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Member Blog: Sleep-Focused Brands Are Seeing Bottom Line Dividends

By Jackie Berg, HealthHub

Nearly 40% of the nation’s top 100 CBD brands focus on need states. Chief among them is sleep, something the American Academy of Sleep Medicine (AASM) reports that 85% of Americans are falling far short of.

The 7.2 million sleep-related Google searches logged this past year provide ample evidence of interest. according to NBC News, which reports that 9 million Americans take prescription drugs to help them fall asleep. 

Others prefer more natural solutions.

Nearly 11 million rely upon CBD and/or cannabis-based products to manage insomnia or sleeplessness, according to a 2021 report issued by High Yields Insights. Among them, almost 70% are women considered statistically more likely to suffer from insomnia.

YOUNG AND RESTLESS

Millennials are driving the bulk of market growth. Together, with a smaller percentage of Gen Z consumers, these severely stressed consumers represented 48% of the U.S. CBD market in the fourth quarter last year, according to High Yields Insights President Mike Luce. 

Regardless of age or gender, brands like CBDfx are discovering that an ever-increasing number of their customers are using CBD to treat sleep-related issues. The Brightfield Group reports more than 58% of CBDfx customers purchased sleep products in the fourth quarter.

Collectively, 40% (4 in 10) of consumers, rely upon CBD to manage insomnia or sleeplessness, according to a recently issued High Yield Insights and InnovateMR 2021 sleep trend report.

FIGHTING FOR SLEEP

Growing pandemic-related uncertainty, anxiety, and associated sleep deprivation issues have kept sleep specialists like Colorado-based Pulmonologist Dr. Julie Whitaker, struggling to manage ever-increasing patient loads.

“We’re not seeing everyone we should,” says Dr. Whitaker, who sees the need to elevate the understanding of the importance of sleep, particularly among Americans.

The pandemic helped to elevate awareness of the importance of good sleep and has softened the momentum of the “sleep is for suckers” mantra, according to the pulmonologist.

CBD and cannabis brands are seeing significant growth, most notably among 25 to 35 year-olds. Although millennials dominate the growth trends, one brand reported moms 40 – 50 years of age are among its fastest-growing demographic. 

Veterans, known to experience higher levels of insomnia (57% veterans) than the general population (30%), face elevated pandemic-related risks. Among veterans with Post-traumatic stress disorder (PTSD) or a traumatic brain injury (TBI), the rates are even higher — 93%, according to the Department of Veteran Affairs in San Diego.

Sleep specialists, like Whitaker, are particularly concerned about the stress levels in at-risk populations, particularly women- and veteran-headed households, whose support needs are more imminent.

When it comes to sleep, routines are important, according to the specialist who recommends patients develop healthy and consistent sleep routines, avoid consuming alcohol and OTC products known to disrupt sleep cycles, particularly antihistamines known to disrupt healthy sleep patterns.

CBD AND CANNABIS EFFICACY GROWING

In regard to other solutions, Dr. Whitaker says there’s “reasonable scientific evidence,” that CBD, particularly when combined with a small amount of THC, can help promote sleep.

Two in five working moms use cannabis, according to a newly minted survey released by San-Francisco analytics firm Lucky Analytics. 

Women are helping cannabis brands like Ganja Goddess achieve record-breaking triple-digit sales growth. The cannabis company reports a 635% increase in its sleep lines last year, according to its SVP of Marketing Heidi Genrich.

Gummies provide a popular entry point, according to Incredible Edibles Brand Director Jessica Benchetrit, whose company helps make cannabis more accessible via entertaining and informative educational sessions.

“Consumers are looking for an enhanced sleep experience, says Benchetrit. “The majority (78%) are actively seeking out ‘indica-like’ edibles.

Incredibles’ Snoozzzeberry gummies climbed to the number one infused gummy product in the markets it sold in, during the fourth quarter of last year, according to BDS analytics reports.  

REVEALING RESEARCH

A 2019 study published in the Journal of Alternative and Complementary Medicine, found cannabidiol (CBD) improved the sleep quality and reduced nightmares of 38% of the participants, all of whom had PTSD.

Joseph Maroon, M.D., a clinical professor and neurosurgeon at the University of Pittsburgh Medical Center who has researched the effect of cannabis on the brain, says that CBD has properties that could help some people sleep better. Most notably, he says, it appears to ease anxiety and pain, both of which can make it harder to fall asleep or stay asleep, according to a published statement in Consumer Reports. 

“CBD is safe,” says Dr. Daniel Clauw, an internationally known pain expert and head of the University of Michigan Director of Chronic Pain and Fatigue Center, who frequently collaborates with the Arthritis Foundation on education efforts.

Among sleep associations, the American Sleep Association has indicated that cannabis may help induce sleep in people with insomnia, anxiety or post-traumatic stress.

A MEANINGFUL IMPACT

“People are interested in better ways to relax at the end of the day,” says Ginrich. “And they are increasingly concerned about safeguarding their well-being over the long term.

“Stress and anxiety are not going away, so products and rituals that help people sustainably manage these pressures are in high demand,” adds the Ganja Goddess Marketing Director. 

We all have a role to play in helping put America’s sleep issues to bed.


Author Jackie Berg is the publisher of the Health Hub, a publication division of CBD Marketing Hub, as well as the publisher of TheHUB Detroit, TheHUB Flint and recipient of the Association of Women in Communications 2018 Vanguard award. To learn more CBD Marketing Hub, a cultivator of CBD and cannabis clients, visit its website or reach out at hello@cbdmarketinghub.com.

 

Senate to Consider SAFE Banking as the White House “Cleans” House

by Morgan Fox, NCIA’s Director of Media Relations

It has been quite a busy month in Washington when it comes to cannabis, but two of the more recent developments have garnered quite a bit of attention in the last couple of weeks and deserve a closer look.

First, a bipartisan group of lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the U.S. Senate. This legislation, which was introduced by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) along with 27 original cosponsors (up to 30 as of this writing), would protect banks and other financial institutions from federal prosecution simply for providing services to cannabis businesses that are operating in compliance with state laws. 

This legislation was reintroduced in the House earlier this month to expected fanfare, understandable given that it has already passed in that chamber and continues to enjoy overwhelming support. In fact, it was the first-ever standalone cannabis policy reform legislation to ever be brought to a floor vote – and pass – in that chamber, and was approved twice more in pandemic relief legislation that unfortunately was not approved by the Senate.

This last fact has caused advocates to more carefully scrutinize the prospects of Senate passage. After this bill flew through the House late in 2019, its movement through the Senate quickly came into question after the Senate Banking Committee voiced concerns about the bill. There was also not much indication of priority by Senate leadership to call cannabis bills for committee hearings, which became even more stark with the onset of COVID-19 when almost every other issue took an immediate back seat. Concerns about Senate support were further compounded by the unfair and politically motivated attacks by some Republicans against Democrats for their inclusion of SAFE Banking language in coronavirus relief packages.

However, a new year brings new opportunities. With the contentious 2020 elections in the rearview mirror, and a renewed focus on economic recovery, supporting small businesses, and public safety, we need to use a different calculus when examining the chances of SAFE Banking in the Senate, and that is giving us plenty of reasons to be hopeful.

Let’s look at the numbers: there are currently 36 states with comprehensive medical or adult-use cannabis laws and either existing or soon-to-be-implemented regulated cannabis markets, all of which would directly benefit from this legislation. That means there are 72 senators whose constituents are being put in harm’s way or face limited business growth opportunities thanks to lack of access to financial services in the cannabis industry, including 25 Republicans (six of whom are already sponsors plus one GOP member from a non-regulated state). With just a few more Republican senators on board, this bill would theoretically be able to beat a filibuster, provided there was unanimous Democratic support.

Does this kind of representation guarantee all 72 of those lawmakers will support cannabis banking reform? Of course not. Legislators on both sides of the aisle frequently do not support legislation that is in their constituents’ best interests. However, it does greatly increase the chances of passage and provides additional incentives for hesitant senators. 

In addition, Republican lawmakers have been more openly supportive of incremental reforms like the SAFE Banking Act than they have been of more comprehensive descheduling legislation that NCIA is working to pass, such as the MORE Act. In fact, some observers are confident that there was enough bipartisan support in the Senate to pass SAFE Banking in the last Congress, were it not for the pandemic and the obstruction of cannabis policy reforms by then-Senate Majority Leader Mitch McConnell.

The new landscape in the upper chamber has given us a lot of reasons to be optimistic about SAFE Banking this year. Democratic control of the Senate, tie-breaker voting power in the hands of pro-legalization Vice President Kamala Harris, the prioritization of cannabis policy reform by Senate Majority Leader Chuck Schumer and other members of Senate leadership, more Republican original cosponsors, and the increasing support of voters in conservative and swing states have given this legislation the best chances of being approved in the Senate since its first introduction.

