In the battle against mold, there are three critically important questions.
Where is the mold coming from?
How did mold get there?
How did the mold travel to where it grew?
Answering these questions gives growers the power to mitigate mold, and the ability to pass total yeast and mold tests.
Know Thy Enemy
It helps to first understand what you’re up against. Understand first and foremost that mold is a living thing that starts and ends somewhere. Its spores travel to reproduce, just like a plant.
And it needs the right environment to flourish. Moisture and temperature have the biggest impact. But hosts that help it travel are also critical.
Process Over Point
Most indoor and greenhouse grows have dozens, if not hundreds of people working across the organization. From back office to packaging to production – you have people and places that impact the air quality and can act as hosts, ultimately, impacting spore counts.
These hundreds of interchangeable parts make it difficult to figure out the source of mold, so it’s critical to see it as a process.
Break your facility into seven core parts of a process, and start digging. Not literally, of course, but as a scientist would. Examine what might cause the issues by looking at variables and constants.
Look at these seven locations:
Mother Plants
Cuttings from Mother Plants (clones, propagation)
Vegetative Growth
Flower Growth
Trim Rooms
Immediate postharvest
Sometimes after dry and cure
Dry Rooms
Cure Space
Follow the plant through those places and test regularly to see where moisture or cross-contamination may be occurring.
This is a painstaking process, make no mistake. Mold develops over time, so you’ll need to spend weeks or months tracking the lifecycle of the plant.
You’ve Solved The Riddle, Now Solve The Problem
Of course, once you find the sources, mitigation through a solid Integrated Pest Management (IPM) program is critical. There are many methods for that, from cleaning and disinfection to HEPA filters, and more. You’re not in this fight alone, either. You can call solutions providers like ProKure for help or find a Certified Industrial Hygienist in your area.
Whatever you choose to mitigate with, just remember to start with the answers to those core questions. Any program will be much more effective with those in mind.
Bernie Lorenz, PhD, is Chief Science Officer for ProKure Solutions, where he applies an advanced chemistry background and passion for sustainability to make ProKure products approachable to cultivation professionals. As one of the industry’s most seasoned experts on ClO₂, Dr. Lorenz recently led the effort as technical contact for a new ASTM International standardaimed at establishing cleaning and disinfecting protocols for indoor and greenhouse cannabis cultivation facilities. Dr. Lorenz earned both his PhD and Masters in Inorganic Chemistry from New Mexico State University.
Member Blog: Cannabis Dispensaries Are Essential Businesses – Transforming How Cannabis Businesses Operate
The COVID-19 pandemic has drastically changed how businesses operate and how people interact with one another. For many individuals, one of the greatest changes is living under “shelter-in-place” orders. The restrictions put in place have resulted in the closure of businesses that just a few weeks ago, many of us assumed would be open. The impact of COVID-19 on the cannabis industry has been dramatic, and the regulations and designations put in place over the past six weeks have altered the way cannabusinesses interact with their patients, as well as the way they are perceived as part of the larger healthcare conversation. The increasing adoption of technology solutions will continue to define the evolution of the industry long after the COVID-19 crisis has passed.
Dispensaries As Essential Businesses
Shelter-in-place has expanded across the country at a similar rate to the virus itself. When officials from states like California and Colorado issued these orders, cannabis dispensaries were initially not designated as an essential business. Due to public outcry, however, these initial orders were reversed. Dispensaries were classified essential and critical, joining other vital businesses like grocery stores, pharmacies, banks, and gas stations.
This distinction of dispensaries — medical, recreational, or both, depending on the state — as an essential business reflects how the cannabis industry and retailers are evolving to become a key part of the health infrastructure. Medical marijuana is a $5 billion industry with around 2,000 retailers serving more than two million patients nationwide. Among them are patients fighting cancer and using cannabis to manage their symptoms, veterans working to manage post-traumatic stress syndrome and those being treated for severe forms of epilepsy, Dravet syndrome, and Lennox-Gastaut syndrome. For patients like these, the cannabis industry plays an important role in their day-to-day health.
According to our research, cannabis sales have increased by 19.2% during the COVID-19 pandemic. Additionally, between March 11 and March 31, online ordering increased by 355%, delivery sales went up by 280% and pickup orders increased by 118%.
Modernizing the Cannabis Industry’s Way of Distribution
As demand continues to grow, cannabis dispensaries must adapt and adjust their operations in order to be compliant with the CDC’s guidelines for social distancing. For some business owners, this can be challenging, as historically, most cannabis dispensaries have sold and delivered product in-person and in-store with cash payments. In this “old way” of doing business, budtenders played an important role in helping customers, as they are trained to listen and discuss the most suitable products for each individual.
The reality of today’s world is forcing a shift in how businesses operate, moving from the traditional “in-person” model and embracing digital transformation for online menus, ordering, and delivery. Dispensary owners need to ask themselves: how with the aid of technology can they differentiate their products, and how can they engage and educate new and existing customers? As an essential business, how can cannabis dispensaries embrace the “new ways” of operating?
Through the integrated use of technology, business owners can keep up with the changing landscape to connect and engage with customers through:
Offering online video budtender consultations to replace in-person meetings
Providing online menus with robust product descriptions, improved merchandising, and bundled offerings around specific themes such as ‘sleep’ or ‘calming’
Developing targeted email and text messaging campaigns customized for individual customers to educate them on new product information
Guaranteeing secure, electronic payments
While industries across the board are embracing digital transformation, the cannabis industry now has an opportunity to fast-track its way there – and in time, this is what will enable cannabis business owners to thrive while protecting the health and safety of the community.
Nina Simosko serves as Chief Revenue Officer for Akerna, a global regulatory compliance technology company in the cannabis space. Akerna’s companies and investments also include MJ Freeway, Ample Organics, Last Call Analytics, Leaf Data Systems®, solo sciences, and ZolTrain.
With more than 20 years of technology industry experience, she has spearheaded strategic innovation initiatives for global Fortune 100 companies including Oracle, SAP, and most recently, NTT Group. Nina oversees both Akerna and MJ Freeway’s revenue generation streams, builds strategies to drive revenue growth, and plays a pivotal role in aligning revenue generation processes across the Akerna organization
Previously, Nina was President and CEO of NTT Innovation Institute Inc. (NTTi3), the prestigious Silicon Valley-based innovation center for NTT Group, one of the world’s largest ICT companies. Prior to NTT i3, Nina was responsible for leading the creation and execution of Nike Technology strategy, planning and operations world-wide. At SAP, she was the Senior Vice President of SAP’s Global Premier Customer Network (PCN) where she led both the PCN Center of Excellence and SAP’s Global Executive Advisory Board. During her eight-year tenure, she was a part of SAP’s Global Ecosystem & Partner Group which was charged with continuing to build and enable an open ecosystem of software, service and technology partners together with SAP’s communities of innovation.
Ms. Simosko currently sits on the Advisory board at Santa.io, AppOrchid and Reflektion and she has also been a member of the advisory boards at Appcelerator and Taulia.
The changes around ordering, delivery, payment, patient education and promotion are here to stay. With more than 70 integrated partners, MJ Platform offers clients the advanced technology solutions that are becoming increasingly important to the industry as we work through these challenging times, and that will define the future of cannabis in the months and years to come.
Committee Blog: Interstate Commerce – Breaking the Laws of Economics (Part 3)
Legal cannabis, for all of its promise, has failed – in some markets spectacularly – to live up to its economic potential. But while each self-contained state market faces its own combination of political and regulatory challenges, the core of the problem everywhere is basic economics. Legal markets exist to efficiently move goods from where they are best produced to where there is the greatest demand. But cannabis, straddling the line between emerging state regulation and the remnants of federal prohibition, has negotiated that legal chasm by violating the inviolable laws of supply and demand, with predictably disappointing results. Perhaps now, in the face of a disastrous recession, with legal and legalizing states in desperate need for jobs and economic stimulus, is the time to get it right by allowing licensed commerce between legal markets.
The inability to move cannabis across state lines creates myriad problems for legal cannabis market operators that have far-ranging effects for all stakeholders in the cannabis industry, from investors to employees down to the patients and consumers who use the end products. The hindrance to economic activity also slows economic growth, employment, and tax revenues to states that have legal cannabis sales.
Oversupply Vs. Undersupply
Oversupply of cannabis in states like Oregon, which has excellent growing conditions and a favorable regulatory environment, are completely artificial and created not by the true excess of cannabis, but by the current inability to export to more populous states. This oversupply causes prices to plummet, which benefits consumers in the short term but is disastrous for small and medium-sized businesses and has far-reaching impacts on the communities that rely on this agricultural cash crop. Long term, the effect of these artificially low prices is that small businesses fail and large businesses take their assets to scale, which reduces employment and revenues in the communities that produce cannabis and extract the profits for investors in the large firms. This reduces competition and diversity in the industry, which hurts the same consumers in the long run who briefly benefited from the low prices. This is not a theoretical or academic argument, as we have seen these exact dynamics play out in Oregon over the past three years, with a staggering failure rate and rapid consolidation across the industry. Hundreds of millions of dollars of local capital have been eradicated as small businesses funded by friends and family have been forced to sell out to larger operators just to cover the worst of their debts.
In states which experience undersupply of cannabis, whether due to poor growing conditions or unfavorable regulations (or both) prices rise, hurting legal customers and patients of state-legal operators right away. Businesses can ultimately suffer losses of potential revenue, even as prices climb when consumers turn to cheaper cannabis from the illicit market. This undermines the legal systems set up by these states and pushes consumers to less-safe, unregulated products. As consumers drift from the legal to the illicit market, again the small and medium-sized businesses that currently represent the majority of the industry become financially unsustainable will suffer most, with the same end result to cannabis stakeholders as an oversupplied market.
Meanwhile, the artificial boundaries make scaling a business nearly impossible without access to an unlimited pool of capital. If a company from Washington, for example, wished to scale up and access new markets, they would have to completely recreate their entire supply chain, and most of their administrative operations, equally increasing their overhead with physical space and labor, for each new state that they wanted to enter. Effectively, they would have to create a brand-new small business in each state instead of scaling their operations efficiently and just expanding sales efforts to new territories. This is complicated in the extreme, both logistically and financially. What is worse, those redundant operations will become completely obsolete when cannabis is de-scheduled and interstate commerce allowed. This will almost certainly lead to a mass lay-off in the cannabis industry for all multi-state operators seeking to consolidate their operations. This will improve their cost competitiveness and further accelerate price drops that particularly hurt small businesses and stakeholders across the industry.
In fact, the extreme difference between the current state of the industry and a future in which interstate trade is allowed creates perverse incentives to investment, as opportunities that may be attractive in the short-term will ultimately prove disastrous long term. For example, massive energy and water-intensive indoor growing operations would be needed for New York to supply its population locally, and those facilities would require billions in investment dollars. These investments would look fantastic if one could be assured that the current regulatory environment would not change. But, if de-scheduling or other federal action allows for interstate trade, these facilities would have only a few years to reap the benefits of high margins before having to compete on cost with cannabis grown outdoors in the fertile Emerald Triangle of Northern California and Southern Oregon, which can produce much larger quantities of high-quality cannabis with a fraction of the inputs.
Newly legal net consumption states like New York and New Jersey will struggle to match supply to demand for years after initial legalization, resulting in millions of dollars of lost revenue, lost employment opportunity, and lost tax collections as the state struggles to develop the capacity to meet demand in a place that has no history of large scale production. If states that have historically been net importers plan for interstate trade from the outset, they can have a thriving retail industry with fully stocked shelves by taking high-quality products from producer states like California, Oregon, and Colorado within months of being able to import. The rapid change from essentially no legal industry to a robust, rich, and diverse retail environment would provide immediate economic stimulus in the form of jobs, thriving small businesses, and tax revenues. If new states are forced to rely solely on cannabis that is grown, harvested, processed, and distributed within state lines, it could take many years to develop the full economic benefits that a legal market could bring to bear.
All of these issues can be avoided, or at least mitigated, by a shrewd approach to incremental interstate trade instead of an instantaneous switch from 25 or more siloed industries to one national, or potentially international, market. The dynamics of how different state regulations interact can be tested and worked out thoughtfully, allowing for a more seamless transition and a clear roadmap for federal regulation when cannabis is de-scheduled. Successful interstate trade on any scale, between even just two states, will clearly signal to investors that the future of interstate trade is of pressing urgency to incorporate into their investment strategy. An investor in New York could then focus on opportunities related to local product development with the promise that affordable raw materials would be available from California and skip investing in indoor agriculture. Consumers and patients in states that allow for trade across their borders will instantly have access to a wider array of products, and as the size of the market that the industry has access to increases the dramatic supply and demand swings will be dampened by a larger and more diverse base of both consumers and producers.
Ultimately, the purpose of markets is to maximize the efficiency and utility of the flow of goods. They should move from the places where they are cheapest to produce to the places where the demand is highest. This is most effective with commodities and consumer goods, like cannabis. The current restrictions against moving cannabis across state lines completely hobble the market’s ability to perform this critical function. The result is bad for producers, consumers, regulators, and state governments. Interstate commerce for cannabis means better markets for producers, more choice for consumers, and a massive economic stimulus for all participating states in the form of job creation and increased tax revenues.
Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.
Gary Seelhorstof Flora California has a passion for developing high-quality cannabis products so their most therapeutic effects can be realized. His 25 years in pharmaceuticals and medical devices helps him bring scientific rigor to the cannabis industry. Gary is very active at both the State and Federal level as an advocate for policy reform/higher quality standards. He enjoyed lengthy stints at Eli Lilly and Pfizer (in clinical development and corporate development) and worked with several start-ups developing corporate and compliance strategies. Gary has a B.S./B.A. from UC San Diego in Biochemistry/Psychology, an M.S. in Clinical Physiology from Indiana University, and an MBA from the University of Michigan.
Committee Blog: First The Vaping Crisis, Now COVID-19 – A Cannabis Physician’s Perspective
The vaping crisis was first reported in June 2019. In October 2019, the U.S. Centers for Disease Control and Prevention (CDC) coined a new medical term describing the cases of severe pulmonary disease that have occurred among e-cigarette and vape users, E-Cigarette and Vaping Associated Lung Injury, or EVALI. EVALI’s primary cause was determined by the CDC to be vitamin E acetate contamination, mostly in illicit market vaping products, although research into this condition continues.
By the early fall of 2019, the National Cannabis Industry Association (NCIA) formed a Safe Vaping Task Force to respond to the crisis. Together with NCIA’s Policy Council, they released a white paper in January 2020 detailing information about vaporizer components, formulations, testing, governmental response, and recommendations for the industry.
As the COVID-19 health pandemic takes front and center stage on the world scene, vaping related issues and EVALI, becomes even more of a health concern as the novel coronavirus causes respiratory issues. While reported cases of EVALI are slowing down, this public health crisis still looms over us, and it’s been very challenging to fully solve this mystery illness associated with vaping e-cigarettes, and other electronic nicotine delivery systems (“ENDS”). Furthermore, it’s been more difficult to stop the primary root cause: the illicit market.
VAPING, EVALI, AND COVID-19
We’re experiencing a worldwide public health crisis with coronavirus and it’s also affecting the Marijuana industry, as we face “stay at home” orders, slower production or reduced access in some areas, and fear from the community about vaping related respiratory illnesses, EVALI, and death due to COVID-19. It begs the question: Is vaping safe and could vaping put you at greater risk of severe illness during this coronavirus pandemic?
Some health experts say vaping can increase the risk of developing COVID-19 complications and spreading the virus to others because many people share vaping devices. A Bloomberg articlewas published last month, stating the FDA says “vaping could compound health risks tied to virus.” The Attorney General of Iowa along with scientists sent the FDA a letter commenting that they should be more careful giving advice at a time like this, especially given “the pronounced difference in risk between smoking and vaping.”
The Food and Drug Administration (FDA) has supported both positions on vaping but now says there is a lack of evidence to support the worsening of health in conjunction with vaping and COVID-19, while also considering that underlying conditions could be the real culprit.
According to the CDC, those with chronic lung disease are at higher risk for severe illness. The conditions listed with the CDC do not include EVALI, but perhaps vaping behaviors should be considered when determining risk. I am a member of Doctors for Cannabis Regulation (DFCR), an organization that supports the legalization and use of cannabis. DFCR cautions against smoking and vaping during the COVID-19 pandemic because we just don’t have enough research yet.
After reviewing the limited literature, it must be noted that “e-cigarette use” and vaping have cardiovascular risks. Buchanan and colleagues reviewed the limited available preclinical and clinical data and concluded that “E-cigarette use is associated with inflammation, oxidative stress, and haemodynamic imbalance leading to increased cardiovascular disease risk.” Current evidence is available primarily from acute studies and the effects of chronic exposure remain an urgent research question.
PERSONAL PHYSICIAN RESPONSE
As an emergency physician, functional medicine specialist, and medical cannabis doctor, I’ve examined, certified, and managed patients for medical marijuana use in Michigan since 2014. As a cannabis physician, I routinely review cannabis-related science and research and its therapeutic effects, based on forms of consumption, frequency of use, and limited data on patient dosing. I evaluate patients for their therapeutic benefits and patient outcomes obtained by using marijuana in various forms of consumption, in conjunction with their other medications.
As a cannabis physician, I work very hard to get to the source of my patients’ medical issues or problems related to their medical need for cannabis. This also means giving them direction about the use of cannabis, cannabis products, and noting any side effects related to their method of consumption and use of marijuana, hemp, and CBD.
Perceiving the same thing as the general public, my patients frequently say, “I thought vaping was safe.” This is still the case even during this ongoing public health crisis with EVALI and now, COVID-19.
Pertinent health questioning should always involve asking patients about their forms of usage of cannabis, their daily intake, and noting if a person has any side effects related to cannabis usage or any other medications. Since vaping related illnesses were first reported, I continue to educate patients about the possible side effects of vaping. For some people, problems related to vaping may have been present since they started vaping, but were disregarded because they thought it wasn’t serious or of much concern. We need more research to better inform educational programs so patients and consumers can make better-educated decisions on which marijuana products they should use.
HEALTHCARE, THE CDC. AND COMMUNITY RESPONSE
“Do you vape? Do you smoke? Do you have an underlying lung disease such as asthma, chronic obstructive pulmonary disease (COPD, e.g. emphysema), heart disease, or any respiratory problems?” These are the most important questions doctors and healthcare providers should ask patients who present with respiratory symptoms, especially during the worldwide COVID-19 pandemic. All healthcare providers, whether on the frontlines or not, must change their assessment of patients to ask about their lifestyle and any respiratory-related health conditions (past and present). This includes addressing smoking, vaping, and potential side effects.
