ve said….OK, good enough, and started your day.
So I ask you if you are your toughest critic, and you’ve already given yourself a passing grade, you should be comfortable enough with how you look on camera.
Remember now that our way of doing business in cannabis has changed, it’s a whole new world of weed and on ZOOM!
A native of Newton Massachusetts and a 1979 graduate of Tufts University, Jimmy Young has over 40 years of experience in commercial television and radio. A former Emmy Award-winning Talk Show host for his sports talk show for kids on NECN in the 90’s, he is one of the rare professionals in that industry who has had success in front of the camera, in production, and in sales management.
The founder of Pro Cannabis Media is the current host of In The Weeds with Jimmy Young, a weekly podcast distributed over the CLNSMedia.com, site, iTunes, Spotify, Googlecast among others. In July of 2019, he teamed up with the founder of Cannabis.net, Curt Dalton, to host a two hour live monthly Weed Talk Show where the two Massachusetts natives have interviewed some of the biggest names in Cannabis, like Steve DeAngelo, Bruce Linton, and Tommy Chong. Locally local cannabis advocates and representatives from the medical establishment in the Bay State have all appeared on that show that is now being distributed nationwide. Young also produces a weekly news video, called News Dabs, highlighting and commenting on the biggest stories around the world in the emerging cannabis universe.
Member Blog: How to Launch a Marijuana Gift Card Program for Your Dispensary
Gift cards are an excellent way to increase brand awareness and an opportunity to generate new customers for your dispensary. Research shows that these tiny pieces of plastic can boost revenue by up to 40%. They are indeed invaluable tools for upselling as well, as 75% of recipients tend to overspend on the value stored in their cards. Starting a gift card program requires minimal investment and is a proven tool to stimulate bottom-line revenues and enhance the customer experience.
Benefits of Gift Cards
A well-oiled gift card program has the potential to bring at least two customers into your store — the buyer and the receiver. A study by First Data showed that 11% of gift card receivers noted they had never or rarely visited the merchant location before receiving the gift card, and over a third became regular customers after redeeming the card. Also, if your loyalty program offers gift cards as an incentive, a customer will be encouraged to spend more money when receiving points redeemable for a gift card in the future. These cards don’t just boost your retail profits but also serve as tiny billboards for your brand.
Following are five important points to consider when launching a gift card program for your cannabis retail store:
#1. Choose and Configure the Best Solution
Choosing a gift card program that integrates seamlessly with your existing POS system is the most reliable solution. If your POS does not offer any gift card functionality, consider an upgrade to a more modern cloud-based cannabis POS system. You may also opt for standalone third-party gift cards that can be sold through your POS as SKUs, but this solution is not recommended as there is a risk of data slipping through the cracks.
#2. Create a Gift Card Strategy
Developing a gift card strategy is a crucial step in designing your program. Is your gift card-program meant to cover your bases across major holidays and slower seasons? Or is it supposed to be an all-encompassing component to your loyalty program and upsells? It is necessary to plan and design a program to meet your requirements and customer needs for gift card sales and redemptions at your cannabis dispensary. Also, choosing customizable branded gift cards will allow you to have total control over the look, logo, and design.
#3. Stay Compliant with Regulations
Cannabis is a highly regulated industry, and retail gift cards must fall in line with specific marketing and advertising restrictions. However, with an easy to manage, activate and track gift program that ensures end-to-end compliance as per local regulations, you can sell more gift cards and add to your revenues without the risk of any legal ramifications.
#4. Plan Gift Cards Orders and Sales
Your supply of gift cards must meet demand, and you must never run low on its inventory. Estimate demand based on your sales volume, holiday season, and target demographics, and plan your order accordingly. Placing gift cards at the payment counter is a great way to capitalize on impulse purchases. Train your staff to recommend gift cards to customers when appropriate, and establish incentives for them to sell the most cards.