The other federal cannabis story making headlines was the suspension, reassignment, and dismissal of a number of employees in the White House that was supposedly based at least in part on past cannabis consumption, despite recent guidance from the Office of Personnel Management which advised federal employers not to view past cannabis use as an automatic disqualifier for otherwise qualified job candidates. While the White House was quick to defend itself and point to other factors involved in individual cases, this move clearly sent the wrong message to employers across the country and called into question the Biden Administration’s stated support for at least marginal cannabis reforms.

Does this mean that Pres. Biden will veto comprehensive cannabis policy reform or other related legislation when it reaches his desk? Extremely doubtful. However, this unfortunate incident is indicative of the continuing stigma that cannabis consumers face, and an ongoing disconnect between public opinion, policy, and leadership. 

This isn’t just a government employment issue, either; it is alive and (un)well in the private sector. Even in states where cannabis is legal for adults, many employers continue to enact strict anti-cannabis policies, limit their hiring pools, and punish qualified workers for off-duty cannabis consumption. This despite ample evidence that cannabis is not associated with decreases in productivity or increases in workplace injuries.

There has been some progress in recent years on this front. Recent court cases have finally begun siding with medical cannabis patients who were wrongfully terminated for using the medicine that works best for them, after years of ruling in favor of employers. More and more states are instituting employee protections, at least for patients. Yet as more states consider “banning the box” — a policy which prevents prospective employers from asking about past cannabis convictions – or institute laws against pre-employment drug screening as a condition of job offers, discrimination against cannabis consumers and people who work in the industry remains a major problem of not only policy, but culture. Ultimately, employers will need to get over the stigma and false assumptions they have about cannabis and develop better internal policies to match the growing reality of legal and accepted cannabis in the United States.

One thing is certain: as we get closer to ending prohibition, the complexity and nuance of this issue are sure to grow. Stay tuned for more updates as reform efforts continue to heat up in our nation’s capital!

Member Blog: Cannabis Compliance Pains and How to Solve Them

by Frank Nisemboum, c2b teknologies

Amid increased anxiety and stress resulting from one of the most turbulent years in recent history, Americans everywhere have been turning to cannabis products to help them make it through. Bearing witness to a 71% increase in cannabis product sales nationally, according to industry experts at Leafly, the U.S. cannabis industry grew beyond expectations in 2020.  

While dramatic increases in product demand may seem like a cannabis business owner’s dream, maintaining compliance with unstable and unstandardized cannabis regulations can bring on more than a few nightmares. Every state seems to have different guidelines, requirements, and procedures than the next, with some in-state laws differing even between municipalities. 

Although maintaining compliance may seem like an unnecessary challenge without an immediately obvious return on investment, the real nightmare for cannabis operators begins once they’re found in violation. Non-compliance consequences usually include huge fines, the temporary loss of business, and even business license forfeiture. 

As a cannabis professional, you know that regulatory compliance isn’t optional and instead, an absolutely critical function of every cannabis operation. From cultivators and manufacturers to distributors and retailers, no business in the seed-to-sale supply chain can expect longevity in this industry without a plan that ensures adherence to local, state, and federal laws. 

The Most Common Cannabis Compliance Issues

One of the most common complaints regarding regulatory compliance involves the amount of time you have to spend on compliance: maintaining adherence, staff training, and preventing non-compliance violations. Let’s face it, this is a burden that doesn’t seem to directly correspond to a return on investment, particularly if you are a smaller cannabis business operating on thinner margins than some of the big guys. When time is among the most valuable things you have, wouldn’t you rather focus on front-end concerns that yield the more obvious benefits to the bottom line? 

Often it’s the level of cannabis regulation complexities that takes so much time and energy to overcome. Without approval and regulation on the federal level, requirements can drastically vary by state, subject to rapid changes by state and local legislatures. Maintaining compliance becomes a more significant challenge if you are a growing business with an eye toward expansion into more than one location in multiple jurisdictions. 

Together with medical privacy requirements, food safety, occupational safety, tax regulations, and other conditions, it seems like you’re spending more time investing in learning and implementing compliance initiatives than in product, facilities, or operational investments. 

COVID-19 certainly didn’t make any of this easier. These regulations have proven to be the most unstable, with many state and municipal governments behaving inconsistently, seemingly unsure of what they were doing week to week. 

On top of existing regulations before the pandemic, many cannabis businesses found ways to quickly adapt to new health regulations, mandatory facility closures, and point of sale changes. Dispensaries once focused on efficient customer service in limited-space shops now have to ensure social distancing, customer turnover, enhanced sanitation, and new capacity limits. 

Alleviating Compliance Pains through Preparation

The hard truth of the matter for cannabis businesses moving forward is that regulatory compliance will continue to be one of the most critical leadership focus areas. With more states poised to follow legalization trends in the next few years and lasting changes from an ongoing pandemic, the complaints concerning regulatory compliance are likely to get louder and more frequent. 

However, you can meet these challenges through systematic planning and the right cannabis tools to continue growing within the industry while striving for perfect compliance records. 

The most impactful steps you can take as a cannabis business include acknowledging the significance and planning for 100% compliance. Not only does compliance protect your business from incurring hefty fines and licensure consequences, but regulations also work to protect the safety of customers and staff. 

Regulatory compliance isn’t just about avoiding fines and protecting a business’s finances — it’s about providing a quality product consistently in a safe and secure environment. Tainted products can injure consumers, while children and animals are at risk of accidental consumption resulting from insufficient packaging. 

As a cannabis operator, once you adequately acknowledge the implications of maintaining compliance, you can begin developing a plan to make it happen. Depending on the scope and size of your operation, requirements specific can vary from one cannabis business to the next. If you run a cannabis business with front-end sales, for example, you may be required to follow regulations that a delivery-only company would not be required to follow. 

Ensuring your compliance plan focuses on the applicable statutes for your business type will save time, energy, and vital resources. Consulting with cannabis compliance experts is an economic investment every cannabusiness owner should make. They’ll teach you about meticulous record-keeping while helping you examine local regulations and understand the requirements specific to your business type. 


Vice President of ERP Sales, Frank Nisenboum, 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: 5 Visual Merchandising Tips for Today’s Cannabis Dispensaries

by Ray Ko of shopPOPdisplays

Retailers from all walks of life are trying to figure out how to merchandise products that, pre-pandemic, would be offered using “try before you buy” tactics to entice people to make a purchase. Clothing stores had dressing rooms. Makeup stores had countertop sampling displays. Food purveyors offered edibles from self-service bins. 

In some ways, the heavily regulated nature of the cannabis industry has put its retailers at an advantage when it comes to visual merchandising—they’ve had to be creative because, especially with adult-use customers, they’ve never been able to set up any type of “try before you buy” scenario. In many states, it’s even illegal for shoppers to bring their own items to the checkout counter. That makes selling an inherently experiential product a game of sight instead of taste, smell, or touch.

With cannabis becoming ever more mainstream, cannabis purveyors have taken an increasingly sophisticated approach to store design. Here are a few things to consider when implementing or refreshing a visual merchandising approach.

Consider the entire space

Floors, walls, ceilings, and countertops should all be utilized from a visual perspective, regardless of square footage. Wall-mounted shelving and wall-mounted pedestals make the most of vertical space. So do tall display cases. Waist-high displays that shoppers can walk around and look into from above work well in the center of a room. Locking display boxes and display cases can be used atop counters as space allows. Eye-catching and strategically placed signage, whether wall-mounted or suspended from the ceiling, can draw people to specific items or areas of the store and provide important educational information.

Consider the traffic flow

People tend to turn to their right when they enter a store, and cannabis retailers should be strategic about what they encounter there. It’s not the best place to put the budtender/checkout counter, because that only serves to bottleneck traffic and keep people from casting an eye about the rest of the shop. The goal in this space is to entice new customers to explore the store and give regular customers something new to think about. Signage that touts specials and intriguing products is a good choice, along with nearby displays of those items with adequate educational info for newcomers. Be sure there’s room for people to linger without impeding those who are coming in for a quick pick-up. That level of awareness is essential for every display in the store. No one wants to feel as if they’re infringing on another’s personal space, whether they’re there to browse or move right to the budtenders.  

Make good lighting a priority

Since customers are often prohibited from picking up any cannabis-containing products in a dispensary on their own accord, the ability to examine them adequately without touching is paramount. Overhead lighting alone is not enough. For one, it will be blocked by the customer anytime they bend over to look inside a counter display. Many shelving units and product display cases come with, or can be outfitted with, lighting from above, beneath, or either side. Mirrors can also be incorporated to give people a 360-degree view. Consider what a person will want to know about a product and illuminate it accordingly—preferably inside a lockable display that doesn’t impede viewing. Displays made of optically clear acrylic are a good choice because they’re lightweight and shatter-resistant (especially as compared to glass).  

Use acrylic blocks to add interest

Arranging products at different heights and angles on shelves or under counters serves many purposes. Acrylic blocks are the Swiss Army knife of displays because they come in a wide variety of dimensions and can be used to call attention to small items, create groups of complementary items and add a level of cachet to any product placed atop them. Since acrylic itself is optically clear, it can be tinted any color to complement a brand or particular look. And, acrylic is infinitely malleable, so custom pieces can be designed to accommodate any product or space.