Patients often delay seeking treatment and the biggest challenge doctors face is that patients might lie about vaping out of fear they will be identified publically or criminally charged if they procured their vaping products from the illicit market. Doctors and other health care providers need accurate information to make a diagnosis and should maintain a non-judgmental attitude and confidentiality when asking patients about their lifestyle and social history.
Detailed information has been created by the CDC for ongoing updates regarding EVALI and related illnesses. Specific information for healthcare providers can be found here.
New tools for physicians include an updated algorithm for the management of patients with suspected EVALI and a Discharge Readiness Checklist. These documents are recommended for use by doctors, hospitals, clinics, and health care professionals and should be followed to help with systematic care and prevention. These tools have been used for EVALI. There have been major updates since the COVID-19 pandemic as of December 2019.
THE FUTURE OF EVALI: CONTAMINANTS AND CONSUMER RESPONSE
According to the CDC and available data, it appears that vitamin E acetate is primarily associated with EVALI, but there could be other substances that are responsible. We now know the illicit market is using vitamin E acetate to dilute their products, but they could use other harmful chemicals in the future. To reduce the risk of lung injury, consumers should purchase vaping products from the regulated market, where products are tracked and tested.
Because there is still so much research to be done, I recommend that anyone who continues to use e-cigarettes or vaping products should monitor themselves for symptoms related to EVALI and see a healthcare provider as soon as possible, especially if you are experiencing the symptoms below.
Patients have reported symptoms such as:
Respiratory symptoms, including cough, shortness of breath, or chest pain;
Gastrointestinal symptoms, including nausea, vomiting, stomach pain, or diarrhea; and
Nonspecific constitutional symptoms, like fever, chills, or weight loss.
Exposure to COVID-19, testing positive or hospitalized and placed on a ventilator
Some patients have reported that their symptoms developed over a few days, while others have reported that their symptoms developed over several weeks.
The American College of Cardiology also released Cardiac Guidelines for cardiac implications of COVID-19, which may mimic respiratory symptoms.
As I mentioned earlier, the FDA previously stated that vapers were at an elevated risk of developing complications tied to COVID-19. However, the FDA also admitted there is actually no “evidence” that vaping makes COVID-19 outcomes worse as noted in this article outlining the FDA’s stance on vaping and COVID-19.
So the jury is out and we are still waiting for evidence on the long term safety of vaping. Asa member of NCIA and the Scientific Advisory Committee, I believe that vaping and it’s long term effects due to acute and chronic exposure remains an urgent and ongoing research question. Is vaping safe, does vaping cause higher risk if you contract the novel coronavirus, and do synthetic flavorings, diluents, or possible contaminants within vaping devices cause harm? More research is warranted.
Member Blog: 5 Ways To Increase Operational Efficiency
by BriAnne Ramsay, CEO of RMCC, and Karen Mayberry, Marketing Director and Co-founder of Trym
In the evolving cannabis industry, companies are streamlining and optimizing their processes.
Labor is the highest expense in commercial cannabis activity across the supply chain, accounting for nearly half of production costs. For example, cannabis cultivation requires a skilled team to support production, harvesting, and processing, and packaging. As a retailer, it’s imperative to calculate labor cost per unit. When these costs aren’t accounted for, inefficiencies lead to lower margins.
Owners and managers are looking at their bottom line and strategizing on how to increase their operational efficiency. In this article, the folks behind Trym and RMCC, share their suggestions on doing just that.
Standard Operating Procedures
SOPs aren’t just for the operating license application, this is your company’s playbook. These procedures outline not what you intend to do, but what you are doing. If you change what you’re doing outside of that playbook; those SOPs need to reflect that.
How do you know your SOPs are being followed? Systems with consistent checks and balances! Data doesn’t lie!
Training and Ongoing Support
Many of us know from experience the cannabis industry has a higher employee turnover rate at 40%-60% within the first 2 months. One might infer it’s because, in a budding industry, we haven’t yet had the time or resources to focus on developing our “training departments” as large corporations have. Cannabis is busy jumping through hoops to satisfy external requirements and therefore we devote our resources to short term needs rather than investing in training infrastructures.
Maintaining a consistent, up-to-date learning strategy with executable trainingplans will help you decrease turnover – in all aspects of your operation. What experience does a new (or seasoned) employee have when coming on board or changing roles? Do they know what happens before they join the team? Day 1? Week 1? After a month? Complex roles may take up to 6 months or longer to acclimate to. If employees get frustrated early on they head out the door. What can you do to prevent this from happening?
Targeted training with ongoing support is crucial to maintain and improve efficiencies. The data shows that investing in your employees decreases turnover and in the long-term, increases your profit margins. According to the Association for Talent Development (ATD), companies that offer comprehensive training programs enjoy a 24% higher profit margin than those who spend less on training.
Communications Strategy
Today’s world demands quick, effortless distribution of information. One way to increase everyone’s efficiency is to enable that flow of information. Decrease the frequency and length of meetings. While important for decision making and collaboration, too many meetings correlates with lower labor efficiency.
Introduce a company-wide communication tool, like Slack, to leave the inbox for truly important emails while also opening up communication between departments.
Build an intranet with internal SOPs, workflow diagrams, important announcements, checklists, etc. Provide your employees with the tools and path to success. When communication flows across departments and seniority, you get a team structure that isn’t limited by bottlenecked decision making. Leadership is more accessible and the company can act quickly, achieving optimal results.
Create incentives for your team to perform great work. Recognize their accomplishments and offer support when necessary. Positive employee morale goes a long way.
Regular Process Reviews
Implement internal checks and balances such as audits, workflows and Key Performance Indicators analysis. Consistently reviewing production data will ensure the licensee identifies their operational gaps and can adapt to more efficient and compliant workflows.
Third-party audits are great resources to identify compliance risks that may not be found through internal audits.
Monthly or quarterly reviews of standard operating procedures are recommended to verify the documents accurately reflect the physical flows and the details reported to the state agency. Perhaps the state has made changes to their regulations and SOPs need to be modified?
Software Tools That Bring Value
Software has the power to automate certain processes and save labor time. When chosen, implemented and adopted correctly, it can greatly increase company efficiency. The first step in software evaluation is identifying the challenges your company faces and the ways in which software can help. Then, evaluate each software product on how well its features and services can support your efficiency goals.
In the cannabis industry, there are many ways to enlist software to optimize workflows. There are traditional software tools like Asana and Slack for project management and internal communication. And there are industry-specific tools like Trym for METRC reporting and cultivation management or Simplifya for compliance monitoring. Check out our piece on implementing Metrc solutions for your cannabis business if you’re in a Metrc state!
RMCC’s training courses, expert counsel, procedures, and documents help businesses achieve and maintain compliance. RMCC helps Operators and Technology companies excel in daily operations, implement seed-to-sale software, provide comprehensive training with on-site evaluations, and gap analysis. We help build the infrastructure of compliance operations through customized Standard Operating Procedures.
Karen Mayberry is the Marketing Director and Co-Founder at Trym.
Trym is farm management software custom-built for cannabis cultivators. Trym improves efficiency and consistency through environmental monitoring, customized task and batch management, and data analytics. Trym is currently integrated with Metrc in California and Oregon, and is used alongside compliance software in other states.
Committee Blog: Facts About Current Good Manufacturing Practices (cGMPs) And Their Role In The Cannabis Industry
Good Manufacturing Practices (GMP) are minimum requirements to ensure that products are created in a manner that ensures they are of consistent quality and safe for their intended use. If a product is found to be produced in a facility that does not meet GMPs, they can be considered adulterated and unsafe. In the U.S., the U.S. Food & Drug Administration (FDA) regulates the manufacture and sale of food and beverages, dietary supplements, pharmaceutical products, and cosmetics by requiring adherence to GMPs. The “c” in cGMP stands for current, meaning that how companies conform to GMPs must continually evolve with the development of new scientific research and industry best practices. Today, the two terms are used interchangeably. While cannabis is not recognized as a legal product at the federal level, federal legalization will inevitably result in the requirement for cannabis producers to conform to cGMPs.
cGMPs can be broken into six major sections (1) Management Commitment, (2) Risk Management, (3) Quality Management Systems, (4) Site & Facility Management, (5) Product Controls, and (6) Staff Training (Figure 1).
Figure 1 Major elements of any system that follows Good Manufacturing Practices
Why are cGMPs important?
cGMPs are important for every industry to ensure manufacturers are producing safe products. A site that isn’t following the minimum requirements for cGMPs in their specific industry is putting the basic well-being of consumers around the world at risk, which the FDA terms adulterated. cGMPs provide assurance that steps within the manufacturing process result in passing final product testing. Final product testing alone is not enough to ensure the safety of consumers. In most cases, final product testing is completed on a small sample batch, so that manufacturers are not wasting the final product on sampling and testing. For example, if the manufacturer is producing 1 million dietary supplements, the manufacturer might only test 100 tablets from that batch. This means that if cGMPs are not being followed and there is no consistency in the safety of producing that product, then some of the products may be safe for consumption, while others may not. This results in product recalls or withdrawals, damage to brand reputation, and lawsuits. A recent study by the Denver Department of Health found that 80% of cannabis products on dispensary shelves failed testing despite passing final batch testing prior to sale.
What do cGMPs include?
Every industry regulated by the FDA has its own guidelines for cGMPs, which are found within Title 21 of the Code of Federal Regulations. Unique differences between cGMP requirements for each industry exist. If your company has multiple product lines that fall into any of these different industries, understanding how these differences will impact you are critical. Figure 2 provides a high-level overview of the major GMP topics that are required by industry.
Figure 2 Summary table of major FDA cGMP regulations by industry sector
Industry Type
Location of primary GMPs within 21 CFR
Food & Edibles
21 CFR 117
Dietary Supplements
21 CFR 111
Pharmaceutical
21 CFR 211
Cosmetics
See Draft Guidance for Cosmetic Good Manufacturing Practices
Figure 3 Table of the major industry types regulated by the FDA and where one can find the major cGMP requirements
Not all GMP topics are referenced in the primary section of the CFRs, which can make it difficult for people who are new to GMPs to ensure they are appropriately prepared. For example, the food and beverage cGMPs (21 CFR 117) does not include packaging and labeling controls, whereas the pharmaceutical cGMPs (21 CFR 211) does include packaging and labeling controls. 21 CFR 101 is home to packaging and labeling statues for the food and beverage industry.
Each sector regulated by the FDA has overlap which contributes to talent acquisition/recruitment from other industries.
THIRD-PARTY cGMP AUDITS
What are Third-Party cGMP Audits?
A third-party cGMP audit is a systematic independent and documented activity in which objective evidence is gathered and assessed to determine if the site’s cGMP system is appropriate and effective. In the 1990’s third-party GMP audits were like an inspection you would receive from the FDA or local health department. This means there was a heavy focus on the building itself and what was happening on the production line during the time of the audit. Nowadays, cGMP audits typically include much more than what is required from the Code of Federal Regulations (CFR). Examples of this include extra requirements for Hazard Analysis Critical Control Points (HACCP) and a much heavier review of documentation to ensure best practices are being followed all the time and not just on the audit day.
Benefits of Using an Experienced and Accredited Certification Body
One thing to keep in mind when considering a third-party cGMP audit is whether or not the audit is accredited. Certification Bodies are accredited (approved) by an Accreditation Body, to ensure their internal procedures and audit processes follow strict guidelines for different audit standards. If approved, the CB gets accredited to that specific audit standard. This along with direct oversight of the audit Scheme Owner and the Accreditation Body ensure that the Certification Body has qualified auditors and that the entire audit process goes through several quality checks before it becomes “final.” In the U.S., the three major accreditation bodies approved to do this are:
WHY SHOULD MY COMPANY RECEIVE A 3rd PARTY cGMP AUDIT?
Unlike the food & beverage, dietary supplement, pharmaceutical, and cosmetics industries, cannabis is federally illegal in the United States. This means there are no federal regulations for cGMPs in the cannabis industry. However, some states, such as Florida, have taken the initiative and implemented requirements to have all cannabis facilities become audited to a cGMP standard before they can receive their license to begin manufacturing.
As the cannabis industry continues to evolve, retailers and others downstream in the supply chain will demand that cannabis manufacturers provide evidence of a certain level of quality and safety in their products. An attestation or certificate from a third-party demonstrating that your facility meets cGMP requirements is an internationally recognized way to provide that evidence and establish trust. Globally, third-party cGMP audits are crucial to maintaining product safety and quality by providing a third set of eyes to verify what is working and what is not. Besides regulatory requirements and customers requiring your facility to get a third-party cGMP audit, there are numerous other benefits to receiving a cGMP audit. Some of these benefits include the following:
Reduction in failed product testing
Improvement of product safety
Improvement of product quality and consistency
Eliminating potential risks and possible recalls
Marketing advantages over competitors who are not audited by a third-party
Improvement to consumer confidence and an increase in brand loyalty
ROADMAP TO cGMP CERTIFICATION
Management Commitment
It is essential to the entire cGMP system to have commitment from top-down. Without this, your site will not receive the resources (e.g. people, equipment, tools, budgets) it needs to implement an effective cGMP system. The culture of an organization requires everyone to practice what is lectured. Simply; Say what you do, do what you say.
Start Preparing Early
Be realistically courteous to the timeline by generating an internal analysis. Using the scheme, the audit will be against, create a list of programs you currently have, and which are missing. Working towards a better score early will provide greater long-term value.
The very first thing you need to do before you start making major changes to your facility or procedures is to identify which GMP standard or standards you intend to meet. With this established, you can select a Certification Body and obtain a copy of the audit form or checklist that they will use to assess you.
Assess Your Current Level of Conformance
Establish an audit team and conduct a thorough assessment of your current organization. If this is new to your organization and staff, it is beneficial to work with a GMP expert that has experience in both cannabis and the cGMP program you are going to be audited against. Review your entire system against the audit checklist and highlight or markup items your site is already doing. This allows you to focus on the things you are missing and close any “gaps”.
Implementation and Teamwork
The preparation of an audit should never rest on the shoulders of one person. Your site should establish a multidisciplinary/interdepartmental team to implement the various tasks based on the findings from your initial assessment. Collaboration is key to successfully preparing for a cGMP audit, especially when timelines set by upper management are very stringent.
Training
Training is essential in preparing for your cGMP audit and business in general. This helps close the gaps between what your safety and quality department has developed and what your front-line employees are applying. All employees should understand what cGMPs are and how it applies to and benefits their daily activities.
Establish Your Internal Audit Program
Conducting internal audits is an effective way to not only prepare for your cGMP audit but to continually improve your organization. Breaking down your entire audit checklist into department or process-specific sections, you can establish the frequency of auditing these bite-sized sections. Should they be reviewed annually, semiannually, quarterly, monthly, or continuously throughout day-to-day operations? Some things, like reviewing your suppliers, may only need to be done annually, while things such as pre-operational inspections should be performed daily. Always use the actual audit checklist to observe your documents and facility to see if there are any gaps. Whenever possible, the person or team conducting the internal audit should never review their own work. Establishing any issues or non-conformances should be noted, evaluated, corrected, and closed out.
Schedule Your Third-Party Audit
A third-party mock audit is the closest thing you can get to an actual audit. This is where a third-party company would come in and evaluate your site to the specific cGMP standards and give a formal report over any deficiencies found during the assessment. This is a great way to test your preparedness before the actual audit.
Address Non-Conformances and Celebrate!
Your auditor will almost certainly identify areas where you are not fully compliant, known as non-conformances. Depending on your level of preparedness, you will hopefully have only a few Minors, but non-conformances can be classified as Major or Critical. You will work with your auditor to establish actions and a timeline to effectively resolve these non-conformances and provide follow up evidence of their closure. After successfully closing out your non-conformances, you will be rewarded with a certificate or attestation. Sit back, relax, celebrate! With a cGMP system in place, the established intervals to audit your system will ensure you have the tools and knowledge to maintain your cGMP status!
Member Blog: A COVID-19 Guide For Cannabis Entities
As the fallout from COVID-19 ripples through the economy, cannabis businesses are once again faced with a plethora of conflicting information and uncertainty. As counsel to the NCIA and in service to its membership, Wykowski Law has put together a guide to the most common issues facing cannabis businesses in the wake of COVID-19. The guide focuses on national issues and focuses in on some issues specific to California.
Please check out the guide for more details, but here is a quick rundown of what you need to know as a cannabis business in the age of COVID-19:
As we’ve unfortunately become accustomed to, cannabis has largely been left out of relief efforts, particularly where the federal government is concerned. Like with anything cannabis, this means that we have to dig deeper and be more creative to survive.
What sort of help can cannabis businesses get from SBA, PPP, and EIDL? Are there alternatives?
Generally, the Feds are not going to let MRBs touch these funds. But don’t despair. There are potential alternatives at the state level (in California at least) including CalCAP, IBank, and JSLP. Of course, these programs present their own challenges for MRBs, but they do not categorically rule out lending to the cannabis industry.
What about taxes and tax relief?
Unfortunately, when it comes to the Feds we continue to live under the spectre of 280E which makes so many of the tax credits and relief potentially unavailable. There may be some strategies to take advantage of some of these programs, but they are largely dependent on your individual situation. Check with your tax expert!
Some of these regulations just aren’t practical during a pandemic. Are we really expected to comply?
There’s good news and bad news on that front. In California regulatory agencies are making some allowances including regulatory variances and allowing curbside pickups. But you have to get approval. Double (and triple) check what sort of regulatory relief your state is offering before deviating from any SOPs.
The bad news is that as an essential service in the age of COVID-19, many cannabis businesses are subject to additional health and safety requirements. California OSHA for instance has put out stricter standards for all businesses and we expect there might be more to come due to the nature of cannabis.
Times are tough, but not hopeless. And, all of the above is just the tip of the iceberg. The full guide goes into deeper detail. Of course, the information you obtain here and in the linked guide is meant to be informational only and is not, nor is it intended to be, advice legal or otherwise. For that you will need to talk to your lawyer and/or accountant.
Henry Wykowski is the founder of Wykowski Law a national cannabis law firm based in San Francisco that has represented the industry since its inception and successfully defended it in multiple landmark cases.
