On Nov. 13, the California Bureau of Cannabis Control (BCC) announced it had awarded research grants to eight public universities to study the state’s cannabis system and its impacts. “The research conducted through these public university grants will provide critical information for evaluating our legal cannabis system and its impacts,” former Bureau of Cannabis Control Chief Lori Ajax said in a press release. (Ajax’s retirement was effective Dec. 2.) “This research will be a valuable tool to inform future cannabis policy in California.”
As this issue goes to press, 2020 is coming to an end. This traditionally is a time for reflection, when people take stock of the previous 12 months before moving forward into the new year. However, many have said that they are relieved this unimaginable year is over and ready to put what has been an unprecedented and devastating period behind them. But it’s also important to remember how we navigated historic challenges and got through it.
Right now, it's the middle of December, and the team at Cannabis Business Times is looking back, compiling roundups of the top articles of 2020 and writing about the most significant industry news and trends, which you can read here. And although CBT covered the coronavirus pandemic and how essential cannabis companies could pivot—and those important articles were widely read—they were not among the top 10 for the year.
And that’s because there were other stories to tell and information you needed. Because your business continued to move forward, even in the face of the most unpredictable challenges. Companies innovated, new markets launched, and advocacy groups collected enough signatures to put legalization initiatives in front of voters despite the seemingly insurmountable hurdles in their way.
2020’s top story came from longtime CBT columnist and editorial advisory board member Kenneth Morrow, who wrote about the complicated matter of drying and curing cannabis at scale and how cultivators can produce quality products while being efficient. You can read Morrow’s column in this issue here. The team of researchers, led by Dr. Brian Whipker, Ph.D., from North Carolina State University, also wrote one of the most-read articles of the year, which detailed how to diagnose and prevent white mold in cannabis. And check out the team’s first article of 2021 here.
This issue’s cover story profiles a company that launched in July 2020—right in the middle of the pandemic—but that is not the significant storyline of the Harbor Farmz article, written by Digital Editor Eric Sandy. Instead, Sandy spotlights how the Michigan cultivator realized its lofty goals, including developing a tissue culture lab out the gate, and other innovations CEO Michael Ward has helped lead to drive efficiency and meet rigorous production deadlines.
And Ward, like other cannabis entrepreneurs, is doing this without the typical access to capital, tax credits and other supports afforded to businesses in other industries. As Cresco Labs’ CEO and co-founder Charlie Bachtell notes in CBT’s new “The Last Word” department, “This industry is truly being built with one to one-and-a-half hands behind its back.” Bachtell was reflecting on the significance of the U.S. House voting to approve the MORE Act, which would deschedule cannabis and potentially open up access to capital and nullify 280E.
Although most agree the bill’s chances in the Senate are slim, Bachtell noted the importance of pausing to appreciate the moment and reflect on the momentum the industry has experienced this year, that will likely continue in 2021. “The fact that you’ve got, for the second time, cannabis-related language now receiving a favorable vote out of half of Congress is something that I know the pioneers of this industry, upon the shoulders of which we stand, didn’t know if they would ever see.”
After a difficult 2019 that left cannabis companies reeling from dried up investment funds, brands started 2020 with minimally available capital, and the COVID-19 pandemic didn’t help. Strapped for funding, cannabis brands had to be strategic with the products they brought to market.
Despite this, Brightfield Group tracked 912 new product launches in 2020 (as of press time), with some products securing shelf space across different markets. Into 2021, cannabis innovation will only continue.
Legislative Changes Open Opportunities for Cannabis Brands
In the 2020 U.S. election, Arizona, Montana, and New Jersey legalized adult-use cannabis; Mississippi legalized medical cannabis; and South Dakota passed both medical and adult use. Of these states, Brightfield Group predicts New Jersey and Arizona will see adult-use sales in late 2021. New York and Rhode Island also could see recreational sales this year, as both state legislatures were already talking about adult-use legalization as of December 2020.
The West Coast has maintained a competitive edge over the East Coast due to its well-established markets, cannabis-friendly climate, and access to capital. Brands already operating in California or Nevada will be able to enter Arizona’s adult-use market with experience. Additionally, many brands already operate in Arizona’s medical market, such as Keef and DNA Genetics.