Choose cannabis-specific displays

Cannabis shops can utilize a variety of cannabis retail displays to showcase the products they sell or have specific displays designed to suit their needs. Cannabis display pods highlight, preserve and protect buds while allowing customers to fully experience terpene aromas without handling the product itself. As well, there are cannabis display pod spikes that enable a full view of your product, enabling customers to see the fine details of each bud. Bud jars can be customized with colored spike inserts and/or placed in display pod holders showcasing multiple jars. We’ve also created displays shaped to hold vape products. 


Ray Ko has been creating effective visual merchandising strategies for retailers for more than twenty years. Today, he is the senior ecommerce manager for shopPOPdisplays, a leading designer and manufacturer of stock and custom retail displays that helps brick-and-mortar and ecommerce stores of all sizes, across all industries, showcase their products to drive sales.

 

 

Committee Blog: National and International Standards & Regulatory Bodies Relevant to the Cannabis Industry

by NCIA’s Facilities Design Committee

The cannabis industry benefits from the accumulated knowledge and established standards developed by many of the organizations listed here. Understanding the regulatory ecosystem is essential for cannabis operators as well as for those who strive to shape the regulatory future of the cannabis industry.

Listed below are some of the major regulatory bodies and standards agencies that have some relevance to the cannabis industry.

Table of Contents


AHPA

American Herbal Products Association - AHPA

The American Herbal Products Association (AHPA) was founded in 1982 to promote the responsible commerce of herbal products to ensure that consumers continue to enjoy informed access to a wide variety of herbal goods. Their seminal Herbs of Commerce (HoC) (first published in 1992) was officially incorporated by the US Federal Government into the Code of Regulations (21 CFR 101.4) establishing consistent naming of botanical ingredients for dietary supplements. With precedent for federal recognition, their active Cannabis Committee is actively paving the path for safe and consistent use of cannabis products. 

http://www.ahpa.org/


ASABE

The American Society of Agricultural and Biological Engineers - ASABE

The American Society of Agricultural and Biological Engineers (ASABE) is an educational and scientific organization dedicated to the advancement of engineering applicable to agricultural, food, and biological systems. ASABE develops standards through its standards committees. Relevant cannabis committees include:

  • ES-300 Energy Utilization & Application: Leads and coordinates the activities of ASABE in matters related to electro-technology as related to agriculture energy efficiency, electrical wiring systems, and electrical utility programs.
  • ES-310 Ag Lighting Group: Leads and coordinates the activities of ASABE in matters related to agricultural lighting systems (combined with ES-311 Electromagnetic Radiation Application for Plants) 
    • The ASABE Standards Committee ES-311 X644 Working Group is developing Draft Standard ASABE X644 Performance Measures of Electromagnetic Radiation Systems for Plants.

ASABE Plants, Animals, and Facilities Systems (PAFS) Technical Community is working with ASHRAE (through its Plant and Animal Environment technical committee) to develop x653 related to HVAC and lighting for indoor plant growth without sunlight.

https://www.asabe.org/


ASHRAE

American Society of Heating, Refrigerating and Air Conditioning Engineers - ASHRAE

American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) is a professional organization seeking to advance HVACR systems and design. 

The ASHRAE Multidisciplinary Task Group coordinates technical activities related to the design of indoor plant production facilities and their HVAC&R systems and considers deliverables created by Technical Committees like:

  • Technical Committee 2.2 on Plant and Animal Environment (concerned with the relationships of environmental conditions and the growth, health, and reproduction of plants and animals).

Link to standards relevant to cannabis production:

https://www.ashrae.org/


ASTM

American Society for Testing and Materials - ASTM

Established in 1898, ASTM International formerly known as the American Society for Testing and Materials is a globally recognized leader in the development and delivery of voluntary consensus standards. Working in an open and transparent process and using ASTM’s advanced IT infrastructure, our members create the test methods, specifications, classifications, guides, and practices that support industries and governments worldwide. ASTM Committee D37 on Cannabis has 1,000 stakeholders from 30 countries working together to advance the industry by addressing quality and safety through consensus standards.

Examples of standards that have already been approved for the cannabis industry use include:

D8250 Standard Practice for Applying a Hazard Analysis Critical Control Points (HACCP) System for Cannabis Consumable Products

D8222 Standard Guide for Establishing a Quality Management System (QMS) for Consumer Use of Cannabis/Hemp Products

D8197 Standard Specification for Maintaining Acceptable Water Activity (aw) Range (0.55 to 0.65) for Dry Cannabis Flower Intended for Human/Animal Use

https://www.astm.org/


DLC

DesignLights Consortium - DLC

The Design Lights Consortium (DLC) is a non-profit organization that promotes high-quality lighting solutions in collaboration with utilities and others and establishes standards for different lighting types. 

https://www.designlights.org/


EHEDG

The European Hygienic Engineering & Design Group - EHEDG

The European Hygienic Engineering & Design Group (EHEDG) was founded in 1989 as a non-profit consortium of equipment manufacturers, food producers, suppliers to the food industry, research institutes and universities, public health authorities, and governmental organizations.

The EHEDG mission is defined as:

“Raise awareness of hygienic engineering, develop guidance and solutions, and provide a platform to promote EHEDG expertise that facilitates networking between hygienic engineering experts from around the world.”

EHEDG actively supports European legislation, which requires that handling, preparation processing, and packaging of food is done hygienically using hygienic machinery and in hygienic premises according to the food hygiene directive, the machinery directive, and the food contact materials directive (see EC Directive 2006/42/EC for Machinery, EN 1672-2 and EN ISO 14159 on Hygiene requirements for the design of machinery). While EHEDG is European Initiative, the EHEDG Certification Logo is becoming more widely seen on food processing equipment sold in the US as a product differentiator, offering assurances of sanitary design, cleanability, sterilizability, and bacterial tightness. It is considered more stringent than other stamps or marks. Auditors or Regulators who might be inspecting a cannabis facility, if they understood this Certification Logo, should have an impression that the operator has invested in more hygienic equipment.

https://www.ehedg.org/


ENERGY STAR® – EPA

ENERGY STAR from the Environmental Protection Agency

ENERGY STAR® is the government-backed symbol for energy efficiency. With oversight from the Environmental Protection Agency, this program certifies the energy usage and energy efficiency of products, homes, buildings, and industrial plants. By using a common set of metrics objectively applied across categories, companies and end-users can make comparative decisions based on energy efficiency.

In many localities, the use of ENERGY STAR® certified products or achieving certification for a building or industrial plant may qualify for rebates from local utility companies. Cannabis company eligibility to participate in these programs will vary depending on local laws, products in use, and rebates offered by local utility companies.

https://www.energystar.gov/


ETL

Electronic Testing Laboratory - ETL - Intertek

Founded by Thomas Edison in 1896 as the Lamp Testing Bureau and renamed to the Electrical Testing Laboratories (ETL) in 1904, ETL certifications demonstrate compliance to the requirements of widely accepted product safety standards, as determined through independent testing and periodic follow-up inspections by a Nationally Recognized Testing Laboratory (NRTL). The company is now known as Intertek.

The ETL Listed Mark indicates to distributors, retailers, and customers that a product has been tested by Intertek and found in compliance with accepted national standards. Acceptance of ETL certification varies by locality though it is widely recognized across the United States and Canada.

https://www.intertek.com/marks/etl


FDA

Food and Drug Administration - FDA

The U.S. Food and Drug Administration (FDA) oversees the safety of all food, drugs, medical devices, and cosmetics in the United States through the Federal Food, Drug, and Cosmetic Act of 1938. Despite the current status of cannabis as a Schedule I controlled substance, the guidance provided for analogous products, particularly current Good Manufacturing Practices (cGMPs) align with global best practices that industry can follow to ensure product quality and integrity as well as prepare for potential federal legalization. Resources on the current approval process and research pathways have been published by the FDA on their page:  What you need to know about cannabis compounds, CBD, cannabidiol, products containing cannabis, scientific data, development & approval process, and much more!

Some states require compliance with The FDA Food Code in their cannabis regulations, but some reference 2013, some 2017. The next issue is expected in 2021. Be aware that The Food Code is for retail and foodservice segments of the industry. Many in the cannabis sector anticipate that when Cannabis is legalized at the federal level,  FDA will apply the regulatory approach suitable to manufacturing, such as: 

  • 21 CFR 111 Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements
  • 21 CFR 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food

      This is a very complex topic, and depending on how the sector for THC and CBD products evolve and how the products are sold and labeled. Other regulations may become relevant, such as: 

  • 21 CFR 211 Current Good Manufacturing Practice for Finished Pharmaceuticals. 
  • FDA regulations for topicals — cosmetics and soaps, which include 21 CFR 700, 701, 710, 720, 740 and others. 

https://www.fda.gov/


GFSI

Global Food Safety Initiative - GFSI

The Global Food Safety Initiative (GFSI) is a private organization that oversees and approves different auditing platforms as meeting their criteria for safe food processing. This criterion provides a universal gold-standard of recognition to specific food safety audits. There are currently 10 global GFSI schemes that can award certifications. Cannabis eligibility for certification varies based on scheme and jurisdiction. Some states are requiring a GMP audit, “such as GFSI” in their cannabis regulations.

https://www.mygfsi.com


GLOBALG.A.P.