Member Blog: Coming Down From The High – Bankruptcy Alternatives For Cannabis Companies
Despite increasing legalization of cannabis among the states, cannabis products with a THC concentration exceeding 0.3% on a dry weight basis remain a Schedule I substance in the federal Controlled Substances Act. Consequently, bankruptcy, which is also governed federal law, has proven to be inaccessible for cannabis businesses, even businesses with only tangential ties to the cannabis industry. The need for insolvency options for cannabis companies was a growing concern prior to the COVID-19 pandemic, and is now likely even more acute. There are, however, several potential alternatives to bankruptcy for cannabis businesses in financial duress:
Assignment for Benefit of Creditors (“ABCs”):
ABCs are essentially state court insolvency proceedings through which a company’s assets are orderly liquidated. The assets of the company are transferred to a trust administered by an “assignee” selected by the company. The assignee will liquidate the assets and distribute the proceeds to the company’s creditors. Given the nuanced and highly regulated nature of the cannabis industry, a cannabis business considering liquidating through an ABC should select an assignee with familiarity with the industry. Additionally, depending on the jurisdiction, it may be unclear if an assignee will have authority to liquidate a cannabis business’ assets, most particularly the inventory given the licensing requirements. To the extent applicable statutes, rules, and regulations are silent on the matter, an assignee will likely have to seek authorization to liquidate or dispose of assets from the presiding court. Lastly, ABCs are strictly a liquidation process and will not provide for restructuring or continuing operations.
Receiverships:
A receiver can be appointed by a state court to manage a company during troubled times. A receiver may try to improve the operations of the company, or perhaps find a buyer for the company or its assets. Receiverships are often initiated by concerned creditors or shareholders or out of dispute among interest holders. While a receivership may improve a company’s fortunes, or at least bring clarity to its financial situation, the owners of the company may have limited control over the process. Like an assignee in an ABC, there may also be a question whether a receiver can dispose of assets of a cannabis business. Three states (California, Oregon, and Washington) have promulgated regulations permitting the operation of the cannabis businesses and/or disposition of assets by a receiver, and other states are considering similar schemes.
Workouts:
A workout is non-judicial process through which an entity can negotiate with its creditors to restructure the amount or repayment terms of debt. Creditors may be presently more amenable to workouts in light of the circumstances related to the COVID-19 pandemic. A successful workout can enable a company to continue to operate with the same management free of at least a portion of its prior debt burden. A company may also attempt to larger workouts called “composition agreements” with several creditors, through which the creditors each agree to accept a pro-rata payment from a defined source of funds in satisfaction of their debt.
Potential Bankruptcy Options
Bankruptcy may be an option depending on the nature of the business and the jurisdiction. For instance, companies that produce hemp and CBD products, which are products with a THC concentration of 0.3% or below, may be able to seek bankruptcy relief since their products are no longer a Schedule I substance in the Controlled Substances Act. There is also an open question as to whether a U.S. company can file a bankruptcy proceeding under Chapter 15 of the Bankruptcy Code in connection with a foreign insolvency proceeding, such as in Canada, commenced by an affiliate. However, the Bankruptcy Code would appear to provide courts a mechanism to deny such a proceeding as being “manifestly contrary to the public policy of the United States” (See 11 U.S.C. § 1506)
There may also be some daylight for bankruptcy relief for companies with tangential ties to the cannabis industry, such as landlords for cannabis businesses or entities that produce equipment utilized by cannabis businesses states within the Ninth Circuit Court of Appeals (The Ninth Circuit encompasses Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), which recently determined that a debtor could proceed in chapter 11 bankruptcy and confirm a plan of reorganization even though it received rental income from a tenant that was a cannabis grower (See Garvin v. Cook Investments NW SPNWY LLC, 922 F.3d 1031 – 9th Cir. 2019).
Michael R. Herz is an Associate in Fox Rothschild’s Cannabis Law Practice Group. Michael centers his practice on complex bankruptcy and insolvency matters. For businesses in the cannabis sector encountering financial difficulties, he advises and writes on alternatives to traditional bankruptcy, including assignments for the benefits of creditors, receiverships and workouts.
Member Blog: Harvesting Automation In The Time Of COVID-19
by Brett Layne, sales and manufacturing leader at Mobius Trimmer
Coronavirus is shining a light on the vulnerabilities (and inefficiencies) of manual processes in cannabis harvesting.
Coronavirus is disrupting the cannabis industry in North America. And while COVID-19 restrictions vary in different markets, many cannabis cultivators have had to stop or drastically reduce operations to maintain compliance.
Sadly, the long-term impact of coronavirus will force some cultivators to permanently close their doors.
Under the current social distancing mandates, the grow rooms themselves aren’t a problem. Staying 10 feet away from other staffers in a greenhouse is easy, there’s always plenty of space and the ability to rotate and spread out shifts.
Harvesting is the culprit.
Cramped and crowded trim rooms with at least a dozen employees (sometimes more) in close quarters isn’t acceptable or wise under today’s circumstances. Laws aside, many hourly employees are calling in sick or not showing up for work at all. Or even worse, they show up to work with an illness, COVID-19 or otherwise. Skilled workers aren’t easy to replace, but a sick employee introduces a new set of issues.
We’re advocates for highly-automated cannabis harvesting and processing. Automation is perfect for roles that are dangerous or repetitious or can introduce inconsistencies and contaminate products.
And because of coronavirus, the cannabis industry needs automation now more than ever.
You’re ahead of the curve if you’ve automated aspects of your harvesting workflow. And you’re probably still operational.
But it’s not too late for cultivators that are manually harvesting and trimming cannabis to re-think their processes, embrace automation, and adapt tools like automated trimming machines, buckers, conveyors, and mills to stay in business and keep their employees safe.
There are many dated arguments that claim trimming machines take the soul out of cannabis. Hand-trimming is viewed by some as a more refined process that does less damage to the flower. And while most people will always be a fan of craft cannabis, the arguments against automation are, at this point, inaccurate.
The trimming machine backlash was the result of legacy trimmers that weren’t able to match the quality of hand-trimmed cannabis. Today, this isn’t necessarily the case. Innovative machine trimmers can produce a trimmed flower that’s virtually indistinguishable from its hand-trimmed cousins. And the best machine trimmers can offer a level of consistency that hand-trimming can’t match.
If you’re not yet convinced, here’s something to consider: the consumer opinion of hand-trimmed cannabis will change after COVID-19. Customers will feel better knowing that their cannabis has had minimal human intervention.
The best of today’s machine trimmers produce an exceptional product, keep your employees safe, and help you stay in business. It’s a win-win for everyone.
Now is the time to consider automation if you haven’t before in order to keep your operations, your employees, and your customers safe, and watch your business continue to grow.
Brett Layne is a sales and manufacturing leader at Mobius Trimmer, his “forever home.” Prior to his career in the cannabis industry he’s been a brewer, winemaker, industrial rigger, carpenter, and mass-timber builder. He lives in beautiful British Columbia with his family.
Mobius Trimmer takes the complexity out of harvesting by offering the world’s best cannabis and hemp processing equipment. Mobius equipment is engineered for ease of use, scalable output, employee safety, and GMP workflows. Plant material bucked, trimmed, and milled by Mobius equipment rivals product processed by hand.
Backed by harvest consulting experience earned in facilities around the world, top-tier customer service, and an immersive training academy to help you maximize your investment, Mobius is the unrivaled global standard for cannabis and hemp processing.
Member Blog: How Risk Management Can Heal Medical Marijuana Businesses
Envision managing the risk of a volatile, staggeringly lucrative, 100 percent federally illegal enterprise. Toss in ridiculously inconsistent federal, state and local regulations, insanely evolving technologies and efficiencies, and an industry-wide disinclination to “play by the rules.” Remember to remove the safety net, because neither cannabis businesses, nor their owners, are entitled to bankruptcy law protection.
However, when armed with decent risk management fundamentals, a marijuana-related business (“MRB”) can diminish most horrible outcomes, fortify the enterprise’s sustained growth, and maybe even get rich along the way.
Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical resources application which minimize, monitor, and control unfortunate events’ probability or impact.
Identifying Marijuana-Related Businesses’ Loss Exposure
The Comprehensive Drug Abuse Prevention and Control Act of 1970 prohibits marijuana’s manufacture, distribution, dispensation and possession and lists it next to heroin as a Schedule I controlled substance having “a high potential for abuse”. 21 U.S.C. §§ 801, Et. Seq (1970). Because of marijuana’s one hundred percent (100%) federal illegality, MRB’s are denied many standard “risk management tools” (like credit cards, bankruptcy law protection, and federal patents and trademarks), assembling a “risk management insurance, accounting, and legal advisory team” could prevent an insufficiently prepared MRB from foundering.
Risk management is the process of anticipating losses and developing a plan to survive them through: (1) identify each loss exposure (ex., being sued for a defective product); (2) evaluating each loss exposure’s frequency and severity; (3) weighing, then selecting, each exposure-managing-technique; (4) deploying exposure managing techniques; and (5) reviewing evaluating and improving risk-management plan.
An MRB’ “loss-causing-events universe” encompasses: (1) people (owners, investors, employees, customers and vendors); (2) property (buildings, equipment, crops, inventory, vehicles, data, cash, intellectual property); and (3) profits.
Although people are a MRB’ most valuable asset, and their welfare is the first priority, even the most safety-conscious businesses experience job-related injuries costing thousands in medical expenses and lost productivity. Through enacting safety plans and rigorous employee training, accidents’ frequency and severity can be minimized, employee health and welfare can be protected, and workers’ compensation insurance coverage premiums can be stabilized. Similarly, to prevent a dying investor’s ownership transferring to a less than cooperative relative, MRBs could obligate owners to execute buy-sell agreements requiring their survivors to sell decedent’s portion to the surviving partners.
Unlike people, damaged or destroyed property can be repaired and replaced and its “useful life” can be accurately anticipated and amortized. Unfortunately, due to federal prohibition, MRBs are denied many standard insurances (like crop or cash exceeding $25,000), federal trademark and patent protection, and banking and credit card services.
MRBs’ profits and valuation create the greatest vulnerability and regulatory fines and penalties, business interruption, and lawsuits impose the most perilous risk. Because they endure federal, state and local regulations, MRBs are vulnerable to fines and penalties from federal agencies, state agencies, and each municipality and borough in which they operate.
“Business interruption loss” is where an event halts an MRB’ operations like a wildfire’s soot and ash wiping out a grower’s crops immediately prior to harvest. Before the ensuing revenue-generating-grow-cycle is completed, employees, utilities and rent still require payment and, unless it has 6 months of cash to survive a revenue-less 180 day period, an MRB could get crushed.
Lawsuits range from a single plaintiff seeking damages to class actions in which an entire group of claimants seek compensation. Each year defective, faulty or misused products cause serious injuries and property damage. Although primarily seeking remuneration for personal injury, property damage, or economic harm, product liability claims may also seek punitive relief to punish the defendant and redress harms allegedly done to society. Defending litigation or settling claims can materially drain a company’s resources requiring additional regulatory requirement compliance, developing/ disseminating product warnings, instituting a product recall, deploying employee time to investigate/mitigate claims, investigating/testing products and assessing risk, and hiring expert consultants.
Bankruptcy’s Unattainable Protections
Because of marijuana’s one hundred percent (100%) federal illegality, and because bankruptcy can’t be used to facilitate federally illegal activity or administer assets that can’t be possessed or sold under federal law, bankruptcy protection is denied to both marijuana growers, processors, sellers, and transporters and the parties that own them.
Generally governed by federal law, called the “Bankruptcy Code” (“Code”), the bankruptcy system allows debtors to either dismiss or partially satisfy debts they are incapable of fully paying, and, upon filing, creates an “automatic stay” period during which creditors are prohibited from attempting to collect. Bankruptcy petitions are filed in a federal bankruptcy court governed by federal law, although state laws may determine how debtors’ property rights are affected (ex., validity of liens or exempting property from creditors).
Bankruptcy’s most common form is a Chapter 7 “liquidation” in which the court appoints a trustee to collect and sell debtors’ non-exempt property and distribute proceeds to creditors. Because most state allows debtors to keep essential property, Chapter 7s are usually “no asset” in which there are zero saleable assets to fund a distribution to creditors.
Bankruptcies allowing debtors to keep some or all of their property, reorganize and use future earnings to pay off creditors fall under Code Chapters 11, 12 or 13. Individual debtors usually file Chapter 13s, business entities file Chapter 11s, and Chapter 12 filings mirror Chapter 13 but are only available to “family farmers” and “family fisherman” and provide more debtor favorable terms.
Because the bankruptcy system cannot be used to facilitate illegal activity and the Code provide no mechanism to administer assets that cannot be legally possessed or sold under federal law, bankruptcy protection is unavailable to both Plant Touching MRBs and the parties that own them.
First, because the United States Trustee Program prohibits debtors with marijuana-derived-income-or-assets from proceeding, Plant Touching MRB’s Chapter 7 petitions are usually dismissed upon filing. April 26, 2017 Letter from Clifford J. White, Director, Executive Office for the United States Trustee to Chapter 7 and Chapter 13.
Second, even if a compliant state-licensed MRB debtor is involved, most bankruptcy courts dismiss cases involving marijuana-derived-income-or-assets. In re Arenas, 535 B.R. 845 (B.A.P. 10th Cir. 2015) (denial of marijuana grower/seller and legal dispensary landlord’s motion to convert to Chapter 13 and Chapter 7 dismissal because debtor is unable to propose feasible plan without violating federal law and trustee’s estate administration duties by selling debtors’ assets); In re Medpoint Management, LLC, 528 B.R. 178 (Bankr. Az. 2015) (dismissing “owner of intellectual property leased to marijuana products seller” due to “dual risk” of assets’ potential forfeiture and trustee’s CSA violation in administering estate).
This “bankruptcy protection denial” also may extend to Non Plant Touching MRBs. In re Way to Grow, Inc., (Bankr. D. Col., Dec. 14, 20l8 No. 18-14330)(because hydroponics equipment seller knew or had reason to believe that customers would use equipment to grow marijuana, bankruptcy dismissed because business deemed illegal under 21 U.S.C. §843(a)(7)).
2019 National Law Journal “Finance, Banking, & Capital Markets Trailblazer” award winner, Steve Schain chairs global cannabis law firm Hoban Law Group’s PA and New Jersey practice and chairs its Financial Services Group. With 17 offices and 52 lawyers, Hoban Law Group is the only practice 100% devoted to cannabis and hemp law. Admitted to practice in PA and New Jersey, Steve represents entities, governments, and individuals in litigation, regulation, compliance, preparing and submitting license applications, entity formation, and drafting legislation. A nationally recognized consumer finance litigation, banking law, and cannabis law expert, Steve is a The Legal Intelligencer, New Jersey Law Journal, and Cannabis Business Executive columnist, frequent Pennsylvania Bar Institute, and National Bar Institute author and lecturer and serves as a court-appointed judge pro tempore and arbitrator.
NCIA Committees: Spring 2020 Update On Achievements And Projects
NCIA’s member-driven committees are an opportunity for individuals from NCIA member companies to get directly involved in specific industry issues and sectors. These volunteer-driven efforts engage members’ expertise and passion to drill down in those areas to effect change, provide professional development opportunities, and develop best practices and guidelines that will shape the future of our industry.
We recently checked in with these various committees to learn more about what they’re up to and what projects they’re working on this term. Get updated on their activities below.
Risk Management & Insurance Committee (RMIC)
The RMIC has recently contributed to several NCIA white papers and educational webinars. They are currently working on an insurance manual. The committee has divided into sub-committees responsible for managing white papers, webinars, and the manual.
Scientific Advisory Committee (SAC)
SAC’s vision is to disseminate educational materials to NCIA members on scientific topics in the cannabis industry and to advise on other NCIA initiatives, ensuring that any formal recommendations produced are scientifically sound, sustainable, and legitimate. This term, SAC published a blog discussing why everyone should know about the endocannabinoid system.
SAC is working on other pieces addressing topics such as the recent vape illnesses from a physician’s perspective, indica versus sativa designation, how cannabis can help the opioid crisis, common scientific myths confusing the industry, and budtender and consumer education about the endocannabinoid system.
SAC is also developing a webinar that discusses what should be on a label, how to read a label, and how to associate what’s on a label with either statements on efficacy or marketing/branding.
Cannabis Cultivation Committee (CCC)
The committee has recorded two podcast episodes for NCIA’s Cannabis Industry Voice Podcast. The first was a Cultivation Best Practices Roundtable, hosted by Noni Goldman of the CCC. In that episode, Cody Hitchcock of Smokey’s 420 and James Cunningham of Fog City Farms were interviewed to shed light on their different growing styles and techniques, focusing on the ways that they implement sustainability in their operations.
The second soon-to-be-released interview was with High Times’ new CEO Stormy Simon, and was hosted by CCC Chair Mo Phenix and member Noni Goldman. This interview explored Stormy’s history and how she got to where she is today, as well as what High Times is up to, and where Stormy sees the industry going.
More podcasts to come in the next couple of months from the CCC! Keep an eye out for an episode or two on regenerative agriculture.
Packaging & Labeling Committee (PLC)
The PLC sub-committees have each contributed to a blog or presentation up to this date. The Sustainability sub-committee has worked with Kaitlin Urso and team in regards to their White Paper. A panel discussion proposal has been submitted for future NCIA conferences.
NCIA’s Northeast Cannabis Business Conference in Boston (February 2020) Panel Discussion on the Future of Cannabis Packaging went great!
State Regulations Committee (SRC)
NCIA’s State Regulations Committee has continued to produce content to help educate and inform members on the latest developments in the world of state regulation of cannabis. As the industry’s law and regulations change quickly across the country, the SRC members stay ahead of the curve and share their insight in a variety of forms. These projects include panel presentations at NCIA conventions, published blogs, and interactive webinars. In this quarter, they published three blogs, produced one webinar, presented on two panels, and participated in an NCIA summit.
As the committee strives to keep everyone updated on burgeoning legal topics, the SRC committee presented a webinar on Michigan, a newly regulated market. The webinar provided information on this key Midwestern state, “Michigan’s Adult-Use Market – What Comes Next?”
Conferences:
SRC members also traveled from across the country to share their expertise on panel sessions at NCIA’s Northeast Cannabis Business Summit in February 2020 in Boston.
The Social Equity Sub-Committee leaders, Erin Fay, Chris Jackson, and Margeaux Bruner provided helpful insight during their session, “What You Need To Know For Winning Applications and Successful Operations That Promote Diversity and Inclusion.”