#5. Promote, Track, and Report
Marketing online and organizing giveaways on social media are excellent tactics to build brand awareness. Capitalizing on holiday season sales and occasions that focus on gift-giving will further propel your cannabis gift card sales. You must also track, measure, and report your program’s results regularly against other established KPIs for your business. An integrated reporting system provides you with insights easily extracted from data within your POS so that you can focus on making your gift cards program a success.
Gift cards are one of the safest and most convenient ways to improve cash flow without increasing COGS. A branded gift card that is fully-integrated with your POS system is simple to set up, easy to manage, flexible, and affordable. However, just implementing a gift card program is not enough, and you must have a robust marketing and sales strategy for your gift cards as well. With the complexity that comes with shopping for cannabis products, your marketing campaigns must enhance brand visibility and be able to communicate to customers that the best gift they can give is the gift of choice.
Download your free copy of the Ultimate Guide to GIFT CARDS for Cannabis Businesses by COVA, which is a comprehensive guide to the best ways to use gift cards in the cannabis industry, with detailed information on how to scale and sustain retail growth through a gift card program.
Gary Cohen is the CEO of Cova Software, the fastest growing technology brand in the cannabis industry. Cohen’s focus has been driving the company’s overall strategy, including its vision, go-to-market plan, and strategic development. Since joining the cannabis industry in 2016 and launching Cova commercially in 4q17, Cohen has led Cova to dominate the enterprise sector for dispensary Point of Sale, while forging client relationships with hundreds of single-store retailers across North America.
In solutioning the POS platform, Cohen & the Cova team have met with over 1,900 operators and leveraged expert knowledge to provide retailers the support they need to get a license, pass inspection, launch a store, and improve operations. Cohen leads seminars on retail technology, compliance, business operations, and cannabis banking laws at the industry’s largest events, including the NCIA and MJBizCon. As Cova has become the predominate thought leader for cannabis retail tech, Cohen has established himself as a leading voice educating cannabis entrepreneurs as they build their own successful brands.
Member Blog: Hemp Production, Testing, and the FDA
The new U.S. Domestic Hemp Program will approve cultivation plans issued by states and Indian Tribes and can approve plans submitted by producers that live in a state or Tribe where plans are not already submitted and where hemp production is not forbidden. According to the USDA website, 28 states and Puerto Rico and U.S. Virgin Islands have had their hemp plans approved by the USDA, 11 states have plans under review, 5 states have obtained a license from USDA, 5 are electing to continue under the 2014 Hemp Pilot Program, Colorado is resubmitting their plan, Alaska is drafting their plan, and Idaho is awaiting state legislation. What is surprising is that some of the biggest hemp growing states, such as Montana (44,910 acres), Colorado (20,330 acres) and Kentucky (18,910 acres) do not yet have their plans approved by the USDA. Montana is choosing to operate under the 2014 Hemp Pilot Program, Colorado is resubmitting their plan to USDA and Kentucky’s plan is still under review.
While there has been a rush to plant hemp by farmers eager to cultivate a high-priced crop with enormous demand, there has not been the same rush to set up extraction facilities. This is a critical step for the manufacture of cannabidiol (CBD) raw material. Hemp must be dried properly before extraction or it will rot so cultivating a plant that is susceptible to rot without an assigned material manufacturer (extractor) is risky. The impact of the differences between hemp and typical crop cultivation for farmers and the lack of extraction companies has been disastrous for some farmers. Hemp must be monitored for THC levels as the crop grows because any hemp harvested with an amount of THC over 0.3% must be destroyed. This is completely different from soy or cotton cultivation. And when the cost of clones to plant in a large field is included, the potential loss increases dramatically.
Then there are the Food and Drug Administration (FDA) hemp/CBD product issues. While there has been positive movement towards the legal sale of hemp products on the USDA cultivation side, the FDA has authority over foods and dietary supplements, and the FDA’s position is that the addition of hemp/CBD to a food or dietary supplement is “violative.” There is speculation that dietary supplement FDA rules are imminent but until the FDA makes those rules public, sales of finished product is still illegal.