GlobalG.A.P. - Good Agricultural Practices

GLOBALG.A.P is a globally-recognized certification program that began as EUREGAP in 1997 to help the supermarkets in Europe address consumer concerns about the safety of agricultural practices and products. GLOBALG.A.P. is the world’s leading farm assurance program, with over 100 countries following the requirements of Good Agricultural Practices (G.A.P.). It focuses on globally accepted criteria for food safety, sustainable production methods, worker and animal welfare, and the responsible use of resources such as water, compound feed, and plant propagation materials. As of 2020, they have begun a feasibility assessment of bringing their G.A.P certification program to the cannabis industry. Cannabis and hemp businesses that are focused on cultivation of the plant would greatly benefit from incorporating these global best practices into their operation.

https://www.globalgap.org


ICC

International Code Council - ICC

The International Code Council (ICC) has developed a guide for Applying the Codes to Cannabis Facilities, which covers IBC (International Building Code), International Fire Code (IFC), and many others. IBC released Chapter 39 on Processing and Extraction Facilities for the industry to follow.

https://www.iccsafe.org/


IES

Illuminating Engineering Society - IES

The Illuminating Engineering Society (IES) is a community of lighting experts seeking to improve the lighted environment by bringing together those with lighting knowledge and by translating that knowledge into actions that benefit the public.

  • The IES Horticultural Lighting Technical Committee researches and develops best practices for horticultural lighting using climate-based annual daylighting and electric lighting with lighting and shading controls, with a focus on greenhouses, vertical farms (plant factories), and building atria. 
    • The committee produces Recommended Practices documents, including one for professional lighting designers who are tasked with horticultural lighting.

https://www.ies.org


ISO

International Standards Organization - ISO

The International Organization for Standards (ISO) is an independent, non-governmental international organization with a membership of 165 national standards bodies that was established in 1946. Today, it has nearly 800 technical committees and subcommittees that manage the standards development process.

ISO standards focus on the business management of an organization and how information and data are reported and responded to.  Some of the most common ISO standards relevant to the cannabis space are:

  • ISO/IEC 17025 – General Requirements for the competence of testing and calibration laboratories
  • ISO 9001 – Quality Management Systems
  • ISO 22000 – Food Safety Management
  • ISO 45001 – Occupational Health and Safety

Additionally, 

ISO is actively developing cannabis standards in the following three areas: 

  • Safety of cannabis facilities, equipment and oil extraction operations.
  • Secure handling of cannabis facilities, operations and transportation.
  • Good production practices guide for cannabis.
  • Demonstrate competence of testing and calibration laboratories to ensure validity of testing results.

https://www.iso.org


National Sanitation Foundation – NSF

National Sanitation Foundation - NFS

The National Sanitation Foundation (NSF) originally brought together key stakeholders back in the 1940s to develop the first consensus standards for restaurant equipment sanitation. Public health inspectors liked what they saw, and began requiring product certification to NSF/ANSI standards. Currently, many states approach cannabis regulation from a foodservice perspective and the NSF Mark is desirable for equipment in the Cannabis processing room, such as sinks, rolling stock, dishwashers, and if available for cooking and packaging equipment.  Even when cannabis is legalized at the federal level and the FDA regulates following Food Safety Modernization Act regulations from 21 CFR, the NSF Mark will continue to provide assurances of the sanitary design of much of the equipment used to produce Marijuana Infused Products (MIPS)  However, after federal legalization, Certifications from the manufacturing perspective, such as 3-A or EHEDG, will become, most likely, more relevant.

https://www.nsf.org


OSHA

With the Occupational Safety and Health Act of 1970, Congress created OSHA, the Occupational Safety and Health Administration, to assure safe and healthful working conditions for all workers by setting and enforcing standards. Additionally, OSHA provides training, outreach, education, and assistance. With steep fines that can exceed $50,000 for repeat violations, this commonly overlooked agency actively inspects cannabis facilities in all states. A free Guide to Worker Safety and Health in the Marijuana Industry was developed by a State of Colorado workgroup that cannabis businesses, regardless of state, can utilize.

https://www.osha.gov/


RII / Cannabis PowerScore

Resource Innovation Institute - RII

Resource Innovation Institute is a non-profit research and advocacy organization providing guidance and data for cultivators and their project partners to use to optimize facilities for efficiency and productivity.

Cannabis PowerScore, RII’s resource benchmarking tool, is both a voluntary performance ranking system and in some jurisdictions where benchmarking is required PowerScore is also specified as a way to report energy and water information to regulators.

https://www.resourceinnovation.org


UL

Underwriters Laboratories - UL

UL LLC (formerly known as Underwriters Laboratories) is a global safety certification company approved by the Office of Occupational Safety and Health Administration (OSHA) as a Nationally Recognized Testing Laboratory (NRTL).

The UL Listed seal means that the product has been tested by UL to nationally recognized safety and sustainability standards. Additionally, it has been found to be free from a reasonably foreseeable risk of fire, electric shock in a Division 2 environment.

In addition, UL published ANSI/CAN/UL/ULC 1389, the Standard for Safety for Plant Oil Extraction Equipment for Installation and Use in Ordinary (Unclassified) Locations and Hazardous (Classified) Locations.

https://www.ul.com


USDA

United States Department of Agriculture

U.S. Department of Agriculture (USDA) has had a significant impact on the cannabis sector through the 2018 Farm Bill, which provided authorization for the USDA to oversee the cultivation of cannabis containing no more than 0.3% THC (i.e. hemp / CBD biomass).

Additionally, the USDA would most likely be involved after legalization if Cannabis producers decided to launch Cannabis-infused meat products. So far this has not happened and the regulatory impact would be difficult to anticipate.

https://www.usda.gov/


USGBC / LEED   

U.S. Green Building Council - USGBC

The U.S. Green Building Council (USGBC) is a non-profit organization that promotes high-performance buildings through the creation of voluntary certification systems for projects and credentialing programs for professionals.

  • The third-party green building certification Leadership in Energy and Environmental Design (LEED), is the most widely used green building rating system for commercial buildings.

The Green Business Certification Inc (GBCI), implements the LEED Accredited Professional (LEED-AP) program to support the construction of LEED-certified buildings.

https://www.usgbc.org


USP   

US Pharmacopeia - USP

The US Pharmacopeia, formed in 1820, is an independent, scientific, nonprofit public health organization devoted to improving health through the development of public standards for medicines, food ingredients, and dietary supplements, and related programs. Over 150 countries recognize the standards set by the USP, with more than 40 integrating USP standards into law. The USP formed a Cannabis Expert Panel in 2016 to support the industry with data-driven recommendations on cannabis quality attributes for human use. The 2020 paper on Cannabis Inflorescence for Medical Purposes: USP Considerations for Quality Attributes (Sarma et al., 2020) is available for download.

https://www.usp.org/


WELL Building Standard

WELL Building Standard

The International WELL Building Institute™ (IWBI™) has created the WELL Building Standard is a standardized metric for buildings, interior spaces, and communities seeking to implement, validate, and measure features that support and advance human health and wellness.

WELL was developed by integrating scientific and medical research and literature on environmental health, behavioral factors, health outcomes, and demographic risk factors that affect health with leading practices in building design, construction, and management.

https://www.wellcertified.com

Committee Insights | 3.23.21 | Marketing Innovations to Accelerate Retail Growth & Awareness

In this edition of our Committee Insights series originally aired on Tuesday, March 23, 2021 members of NCIA’s Retail Committee convened a panel of retail cannabis experts to lead a discussion of innovative retail cannabis marketing strategies & challenges. At the conclusion of the presentation they hosted a moderated Q&A session so don’t miss your chance to learn from these pioneers in the retail space!

Presentation Slide Deck: https://bit.ly/2PtzlPo

Learning Objectives:
• Learn numerous innovative ways to market to customers during changing times
• Local, state and federal challenges to retail cannabis compliance
• Successful public relations and social media strategies
• Tools for building a marketing strategy
• What is your data worth and how can you capitalize on it?

Panelists:

Brandon Dorsky
Hoban Law

Gary Strahle
3KEYMEDIA LLC

Allison Disney
Receptor Brands

Byron Bogaard
Highway 33

Tara Coomans
Avaans PR

Larina Scofield
Lucy Sky Cannabis Boutique

“If you don’t own your data, your data will own you” – Gary Strahle of 3KEYMEDIA LLC

Committee Insights | 3.17.21 | No Time to Waste – Putting Equity First In The Mid-Atlantic Region

In this edition of our NCIA Committee Insights series originally aired on Wednesday, March 17, 2021 we were joined by members of NCIA’s Diversity, Equity, and Inclusion Committee to discuss the key positions that all activists should dig their heels in to ensure cannabis legislation is as equitable as possible.