Sean Donahoe and Gabriel Cross of the SRC’s Interstate Commerce Sub-Committee presented on the issues surrounding interstate commerce and strategies for preparing for this anticipated change in the cannabis industry.
Also, SRC members participated in the NCIA’s summit about tackling the illicit market.
The State Regulations Committee is excited about its work and continues to stay knowledgeable about the ever-changing legal and regulatory landscape. Their projected work includes a webinar on the Illinois adult-use market and a wide range of written projects. Stay tuned!
Banking & Financial Services Committee (BFSC)
The committee’s vision is to provide the NCIA member base with current and actionable information related to Banking and Financial Services in the State legal cannabis industry.
They have implemented monthly newsletters for the member base and have been extremely active in response to the proposed federal legislation regarding banking and the cannabis industry.
Human Resources Committee (HRC)
The Committee’s vision is to provide best practices in all disciplines of Human Resources to NCIA members. They have worked on a couple of blogs this year around the recent reduction in force trend and will be releasing a few blogs providing some recommendations for how cannabis employers can navigate CV-19 when it comes to their workforces.
The HR Committee is working on a very exciting case study. They are looking forward to releasing the first few modules of it this summer!
Marketing & Advertising Committee (MAC)
The MAC coalesces the talents of 20 of the industry’s top-tier marketing and communications professionals around three focus areas: Education, Advertising Access and 2020 political goals. The committee uses their personal, professional and business skills and networks to help build a responsible, legal cannabis industry. The committee is producing best practices, webinars, workshops and social media campaigns to aggregate and generate support from NCIA members, the public, media, government and business leaders.
The MAC Education Subcommittee has focused its energies on developing a Speakers/Expert Directory with a goal to launch by year-end.
The 2020 Subcommittee has created its first infographic covering Oklahoma’s 2020 ballot initiatives; infographics for additional states with legalization initiatives on the ballot this year will follow soon.
The Advertising Access Subcommittee is adding more states (as they come online) to their overarching list of “Do’s and Don’ts” for compliant cannabis advertising. Those are pending editing and legal review and will be published on the NCIA website soon thereafter.
The committee is also working on upcoming webinars including “Advertising Best Practices.”
Cannabis Manufacturing Committee (CMC)
The Cannabis Manufacturing Committee is focusing on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers, and edibles ensuring the manufacturing sector is helping shape its destiny.
They are also working on their second publication, “Facts About Current Good Manufacturing Practices (cGMPs) And Their Role In The Cannabis Industry” which will be a resource for essential businesses.
In addition to the work the CMC is carrying out, they are collaborating with other committees to help create an NCIA resource library.
The CMC Testing sub-committee is working on writing blogs about “Positives of Testing” (from the operator’s view), and “Nomenclature: Cannabis Nomenclature Register” for publication.
Retail Committee (RC)
Members of the Retail Committee attended NCIA’s Northeast Cannabis Business Conference in Boston in February 2020 to participate in an educational panel on Retail 101. The committee has an upcoming webinar in April: “Retail: Tips and Best Practices” which will include 4 panelists that are currently license holders or working in licensed dispensaries in 3 different states (CO, CA, WA), and will also address some tips and best practices for the current CV-19 climate.
Facilities Design Committee (FDC)
Committee member David Vaillancourt of The GMP Collective appeared on NCIA’s weekly podcast, NCIA’s Cannabis Industry Voice, in February 2020 to discuss GMPs (Good Manufacturing Practices) in an episode titled “Revolutionizing How Cannabis Producers Achieve Success.”
Member Blog: Best Ways to Attract Top Talent to Your Cannabis Business
The cannabis industry is growing rapidly. As more people look to cannabis for the health benefits it provides, the industry is on an upward trajectory and now is a great time to get in on the ground floor.
If you are starting or growing your cannabis business, the people you hire will be very important. Your staff will include customer service reps which will be the face of your business, people who work behind the scenes to make sure you are compliant and organized, a marketing team and those in the warehouse who are responsible for making sure your products arrive safely and securely.
While the market is growing, the industry is quite competitive and you need to do what you can to make sure your business stands out. Hiring the right people can give you that edge. With that in mind, this article will explore the best ways to attract talent to your cannabis business.
Seek the Help of a Specialized Search Firm
It’s important to remember that the best candidates might not be the ones looking for jobs. They are often people that are already in respected positions and, with an attractive enough package, you may be able to lure them in to start working for you.
Certain search firms will know exactly where to look for the talent you need. They will have a network of qualified people that they will sort through before using other tactics. This will ensure that they are picking from a pool of experienced candidates who will know what it takes to help your company grow.
When considering what type of search firms will be best, look into retained recruitment and executive recruitment firms. Retained recruiters are dedicated to finding the ideal candidate for your position and they won’t stop until their job is done.
Executive recruiters, on the other hand, are skilled in finding candidates for top-level positions. Consult them to find qualified people who will see to it that your company is running smoothly and reaching its goals.
Show Your Company in the Best Light Possible
If you are looking to find top tier candidates for your positions, you have to show your company in the best light possible. Remember, you will be picking from a pool of highly skilled candidates who may have their choice of positions to choose from. Therefore, not only will it be important for the candidate to make a favorable impression, it will be important to the company as well.
Companies can do this by offering comprehensive compensation packages including competitive pay, benefits, and perks. A great work environment will also be a bonus.
You also want to do all you can to impress the candidate in the interview process. During this process, be sure to not only ask the candidate questions about themselves but leave them plenty of room to ask you questions as well. Bringing in members of the staff to meet them will also make them feel as if you are showing a real interest in them and want to make them part of your team.
Establishing your brand is another thing you can do to make your company look impressive. Your brand should have a logo, a well-designed website, a strong online presence, a clear mission statement, and a strategic marketing strategy before even attempting to look for top tier talent. A lack of these qualities can make qualified candidates run the other way.
Accurate Job Descriptions
Whether you are going through a search firm or doing your own headhunting, having an accurate job description will be a real bonus. It may seem obvious, but leaving out valuable information like the basic duties of the job, the hours, the benefits and pay offered, the location and anything else that might be relevant can make candidates skip over your ad and move on to the next.
Be sure to add as many details as possible when creating your wanted ads.
Offer Smooth Onboarding
Once you have decided on a candidate you would like to hire, follow up with a smooth onboarding process.
It may be surprising to find out how easy it is to lose qualified candidates during the onboarding process due to lack of communication, lack of support of just general confusion. Make sure that you maintain plenty of contact with your employees while they are becoming integrated into your system. Provide helpful feedback and encourage them to share their feelings and opinions during this pivotal time.
If you are looking to make your cannabis business stand out by hiring a first-rate staff, the steps you take during the hiring process are very important. Team up with the right search firms, make sure you look impressive to the talent, provide accurate job descriptions and continue to support them throughout the onboarding process. Then you can look forward to having a team that will help your company grow.
Jacob Carlson is the Co-Founder and CEO of Fortuna Business Solutions. Fortuna is proud to be one of the first east coast staffing agencies in the cannabis industry being based out of Portland, Maine. Jacob is a serial entrepreneur having previously co-founded a corporate event service (Just Enjoy!) and social media automation tool (RapidCrowd), and he is primed for scaling his next venture with his two co-founders, the Ellis brothers.
Hiring in the cannabis industry is hard, Fortuna Business Solutions makes it easy. We help businesses in the cannabis, CBD and hemp industry find quality candidates to hire on to their team. If you are tired of weeding through thousands of unqualified applicants or struggling to find someone with specific experience, we can help.
Webinar Recording: In the Weeds – Cannabis Advocacy from the Statehouse to Capitol Hill
Watch this recent webinar from March 31 for a lively discussion about how to leverage your company, customers, and industry partners to achieve your state, local, and federal advocacy goals. Whether cannabis is already legal in your state or on the path to being so, learn the advocacy basics to ensure the industry’s, and your company’s, long-term success.
This panel of industry experts discuss:
– What types of activities and interactions with government officials trigger lobbyist registration requirements;
– Best practices for forming coalitions to achieve your advocacy goals, whether at the ballot box or in the statehouse;
– How to form a PAC or other advocacy vehicle; and
– What types of gifts to public officials may be off-limits because of the nature of your cannabis business.
Speakers
Moderator: D. Michael Stroud, Jr.
Partner at Nossaman LLP
Michael Stroud, Jr. brings more than 15 years of legal and legislative policy expertise in border security, infrastructure, national security, tax, transportation, trade, state and local municipal government, and water and wastewater utility. He has advised clients on federal campaign and lobby laws, gift rules, ethics compliance and investigations. Michael has also led efforts on appropriations legislation to obtain legislative changes to advance clients’ interests in the cannabis industry.
Amber Maltbie
Partner at Nossaman LLP
Maltbie is a campaign finance and election law attorney who advises clients in the cannabis industry, including trade associations, private, and publicly traded companies. She advises them on the permissibility of making contributions at the state and local level, preparing and filing campaign finance reports, tracking and notifying public officials who have received client gifts. She has helped develop a banking relationship and facilitated getting its PAC banked. She also advises on support and promotion of ballot measures and legislative advocacy. Amber’s practice covers all 50 states.
William Powers
Partner at Nossaman LLP
William Powers focuses his practice on political law and campaign finance issues. Drawing on his decade-long career in government, including as a top enforcement official at the Federal Election Commission (FEC), Bill helps clients navigate laws related to campaign finance, lobbying, ethics, gift and gratuities and pay-to-play. His clients include companies and nonprofits at the cutting edge of their industries, and he brings a collaborative and flexible approach in helping them achieve their advocacy goals in elections, the legislative arena, and the ballot measure and initiative process.
Committee Blog: Working With Your Local Government as a Cannabis Processor
If you want to open and operate a regulated cannabis business, there’s no avoiding local government. Every state grants different amounts of power to towns and cities, with some allowing localities to ban cannabis businesses outright, and others simply giving them the same power over time, place, and manner of operations that they have for other businesses. But since cannabis can be a hot-button issue, a proposal to open a cannabis facility often attracts far more attention than opening any other type of business.
To help NCIA members and other cannabis entrepreneurs navigate local government, we at the State Regulations Committee have launched a series of blog posts, with each taking a close look at a different type of cannabis license. Last month, we published our first post, “Working With Your Local Government as a Cannabis Cultivator.”
Today, we’re moving one step down the supply chain and talking about cannabis processors (sometimes also called manufacturers or infusers). Since state programs vary widely, with some licensing cannabis processors independently and others combining processing with cultivation (or even a single vertically integrated license), we will be focusing on the operations rather than the licenses themselves. If you’re seeking a combined license, be sure to read the blog for each activity your business will be allowed to engage in — while there is some overlap, there are also some major distinctions in how different operations can most effectively interact with municipal officials, and you will need to be well-versed in answering questions unique to each phase of your business.
ECONOMIC IMPACT
Like the three rules of real estate being “location, location, location,” the three rules of economic development are “jobs, jobs, jobs.” When proposing a new business in a town or city, local officials are going to want to know how many jobs it will bring, as employment can put money directly into the hands of their constituents and have ripple effects throughout the local economy.
In addition to the raw number of jobs your business will create, it’s also important to highlight the qualifications for those positions. Processing facilities often need to have highly qualified individuals with PhDs or other certifications to manage production processes, and officials will be happy to see the salaries that come along with such positions. Entry-level jobs, such as working production lines, are also worth talking about — even though they have lower salaries than someone with a doctorate, it’s usually much easier to hire local talent for these positions. Any commitment to hiring locally as much as possible is usually a big plus to politicians. Additionally, be sure to mention how much these new employees will add to the local economy, through all the typical living spending they will do.
Setting up and maintaining your facility will also have a major economic impact, especially in smaller communities. If you’re constructing a building to suit, get estimates from your contractors about the jobs your project is supporting, and let officials know how much you’re investing in the build-out. If you’re moving into an existing space, you’ll almost certainly be doing significant renovations to meet the state’s strict safety standards, which is also worth talking about. Towns and cities that are struggling economically will often be very happy to see unused commercial space become occupied, especially if those properties are being improved. If possible, also identify local contractors (like electricians) or suppliers (like lumberyards) you will use for construction.
Finally, there are direct payments to the local government. While officials love to see any sort of economic development, they still have services to provide and a budget to balance, and will want to know what the municipality will be receiving directly. Calculate your building’s expected property taxes, both on an annual basis and 5-10 years out — since cannabis licenses are usually very difficult to re-locate, emphasize that you are in it for the long haul. Be sure to understand your states’ tax structure, and know whether there are any local taxes that the town will receive, or if towns that host cannabis licensees receive any portion of state tax revenue.
PUBLIC SAFETY
The top public safety issue in local officials’ minds when it comes to cannabis processing is almost surely to be butane fires and explosions. This is for good reason — while hydrocarbon extractions can be very safe and effective when done properly, when done improperly they can be incredibly dangerous. City councilors or fire chiefs may have read some of the many headlines about butane-related accidents over the past few years, and it’s up to you to address these concerns directly and honestly. Of course, before diving into these conversations, check to see if the municipality or county has already banned such extraction methods, as some state laws allow local control in this area.
If you’re not planning to perform hydrocarbon extractions at your facility, be sure to tell that to your local officials. They may not realize that there are many other types of cannabis extracts that do not present such safety risks, such as CO2 extracts (carbon dioxide is not flammable, and similar processes are used for decaffeinating coffee) or bubble hash (which uses only cold water). If you have zero interest in ever using hydrocarbons in your facility, putting this agreement into writing may make local officials even more comfortable.
If you do plan to perform hydrocarbon extractions, educating officials on the risks and safety measures is paramount. Most states have extensive regulations on how extraction labs must be set up, which you can email or print out for meetings to demonstrate what you’ll need to comply with. Since the vast majority of butane-related accidents have come from illegal labs with makeshift equipment, show officials the equipment you’ll be using, emphasizing the price and professional quality. The manufacturers may even have fact sheets or other information you can share to demonstrate the safety of their equipment. As you educate officials on your methods and equipment, be sure to keep open lines of communication with the fire chief and building inspector, who will have the most expertise and authority on this aspect of public safety.
Beyond the processing-specific concerns about fires and explosions, all cannabis businesses will have to deal with officials’ concerns about theft. These may be particularly acute for processors since your end products have a much higher value-to-weight ratio than raw cannabis plants. To address these concerns, explain the security requirements in state laws and regulations, and any areas where you are going above and beyond what is mandated. Things like external security cameras and floodlights can both protect your own business and your neighboring community, making a cannabis business a net gain to public safety.
COMMUNITY IMPACT
Once economic development and public safety have been considered, local officials will wonder about the broader community impact of your cannabis business in areas like odor or traffic. This is an easy topic for processors, as they arguably have the smallest impact of any type of cannabis operation.
Processors are generally much smaller than cultivation facilities, and since they’re not full of growing cannabis plants, they also have much less odor to address. Unlike a dispensary or retailer, processors are not open to the public, so town planners won’t need to worry about an influx of traffic. Once you explain how you’ll be operating, local officials should be able to rest easy knowing that to an outside observer, your business will be virtually indistinguishable from a commercial kitchen or light manufacturing facility. If there are still concerns about odor, inform them that modern odor mitigation technology can completely eliminate any odor from leaving your facility.
GOING FURTHER
Once you’ve explained what you’d like to do and how you think your facility would fit into the local community, the conversation isn’t over — it’s just beginning! If the local government needs more time to consider your proposal, then it’s good to keep in close touch and address any additional concerns they have as they arise. If the local officials are already comfortable with your business and are welcoming it into their community (or if your state law doesn’t give local officials the power to stop you from opening up), it’s still great to build that relationship and keep an open dialogue.
Elected officials usually need to know a little bit about everything, but don’t have the bandwidth or in-house expertise to go very deep on most subjects. That’s where you, someone working full-time in the cannabis industry, come in — you almost certainly know more about state laws and regulations than they do, which is a great opportunity for you to serve as a resource. If you hear about changes in the law or proposed bills that could impact their town or city, send over news articles or bill text to help keep them informed.
Once you’re open, it’s always great to offer tours of your facility. This will help officials gain first-hand knowledge of what you actually do, and in municipalities where legal cannabis is new, it can help dispel negative stereotypes and demonstrate how professional you and the rest of the regulated cannabis industry are.
Be sure to stay tuned for future installments in this series, where we will be addressing other cannabis license types. Our next blog will focus on retail.
Member Blog: How to Launch Online Ordering and Dispensary Procedures During COVID-19
The growing coronavirus outbreak in North America has affected businesses of all sizes and sectors, including cannabis dispensaries. Many states have categorized medical dispensaries and retail cannabis stores as essential businesses. But it’s extremely important that any cannabis retailer choosing to stay open during this time take extra precautions to keep their staff and customers safe while still staying compliant with local and emergency laws.
COVID-19 Plan
5 Steps to Get Started With Online Ordering and Delivery Service
Use technology to stay compliant and make your vision come to life
You will have to rely more on retail technology while human interaction and in-person sales are not possible. Online ordering, delivery, line queuing, and no-touch ID verification policies will all require reliable tech. Check with your current POS if they have a workaround to facilitate the new process and integration with an online ordering platform.
Re-design your store layout
Change your store layout to further limit exposure. Take all of the products out of display cases and instead use that space to store fulfilled online orders. Use ropes or another barricade to ensure a six-foot distance between customers and sales counters. Install sneeze guards in front of checkout stations. Use tape or signage to mark where customers should be standing (six feet apart).
Develop operating procedures
These changes will require an update to your operating procedures. You will need a few employees dedicated to packing online orders and another employee on the floor ensuring customers are far enough apart and surfaces are consistently sanitized. If employees are feeling sick, require them to stay home. Some dispensaries are even taking the temperature of employees before every shift.
Train & protect your staff
Be sure to limit the number of customers in the store at a time, so there is ample distance (3-6 feet) between people. Protect your employees and customers with the following equipment:
Touchscreen-friendly gloves for employees
Alcohol swabs for any surface customers touch at the POS
Hand sanitizer
Masks
Lysol or other CDC-approved antibacterial cleaning spray
Faai Steuer is VP of marketing at Cova Software, the fastest-growing cannabis retail POS in North America. An entrepreneur at heart, she has a passion for growing startups and building brands. With 20 years of marketing experience in CPG and retail tech, she lends her knowledge and best practices to help cannabis entrepreneurs in the U.S. and Canada open their first store and grow their business through vital thought leader content.