In a Consumer Update statement revised on November 25, 2019 the FDA clearly stated that “it cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.” Numerous warning letters have been issued by FDA to CBD manufacturers for disease claims about their products. Whether sold as dietary supplements, conventional foods, cosmetics, animal food, so of the violative disease claims include pain relief, anti-inflammatory, diabetes, acne, anxiety, depression, and cancer. For example, one Warning Letter issued by FDA on November 22, 2019, cites 45 diseases. FDA has stated that CBD in products sold as dietary supplements does not meet the definition of a dietary ingredient in the Federal Food, Drug, and Cosmetic Act (321(ff)(B)(i)(ii)). This provision clarifies that a dietary ingredient cannot be a substance that has been approved as an active ingredient in a drug. FDA has approved CBD as an active pharmaceutical ingredient in the drug Epidiolex. Although the FDA is only taking enforcement action on companies making products that contain disease claims, once the disease claim is made the FDA will cite other regulatory enforcement issues. Companies not making disease claims have not been targeted for enforcement yet. Several states, including New York and Oregon, are following the FDA’s lead by banning some products containing CBD, mostly infused food.
In addition to these challenges, there have been a series of class-action lawsuits filed against hemp/CBD manufacturers. These are based on the fact that the FDA has stated hemp and CBD is illegal in food and dietary supplements. The lawsuits claim the plaintiffs suffered economic loss because the products were not dietary supplements according to the FDA. The 11th Circuit Court of Appeals is allowing the consumer injury requirement necessary to sustain a complaint to be satisfied by the allegation that an FDA product is “illegal.” This ruling may open the floodgates for more class-action lawsuits.
All testing of hemp must be performed by a laboratory with a Drug Enforcement Agency (DEA) license. This is because hemp that does not meet the less than 0.3% tetrahydrocannabinol (THC) does not fall under the industrial hemp definition and is still under the jurisdiction of the DEA. A list of U.S.-based licensed laboratories is available on the DEA website and also on the USDA website. Pesticide screening is one of the tests dictated for hemp in the US Domestic Hemp Program. Ten pesticides have been approved for use on hemp by the Environmental Protection Agency (EPA). The latter is a notable step since the EPA could not do this before the removal of hemp from The Controlled Substances Act. Nine of the allowed pesticides are biopesticides and one is a conventional pesticide.
Then there is the matter of CBD as either a full-spectrum oil vs. an isolate. Unlike marijuana flower which is a very popular product, hemp flower is very rarely sold at the retail level. Full-spectrum oil is extracted from the plant, and depending on the solvent used, produces an oil with the same, or close to the same, naturally occurring chemicals from the plant. The oil, therefore, includes all the cannabinoids present along with any terpenes, lipids, or other compounds present in the plant. Full-spectrum oil is a botanical extract and is a dark thick oil. Isolate is produced by separating the constituents of the full spectrum oil by molecular weights or boiling points to have very pure chemicals in the 95%+ purity range. CBD isolate is a white crystalline substance and bears the greatest resemblance to synthetic raw material and at its purest form cannot be distinguished as coming from a plant in the dirt or a synthesized chemical. Full-spectrum oil bears the greatest resemblance to a botanical dietary supplement. It remains to be seen what the FDA will allow in the future.
I believe in this industry and I am rooting for the pioneers who have taken all the risk thus far, but am concerned about the lack of understanding over FDA’s authority particularly as this industry aims to transition to a regulated future. Most don’t understand FDA’s purview or don’t think it applies to them or their products. When that day comes, bringing the hemp industry into compliance with federal regulations will be challenging.