With the Mid-Atlantic poised to becoming the next region to ride the wave of cannabis legalization, this was a timely conversation to help those in the region understand what demands they should be making with their lawmakers, all from the perspectives of those who’ve come before us in different markets who’ve fought these kinds of battles.

Panelists include:

Tauhid Chappell
Founder
CannAtlantic Conference
(Host)

Brandon Bolton
Executive Director
United CORE Alliance

Chelsea Higgs Wise
Executive Director
Marijuana Justice

Chirali Patel
Executive Board Member
New Jersey State Bar Association Cannabis Law Committee

Committee Insights | 3.17.21 | Energy Use and Working Towards Standardizations in Regulations

In this edition of our NCIA Committee Insights series originally aired on Wednesday, March 17, 2021 we were joined by members of NCIA’s Cannabis Cultivation Committee for an advanced session on energy use and procurement alongside sustainable cultivation practices.

Energy consumption is one of the largest costs for a licensed cannabis cultivation. During this webinar, we convened a panel of cannabis industry cultivation experts to share what cultivations are doing to lessen energy consumption and the potential need for standards and/or regulations to help promote “greener” cannabis cultivations.

Panelists:

Steve Mackey – Senior Vice President – Yobi
(Host)

Ash Ganley – GrowRay Lighting Technologies

Adrian Geovenco – CEO & Co-Founder – InSpire Transpiration Solutions

Josh Holleb – Ceres Greenhouse Solutions

Ryan Disney – Botanist – Red Arrow Farm

Noni Goldman – COO – The Hub Craft

Sonny Antonio – CEO/Founder – Sunshine Design

USPS and Vaping Devices: What You Need To Know

by Madeline Grant, NCIA’s Government Relations Manager

The most recent omnibus that passed into law in December 2020 included a small provision related to vaping devices that could potentially have big implications.

The bill included language related to the Preventing Online Sales of E-Cigarettes to Children Act (the Act). The intent of the Act was to prevent underage smoking by applying the same safeguards already in place for cigarettes and smokeless tobacco products to the online sales of e-cigarettes — a mission we all wholeheartedly support. The Act also amends the Jenkins Act, which generally prohibits mailing of cigarettes to consumers through the United States Postal Service (USPS), to include Electronic Nicotine Delivery Systems (ENDS) and to subject them to the same mailability restrictions.

The Act defined ENDS as any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device. The provisions also extend to any component, liquid, part, or accessory of an ENDS, regardless of whether sold separately from the device. Unfortunately, this definition is overly broad, and despite the name, an item can be interpreted to qualify as an ENDS without regard to whether it contains or is intended to be used to deliver nicotine — this means devices used for the vaporization of cannabis or hemp, essential oils, and other aromatics, or even water vaporizers used for babies.

What does this actually do?

  • Prohibits the mailing of non-nicotine devices to consumers through the USPS
  • Triggers burdensome and illogical compliance requirements for mailing through common carriers (i.e. requires the labeling of packages as containing nicotine, payment of state tobacco taxes, reporting of consumer data, and more, even if non-tobacco products)
  • Eliminates USPS exception for B2B mailings for non-nicotine devices, as the form requires tobacco product license information which non-nicotine businesses do not hold
  • As a result of this Act and subsequent confusion, many common carriers have changed their policies to ban shipments of any vaporization devices and components, nicotine or otherwise

How can you help?

Although the time to submit public comments has passed, you can still make a call to your congressional representative and senators to express your concerns. To find your elected officials you can visit congress.gov, type in your zip code, and this will bring you to your representative photo and information. From there call the Washington, D.C. office, state your name and address, to confirm you are a constituent and discuss the talking points below. Every constituent call can make a difference as staffers log all comments and concerns for the office. 

When relaying your concerns, note that this broad interpretation of ENDS was not the intent of the legislation. It creates conflicts with existing regulations (e.g. FDA deeming rules, USPS mailability of hemp products, and state tax guidelines, etc.) and delivers significant unintended consequences.

Ultimately, it means consumers and patients may not be able to receive the state-legal, non-tobacco products they want and could significantly increase costs — all at a time when USPS is already struggling to bring stability to the agency.

Along with a fantastic informal coalition that formed to address this issue, NCIA has submitted comments that ask USPS to clarify that their interpretation of ENDS to not include these additional product categories that were not the intent of the original statute. As a united front, we will continue to educate congressional offices. We will continue to monitor any movement of this legislation and keep our members informed. Please reach out to your elected officials. Of course, if you have any questions please feel free to reach out to Madeline@TheCannabisIndustry.org

Committee Blog: Manufactured Product Safety — Vaporizer Delivery Devices

by NCIA’s Cannabis Manufacturing Committee 

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 developed for 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.

Member Blog: Strategies to Reduce Indoor Cultivation Facility Energy Costs

by Jason Magnuson of Mintropy

Indoor cannabis cultivation facilities are complex environments, where a large number of variables interact to create an ideal ecosystem to grow cannabis. The upside of an indoor facility is it allows a year-long growing climate, optimized for each stage of the plant grow cycle. The downside, however, is creating this ideal climate is very energy-intensive.  

The total energy costs for indoor cannabis grow operations typically vary between 20%-50% of total operating costs (approximately 120-150 kWh/sq.ft). In comparison, energy use in a typical commercial building environment is approximately 25 kWh/sq. ft. As indoor cultivation facilities increase, they can be a source of strain on electrical grids. A recent study showed indoor cannabis cultivation alone accounted for 4% of the energy grid usage in Denver. (IEEE, 2020)

With that context, any areas we can identify to improve energy efficiencies without introducing a negative impact to the grow environment can have enormous bottom-line impacts for cultivation owners and society at large. 

In this article, we are going to be examining two ways we can optimize HVACD systems to improve energy efficiency. When HVACD systems are designed for grow facilities, the primary variables we are looking to influence are the following psychrometric properties: temperature (either wet or dry bulb) and relative humidity. Mechanical engineers will often refer to an information-packed graph called a psychrometric chart shown below.

This chart helps to visualize the relationships different properties of air like temperature, humidity (relative and absolute) and dew points along the saturation curve have with each other. This is useful to analyze, as these are direct inputs to a scientific measure often favored by growers called Vapor Pressure Deficit (VPD). 

Vapor Pressure Deficit, simply described, compares these variables to determine how much additional room for water vapor there is in the air. This is important as it determines how well cannabis plants can transpire. Controlling transpiration rates help to aid in healthy, robust growth through the plant life cycle. Growers tend to want lower VPD, and thus lower transpiration, early in plant maturity, and increase to higher VPDs, and thus high transpiration, at the flowering stage before harvesting.

So we know a successful indoor cultivation facility HVAC system will need to control temperature and humidity to ensure the desired VPD values. How can we do that efficiently?

Stand-Alone Dehumidifiers Are Inefficient

A cannabis plant can transpire up to 99% of the water absorbed through its roots. Due to this, we often tell people that designing an Indoor Cultivation Facility is like designing a Data Center with a swimming pool inside. Because of the increased humidity introduced from plant transpiration, we must pay special attention to dehumidification strategies within the grow space. Humid air requires treating significant latent loads in the grow space, requiring additional energy to remove moisture from the airstream. This is one reason HVACD systems can consume up to 50% of the energy budget in a cultivation facility.  As previously mentioned, higher humidity levels will lower the VPD in the room, preventing a plant from transpiring effectively to continue healthy growth. To combat this, sometimes stand-alone dehumidifiers are added into the grow room.

While these units can do the job of removing moisture from the room, it is a very energy-intensive process. One of the issues with stand-alone dehumidifiers is that they reject heat back into the grow room, thereby adding additional cooling load onto the main HVAC equipment. 

Integral Hot Gas Bypass System

An air handling unit, sometimes called an air handler or AHU, is a piece of equipment that is used to condition and circulate air as a component of a heating, ventilating, and air conditioning system. 

The air handler is usually a large metal box that contains a blower, heating and cooling elements, filter chambers, sound attenuators, and dampers. It then connects to ductwork that distributes the conditioned air throughout the space before returning it back to the AHU.

Of particular interest are the units cooling coil and reheat coil. These two components are namely responsible for controlling VPD levels in our grow space. In an Integral Hot Gas Reheat AHU, the cooling coil serves as a dehumidifier, by cooling the air thereby reducing its moisture/latent load (we highly recommend capturing this water for treatment and reuse: read more here). The hot gas reheat capability utilizes heat from grow space and compressor heat to reheat the air before returning to the grow space (without using additional heating energy).