Cova is an award-winning, seed-to-sale compliant POS with an intuitive design and robust tech platform, making it the most reliable cannabis POS system on the market. Cova helps dispensaries simplify compliance, raise the customer experience bar, and increase revenue through automated compliance capability, express check-out app, and integrated delivery solutions. Learn more at www.covasoftware.com.
NCIA’s Human Resources Committee hopes that you and all your employees are healthy during this outbreak. Many states continue considering cannabis-related business as ‘essential,’ so the HR Committee met to discuss ways NCIA member companies could navigate the impact of the COVID-19 outbreak on our cannabis businesses to help ensure you and employees minimize your risk of spreading and contracting the virus in the workplace.
We are confident that our fellow member companies strive to create a safe and healthy work environment for their employees, but we have brainstormed a few extra precautions cannabis companies may want to consider during this outbreak.
One of the best resources we have seen thus far are the WHO guidelines put in place for workforces.
Some additional best practices we have seen from dispensaries, processing facilities, and cultivation sites are as follows:
Time Login/Logout
Consider using an app so employees can login/logout on their own phones versus signing in/out, using a time punch system, or everyone logging in/out on the same computer system.
Cash Handling
We know that cash handling & computers being used by multiple people is a concern for many employees. Consider purchasing gloves for employees to use. If gloves aren’t available due to medical personnel needing these supplies at this time, offer additional breaks so employees can wash their hands between each transaction with a customer.
Product Packaging Handling
If you’re in a state where customers are allowed to touch the product packaging or sample containers, consider also having gloves available for customers to use. You should also have some form of cleaning wipes available to wipe down packaging, sample containers, etc. after each customer has touched them, along with wiping down cabinet tops between each customer. Seeing as these supplies are sometimes not available at this time, consider putting up a notice stating that in order to keep customers safe during these times, only Store Employees will be handling product packaging.
Safe Distancing
For retail stores, you may want to even consider installing plastic/glass barriers (think similar to what we had back in the medical days or you see at banks) in order to keep employees/customers safe. For Producer/Processer cannabis companies, you should try to keep employees at the 6-foot minimum distance. If you’re not already operating in multiple shifts, you may want to consider doing this as well so you can continue regular production but space out workers so they feel safer in this environment.
Hand Washing
Add additional hand sanitizer stations and consider hiring additional staff and/or appointing one of your current staff members to wipe down all surfaces every 30 minutes.
Thermometers
Consider purchasing thermometers for each employee so they can check their temperature multiple times/day.
Curbside Pickup or Appointment-Based Purchasing
Consider adding to your website a mechanism for customers to pre-order online with curbside pickup, or to schedule an appointment to visit your store. This can help to keep the number of customers in your store at any given time relatively low, while maintaining consistent business throughout the day.
Encourage Delivery
While not all states have delivery available, those that do should try to encourage its use. This will help limit contact between your workers and customers.
We are sure our fellow members will have plenty of other valuable suggestions, so we encourage you to share your best ideas in the comments section of this blog post, on NCIA’s Facebook page, so we can all work together to keep our cannabis community safe during these times.
Member Blog: Protecting Your Cannabis Dispensary During The Coronavirus Outbreak
Amidst the coronavirus outbreak, cannabis dispensaries across the U.S. are posting record sales numbers. Many people are stocking up on what they consider to be the essentials. While we are always excited when our clients see increased sales, we need to emphasize the following:
Do not trade a short-term jump in revenue for the long-term damage you can do to your customers, employees, and community by continuing to operate your business as usual. It is NOT business as usual for most Americans right now, and precautions need to be taken by dispensaries that are continuing to operate.
Be ahead of the curve. Be proactive with the measures we outline below rather than just responding to coronavirus restrictions when you are required to. It shows that you put your customers and staff’s health ahead of profit… Which you should be doing anyway. Being the first in your market to voluntarily adopt these precautions is newsworthy, and you may be rewarded with some media coverage if you spin it right.
Cannabis is a medical necessity for many of your customers, whether they do their actual shopping on the rec or medical side. And your employees are depending on their jobs to continue to support their families during this very difficult time. That’s why we encourage dispensaries to continue to serve their customers and staff but to do everything in their power to reduce the risk of spreading COVID-19. And while there is no way to eliminate the risk entirely while continuing to operate, there are many things you can do to reduce the risk of spreading the virus amongst your staff and customers.
Encourage online ordering
If your dispensary is in a market that offers online ordering, offer incentives to encourage customers to do this. Make sure you send e-blasts and text messages advertising the incentive, and include a pop up on your website promoting it.
Offer curbside pickup or delivery
If you’re in a state that allows it, like Michigan, offer curbside pickup. Many places already offer delivery. Either of these are far better options than allowing people into your store, and should be encouraged with an incentive. If you need to beef up your delivery staff, remember that there are many, many folks in the service industry that are now desperately looking for work as restaurants and bars are closed down. If you’re in a market that allows curbside pickup, delivery, and/or order ahead, then considering shutting down in-store purchases completely.
Limit the number of people in your waiting room and/or store
Social distancing is the mandate across the entire country, so reducing the number of people physically in your dispensary at any one time is critical. Consider a “call-back” service, similar to how many restaurants operate their seating. Customers give you their name and phone number and are added to a list. They can then go wait in their car until you call them to come into the store to make their purchase. It slows down the customer flow but will drastically reduce the number of people in close proximity.
Require hand-sanitizing before entering the store
This one is simple! In most states, dispensaries have the right to refuse service to anyone for any reason. Have an employee stationed at the door and require customers to apply hand-sanitizer before entering the premises. Refuse service to anyone that won’t use the hand-sanitizer.
Rotate staff on “round-the-clock” cleaning
Every business that remains open should be conducting a deep cleaning multiple times per day. Critical to that is sterilizing the “problem spots” that are most commonly touched by customers and staff inside your store. Light switches, door handles, credit card terminals, ATM buttons, and computer keyboards. If you have a location and staff large enough to support it, then consider round-the-clock cleaning of the interior.
Shut down your store
Drastic times call for drastic measures.Pro-actively closing down your cannabis dispensary even before it’s required by law may be the best option for some business owners. In certain markets, it may be the only responsible choice. Consider the fallout and permanent damage to your business if a customer or employee is infected, gets seriously ill, or dies because of an interaction they had in your store.
It’s important to keep in mind that this jump in sales and/or complete closure are only temporary. Regardless of what you do with your dispensary, consider the long-term implications of your business choices.
When things do return to normal, how will your stakeholders view your actions or inactions?
If you must close your dispensary, keep your community close and engaged. Consider offering formal and informal virtual events, merch giveaways, contests, or educational webinars. There are lots of streaming and collaboration tools available, including many that are free or nearly free.
Johnathan McFarlane is the Director of Strategy at Hybrid Marketing Co. Hybrid Marketing Co is a Denver-based branding and marketing agency that specializes in building custom strategies that supercharge growth and drive revenue. Working with brands and businesses across the U.S. and Canada, Hybrid’s partners run the full-spectrum of the cannabis world including dispensaries, manufacturers, cultivators, and ancillary businesses. Visithybridmarketingco.comto learn more about theHybridapproach.
We have plans in place with several of our clients to maintain their brand visibility if a total shutdown is necessary. We are offering completely free continuity-planning sessions for any cannabis business that is worried about their future.
Member Blog: Attracting Investors Requires Compliance And Scalability
by Frank Nisenbaum, Vice President of ERP Sales, c2b teknologies
More new cannabis entrepreneurs are trying to carve out space in the industry, and as the market continues to expand, so are cannabis investors.
This comes as no surprise. Cannabis investors have more predictable ways to invest in cannabis companies since marijuana can now be found in everything from beverages to beauty creams.
But the needed operating capital coming from these investors isn’t being thrown at new upstarts riding on nothing more than the dream of success in the legal marijuana marketplace. Cannabis investors want to see the people and businesses into which they put capital have a strong commitment to their industry and a dedication to their processes. Of course, this entails strict adherence to local, state and federal regulations for compliance initiatives, but investors also want to see a solid foundation for expansion and scalability in place.
Scalability
Consider your projected growth over the next few years, what are you doing to meet it? Investors want to see more than forward-thinking ideas, they want to see the initiatives you’ve put in motion to meet your projections. Are you upgrading suppliers, creating new products, or even better, adding new locations?
Investors need to believe that organizational leadership has a sound plan for scalability in place. More importantly, as you expand into new markets and grow your product offerings, you have invested in the framework and infrastructure in order to grow their operation in line with your business plan.
Regulation and Compliance
Among the more burdensome compliance issues for cannabis operators is the need to track the entire lifecycle of cannabis products from seed to sale. You need to be able to account for every step in the lifecycle of your cannabis plants and be able to provide this information to regulatory agencies at a moment’s notice.
Adding to the complexity of tracking the plant, you’ll need tracking for each employee who works with the plant. These seemingly minor details can derail the best intentions, so demonstrating success surrounding mandated quality assurance testing at key points in the plants’ development will get the attention of would-be investors.
Multiple Jurisdictions for Added Complexity
Compliance is even harder to achieve due to the multiple bodies which have jurisdiction. Local, state, and federal agencies all jockey for partial control of regulatory measures placed upon your cannabusiness.
Some of the federal agencies involved in the regulation of legal cannabis plants include, but are not limited to:
United States Department of Justice
Environmental Protection Agency
Internal Revenue Service
Each state in the U.S. has its own regulatory body for cannabis operations. Examples include:
Department of Public Health
Department of Food and Agriculture
Department of Fish and Wildlife
Department of Pesticide Regulation
Alaska Marijuana Control Board
California Bureau of Cannabis Control
Colorado Department of Revenue Enforcement Division Marijuana Enforcement
Illinois Department of Financial and Professional Regulation, Cannabis Regulation
Maryland Medical Cannabis Commission
Massachusetts Cannabis Control Commission
Michigan Department of Licensing and Regulatory Affairs Bureau of Marijuana Regulation
Nevada Department of Taxation
Oregon Liquor Control Commission
Washington State Liquor and Cannabis Board
The full list of regulatory bodies is much longer. Compliance concerns are not exclusive to this industry, but as a cannabis operator, you face a tremendous number of regulatory bodies and each of these agencies has specific requirements to adhere to in order to stay compliant and stay in business.
As cannabis legalization becomes more widespread, each jurisdiction develops its own guidelines surrounding cannabis, from seed to sale. Unfortunately, this often creates confusion and leaves cannabis compliance open to interpretations. Without the systems in place to track and document multiple aspects of the cannabis industry, you’re at risk for considerable fines for non-compliance.
How to Present Your Cannabusiness
If you’re seeking capital from cannabis investors, understand that building a cannabusiness for compliance and scalability is nearly impossible without purpose-built technology. To that end, cannabis operations software is an invaluable platform for your cannabusiness when looking to attract investors.
Beyond your core business functions, investors consider the systems in place which support your cannabusiness. By planning ahead and incorporating a cannabis operations solution before you seek outside funding, you’re able to enjoy the fruits of efficiency, but you’re also able to prove it.
Cannabis operations software features tools for inventory tracking, asset management, and personnel scheduling and management, which means that the regulatory guidelines with which a cannabusiness must remain compliant are areas intrinsically handled by the platform. These systems excel at tracking inventory and allocating resources while maintaining clear audit trails, which is extremely important if a regulatory agency knocks on your door.
Cannabis operations software gives you and potential investors a unified view of your entire operation by bringing all operational data under the same umbrella, standardizing the data reporting and making it available for easy cross-referencing. By collecting all data into a single pipeline, a best-in-class solution gives everyone in the process the tools and insights necessary to make the right decision.
Vice President of ERP Sales, Frank Nisemboum,is a trusted advisor at c2b teknologies who has guided organizations of all sizes enabling them to establish a technology presence and expand their business through technology. His proven ability to analyze the current and future plans of a company and work with team members to subsequently bring technology solutions to the organization result in improved processes and controls that assure continued growth and profitability.
Frank has worked in the ERP and CRM software selection, sales and consulting industry for almost 25 years. His strong ability to understand, interpret and match the needs of an organization to the right solution make him an asset to all of his clients.
c2b teknologies integration and engineering experts have partnered with leading cannabis industry experts to develop a software solution that provides a complete cannabis operations system. The best-in-class solution not only handles tracking of seed-to-sale activities but encompasses your entire cannabis operations with compliance needs handles along the way. Our passion for solving problems drives us to deliver innovative solutions for everyone we work with. Visit c2btek.com for more information.
Committee Blog: California Social Consumption Leads the Way
It was January 28, 2020: It’s a full house at the Berkeley City Council meeting, with comprehensive changes to the city’s marijuana regulations on tonight’s agenda. The biggest issue, with supporters of both sides attending, is the vote to consider legalizing cannabis consumption at specially designated licensed dispensaries.
The proposal to allow smoking, vaporizing, and consumption of edible goods is supported on one side by a phalanx of marijuana advocates and dispensary operators, and on the other side, it’s the city Health Department and Berkeley’s famously NIMBY neighbors. This conflict runs deep; cannabis users want dignified, legal facilities where they can gather and use marijuana, and several dispensary neighbors and the health department want this idea squashed, full stop.
Fact is, people have long gathered together to share cannabis, as shown by an extensive recorded history of use. This spans from ancient Sumerians, who built huts and vaporized cannabis on burning coals inside, to underground marijuana smoke-ins in the 70s and 80s, to now, where cities are licensing legal cannabis consumption facilities for adults.
California is helping lead the United States consumption lounge movement. For example, California’s Bureau of Cannabis Control (BCC) regulations (Section 5025) explicitly contemplate the possibility of consumption lounges, stating that “this section shall not be interpreted to prohibit cannabis consumption on the premises of a licensed retailer or licensed microbusiness authorized to engage in retail sales,” as long as they are locally licensed and approved.
The state law also created Temporary Cannabis Event Licenses, where onsite consumption is allowed at festivals like the High Times Cannabis Cup and the Emerald Cup. Yes, with city or county and state permission, it is possible to throw your cannabis dream event, but there are a limited number of locations in only a handful of places that allow these uses (including my hometown, Oakland). This makes it hard to get these licenses, and the costly and complicated regulations are hard to meet once you have one. Anyone hosting a Temporary Cannabis Event can expect to interact closely with the BCC regulators, who will surely attend to ensure compliance.
Cannabis consumption facilities are nothing new in California. They have long existed, ever since Dennis Peron opened his first dispensary in San Francisco in the early-1990s. His famous location on Market Street was five stories high, literally, as each floor contained tables, couches, and chairs where patrons could hang out and consume cannabis. When the Compassionate Use Act of 1996 passed, collective dispensaries started opening across the state, despite federal illegality and the occasional raid because of it (Dennis was raided by the feds and forced to close in 1998).
I opened my first cannabis consumption lounge at Berkeley Patients Group in 1999, which was long before it was legal to do so. This was under the cover of tolerance provided by Proposition 215; after all, not even dispensaries were actually made legal by this groundbreaking initiative. That didn’t happen until the state legislature passed the aptly named SB 420 in [year], after which most cities grandfathered in their existing cannabis dispensaries. (Not all, though. Some municipalities used this transition as an excuse to ban dispensaries, or to close existing ones, during long periods of regulatory contemplation.) Berkeley allowed onsite consumption until the early 2010s, when the local regulatory processes changed. Hence, the City Council vote tonight to decide the fate of onsite consumption here once again.
Now, I own Magnolia Wellness dispensary in Oakland, where local regulations have allowed cannabis consumption at specifically licensed dispensaries since 2017. Magnolia’s Dab Bar and Vapor Lounge was the first legal consumption lounge in the East Bay. We have café style tables, a gorgeous full, copper top bar, glass dab rigs with e-nails, Vapexhale and Volcano vaporizers, and a variety of tasting events where people can try samples. Unfortunately, Oakland’s dispensary law only allows vaping, edibles, and topicals, limiting smoking to additionally permitted outdoor patios, none of which currently exist. (Full disclosure: I also co-own Hi Fidelity dispensary in Berkeley, too.)
San Francisco, on the other hand, has more than a dozen shops where cannabis smoking, vaping, and edibles consumption are all allowed. SPARC, one of the first lounges in the city, has tasteful tables and chairs right in the main dispensary, where volcano vaporizers can be used onsite. Vapor Room, a few blocks away, is a smaller neighborhood joint, with a handful of seats for people to sit and enjoy smoking or vaping. According to owner Martin Olive, it was a costly HVAC system, at a near six-figure expense, that allowed his facility to host its cannabis smoking patrons. Moe Greens, the latest licensed lounge to open in the city, took four long years to get licensed, but is now a beautiful facility, with cushy booths for smoking and a counter service dab bar with top-of-the-line e-nails and dab rigs for patrons to use.
West Hollywood is the biggest news on the California consumption lounge scene, as the city recently licensed 16 facilities for on-site consumption. Half of these facilities will allow retail sales and consumption, while the others are allowed to sell only single-use items, designed to be consumed café style, while patrons are on-site. This plan has been controversial, though, because in issuing these licenses, the city took permits away from several of the long-existing dispensaries, re-issuing them to new operators. The ensuing lawsuits and legal battles will surely play out through 2020.
There is another big problem in West Hollywood: the state law does not match up with their rather forward-looking ideas for cannabis cafes. For example, cannabis cannot be blended into café food and served on the spot, as the city imagined when creating this law; Cannabis can only be sold pre-packaged and tested, per BCC regulations. Furthermore, state-licensed cannabis businesses are not allowed to sell anything but cannabis products (and a shortlist of branded items like mugs, lighters, and pipes). In other words, they can’t sell non-infused foods or beverages like coffee, soda, or tea (or, since we are talking West Hollywood, kombucha and smoothies).
Until state law changes, the plan is stuck in limbo, with facilities looking for creative workarounds to allow food and beverage service.
So, despite the West Hollywood ordinance passing in late 2018, only one facility has opened there, and even this has hit roadblocks. In fact, they recently re-branded after only a short time in business, from Lowell’s Café to the Cannabis Café, after a regulatory crackdown hit the Lowell’s brand hard. It remains to be seen when the other 15 cannabis lounges will open there.
Back in Berkeley, staff from the Health, Planning, Police and Economic development offices joined forces with the Berkeley Cannabis Commission to present the City Council with a comprehensive plan to update the city’s cannabis ordinance. Diverging opinions meant that the agenda contained competing proposals on several of the ten proposed ordinance changes, with the Cannabis Commission leading efforts to create progressive changes, and the Health Commission stuck on the old trope, “we need more research.”