The East Coast cannabis market is much less established, with only Massachusetts having adult-use dispensaries for more than a year. The multistate operators that sell medical cannabis on the East Coast—like Curaleaf and Cresco Labs—will likely help transition East Coast markets to adult-use, as they have done in Illinois. East Coast legalization will provide much-needed capital to the U.S. cannabis market; but with brands fiercely competing on the West Coast, we’ll likely see most of the innovation on the West rather than the East. Products that can successfully compete in these markets may then establish themselves across the U.S.
Product Technology Advancement Continues
Looking from a product perspective, Brightfield Group expects cannabis edibles technology will continue to advance toward quicker, more precise onsets. Several brands in the U.S. and Canada introduced gummies, drinks, and powders with improved THC bioavailability for more effective uptake. By improving how THC is absorbed in the body, cannabis companies can more accurately provide a uniform onset time and length of experience.
In 2020, consumers became more aware of their THC doses. Brightfield Group’s U.S. Cannabis Consumer Insights reveals that only 15% of all cannabis consumers in Q2 were “not sure” of the dosage they take, down from 21% in Q1. Generationally, Baby Boomers are the most likely to not know their dosage, but still only 25% report not knowing. With only 11% of Millennials unaware of their dosage, edibles brands must continue to innovate to suit consumers’ experiential desires. Predictable dosages only serve to add more credibility to an edibles brand, and the quest for ingestible products that mimic inhalable experiences will keep this category innovating through 2021.
Madeline Obrzut is a content specialist at Brightfield Group.
As a business owner, operator, and consultant, I have purchased, used, and recommended several extraction instruments including butane, CO2, ethanol and solventless. The type of extraction you plan to perform is just one aspect of selecting the right equipment for your facility. Here are some key considerations to note when evaluating a new extraction or distillation machine:
1. Vet Manufacturers.Knowing how long the manufacturer has been in business and if the company has experience prior to cannabis is important. Ask potential manufacturers how many units they have sold and understand how their machines are performing with real operators. You can ask potential suppliers these questions directly and assess their track record, but also search for (un)satisfied customers using their instruments and talk to them. LinkedIn is a good source for that. Do not rush to buy the first machine you like. Seek unbiased, professional expertise from consultants and their technicians to guide you in evaluating options from a technical perspective. Technicians who are running the machines in a lab can verify yield and other claims from the manufacturers.
2. Define Your Goals.Understand the competition and consumer trends to develop a business strategy that will allow you to determine the right products to produce for your market (and which machines you will need for that). Some machines are better for producing certain products. For example, an instrument used in other highly regulated industries is more precise and consistent for a medicinally focused product, but this may mean the equipment is more complex to operate and expensive. Moreover, knowing the specific products you want to produce will allow you to determine the cost and availability of the input material required and whether you can supply it internally (for vertically integrated operations) or through third-party suppliers. For example, in the case of solventless extracts, finding a reliable source of fresh frozen (FF) cannabis is key, specifically with flavorful genetics that yield over 4% from FF wet weight to freeze-dried material.
3. Understand How Machines Work Together.
We tend to focus on the most expensive, primary unit for the lab, but manufacturing is a process with multiple systems and people working together. Understanding this is key to prevent bottlenecks and inefficiencies. We tend to dismiss the downtime required for cleaning, loading, unloading and repairs. For example, do not project a 24/7 productivity, because you will fall short. Furthermore, make sure that the units you select have the necessary safety ratings to avoid licensing approval delays from building and fire departments (for more info on extraction equipment safety, see the Cannabis Business Times story "Buyers Beware"). Good consultants and engineers will be able to help with this.
4. Hire the Right Talent.
The level of expertise required to run a machine efficiently and effectively varies greatly. Hiring qualified talent with technical knowledge (preferably science degrees) and experience operating the machines you are purchasing will help you avoid a lengthy learning curve and mistakes that will likely end up costing you more money and time. For example, one machine I evaluated for a client could not be left unattended for more than 15 minutes. Understanding the number of people required to operate the instrument is important to running an efficient operation. Good recruiters can be a worthy investment to find the right people for your company.
Rudy Ellenbogen is the founder and CEO of Whole Grow, where he works with select clients to develop their business strategy, design and operations based on his successful industry track record.
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More