 

While this may seem like a minor design change, it results in a considerable reduction in energy. As the chart below illustrates, leveraging the Integral Hot Gas Bypass AHU units can result in a 30-35% reduction in HVACD energy when compared with other dehumidification systems. Additional automation capabilities built-into these systems will ensure that the grow room will remain tightly controlled within the desired state points of your grow room to optimize VPD.

This reduction in energy quickly adds up to reduced utility bills. Despite marginally higher upfront costs as compared to standard HVAC equipment coupled with standalone dehumidifiers, this option results in a lower 5-year system cost than common HVACD systems installed in cultivation facilities, and these savings will only increase over time.  

Maintaining Consistent VPD, but at higher Temperature / Humidity Ranges

The second energy-saving measure we would like to discuss goes back to the earlier discussion of VPD.  Recall the equation for VPD is

V P sat – V P air = VPD

This is important, as it provides growers the flexibility to fall within desired VPD ranges, but at higher temperature and humidity ranges than typically used. Many growers target maximum temperatures around 70-75F and limit relative humidity to a maximum of 50 percent, but by allowing slightly higher maximum room temperatures of 75-80F, with corresponding relative humidity increases, we can create identical VPDs. The cost-benefit of this small adjustment is considerable. The HVAC system (including cooling and dehumidification) can be sized at roughly 20-30% smaller capacity, reducing the grower’s up-front equipment costs. In addition, the system’s energy consumption and costs during operations will be significantly lower, to the tune of 30-40%. In a theoretical 30,000 square foot facility, this could result in a $1,300,000 savings in the first 5 years.


Jason Magnuson is the Director of Business Development at mintropy. Mintropy is an MEP (Mechanical, Electrical, Plumbing) Engineering Design firm, with a focus on Indoor Cultivation Facility and Dispensary design. At mintropy, we strive to minimize entropy (minimize disorder) in building systems, by creating innovative and efficient designs to meet our client’s needs. For assistance in your cultivation facility, be it auditing/upgrading existing systems or designing new, reach out to us today.

 

Service Solutions | 3.16.21 | Best of Breed Approach to Cannabis Resource Planning | Backbone

NCIA’s #IndustryEssentials webinars are our weekly educational series featuring a variety of programs allowing us to provide you timely, engaging and essential education when & where you need it most.

The cannabis & hemp industries are experiencing explosive growth. How can your enterprise stay competitive, compliant, and scale effectively?

In this edition of our Service Solutions series originally aired on Tuesday, March 16 our panel of experts led by the team at Backbone & Armanino LLP discussed the best of breed approach to selecting cannabis production, financial, demand, quality & data warehousing systems to provide custom-tailored cannabis and hemp ERP solutions.

Presentation Slide Deck: http://bit.ly/318lGQs

Learning Objectives
• Learn ways to stay competitive, compliant, and scalable
• Strategies for selecting the right ERP solutions for your business
• Hear our take on custom tailored cannabis and hemp ERP solutions

Panelists:

Peter Huson, PhD
Chief of Operations
Backbone

Erika Tingey
Head of Product Development
Backbone

Todd Bowlsby
Technology Consulting Manager
Armanino LLP

Sponsored By:
Backbone

Want to know more about B A C K B O N E? Head to https://www.backboneiq.com/ to learn more!

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.

Protected: Committee Insights | 3.10.21 | Leveraging Technology for your Advertising & Marketing

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Committee Insights | 3.3.21 | Out of the Box Ideas to Market Your Cannabis Retail & Product Brands

In this edition of our NCIA Committee Insights series originally aired on Wednesday, March 3, 2021 we were joined by members of our Marketing & Advertising Committee for a lively conversation surrounding unique ideas on how to market and advertise your cannabis brand!

Our panel of esteemed experts highlight ten (or more!) creative examples others are doing to jump start your idea factory and get attention! They’ll each bring examples of other cannabis business brands doing out-of-the -ordinary things, and maybe a few from other industries that YOU can duplicate successfully in cannabis.

Presentation Slide Deck: http://bit.ly/30XEqC4

Panelists:

Laura Wilkinson Sinton
Founder & CEO
Caligrown™/AFC Products

Jake Wall
Chief Innovation Officer
avec bloom

Michele Ringelberg
Owner
ThrivePOP

Josefine Nowitz
Co-Founder
Cannabis Creative Group

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.

Spring Update from Capitol Hill – SAFE Banking, the MORE Act, and Appropriations

Photo By CannabisCamera.com

by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

It’s hard to believe that somehow it’s March again, but all the while, the NCIA team in D.C. has been hard at work lobbying and advocating on behalf of you and your business. Things are really beginning to warm up and spring into action, so keep reading below for a quick update on where things are at with SAFE Banking, comprehensive reform, appropriations, and more! 

SAFE Banking

Bill reintroductions in both chambers have been off to a slow start. Between a new session, most people still working remotely, a delayed organizing resolution in the Senate, and a somewhat contentious COVID relief package that’s finally passed, members of Congress and their staff have been incredibly busy. But, now that that’s all behind us, I’d suggest preparing for many cannabis bills to be introduced soon.

Specifically, you can expect the reintroduction of the SAFE Banking Act to happen in both the House of Representatives and the Senate within the next couple of weeks. When the bill was introduced in the House during the 116th Congress, it had over 100 cosponsors. In the Senate, it was introduced with more than 20 — that’s more than a fifth of the entire chamber! The bill later went on to be passed by the entire House of Representatives in September 2019 by a vote of 321-103. 

You’ll remember that the SAFE Banking Act addresses urgent public safety concerns by allowing tightly regulated marijuana businesses the ability to access the banking system and make our communities safer. The bill also provides protections from money laundering laws for any proceeds derived from these state-legal marijuana businesses. The bill also includes the Financial Institution Customer Protection Act and protections for hemp and hemp-derived CBD-related businesses, which sometimes still struggle in accessing financial services despite the legalization of hemp in the 2018 Farm Bill. 

Don’t expect any big changes, however — the bill this Congress includes minor technical changes to the safe harbor language, strengthened hemp provisions, and other technical updates.

Comprehensive Reform

While SAFE Banking’s timeline is clear, the same can’t completely be said for more comprehensive reform. When I say comprehensive reform, I’m talking specifically about bills that would remove marijuana from the Controlled Substances Act like the MORE Act and the upcoming Schumer-Booker-Wyden bill. 

In the House, we are continuing to work with various committees and members to determine the best path forward for the MORE Act and what changes should be made. I wouldn’t be surprised if that bill gets reintroduced sometime this spring, but the process is truly still in flux, so I also wouldn’t be surprised if it was postponed awhile. This will be determined by the lead sponsors’ offices and also by the congressional calendar and how various bills/issues move through the legislative process.

In the Senate, we’re excited to be working with Leader Schumer (D-NY) and Sens. Booker (D-NJ) and Wyden (D-OR) on their new cannabis bill. That bill will draw heavily on provisions from the MORE Act, but will also include expanded language on taxation and smart regulations. Now that the COVID relief bill has passed into law, I think we can expect to see their bill be introduced sometime in the near future. 

You’ll also remember that NCIA was one of two industry trade associations invited to the initial meeting with those Senators to discuss this new bill. We’re looking forward to their discussion draft and offering our thoughts. 

Appropriations

It’s spring, which means it’s appropriations season here in D.C.! These bills are legislation that “appropriates,” or sets aside, federal funds to be divided between specific federal government departments, agencies, and programs. For a refresh on the history of appropriations, click here, or, if you’re interested in how these provisions relate to cannabis, click here.

While the appropriations amendment that protects medical cannabis businesses, patients, and programs has been in law since 2014, we’ve had difficulty expanding those provisions and passing new cannabis-related amendments due to the formerly-Republican controlled Senate. However, now that Democrats control both houses of Congress, we’re excited to go back to the drawing board and get creative with the appropriations process to help provide some certainty and relief to the cannabis industry. 

We’ll be looking at amendments pertaining to adult-use cannabis programs, banking, veterans access, allowing Washington, D.C. to finally implement a functioning 21+ cannabis program — and that’s just scratching the surface! 

All of this is to say: things are really springing into action in D.C.! Prepare for many cannabis bills to begin getting reintroduced, and remember that the appropriations process takes months, so stay tuned via our blog, newsletter, NCIA Connect, and the new NCIA Mobile App to remain in the loop and get involved! 

 

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. 

 

 

Member Blog: Reducing Labor and Trichome Degradation with Drying and Curing Solutions

by Michael Williamson, Director of Cultivation at Pipp Horticulture

Cannabis production strategies may differ from one facility to another, but most facilities share a common goal: to produce the highest quality product at the lowest cost. One area of the cultivation cycle that is often overlooked but has great potential for optimization is the drying and curing process.

Many cultivators use bins or totes to harvest, weigh and transfer cannabis plants to the drying room. The plants are then manually hung one by one on wire, pipe, hangers, hooks, and/or racking.

Once the product has been dried it is then manually unhung plant by plant and placed back into the bins or totes. These are then transferred to trimmers to process into the finished product. These transfer events have significant labor costs and more importantly can reduce quality by degrading trichomes and associated cannabinoid and terpene content.