Elizabeth Greene, City of Berkeley Senior Planner, explained to Council that these proposals have been in development since 2017, with the goal of expanding the rules to protect the entire cannabis supply chain, from seed to sale. This includes development of two new license types, cannabis consumption lounges and non-retail dispensary licenses.
“State law allows for consumption lounges as part of a retail license, as these are the only facilities open to the public,” Greene says. “Currently, consumption lounges are not permitted in the City of Berkeley.” Her presentation made it clear that city staff recommended cannabis lounges be permitted, despite the worries of the Health Commission, whose representative commented that “legalization is new,” despite that cannabis sales have been regulated by the city for around 20 years.
Long time senior advocate, and ICANN dispensary owner, Sue Taylor spoke eloquently in support of the proposal to allow lounges. “Seniors need a place to learn about cannabis, how to use it and dosing, and you could do that in a vape lounge. I can’t go into their homes, but I can provide this education at a lounge,” says Taylor. “It’s not like a bar; at a bar, you just get sicker. A vape lounge helps people.”
Ultimately, the City Council agreed. By 11:30 PM, Mayor Jesse Arreguín called the vote, with the Council unanimously approving the entire proposal. Supporters filled the room with cheers, and long-time advocates like myself reflected on the fact that, yes, hard work and determination do pay off. Together, we may just end prohibition, once and for all — and have some fun, too.
Member Blog: The Days Of Breaking Bad Are Over… Sort Of
With the expanding decriminalization of marijuana and hemp and increasing market demand for cannabis concentrates, more people are assuming the role of pseudo-chemists or lab technicians without formal training. People no longer need to ‘break bad’ by extracting and processing cannabis in their garages, kitchens, or old RVs. Commercial laboratory spaces are becoming more common. Unfortunately, without formal laboratory training, appropriate laboratory safety habits are often not established. The ‘whatever-it-takes’ mentality plus some questionable lab techniques add up to be quite dangerous in a pursuit for the ‘good stuff.’
Solvents used for extraction, though often odorous, are clear and colorless and therefore invisible in vapor form. They are often handled in the lab like water. For those manufacturing cannabis concentrates for retail, the focus has been on possible regulations set by the FDA, but these new, small businesses are also under the jurisdiction of OSHA. While studying industrial hygiene standards written by OSHA, most safety practices seem like common sense, but only after the chemical hazards are recognized.
For more in-depth safety standards and fire codes for non-glassware or non-laboratory-scale (read: industrial-scale) extraction and processing equipment, ANSI/CAN/ UL/ULC 1389 or NFPA 1 Chapter 38 are great starting points.
Most of What We Breathe Is Invisible
As mentioned above, the solvents used to extract and process cannabis are either gases compressed into their liquid form or clear, colorless organic liquids. [Note: here ‘Organic’ means a substance that contains carbon, not the label you find at your grocery store]. These solvents include ethanol, propane, butane, pentane, hexane, isopropyl alcohol, methanol, acetonitrile, and other less common ones.
The danger of these solvents is that even when they are cold they vaporize easily enough for inhalation, some without harsh odors as a warning. Opening containers, glassware, or vessels without proper ventilation or PPE (personal protective equipment) exposes laboratory workers over a short time and many times a day. This exposure can occur during simple acts of pouring, transferring, heating, drying, mixing, or weighing on a balance. While many of the solvents used have a GRAS designation (generally regarded as safe) by the FDA, this label is used for food additives with the intention of ingestion, not inhalation. There are a few research studies on the toxicological effects of breathing in these VOCs (volatile organic compounds) in a short period of time. However, chronic studies of consistent exposure for years are rare. NIOSH, or the National Institute for Occupational Safety and Health, provides a decent summary of worker exposure studies for common industrial chemicals. Some of which can cause respiratory effects that evolve into allergies or even neurological damage. Unfortunately, most of the toxicological literature available can be decades old.
Yet laboratory technicians are not the only ones exposing themselves to a potential hazard. Working onlarge-scale extraction equipment, workers come into contact with large plums of high concentrated VOC when opening extraction tanks and vessels. This process happens many times a day when workers reach in to load and unload bags of cannabis biomass. Exposure also occurs through skin contact, as many of these solvents absorb into uncovered skin.
Gases under pressure are yet another non-chemical hazard. Compressed gas tank cylinders need to be transported and stored safely to keep them from falling over and crushing limbs. If a cylinder valve breaks off, they turn into a projectile missile, or they become damaged enough to rupture and release thousands of liters of suffocating gas within minutes or seconds.
Carbon dioxide solid in the form of ‘dry ice’ is often used in large amounts for cold traps in cannabis oil processing. Dry ice easily sublimes, where the solid form converts directly into a gas. Gaseous carbon dioxide is much heavier than general air and can easily displace oxygen in closed-off storage areas. Oxygen sensors, proper ventilation, and limited exposure help to avoid hazardous side-effects of oxygen deprivation.
The Tools to Keep Everyone Safe Are Out There
Any workplace that handles or stores chemicals should have the corresponding Safety Data Sheets (SDS) of the chemical. These are usually obtained from the manufacturer of the chemical, but there are also free databases online for easy access. All SDS’s should be available for easy access to workers who handle or are in an environment that uses chemicals.
OSHA also provides its own chemical database system that lists the physical properties of chemicals as well as their permissible exposure limits (PELs) and short-term exposure limits (STELs). These limits are used for compliance purposes, but in short, they provide a rough guide for how dangerous it is to breathe in some of these chemicals. Note that OSHA’s exposure limit guidelines may be outdated as many have been written 50 years ago when OSHA had been founded! For the latest guidelines visit NIOSH and ACGIH. These organizations/agencies keep up with current toxicological research and provide more up-to-date exposure limits that are sometimes significantly lower. Air sampling of your workers can always be done through an AIHA-accredited laboratory that will send out certified industrial hygienist to sample during a work shift.
Any industrial hygienist will tell you that the use of PPE is the last line of defense against chemical hazards and exposure. Engineering controls like proper room ventilation and local ventilation, including fume hoods, exhaust hoods, and elephant hoses, are some of the best ways to avoid exposure through inhalation. Fume hoods are almost always found in laboratory spaces; however, it’s easy to form bad habits when using them. For example, storing large objects and numerous chemical bottles inside the hood significantly blocks the proper airflow that needs to occur to make sure any vapor is properly ventilated. The sash (or glass door) should always be kept as low as possible and especially below the chin of the person working at the hood. Newer models of fume hoods have airflow monitoring devices and alarms systems to make sure the face velocity of the hood is between 80 and 120 fpm (feet/min).
Finally, PPE that fits comfortably, doesn’t interfere with the flow of work, and is rated properly for the hazards of the chemicals used, is a definite requirement when working with chemicals even when other controls are in place.
When effective local ventilation is not available for situations where a large plume of solvent vapor is expected (e.g., opening an extraction vessel to remove biomass bags), a full-face or half-face respirator is the best option to prevent exposure.
Respirators have specific cartridges that stop the inhalation of certain hazards. VOC cartridges are required to keep out the organic solvents most used. However, respirators will only protect as they meant to be if they are fit-tested, and properly cleaned and stored.
Last, eye protection via safety glasses is an obvious and thankfully well-practiced habit even in workplaces without chemicals. Unfortunately, the commonsense practice of making sure workers are wearing long pants, shirts with sleeves or lab coats, and closed-toe shoes (preferably non-absorbent) is more difficult to enforce if the location is in warmer climates.
All that said, for those who are dabbling in the new, exciting world of cannabis extraction, let’s hope they are following Walter White’s lead and suit up before they get to work.
With more than 15 years of experience working and teaching in chemistry laboratories, Meghan McCormick, Ph.D. is the Senior Chemist and a part of the Herban Legends team at Spektrum Cannabis Technologies, an innovative, fit-for-purpose engineering services company. Meghan serves as the resident expert in the chemical processes that occur during cannabis extraction and post-processing and has helped design and test the Spektrum industrial-scale cannabis processing modules. Meghan worked as a Senior Chemist for the OSHA Salt Lake Technical Center for 3 years. She received her Ph.D. in Inorganic Chemistry at Indiana University studying organometallic electrocatalysis and anti-cancer prodrug activation mechanisms.
Member Blog: What’s new in Cannabis Compensation – CannaComp Update for 2020
By Matt Finkelstein, BlueFire Cannabis by FutureSense
Opening up the new year, NCIA and FutureSense LLC released results for the inaugural Cannabis Compensation Study. The collaborative effort sought to uncover trends in compensation and establish benchmark data, creating a singular industry-wide resource for all to use. With the initial report released, we have some exciting updates to share for the coming year’s development.
Culture Shift
The cannabis industry at-large has been transitioning from the black/traditional/legacy market to a legal one and understandably still maintains tinges of a culture of secrecy. Emerging markets also tend to be initially trepidatious about sharing critical business info, so this is especially prevalent in this line of work.
As the market expands and evolves, the need to understand trends and have accurate data supporting it is becoming more and more important. Cannabis companies can spend between 65-70% of their expenses on payroll. Being even 5% on- or off-the-mark can mean make-or-break in this highly volatile industry.
More and more cannabis companies are realizing the value of this type of market data. It is useful for establishing competitive compensation packages, setting growth trajectories, and managing tight budgets. To establish this data and reap the benefits of its findings, companies are becoming more comfortable with some transparency via an independent 3rd party service provider.
Expertise, Confidentiality, and Anonymity
FutureSense LLC brings over 30 years of compensation expertise across multiple industries. We worked with NCIA to establish a confidential and compliant salary survey that follows all Department of Justice and Department of Labor regulations to protect and ensure anonymity.
Our efforts producing the Cannabis Compensation Survey in 2019 laid out a solid foundation to continue to grow and expand the project. A couple of the key takeaways from the survey include:
Nearly 50 participating companies
Reportable data for 80+ positions in 12 job families
More than 100 additional job title benchmarks established
Growth and Development in 2020 and Beyond
In 2020, we are expanding the project by opening enrollment for submissions throughout the year, and by bringing in supporting partners such as recruiting firms and cannabis payroll applications.
Expanding participation will allow us to present data via demographic breakouts such as:
Industry sector
Location/region
Size (employee count, revenue, etc.)
We will also collect and report on benefits, incentives, sales, and equity compensation. We believe this will provide participating companies with an even deeper perspective into their own business practices and needs.
New Names
FutureSense LLC has recently established a cannabis-specific brand to support our on-going work and dedication to this industry. We brought on BlueFireHR – a human resources services firm with years of experience serving cannabis clients and other industries – and formed BlueFire Cannabis by FutureSense. BlueFire Cannabis will now be the main project partner alongside NCIA for the Cannabis Compensation Study. We’re excited to announce our other supporting partners in the very near future.
Sign-Up!
All cannabis companies with 10 or more individuals are encouraged to participate. We also welcome inquiries from other professional service firms or ancillary services about opportunities for supporting partnership.
In the cannabis industry, it is critical for cultivators to track crops throughout their production. Traceability benefits and protects cannabis companies, state governments, and the consumer. Without proper tracking systems in place, it would be impossible for states to tax businesses appropriately, it would be dangerous for consumers, and the burden of risk is placed almost entirely on the operator.
To combat this risk, states have mandated certain systems to track cannabis products called track-and-trace or seed-to-sale systems. There are a few leaders in the space – Metrc, MJ Freeway, and BioTrack. All three provide tracking software solutions for operators and contract their software to state governments.
These systems are designed for regulators, not cultivators. Growers instead have to purchase a second system to manage their operation. We’ve highlighted why it’s important for growers to implement a cultivation management platform (CMP) in the past, but it’s important to note how difficult it is to implement a CMP in the current market.
Growers are second class citizens in the cannabis world – and that’s a major failure of the industry right now. Growers are the backbone of this industry and we, as innovators, should be making it as easy as possible to track products through the supply chain. This is not just because it’s a good business decision or because it makes it easier for governments to tax products, but because it’s good for the industry. It’s good for the consumer. It’s the right thing to do.
However, the industry is disconnected. For Metrc required states, it takes weeks before you will hear from the company regarding connectivity and months before integration can happen. The regulatory systems all tout their API as a way for other software companies to integrate into their systems, but in reality, it’s not that simple.
Here’s what that means for growers. Growers are mandated to use regulatory systems to record weights and plant IDs (as well as other data) for the benefit of the regulator and the chosen software provider, but they cannot use those tools to their advantage. Instead, they have to choose to purchase a third-party system that may or may not be able to integrate into the regulatory system or they are forced to purchase the cultivation software from the same regulatory software provider, which again, may or may not fulfill their needs. If the grower chooses a system that they like but cannot integrate, it means they have to enter information twice. This is a costly burden and often leads to unnecessary data entry errors.
Most of the regulatory systems on the market today are ill-equipped to provide enterprise-ready software in the first place, but it’s not the fault of those software providers. This is a new industry. Most of the software companies on the market are undercapitalized and many are outsourcing development as a result. This leads to serious security issues and system outages, like we’ve seen in Washington and Pennsylvania.
A better way to handle the growth of this industry would be to regulate in a connected and open environment. Instead of mandating a particular software solution, mandate traceability and let the grower decide how to meet that requirement.
For example, under the Controlled Substance Act, the DEA requires certain reporting requirements and these are submitted to the DEA database ARCOS (Automated Reports and Consolidated Ordering System). However, a company could choose to use Microsoft NAV for its management solution and sync to ARCOS for submittal of reports.
In food, the USDA governs food safety requirements under FSMA (the Food Safety Modernization Act). FSMA mandates food producers create and maintain a food safety plan, however it does not require a specific format or content. There is guidance for how to create a plan, but FSMA also allows for flexibility in operations and there is trust that operators will create a plan that is right for their operation.
This idea of trust in the grower and a unified framework of requirements is missing in the cannabis industry. Some software providers have tried to close that gap, but relying on mandatory software and changes on a state-by-state basis will only hurt the industry. We need to enable growers to scale efficiently and legally. We should support growers and provide tools that make it easier for them to implement new regulatory requirements, not harder. Our industry should consider opening up the software market for regulatory reporting and at a minimum should encourage data integrations, not limit them.
Allison Kopf is the Founder and CEO of Artemis, the market-leading Cultivation Management Platform serving the fruit, vegetable, floriculture, cannabis, and hemp industries. Artemis won the highly coveted Disrupt Cup at TechCrunch Disrupt in San Francisco. Kopf was recently named one of Forbes 2019 30 Under 30 as well as one of New York Business Journal’s 2019 “Women of Influence.” Allison is an Investment Partner at XFactor Ventures and serves on the boards of Cornell University’s Controlled Environment Agriculture program and Santa Clara University’s College of Arts and Sciences. She is a Techstars Farm to Fork mentor and holds a BS in Physics from Santa Clara University.
Artemis provides a world-class Cultivation Management Platform that enables owners and managers of enterprise horticulture facilities to drive efficiency, profits, and growth while ensuring security and regulatory compliance. With Artemis, users can manage workflow and daily tasks, register crop batches, trace food safety issues, manage workers, and leverage data insights to increase workforce efficiency and crop productivity. Read our software buyer’s guide for more information.
Committee Blog: Cannabis Banking – Regulatory Outlook and Effective Compliance
During a recent webinar, we polled the audience on their current positions on offering financial services – traditional financial services – to direct marijuana-related businesses (MRBs). The results, as you might imagine, were mixed but we identified one common theme: The vast majority have taken action to address cannabis banking issues. This has been the theme we’ve been championing for years. The dichotomy between state and federal cannabis laws has placed our financial institutions in a precarious position: Bank the cannabis industry, be first to the market in doing so, create a non-traditional revenue stream and help to solve public safety and other logistical issues by solving the all-cash conundrum OR continue to watch from the periphery as others take the leap?
We see the number of financial institutions – banks and credit unions – that offer financial services to cannabis businesses expanding, but not to the level suggested by FinCEN SAR data. There remains a critical need for financial services within the cannabis industry.
Why the hesitancy in tackling this issue?
The current regulatory environment is a critical factor. As it stands, our industry is relying primarily upon the FinCEN guidelines to offer financial services to cannabis-related businesses. These guidelines, coupled with a surge of proposed legislation and a regulatory perspective on risk-based risk-taking, have allowed financial institutions across the country to effectively provide financial services to cannabis-related businesses. There is a key term we’ve been using: cannabis-related businesses. Within this term, we encompass direct and indirect marijuana-related businesses, hemp, and CBD entities. The majority of those polled feel more comfortable with hemp and CBD entities primarily due to the passage of the 2018 Farm Bill. Getting into the intricacies of how the Farm Bill and the USDA’s resulting interim final rule have added a layer of complexity to banking hemp and CBD businesses is more than we can cover in this blog post. Let’s focus instead on those providing financial services to direct MRBs, those that are state-legal, licensed cultivators, extractors, and dispensaries.
It IS possible to actively bank direct MRBs, to offer stable banking services that bring the cash off the street and provide a means for these businesses to operate more effectively and efficiently, and surely in a less costly manner than an all-cash business. The regulators are not criticizing financial institutions for providing financial services to MRBs; they review these services as they would any higher-risk, complex activity. When an institution takes on too much too fast or does not have sufficient controls to know whether it actually has a higher risk or complex business concentration within its customer base, the regulators will be critical… as they should be.
So, what are they looking for?
This goes back to the theme we mentioned: Financial institutions actively addressing cannabis banking issues.
Every financial institution, whether it intends to bank direct or indirect MRBs, hemp or CBD should have a Cannabis Banking Program that assesses the inherent risks of doing so, speaks to the controls necessary to effectively manage those risks, and determine whether they are well-positioned, or have a risk-appetite for, providing financial services to the cannabis industry. Conversely, if a financial institution that has no appetite for, or does not reflect sufficient regulatory health to bank cannabis, it must establish effective controls to ensure that position can be maintained.
But, this post is about empowerment. It is about speaking to the regulatory environment in which we find ourselves. It is about providing the perspective that banking marijuana, hemp and CBD CAN be done effectively, safely and soundly. Yes, there is a significant level of infrastructure needed to do so. Yes, it does come with the need for ongoing, strong risk management and control enforcement. Yes, it can be a bit scary. By establishing a Cannabis Banking Program, comprised of a comprehensive risk assessment that drives an equally comprehensive policy, a financial institution can provide financial services across the spectrum of marijuana, hemp and CBD, and undergo regulatory scrutiny with confidence. Moreover, such a program has become a regulatory expectation to support a financial institution’s cannabis position. This is also not a program where a financial institution will set it and forget it. The risk assessment and policy must remain dynamic as legislation evolves, as regulatory perspective changes, and as a financial institution’s position or outlook may shift.