Hemp pioneers deserve to benefit from their labor and the risk they have taken. For those hemp product companies that do not think compliance is worth the effort or cost, there are many FDA compliant human food, animal food, dietary supplement, pharmaceutical, or cosmetic companies that are waiting to take your business…
Charlotte Peyton supports EAS Consulting Group hemp, CBD and hemp clients as well as that of dietary supplement and pharmaceuticals. As an independent consultant she assists with projects ranging from startup through manufacturing and support. Her expertise includes quality, regulatory and management, method development and method validation for FDA regulated drug, dietary supplement, and bioanalytical samples. She has extensive experience in writing validation protocols, reports and SOPs and assists with implementation of stability programs and report writing for finished products.
EAS Consulting Group, a member of the Certified family of companies, is a global leader in regulatory solutions for industries regulated by FDA, USDA, and other federal and state agencies. Our network of over 150 independent advisors and consultants enables EAS to provide comprehensive consulting, training and auditing services, ensuring proactive regulatory compliance for food, dietary supplements, pharmaceuticals, medical devices, cosmetics, tobacco, hemp and CBD. www.easconsultinggroup.com
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Product safety isn’t an endpoint, it’s a journey. That’s what we told you in the 2021 series premiere, and it continues to hold true. In the last post, we revisited the Vaporizer Liquid Formulations portion of the NCIA’s policy council white paper to provide guidance to the industry. This time, we’re republishing the Vaporizer Delivery Devices section below. We’ve learned more about EVALI since its original publication, and while some of the specifics may be a little dated, the principles remain relevant to helping you understand vapor product safety.
Melissa Hafey is the Director of Human Resources for Blackbird. Blackbird is a software and services company that provides marketing tools and transportation solutions for cannabis operators. Melissa is a passionate advocate for creating meaningful work in rewarding work environments. Her experience includes change management, benefits administration, HRIS implementation, recruiting, workplace diversity initiatives, and human resources management across multiple states including California.
Jon Monk is the Managing Director at 
John Shearman is Vice President of Marketing and Cannabis Business Lead at 
Excerpt from 
Charles J. Messina
Jennifer Roselle
Daniel Pierre
Lindsey Griffith is the Creative Content Specialist at 
The last few weeks have seen quite a bit of excitement for the possibility of comprehensive federal cannabis policy reform being closer than it has ever been, but what about the states?
There is momentum brewing in Congress as we enter the 117th session. With Democrats controlling the House of Representatives, Senate, and White House, we certainly feel a hopeful shift in Washington that is exciting for the cannabis community. Last Congress, we saw various cannabis reform bills move through the legislative process on the House side, however, those efforts were then stalled in the Republican-controlled Senate. As we enter a new year, there’s also a new congressional dynamic and that gives us hope, for some different outcomes.
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Eric Sklar is an entrepreneur, Napa Valley vineyard owner and public official. He and his family have been growing grapes in Napa Valley for 40 years and he planted his first licensed cannabis garden in 2018. Eric is the CEO and co-founder of 
Rebecca Colett
Cody Stross
As a country, the U.S. is experiencing what can best be described as the “age of distrust.” While public distrust in institutions has been escalating for at least a decade, according to the annual Edelman Trust Barometer which has tracked trust in media, governments, businesses, and nonprofits since 2000. Social unrest and a global pandemic have escalated this distrust. Never has the public eyed institutions or businesses with such suspicion. 
Tara Coomans is the CEO of 
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Jacob Carlson is the Co-Founder and CEO of 
The future is coming and the cannabis (marijuana and hemp) industry is uniquely positioned to offer innovative approaches to best management practices in its manufacturing sector. In 2021, the National Cannabis Industry Association’s Cannabis Manufacturing Committee formed a new group focused on addressing sustainable practices, legal protections, and policy considerations to future-proof your cannabis manufacturing business. The series, 
A native of Newton Massachusetts and a 1979 graduate of Tufts University, Jimmy Young has over 40 years of experience in commercial television and radio. A former Emmy Award-winning Talk Show host for his sports talk show for kids on NECN in the 90’s, he is one of the rare professionals in that industry who has had success in front of the camera, in production, and in sales management. 
Charlotte Peyton supports