In lean farming and manufacturing, we refer to these actions as non-value adding touch points. The process outlined above is not only cost-intensive for the producer, but also one that reduces quality and value to the end consumer, who should be at the center of every decision a cannabis producer makes.

Let’s take a look at two options that allow operators to reduce labor and associated costs while producing a higher quality product. Below, we introduce you to drying carts and drying racks solutions for your operation. 

First thing’s first: Ditch the Bins

Many growers use plastic bins or totes to help them harvest. An inexpensive and simple solution, binning plants has been a common method amongst growers.

Unfortunately, it greatly increases labor requirements due to the many staff and non-value adding touch points with the plants. These touch points also negatively impact the final quality of the product as the terpenes and trichomes are disturbed each time.

Bins or totes also present additional and unnecessary cross-contamination, workflow, and labor challenges. They need to be cleaned and sanitized after each batch or during daily use. Many facilities are not set-up or staffed appropriately to properly clean and sanitize bins and totes regularly.

In addition, bins and totes take up a tremendous amount of space, which is often not taken into consideration during the facility design process. They are often stacked or nested one on top of another. If these bins are not cleaned and have been dragged on the floor, operators risk contaminating their cannabis plants and dried flowers that come in contact with the inside of the bins.

Labor is the biggest cost for a cultivation operation. And as it so happens, the harvest and post-harvest team is often the largest department by headcount.

By introducing equipment such as drying carts or racks, operators can decrease their labor costs while increasing product quality, all without the use of bins or totes.

Optimize Your Drying Process

The first step in optimizing your drying process is to evaluate the space in your facility. There are two unique solutions to meet cultivators’ drying needs: mobile drying carts and mobile drying storage racks.

An easy way to tell them apart is to remember this: drying carts bring work to the workers while drying racks bring workers to the work.

Drying carts are mobile by design. Staff roll the drying carts into the flowering room being harvested and hang plants directly on the drying carts without the need for hangers or hooks.

The drying carts are then transferred to the drying room. Once the plants have dried, the carts are then rolled into the trimming room. The product moves efficiently around the facility with little to no touching of the actual plants.

Drying racks differ in that staff must still bring plants to the racks where they manually hang from the rack. A mobile drying cart can still be used for the transfer to eliminate the use of bins or totes. However, what sets these drying racks apart from common drying setups is that the racks can span the full height of the room, taking advantage of not only total available square feet but cubic feet as well.

There are pros and cons to both options. Ultimately, your operation’s capacity, efficiency, and labor demands will be the deciding factor.

Space Requirements

If space is not an issue, the ideal choice is drying carts for the points mentioned above: lower labor costs and higher quality product. The carts must be stored when not in use, and you’ll also need adequate space in your flower room for the carts to roll through the aisles. We recommend a minimum of 28” width aisles.

If you’re already tight on space in the drying rooms and are using trellis or cable wire, installing mobile drying racks will greatly optimize your room’s plant-drying capacity. Drying racks can help transform a tight, restricted space into an efficient one that supports your scaling business. 

To get an idea of how much space is required for either racks or carts, we crunched some numbers for you below. Here, you can see how much square footage of drying space is required for each equipment option.

For this example, let’s consider 1000 harvested cannabis plants. The following space is required in your drying area for each solution (the range accounts for plant size and density):

  •     2-tier drying carts: 300-600 sq. ft.
  •     3-tier drying carts: 200-400 sq. ft.
  •     Mobile drying racks (4-tiers): 200-400 sq. ft.

You can see that the available space in the facility is the main consideration here. Let’s take a deeper dive into the pros and cons of drying racks vs drying carts. 

Drying Carts

 The Pros

  •     Ideal for purpose-built cultivation facilities that can dictate the size of the drying rooms
  •     No ladders or lifts required
  •     Drying carts have options for two or three levels of cantilever-style finger hooks, which eliminate the need to use hooks, zip ties, coat hangers
  •     Improves operational workflow by reducing non-value adding plant touches
  •     Improves trichome and terpene preservation by eliminating non-value adding touch points
  •     Eliminates the and use of bins/totes
  •     Brings the work to the workers
  •     Plants can be defoliated on drying carts if desired
  •     Less expensive than investing in drying racks
  •     Anti-fungal/bacterial coating option
  •     Easy to clean and sanitize
  •     Reduces labor to clean and sanitize drying rooms as room can be cleared of carts and equipment

The Cons

  •     Drying carts do not maximize cubic or square feet when compared to mobile drying racks. 
  •     Drying carts that do not nest, break down easily with minimal tools
  •     Can be challenging to create linear queues in drying rooms
  •     Increased risk for finger and hand injuries

Drying Racks

(show image: “09 Pipp Hort Redbud mobile drying system Redbud Roots”) Photo Caption: Mobile Drying Rack Storage System 📸 Redbud Roots

The Pros

  • Drying racks are ideal for:
  • Existing cultivation facilities with suboptimal sized drying rooms looking to retrofit
  • New facilities that undersized their drying room and need to maximize every cubic foot
  • Pre-operational facilities that are in the design phase and need to free up space for other areas of the design
  • Typical racking height up to 16′ with 6 tiers
  • Typical racking width options: 24″, 36″, 48″
  • Drying racks support multiple hanging options from hang bars that allow for use of hooks and coat/plant hangers, wire grid, and fingers hooks
  •  Most efficient solution to maximize square and cubic feet
  •  Ability to scale by adding tiers based on phases or increased yields
  •  Anti-fungal/bacterial coating option

The Cons

  • Requires lift or ladder to hang as well as take down
  • More touch points, which leads to degradation of THC and terpenes
  • Higher labor cost
  • Racks bring workers to the work which involves the use of bins and totes and increased non-value adding plant touches
  • Less efficient to clean and sanitize, compared to drying carts

Now that you’ve made it this far, you’re probably getting a good idea of which option (drying racks or carts) might work best for your grow space. 


Michael Williamson is the Director of Cultivation at Pipp Horticulture. Pipp Horticulture is the industry-leading provider of vertical farming and space optimization solutions. Our vertical mobile cultivation racks, Greenhaus grow trays, and innovative cart systems, create and optimize space for commercial agricultural facilities. We manufacture, design, and install products to optimize operational space throughout the cultivation, post-harvest, and distribution stages. For assistance in selecting and implementing the best drying solution for your operation, contact the team at Pipp Horticulture today!

Committee Blog: Property Insurance – The Good, the Bad, and the Ugly. 

by NCIA’s Risk Management & Insurance Committee

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: 

Basic: fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion, aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.

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? 

by Jonathan Monk, Managing Director at Most Consulting Group

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.

 

Committee Insights | 2.23.21 | Future Proofing Your Business – Vaping Product Regulation Preparedness

In this edition of our NCIA Committee Insights series originally aired on Tuesday, February 23, 2021 we were joined by members of our Cannabis Manufacturing Committee for a discussion surrounding future vaping product regulations. You’ll learn what to expect and what manufacturers can do to support compliance, as well as help protect the environment and public health

Panelists include:

Emily N. Long
Byers Scientific
(Moderator)

Robert Thomas
Scientific Solutions

Ramon Alarcon
Wellness Insight Technologies Inc.

Arnaud Dumas de Rauly
Blinc Group

Member Blog: Cannabis Partnerships – The Importance of Building a Successful Business

By John Shearman, VP of Marketing, Cannabis, Applied DNA Sciences

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.

 

Momentum Across The Nation – New Mexico, Virginia, and the District of Columbia

By Madeline Grant, NCIA’s Government Relations Manager

We may be barely three months into 2021, but we’ve seen a lot of action in state legislatures already! This week, let’s take a look at three significant state victories in their respective state legislatures: Virginia, New Mexico, and the District of Columbia. 

Virginia 

The Virginia legislature approved adult-use cannabis legalization this past Saturday in a historic vote. The state of Virginia specifically is a major achievement as it’s the first state in the South to embrace full cannabis legalization. The House passed the measure in a 48-43 vote, and the Senate approved it in a 20-19 vote. It is important to note that not a single Republican voted for the bill in either chamber, but regardless, it passed and this is a major victory for cannabis policy reform.

So, what’s next? Virginia is the 16th state to pass an adult-use cannabis legalization law. Along with Illinois and Vermont, Virginia is the third state to pass legalization to legalize, tax and regulate recreational cannabis through the state legislature. 

The Conference Committee established a January 1, 2024 enactment date for the law — this is when regulated sales are scheduled to start. Additionally, lawmakers agreed to establish an independent agency, the Virginia Cannabis Control Authority, to oversee the regulations and govern the adult-use market in Virginia. Adults will be able to possess up to one ounce of marijuana and cultivate up to four plants per household without penalty. The remainder of the bill, which details regulatory and market structure social equity provisions, and repeals criminal penalties, is subject to a second review and vote by the assembly next year. Lawmakers were sure to address issues such as how to prevent large corporations from taking over the cannabis market, how to handle expungement of cannabis offenses, addressing social equity provisions, including prioritizing business licenses for individuals who have been disproportionately impacted by criminal enforcement, and more. This is a big move for Virginia and we are excited to keep a close eye. 