This is an industry that has already proven prolific. This is a time that will be ingrained within our nation’s history. Let’s be remembered as those who championed the issues, established the country’s infrastructure, and set the standard for those who follow.
As a former Federal bank regulator and seasoned consultant, Angela’s knowledge of regulatory compliance, risk management and investment advisory services has established her reputation as a leading resource within the financial consulting industry, spanning consumer protection and anti-money laundering statutes, fraud and cannabis banking issues.
Angela is the Managing Partner and Co-Founder of Sterling Compliance, LLC, a consumer compliance consulting firm based out of Pittsburgh, Pennsylvania. Sterling specializes in consumer protection and anti-money laundering compliance within the community banking industry and enjoys a significant online presence with a client base spanning the coasts.
In December 2019, Angela joined Integrated Compliance Solutions, LLC (ICS) upon the ICS acquisition of Sterling Compliance as an independent operating subsidiary. Angela oversees the firm’s Compliance Strategies division, of which cannabis banking is a significant component. ICS is a financial technology, banking compliance and innovative payments solution provider helping financial institutions with complex solutions. In joining the ICS team, Angela has continued the firm’s mission of bringing its complete SEED-TO-BANK™ solution to financial institutions and cannabis-related businesses throughout the United States, and has expanded the firm’s industry engagement as a well-respected authority on the regulatory and compliance issues surrounding cannabis banking.
Member Blog: Job Description Templates to Build Your Dispensary Team
When it comes to opening a successful marijuana dispensary or cannabis retail store, the importance of building a strong, trustworthy team simply cannot be understated. Depending on the rules of your market, you may even be required to have certain positions filled before applying for a license. Either way, the people you hire — from front-line staff to shift leaders to managers — will ultimately make or break your operation.
If you’re new to the industry, you may be wondering just exactly what positions you’ll need to fill. Cannabis does share some similarities with other traditional retail industries; you’ll need customer service reps (often referred to as “budtenders”) as well as shift supervisors and general managers. But there are some significant differences between cannabis retail and other industries, mainly with regard to compliance, and you’ll see these reflected in some of the critical positions listed below.
Read on to discover a few of the most critical positions you’ll need to hire for in your cannabis dispensary — plus how you can get your hands on our free dispensary job templates guide!
Crucial Cannabis Retail Roles
Let’s take a quick look at some of the more critical cannabis-specific positions every dispensary needs.
Compliance Manager
There’s one simple principle that cannabis business owners live by: no license equals no business. That’s why it’s imperative that you have a manager on your team whose sole function is to ensure that every aspect of your operation remains compliant at all times.
Typical compliance manager duties include conducting regular audits of dispensary operations, investigating and resolving compliance concerns, keeping up with regulatory changes and ensuring understanding and adherence throughout the company, and liaising with regulatory and law enforcement agencies.
Inventory Manager
While inventory managers are also found in traditional retail operations, this role is particularly important in cannabis due to inventory compliance regulations. The inventory manager is responsible for overseeing product replenishment, conducting inventory audits, and ensuring all counts and reconciliations are correct and compliant.
Security Manager
Security is another major aspect of dispensary operations that is governed by regulation. Your local and state or provincial laws will spell out exactly what security measures you’re required to take, but at the very least, you’ll want a security manager on your team to help advise and implement security best practices and protocols.
Additional responsibilities of the security manager include compiling security reports, recruiting qualified security agents or guards, and ensuring all security systems and equipment are maintained and operable according to regulation.
Why Your Cannabis Job Descriptions Matter
The truth is, anyone can throw up a job ad online and attract some interest. But you don’t want just anybody working at your dispensary — you want the right people who understand the importance of the role they’re seeking and will do their best every day to uplift your operation.
It’s also important to set standards and clear expectations for your employees from the outset. A well-thought-out job description shows that you care about the role you’re seeking to fill and take the job seriously — just as you would want from any candidate who responds to the ad.
Finally, a thorough and comprehensive job posting that lays out all the responsibilities of the role makes it easier to hold team members accountable in their job performance. You don’t want to get caught with the old “that’s not in my job description” excuse — so cover your bases by making sure you lay out all the expectations of every position from the get-go.
Download Your Free Dispensary Job Description Templates
At Cova, we’ve helped hundreds of dispensary and cannabis retail operations across the U.S. and Canada maximize their operations. Plus, our parent company has 20+ years of retail tech experience under its belt — which means we know a thing or two about retail best practices.
We’ve compiled these dispensary job description templates to help you find the absolute best candidates for your cannabis store.
The California Statewide Utility Codes and Standards Program is considering the addition of energy efficiency standards to its Title 24, Part 6 Building Code for Controlled Environment Horticulture (CEH) facilities.
Currently, there are no existing energy efficiency standards in Title 24, Part 6 for CEH facilities and the Statewide Codes and Standards Enhancement (CASE) Team is actively working to help code-setting bodies develop building energy codes that not only save electricity but are practical and cost-effective.
Right now, the CEH CASE Team is in the process of gathering data on the types of equipment that are commonly used in cultivation facilities.
California growers, the Statewide CASE Team needs your help!
Please take a few minutes to tell them what equipment you currently use by participating in a short 10-minute phone interview. Involvement from stakeholders is a critical part of the energy codes and standards development process. It is important to get direct input from California growers so proposed codes can achieve significant statewide energy savings without placing an unreasonable burden on you or the industry. This is the first time the Statewide CASE Team is analyzing CEH facilities and we would like California growers to be a part of this historic and monumental process.
Any information you share will be considered confidential and will not be shared outside the Statewide CASE Team. They understand privacy is important to growers and will not publish or share your name for any reason.
If you would like to participate, please email joe@CultivateEO.com with the subject line ‘CA Grower Survey’ and include your first name, phone number and the best time to receive a call in the body of the email.
This program is funded, in part, by California utility customers and administered by Pacific Gas and Electric Company, Southern California Edison, Southern California Gas Company, San Diego Gas & Electric Company, Los Angeles Department of Water and, and Sacramento Municipal Utility District Power under the auspices of the California Public Utilities Commission. The Statewide CASE Team will provide the Energy Commission with the technical and cost-effectiveness information required to make informed judgments on proposed standards for promising energy efficiency design practices and technologies in controlled environment horticulture facilities. For more information about this process, visit:www.title24stakeholders.com.
Thank you for partnering with us to help build an efficient and sustainable horticulture industry in California!
Joe Sullivan is the technical director and co-founder of Cultivate Energy Optimization, an energy management firm that works exclusively with utilities and governments to design and implement energy management programs specifically for the controlled environment agriculture industry. CultivateEO currently administers programs for utilities across the U.S. and Canada, including the country’s first state sponsored cannabis energy management program in CO. Joe serves as the company’s national expert on indoor ag. and energy management technologies working closely with over 100 cultivators to develop and implement energy management strategies. Prior to forming CultivateEO, Joe worked for the USDA supporting their research on global climate change and its effect on field crops. Joe is a Certified Energy Auditor through the Association of Energy Engineers and hold a bachelor’s degree from the University of Illinois Urbana-Champaign in Natural Resource and Environmental Sciences.
Member Blog: The Women in Cannabis Study – Advocacy, Allies, and Voting
It can be easy to forget the beginnings of the cannabis industry. The stigma we had to fight. The laws we had to change. The pounding anxiety stemming from societal pressure and legal threats. But here we are in 2020, leading a nearly $10 billion industry in the U.S. with a promising future.
Being at the beginnings of a new industry is a powerful experience; seeing the fruits of our labor and the positive effects of legalization have been galvanizing and heartening. We’ve built something unique. But it’s still subject to the pressures and pitfalls of any other industry.
We’ve worked on legalization, supply chains, and policy, but what about equity? What about ensuring that the industry was diverse? And most importantly, how do we even know where we’re starting from?
The only way to move forward was deceptively clear: gather the data. I founded the Women In Cannabis Study after hearing stories of real women and recognizing the need for our undivided attention to shift to diversity and inclusion in the cannabis industry.
Much like a lot of the research in the cannabis industry, anecdotal data has ruled. In some ways, the lack of clinical research in cannabis has gotten us away from valuing qualitative data when looking for insights into particular issues in the cannabis industry. Ultimately, we need substantial numbers and stories to understand our industry and ultimately, form a game plan for equity.
So let’s start with the numbers. So far, data from our survey shows that 68% of women identify as heterosexual compared with 2010 U.S. census data showing 95% heterosexual. It’s a heartening sign that on its face, this is a welcoming environment for people of various sexual orientations.
Unfortunately, our findings also show the industry isn’t immune to sexist behavior.
By asking hard questions through the study, we’ve pinpointed that 33% of our sample as of February 5 have been sexually harassed while working in the cannabis industry. 1 in 3 is a huge number. It’s also worth noting that in our survey, 52.6% of women reported being sexually harassed in another industry—a sign that there might be a substantial difference in the cannabis industry to build on so that we can get that number to 0.
Additionally, only 23% of our study sample say they are paid the same salary as male coworkers in similar positions and 52% feel they have lost opportunities because they are a woman. Fifty-nine percent of women have experienced bullying or lack of support from other women in the industry, showing that even new industries are not free of toxic professional dynamics in the wider business world.
So we have work to do. Or as I like to think of it, we have an opportunity.
That means not going down the same rabbit hole many industries have. It means data points sourced from an academically rigorous study. It means stories about bud-tenders, growers, scientists, extraction and edibles manufacturers, lawyers, doctors, and activists that emerge as a direct result of an academically rigorous study. It means industry-wide alliances.
Alliances come from a shared desire to make big changes. And that only happens when we decide that our goals are worth sharing.
The reality is, we need everyone’s help to tell the full story. While we have enough responses to tell the story of women as a collective group, we are lacking diversity and representation in our sample. We need at least 50 of each of the following populations of women in order to compare communities of women and we aren’t there yet.
If you believe our goal is worth sharing — if you believe that doing the work of creating equity is worth it — tell your story. Encourage your employees to tell theirs. This industry doesn’t belong to one person. Let’s find a way to show that to the world.
The Women In Cannabis Study (WICS) is an academically rigorous, global, comprehensive quantitative study to explore, document and ultimately support women’s participation in the cannabis industry. This groundbreaking study supports the development of actionable recommendations and strategies to make the cannabis industry equitable and inclusive for everyone. The WICS mission is to tell the story of women, as well as individual women’s stories—with data. The study was developed by Jennifer Whetzel, founder of Ladyjane Branding, joined by U.S. research lead Dr. Nicole Wolfe of Wolfe Research & Consulting.
Ladyjane Branding empowers entrepreneurs to build a smart, strategic and consistent brand identity. Founded by veteran marketing executive, Jennifer Whetzel, Ladyjane has simplified the branding techniques used by Fortune 500 companies. Her signature creations include the Two-Hour Brand Makeover, Ladyjane’s Brand Archetype Quiz, and an Archetypal Segmentation Model – all designed to provide inspiration and guidance to help brands create deep emotional connections with consumers, multiply the effects of marketing and advertising and increase their company’s value.
Committee Blog: Opportunities & Challenges with Next Gen Packaging In the Legal Cannabis Market
It’s a new year, a new decade and quite frankly—a new era of packaging in the cannabis industry. We are officially face-to-face with next gen packaging in our ever-growing market. But what is next gen packaging, anyway? By definition, next-generation packaging is “basically a packaging technology, which possesses different advanced features, such as traceability, offers various benefits such as product shelf life extension and provides product quality information.”
Essentially, it’s taking our cannabis packaging to the next level.
The Growing Opportunities
With new products, formats, and technologies available, the opportunities for next gen cannabis packaging are limitless. In fact, there are so many options for next gen technologies that our NCIA Packaging and Labeling Committee has organized a subcommittee that is dedicated to the topic. We’ve also created subcommittees for Sustainability, Honesty in Labeling and Intellectual Property and Protection. A new era for packaging indeed!
Today’s cannabis cosumers are supporting the legal market for its quality and transparency, and today’s cannabis retailers need accessible platforms to educate them. These dynamics create an environment where next gen packaging (and merchandising) can really shine. With these new tools, brands can immediately engage, inform, and incite action.
Dreams Vs. Reality
While our hopes are super high for next gen cannabis packaging, the reality can be a bit of a buzzkill. In a state-by-state market, the variables for packaging create an inherently significant expense. And with regulations frequently shifting, it makes investing in premium packaging challenging, to say the least. There’s also the complication of managing data and actions behind a next gen platform. Worth the effort? We sure think so. And the good news is that next gen packaging is designed to be measurable so there’s data to evaluate its impact.
Promising Examples
The applications of next gen packaging for cannabis are seemingly limitless. Everything from a simple QR code, to complicated anti-counterfeiting technology, are possible. Augmented and virtual reality, scratch and sniff add ons, and improved breathability all present powerful opportunities to quickly and effectively affect a purchase decision.
KURZ is really pushing the boundaries of cannabis packaging with value-added security and technology solutions that are not only effective but purposefully decorative. Think holograms on packaging that can be used for anti-counterfeiting and other special finishes that add pop but are also sustainably produced. Now we’re talking next gen!
BUNDLAR is getting ahead of the curve with what they call “AR made Easy.” By making aspects of AR technology publicly available as well as offering customization, brands can more easily experiment with this exciting new platform.
The strategic approach to structural design that Greenlane is taking and the inspiring steps SANA Packaging has made with hemp-based materials are other compelling examples of the momentum in next gen packaging. Perhaps the most promising example of all is that as an industry, we’re just getting started.
New Decade, New Attitude
Our subcommittee predicts more exploration in cannabis with packaging that covers the exciting world of next gen possibilities in this new 2020 era and beyond. Which brands will step up? Will retailers ask for it? Will consumers pay for the experience? In an industry that refuses to stand still, these questions will inevitably be answered. The Packaging and Labeling Committee will be watching and sharing more examples and insights in additional articles.
Are you using next gen packaging? Drop a comment and share your experience!
Committee Blog: Interstate Cannabis Commerce Will Benefit Public Safety, Consumer Choice, and Patient Access (Part 2)
By Sean Donahoe, Founder and CEO, Sungrown Developments Inc. Member of NCIA’s State Regulations Committee
In Northern California’s legendary cannabis growing region of Mendocino, the elected county sheriff was recently a competitor at a homebrew festival, jovially pouring samples of his “Pretty Sour Powerful Sider” (jokingly referring to the “Public Safety Power Shutoffs” recently implemented by the electricity utility PG&E to prevent wildfires.) While this relaxed scene of neighbors bonding in the wake of shared inconveniences was not exceptional in itself, here, Sheriff Allman was posing for selfies with licensed (but possibly a few unlicensed) cannabis cultivators sharing the liquid bounties of harvest for the benefit of a local nonprofit.
For nearly a decade, the elected officials and staff of Mendocino county have worked together to normalize the local cannabis farmers by providing a pathway for medical cannabis cultivation permits, long before the state established a licensing system. This public policy process brought once-outlaw cannabis growers into conformance with every regulation of modern life: from building code standards to streambed alteration regulations to the quantification of gross receipts for tax collection. Bringing regulators onto these farms has curtailed previous practices that may have threatened consumer safety: pesticide and other chemicals are now tracked and regulated, while every gram can now be tracked back to its very plot of origin (in case of a safety recall or other concerns post-harvest.) This has been unquestionably difficult for and disruptive to many heritage and small farmers, but it has also allowed in these regions for simple scenes of social bonding and neighbors trusting neighbors again, as participants in the illicit sector were normalized into first their local county’s community then into a system of state license and next (hopefully soon) into a web of regulated interstate commerce. The process of bringing every farm into the regulated supply chain is far from complete, of course, and there are still illicit operators producing for consumers in urban areas in the state and beyond.
Rather than dwell on the incomplete success of California’s ongoing efforts to bring order to the world’s largest cannabis marketplace, it is essential to focus on the quality of life benefits from every cannabis operation successfully brought over from the traditional market to the regulated sector. Each licensed operation makes for one more safe workplace, one more source for lab-tested products for consumers and patients, and one more farm abiding by environmental regulations while providing stable employment and economic sustainability in rural communities. Under the previous medical cannabis paradigm, while there was certainly an abundance of responsible operators, there was virtually zero guidance from the state on matters of workplace safety, manufacturing standards, or environmental compliance. We are now several years into a robust legislative and administrative rulemaking process that has established a (mostly) clear set of rules of the road for commercial cannabis activities. It has unquestionably been a bumpy road for many of the legacy farmers to comply with new regulatory standards, but we are nonetheless able to say that there are now thousands of well-regulated cannabis farms in California (and southern Oregon) eager to sell their clean and craft quality products in a hopeful system of interstate commerce.
Has every cannabis farm in California transitioned? Of course not, but neither have the illicit cannabis economies been entirely supplanted by adult-use cannabis retailers in Colorado and Washington. Sensible and sustainable cannabis policy reform is a process, not a simple flipping of a switch from “illegal” to “legal,” and Americans should be realistic about the progressive and iterative nature of this process. This process, like most evolutionary processes, has already experienced several inflection points, transformative moments that noticeably shifted public opinion or opened up new frontiers in policy reform. While the earlier era of medical cannabis state laws certainly created a base of public opinion and laws, it was questionably the passage of adult-use ballot measures in Colorado and Washington which brought onto the global stage and accelerated the awareness that adult consumers could buy cannabis in clean, responsible retail locations rather than furtive or even dangerous transactions in the illicit marketplace
Throughout this policy process, we have established that licensed retail options can be scaled without negatively affecting public safety and are highly efficient competitive enterprises, offering consumers ample product selection and low prices. In both Colorado and Washington states (but also in later states) we have seen imbalances for some time as market forces, regulatory factors and new cultivation capacity coming online have all helped to create price fluctuations, product shortages, and other supply disruptions. These disruptions were not unique to these early states and will likely continue in every market as new in-state regulated options come online in fits and starts (but when interstate commerce becomes possible we should expect significant price fluctuations unlike any seen to date.) During these fiscally trying periods, we have often seen cannabis operators attempt to cut corners on compliance to make ends meet, which can lead to compromised consumer safety and public safety. The goals of consumer availability and cost competitiveness should be foremost in the minds of policymakers crafting cannabis policy reform nationwide, most notably in the anticipated markets of the Northeast. As these next anticipated adult-use states are designing the framework of their retail and distribution systems, strong consideration should be taken on the potential benefits of quickly and effectively scaling their programs by incorporating interstate commerce as soon as (politically) possible.
The Interstate Commerce Conversation
As the serious policy conversations about compliant interstate cannabis commerce begin, it is helpful to study how in our proverbial laboratories of democracy we can see that decreasing retail friction and shifting consumers from the illicit marketplace benefits crime reduction efforts and improves overall public safety. We should also note that retail cannabis sales have continued to grow in Colorado and Washington, even after the initial novelty and the surge of tourism waned, while legal sales have supplanted illicit sales. These early-adopting states have created models that are addressing consumer demand as national interest in cannabis for wellness and adult-use purposes are soaring and the cultural normalizing continues to occur on a global scale. Interest is high, consumer demand is real, and evidence shows that our drug reform policies should be crafted to bring every cannabis consumer transaction into the regulated supply chain in order to fulfill the demand while benefiting from increases in public safety.Interstate commerce could provide not only safer products but also a greater variety of quality and highly competitive offerings. For medical patients and wellness-oriented consumers, interstate commerce may be the only viable means of access for certain formulated cannabis products or cultivars, especially in smaller state markets.
In addition to the above benefits, regulated interstate cannabis commerce system could provide a more robust and differentiated production and distribution network combined with the ability to rapidly scale retail sales and address insufficient cultivation capacity in new adult-use markets.Cannabis consumers are price sensitive and illicit market retail options continue to entice consumers in states with functional adult-use programs such as California (or Canada), where there is an insufficient amount of licensed retail options to address total consumer demand. With the beginning of adult-use sales in Illinois and larger adult-use states yet to come, it is frankly a bit difficult to envision how total consumer demand will be able to be fulfilled in any near term by relying on licensed cannabis cultivated in-state alone.
The Safe Vaping Discussion
While moving to allow interstate commerce will best position licensed operators to compete with the prices available to consumers in the illicit sector, moving towards a borderless system of production and distribution will also increase safety and access for patients and consumers. Most prominent is the recent nationwide discussion on vaping and vaping-related issues, where tainted products and resultant injuries have been found in the unregulated, illicit sector (or in a very few instances from licensed but arguably under-regulated sources.)Notably, NCIA’s Policy Council established a Safe Vaping Task Force to work on these issues and has released a more comprehensive document advocating for the expansion of a regulatory approach for the safe manufacturing and distribution of cannabis products, whether vape cartridges or otherwise.
The issue of vaping extends to broader issues of product safety including educational campaigns, quality assurance, and testing programs, supply chain integrity, track and trace, and other reporting systems, and (when all else fails) a capable and sophisticated product safety recall system and these are all necessary components of a well-regulated marketplace. These consumer safety programs have already been carefully designed and stress-tested in Colorado and California and the insights from these systems and those in other states should be incorporated into the crafting of interstate cannabis policy (which will require significant harmonization of Certificates of Analysis and testing standards, packaging and labeling standards, etc., again all of which will benefit patients and consumers by offering greater predictability and reliability of their preferred products.)
Multi-State Coordination
In various forums, we have begun to see state regulators liaise with each other and we hope to see more coordination in the future and potentially an earnestness in harmonizing standards where statutorily possible. This multi-state coordination on product safety standards would be accelerated as part of the regulatory coordination efforts that are likely necessary for interstate commerce and, again, consumers and patients will benefit from safer cannabis and cannabis products, and we see NCIA as the critical player in this coming national conversation. In conclusion, moving to a system of regulated interstate cannabis commerce will have tangible benefits for the general public, for consumers and patients and I encourage forward-thinking members of the industry to participate and help manifest a system of interstate cannabis commerce with NCIA, its Allied Associations and other industry groups.
After studying Russian affairs and working as a political consultant, Sean Donahoe co-founded the California Cannabis Industry Association. He served as its Deputy Director through 2014 when he transitioned to consulting for investors and operators, communicating with public stakeholders, serving on local government committees, and advising industry trade groups. He holds an MSc in Government from the London School of Economics and is CEO of Sungrown Developments Inc., an advisory firm and holding company in Oakland, California.
Member Blog: Common Interior Design Mistakes that Dispensaries Make
As the legalization of cannabis spreads rapidly throughout the United States and across the globe, new medical and adult-use dispensaries are opening just about every day. The progression of architecture and design within dispensaries has expanded just as quickly as the legalization of their products.
The saying, “never judge a book by its cover,” has been ingrained into our brains since our adolescence. The truth is, consumers are first drawn to a product or location simply by the look of it. That is why your space must stand out from your competitors. From choosing the right location to conceptualizing layouts, here are a few major mistakes to avoid when designing a dispensary.
Layout
The foundation of any dispensary design should be rooted in the customer experience. A poor layout can interfere with traffic flow, lead to security issues, and cause longer wait times, which upsets patients. The goal is to create an effective layout that provides efficiency for patients while encouraging them to spend more time in the store, discussing products and treatments.
To achieve this goal, designers must have a deep understanding of how a “typical” customer will move within space and in what order. Mastering that concept allows designers to make the best use of the available space.
Basic Interior Design Features
A dispensary does not have to be a cold, sterile environment; in fact, it shouldn’t be! New patients may already be intimidated; bright and welcoming furnishings and color palettes will contribute significantly to their experience. Additionally, an inviting design will help attract and retain patients.
Interior design can quickly become mismatched and overdone. To avoid your design and layout, looking discombobulated, stick to a style, and keep in mind that less is more. Adhering to an overall aesthetic will ensure your elements flow together and complement one another.
Another major factor contributing to the layout and function of a dispensary is the merchandise display. For starters, all of the displays should be made of the same materials. Whether it be wood or glass, keep it consistent.
Now, think about the customer experience. Products layered in vertical displays tend to make browsing the selection easier than a flat surface.
Finally, make sure you build out the appropriate amount of displays. Too much space and the dispensary will look like it’s lacking while not enough space will leave it looking cluttered.
Furniture Selection
To you, the words cheap and inexpensive may be synonymous, but to an interior designer, something defined as “cheap” implies that it is poorly made and, therefore, of low quality. With that said, avoid purchasing cheap furnishings. Opening a retail cannabis location is a costly feat. So, it’s understandable that you would want to cut costs where you can. Know that cheap furniture and furnishings can tarnish a customer’s experience as well as your dispensary’s reputation. Most importantly, buying cheap seating and tables from budget vendors that are not for commercial use can lead to unexpected claims.
Dispensaries follow the same rules as retail stores
As a store-front business, foot traffic will be consistent. Failing to prepare for the long-term wear and tear of your floors, couches, and tables, etc., can be costly.
Practicality is essential here. Select flooring and surfaces that require minimal maintenance and won’t show visible signs of deterioration. The furniture should be durable enough to last and comfortable enough to function well for all ages and abilities.
Lastly, remember that the design of a retail store does not change from year-to-year, if ever. Create a timeless design.
Location
Location is one of the most important elements that factor into the success of any retail business. Prime locations support long-term success.
Unfortunately, prospective dispensary owners can not pick any old retail space they want. Due to rigid state laws and local regulations, they are limited in terms of available real estate. Familiarizing yourself with an area’s zoning laws is critical for establishing your business in the best possible location.
ATMs
Given the current status of the banking laws within the cannabis industry, the majority of purchases still need to be made with cash. Do not overlook an ATM when conceptualizing the layout! If there is nowhere for a patient to withdraw the cash necessary for a purchase, owners are missing out on sales.
If your budget allows, offer cashless ATM services to enable quick and safe transactions, which not only makes purchasing more convenient for customers but also adds to the security of your dispensary by limiting the accumulation of cash.
Perpetuating Old Stereotypes
The modern-day cannabis consumer represents a cross-section of the diverse population. Creating an environment that plays into the negative stereotypes will turn off a good portion of consumers simply because they will not want to be associated with the old stigmas surrounding marijuana. Paying homage to Jeff Spicoli will not only offend a majority of potential customers, but it will also draw unwanted attention from the surrounding community and law enforcement.
Christina is a certified Interior Designer with 20+ years of experience in the industry. Chris received a Bachelor of Science in Interior Design from Philadelphia University and honed her skills as an interior designer with several large architecture firms in Philadelphia. Specifically, while with Ballinger and EwingCole, Chris gained considerable experience in a variety of market sectors including healthcare, research and development, government, education and sports and entertainment, overseeing dozens of multi-million dollar projects. Christina first established herself in the cannabis industry when she was recruited to join a team of experts assembled by Philadelphia-based attorneys and consultants Moriconi Flowers, Ltd. to assist clients in obtaining permits to grow, process, and sell marijuana. Moriconi Flowers intended to coordinate a group of diverse professionals to act as strategic partners to support marijuana permit application projects and identified Christina and Design 710 as ideal to provide building/zoning code analysis, budget and schedule development, and interior design services to their clients. Christina quickly became an integral part of the team.
Design 710’s successes have included designing the project for the winning application and first dispensary to open in Philadelphia, designing the project for a winning grower/processor applicant in the Delaware Valley, and designing the winning project for an additional marijuana dispensary permit holder in the Philadelphia area.
Design 710 was created to help assist both new and experienced businesses to navigate the ever-changing cannabis industry. Christina’s intuition and experience has made her the ideal interior designer for countless projects, including 3 dispensaries she opened with Restore Integrative Wellness Center in the greater Philadelphia area over the last 2 years. Christina’s experience working within the recreational and medical cannabis industry makes her an excellent strategic partner, and her unique vision is complemented by years of experience navigating the ins and outs of opening a dispensary. Having provided design assistance and consultation to projects in Pennsylvania, New Jersey, Ohio, Connecticut, Massachusetts, and Missouri, Christina has a wealth of experience navigating multiple markets.
Member Blog: “What are companies like us doing?” – Revisiting compensation peer groups
Central to most discussions about executive compensation – not unlike any business discussion – is the question “what are other companies doing?” In compensation analyses, this guides the selection of data, typically for companies of a similar size in the same industry. Inherent in this approach is that a list of companies defines the landscape of business competitors, including competition for talent. Boards of Directors want to know – and are required to know – marketplace norms, trends, and practices as elements of their approving executive compensation.
Executive compensation in peer companies provides a guideline for determining appropriate pay levels and program design – what the other companies are doing. But these groups are typically determined by business-based characteristics – revenue, market cap, industry code, etc. In the rapidly evolving cannabis sector, these criteria may not yield a meaningful comparison group.
Most importantly, no data from a talent competitor aspect is typically included as a metric, though companies mention “talent competitors” as a criterion for inclusion in their “peer group” as we call it.
Peer Group Pressure
Proxy advisory firms (e.g., ISS, Glass Lewis) encourage and provide specific guidelines for the development of peer groups for executive compensation comparisons among public companies. In fact, they not only prefer but expect this process and disclosure. But their process may not make sense for every company as it focuses on market cap, revenue size, and industry code.
The problem for cannabis companies is:
There is no industry classification code for cannabis companies (with the exception of some suppliers that may serve multiple industries)
Most cannabis companies have not disclosed benchmarking peers
Size constraints are moot when #1 and #2 don’t exist.
And, none of this peer selection process gets to the root of the purpose: Identifying talent competitors to help guide the design of compensation programs to attract valuable employees from those competitors and keep employees from defecting to those competitors.
Complexities of a Cannabis Peer Group
Some of the largest cannabis companies are issuing proxy statements that parallel the norms for large mature companies in the U.S. For a cannabis company, constructing a peer group is a challenge given the characteristics of vertical integration of the business, merger and acquisition activity, and – most importantly – the breadth of occupational categories represented by these firms’ employees.
Here, for example, is the peer group disclosed by Canopy Growth – two sets of companies from four industry sectors – cannabis, fast moving consumer goods, specialized pharmaceuticals, and technology:
This is the most complex peer group structure I have seen among the hundreds and hundreds of companies’ disclosures I have reviewed. The cannabis sector poses this challenge: Covering some or all of the subspecialties that are under one roof with a group of similar companies, when there may be no similar companies
Some Recent Examples
“High Times… hires President”
“Cannabis producer Tilray taps ex-Molson, Revlon employees for Executive roles”
Interestingly, Molson Coors, Pharmaca, Revlon, Goldman Sachs, GE, and Apple have never included a cannabis company as one of their peers. That is likely because Tilray (drug manufacturers – specialty and generic) and High Times (not a public company) would not fit the criteria for those companies’ peer groups.
The peer group disclosed by Revlon (household and personal products) includes Hain Celestial (packaged goods), Clorox (household and personal products), and Tupperware Brands (packaging and containers).
Molson Coors’ peer group includes The Hershey Company (confectioners) and J.M Smucker Company (packaged foods).
Yet Molson Coors, Revlon, and other non-cannabis companies are rapidly losing executives to cannabis companies – the definition of talent competitors.
Let’s Try Peering Backwards
Maybe the current process is backwards. As cannabis companies face a limited supply of talent with cannabis experience, they will find the talent from diverse industries and then, perhaps, compile a list the companies from where those new executives came. That would indeed be a talent competitor peer group.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like.
What About Your Company?
Your company – in the cannabis sector – is hiring a new C-level executive, maybe even a CEO. Your company did not disclose a peer group because it has not thought about a peer group. Your company is vertically integrated – cultivation, extraction, distribution, branding, retail – so it is simply a matter of finding a candidate with experience in all of those, or some of those…or one of those?
Let’s continue “peering backwards” – looking at where executives have come from and having a compensation program that keeps our company off of the next company’s “from” list.
What would that look like? Based on publicly-available information about the previous employer of the executives in these cannabis companies, we can “peer backwards” into what their cannabis-relevant talent pool looks like:
Peering Backwards
Company
CEO
CFO
Tilray
Silicon Valley Bank (SVB)
Primo Water Corporation
Canopy Growth
Constellation Brands
Montana Mills
Gallo Winery
Pepsico
Charlotte’s Web
Kellogg Company
Crocs
Orbitz
Financial services, water dispensers, consumer products, bakeries, wine, soda and snacks, cereal, shoes, travel – not the usual mix of talent sources.
Cannabis Companies Finding Their Tribe
One will hear that the cannabis sector is in the “Wild West” phase, which is sort of like saying that a 14-year old is in the Wild West phase of adulthood. The only norms appearing are those carried over by the large consulting firms accustomed to consulting to mature companies. The entrepreneurial companies in the cannabis sector need not worry about self-appointed third-party opinions of their executive compensation practices – until they grow up. They can pursue practices that make sense for their business strategy, talent sourcing strategy, dispersion of locations, and other business-driven factors.
As we research executive compensation in the cannabis sector, we find a blend of compensation practices from these diverse industries, defying the notion that there is a “norm” or a “median” in the cannabis sector. Understanding executive pay in cannabis companies, for now, requires understanding executive pay in perhaps dozens of industries.
As cannabis companies grow, they will face the need for some additional structure and processes around executive compensation. But many of these companies are, and will continue to be, Smaller Reporting Companies,Emerging Growth Companies, Controlled Companies, TSX-V listed, or in another category with lesser disclosure requirements and lesser pressure from proxy advisers and institutional shareholders. With more of a grassroots shareholder base, they will have more maneuvering room in compensation design, less concern about the “optics” of a given executive compensation action or program, and more opportunities for the compensation program to fit the business, not fit a third-party’s unsolicited opinion of compensation. This is already leading to greater creativity and innovation in compensation design among cannabis companies.
Fred Whittlesey is the founder and President of Compensation Venture Group, SPC (CVG) – a Washington Social Purpose Corporation – operates as Cannabis Compensation ConsultantsTM and maintains a database of cannabis companies’ peer groups, executive pay levels, and executive hire sources. Fred Whittlesey is the founder and President of CVG, and with more than 35 years of experience in compensation, has worked for hundreds or companies across the industries that collectively comprise the cannabis sector – agriculture, biopharma, retail, distribution, manufacturing, marketing, branding, REITs, financial services, and technology.
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Bernie Lorenz, PhD, is Chief Science Officer for ProKure Solutions, where he applies an advanced chemistry background and passion for sustainability to make ProKure products approachable to cultivation professionals. As one of the industry’s most seasoned experts on ClO₂, Dr. Lorenz recently led the effort as technical contact for a new ASTM International standard aimed at establishing cleaning and disinfecting protocols for indoor and greenhouse cannabis cultivation facilities. Dr. Lorenz earned both his PhD and Masters in Inorganic Chemistry from New Mexico State University. 
Nina Simosko serves as Chief Revenue Officer for 
Gabriel Cross is a Founder and CEO at 
Gary Seelhorst
The vaping crisis was first reported in June 2019. In October 2019, the U.S. Centers for Disease Control and Prevention (CDC) coined a new medical term describing the cases of severe pulmonary disease that have occurred among e-cigarette and vape users, E-Cigarette and Vaping Associated Lung Injury, or EVALI. EVALI’s primary cause was determined by the 
BriAnne Ramsay is the CEO of 
Karen Mayberry is the Marketing Director and Co-Founder at 
2019 National Law Journal “Finance, Banking, & Capital Markets Trailblazer” award winner, Steve Schain chairs global cannabis law firm Hoban Law Group’s PA and New Jersey practice and chairs its Financial Services Group. With 17 offices and 52 lawyers, 
Jacob Carlson is the Co-Founder and CEO of 
Faai Steuer is VP of marketing at Cova Software, the fastest-growing cannabis retail POS in North America. An entrepreneur at heart, she has a passion for growing startups and building brands. With 20 years of marketing experience in CPG and retail tech, she lends her knowledge and best practices to help cannabis entrepreneurs in the U.S. and Canada open their first store and grow their business through vital thought leader content. 
Johnathan McFarlane is the Director of Strategy at Hybrid Marketing Co. 
With more than 15 years of experience working and teaching in chemistry laboratories, Meghan McCormick, Ph.D. is the Senior Chemist and a part of the Herban Legends team at 
Allison Kopf
As a former Federal bank regulator and seasoned consultant, Angela’s knowledge of regulatory compliance, risk management and investment advisory services has established her reputation as a leading resource within the financial consulting industry, spanning consumer protection and anti-money laundering statutes, fraud and cannabis banking issues. 
After studying Russian affairs and working as a political consultant, Sean Donahoe co-founded the California Cannabis Industry Association. He served as its Deputy Director through 2014 when he transitioned to consulting for investors and operators, communicating with public stakeholders, serving on local government committees, and advising industry trade groups. He holds an MSc in Government from the London School of Economics and is CEO of Sungrown Developments Inc., an advisory firm and holding company in Oakland, California.
Fred Whittlesey is the founder and President of