New Mexico 

Last Friday, Members of the New Mexico House of Representatives approved House Bill 12, to legalize and regulate the use, possession, cultivation, and retail sale of cannabis for adults. House Bill 12 will move to the Senate for further consideration. If passed, the current measure, approved by the House by a 39 to 31 vote, would allow adults to purchase at least two ounces of marijuana and cultivate up to six plants for personal use. Additionally, those convicted of an offense involving up to two ounces of marijuana possession would be eligible for automatic expungement, and those currently incarcerated for these offenses would be eligible for dismissal. House Bill 12 is one of the five competing adult-use legalization measures and specifically addresses social equity and community reinvestment provisions. 

So, what’s next? We’ve seen a history of opposing chambers in New Mexico through cannabis legalization efforts in 2019 and 2020. The following day after the vote in the House, the Senate Tax, business Transportation Committee considered three additional measures to legalize and regulate cannabis retail sales. The lawmakers discussed the differences and similarities between the competing cannabis measures and noted the need to reach an agreement on differences before the end of the short legislative session, adjourning for the year on March 20, 2021. We will keep an eye on the Virginia state legislature and actions moving forward. 

District of Columbia 

We saw movement in D.C. when voters showed support at the ballot box by passing Initiative 71 in 2014, which allows adults in D.C. to grow, possess, and gift marijuana but not sell it. Since then, we’ve seen Congress prevent D.C. from allowing the sale of cannabis by attaching a provision to D.C.’s appropriations bill that precludes the District from using its fund to legalize or regulate cannabis sales. The District’s Mayor, Muriel Bowser, is pushing forward with legalization to legalize cannabis in the District. The Safe Cannabis Sales Act of 2021 was introduced last Friday. It would legalize recreational cannabis sales in the District for people 21 and up. The bill also takes steps to combat the toll cannabis criminalization has taken on communities of color, expunge some marijuana-related offenses from people’s criminal records, funnel sales tax revenue into helping get start-ups off the ground, and creates a new license category for microbusiness and third-party “social equity” delivery services. Additionally, more revenue from cannabis sales would go towards funding organizations in wards 7 and 8, which includes women and minority-owned small businesses opening or expanding restaurants; small grocery stores; and public school after-school programs. D.C. would require cannabis vendors to have their products tested by an independent facility to track their potency and check them for contaminants. Days after Mayor Bowser unveiled her reform proposal, Council Chairman Phil Mendelson introduced a cannabis regulation bill. When comparing the two pieces of legislation there are some key differences surrounding tax rate, revenue, licensing, and expungements. For more details, check out Washington City Paper’s article here

What’s next? As I mentioned previously, since 2014, Congress has included language in a spending bill that prevents the District from spending any of its funds to create a tax-and-regulate system. Because of this, the District has been stalled in implementing the sale of cannabis. However, now that Democrats control both houses of Congress and therefore the appropriations committees, we are hopeful that this rider preventing cannabis sales in the nation’s capital could be lifted. 

According to the latest Gallup poll, 68% percent of Americans support legalizing cannabis, which is up from last year’s 66 percent. With support for full cannabis legalization growing, it’s not particularly surprising to see reform happening in these states. We are watching these states closely as they inch towards cannabis legalization. We see different entities making efforts to reform outdated cannabis laws; such as governors, mayors, advocates, patients, lawmakers, and the overall cannabis community. Together, through dedication and commitment, we will continue to move the ball forward in states and at the federal level. 

Please stay tuned for more updates and please make sure to check out NCIA’s State Policy Map where all state updates are housed. As we continue the good fight it’s important to count our victories. 

 

Committee Blog: Everything You Need to Know About ADA Compliance for Your Cannabis Website

by Kavya Sebastian, Content Marketing Associate for Cannabis Creative
NCIA’s Marketing and Advertising Committee

When the legal cannabis industry began making waves in the late ’90s, there was still a major stigma against cannabis users. Although the federal status of the plant has yet to change, a Pew Research survey shows that around nine-in-ten Americans favor legalization for adult-use or medical purposes.

As more consumers enter regulated cannabis markets, the industry continues to evolve and be held to higher standards. Given its diverse history, the cannabis industry does not only aim to be an inclusive space – it is expected. 

From social equity programs to ADA compliance, cannabis businesses and markets are increasingly standing out from the crowd with their efforts to be more broadly accessible. 

What is ADA Compliance?

The ADA, or Americans with Disabilities Act, is a law that prohibits discrimination against people with disabilities in all public spaces. ADA website compliance expands upon this and refers to meeting the standards set by the Americans with Disabilities Act Standards for Accessible Design. This act describes the accessibility of information technology, such as the Internet and its websites (as opposed to physical locations).

In other words, your cannabis website’s ADA compliance characterizes whether or not the site is deemed accessible to people with disabilities as outlined in the ADA’s guidelines.

Why does my cannabis website need to be ADA compliant?

Nearly every registered and operating business needs to follow ADA. It is required that any business, regardless of size, make all reasonable efforts to accommodate customers with disabilities.

More importantly, as a business owner, you want to provide everyone, online or offline, with the same positive experience and level of accessibility. As we continue to become a more technology-based society, website accessibility will become more important to your business as well as consumers.

Now that you understand why your cannabis website needs to be ADA compliant, it’s important to learn how

Before you touch your website, we recommend reviewing the Website Content Accessibility Guidelines. These guidelines explain how to make web content more accessible to people with disabilities, from the text, images, and sounds on your website to the code or markup that defines structure, presentation, etc.

Once you have a complete overview of what makes website content accessible to all users, you can begin to go through your site and evaluate it for needed changes. Here is a checklist of features you should have to make sure your website is following best practices: 

  • Keyboard navigation is supported.
  • Your website can be easily navigated without a mouse. 
  • Fonts are easy to read. 
  • Screen readers can accurately interpret and read your site content.
  • Text can be scaled without distorting the page. 
  • The contrast between the text and the background is sufficient for easy legibility.
  • Website design is consistent and intuitive. 
  • Calls to Action are clear and concise. 
  • Alt tags, closed captions, and descriptions are provided for all image and video assets. 

For additional reading, check out the ADA Tool Kit for Website Accessibility.

Frequently Asked Questions About ADA Compliance

With all the existing rules and regulations surrounding the cannabis industry, especially when it comes to cannabis marketing, it can be overwhelming to think about more to add to the pile. However, ADA compliance will not only show your customers that you are committed to creating inclusive spaces both in-store and online, but it will also protect your business. 

Is ADA compliance mandatory?

In short, yes. 

Although there are no clear ADA regulations that define what makes a website compliant, courts have overwhelmingly ruled that websites are considered places of public accommodation. Therefore, under Title III of the ADA, accessibility is mandatory for websites that affect interstate commerce and fit under 12 listed categories.

These 12 categories include sales establishments, like retailers and dispensaries, as well as service establishments, such as any cannabis ancillary business. 

Additionally, if your website fails to meet ADA standards, you risk lawsuits and large fines. First-time violations typically receive a $55,000 – $75,000 fine, while repeat violations come with a $150,000 fine. In fact, federally funded organizations that are not compliant can lose funding.

Can I be sued if my cannabis website is not ADA compliant?

Absolutely. The more commercial in nature your website is, the more you become vulnerable to lawsuits. This is especially true if your website is connected to a physical location. However, even if your website is only web-based, you can absolutely still be sued. 

In fact, online-only businesses with no physical presence are increasingly being swept up in ADA compliance litigation. So whether you’re a dispensary, a CBD brand, or a B2B cannabis business, you should be testing and mediating your cannabis website for ADA compliance.

How do I test ADA compliance?

There are a number of ways to test whether or not your cannabis website meets the Web Content Accessibility Guidelines (WCAG) standards. 

Firstly, you can use online tools to evaluate your compliance. This could include something like Web Accessibility’s URL Scanner, WAVE’s Web Accessibility Evaluation Tool, or the Lighthouse open-source automated tool. These sites help web developers and creators make their content more accessible to site visitors.

Another way to test your cannabis site’s ADA compliance is by conducting a manual audit. Completing a website audit by yourself means evaluating every page of your site for accessibility using the WCAG standards and checklists like the one above. It can also include testing your website using assistive technology, such as a screen reader, to be sure all barriers have been remedied.

Partnering with an innovative website accessibility tool can also help you achieve ADA compliance in record time.

The bottom line is that your cannabis website should be ADA compliant – and not just because of the legal requirements. To take meaningful steps towards a more equitable and inclusive industry, we must all be proactive in making all touchpoints of our businesses more accessible. 

 

Member Blog: How To Know When To Expand

by Ryan Douglas, founder of Ryan Douglas Cultivation

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.

 

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