California cannabis growers spend an average of $136 per pound of dried cannabis flower on testing costs, researchers at the University of California, Davis, found.
In a study published on April 23, Pablo Valdes-Donoso, Daniel A. Sumner and Robin Goldstein, all researchers with the public Californian university, found that testing costs accounts for approximately 10 percent of the reported average wholesale price for cannabis in the state.
The study’s authors, who published their findings on PLOS ONE, an open-access science journal, collected data from in-state testing labs as well as testing equipment manufacturers to calculate the average cost for various tests required for a product to be compliant. They found that testing costs varied greatly depending on the type of test, with a moisture balance test representing the lowest cost (approximately $1.25 per test) and a liquid chromatography-mass spectrometry (LCMS) test representing the highest cost (approximately $8.82 per test).
The study also highlighted the impact on batch size and failure rates on testing costs. For example, “given a 0 [percent] rejection rate, the cost of testing per pound of cannabis marketed from a one-pound batch is about 27 times higher than the cost of a 48-pound batch,” the researchers found. “[On] the other hand, given an 8 [percent] rejection rate, the cost of testing per pound of cannabis marketed from a one-pound batch size is only seven times higher than the cost from a 48-pound batch size.” (California allows for batch sizes of up to 50 pounds.)
The authors looked at how food products would fare if held to the same contaminant thresholds as cannabis. While more than 60 percent of food products have detectable (but allowable) levels of pesticides, only less than 1 percent actually fail to meet EPA standards. However, more than 13% of food products would fail compliance testing using criteria for inhalable cannabis products.
“Testing itself is costly,” said study author Dan Sumner, a professor of agricultural economics at UC Davis in a statement. “But growers have to destroy the product that doesn’t pass the test and that is where the biggest losses occur.”
The authors found that higher testing costs ultimately led to higher consumer prices, adding that “safety regulations and testing may improve the perceived safety and quality of cannabis in the licensed segment.” That said, “for price-sensitive consumers, the alternative is an illegal market. That means they consume a product with no testing at all.”
'Folio:' Names Cannabis Conference Directors ‘Top Women in Media’
Folio: magazine recognizes Editorial Director Noelle Skodzinski and Director of Conferences & Events Maria Miller as leading women in media.
CLEVELAND, OH & LAS VEGAS – APRIL 29, 2020 – Cannabis Conference Editorial Director Noelle Skodzinski and Director, Conference & Events Maria Miller have been selected as honorees in Folio: magazine’s “2020 Top Women in Media.” This prestigious media awards program highlights the best and brightest up-and-comers, entrepreneurs, change-makers, corporate champions, and industry trailblazers in the media industry.
Skodzinski
Noelle Skodzinski, editorial director for Cannabis Conference (produced by GIE Media’s Cannabis Business Times, Cannabis Dispensary and Hemp Grower magazines), has been selected in the “Change-makers” group, comprised of women “who’ve successfully altered the course of their brands or the industry for the better.”
Skodzinski recently celebrated her 5-year anniversary at GIE Media on April 20, the day the company officially acquired Cannabis Business Times—the nationally award-winning trade publication that serves cannabis cultivators in North America. Skodzinski co-founded the Cannabis Business Times website and, in collaboration with the GIE Media team, launched the print publication in November 2015.
Maria Miller, director of conferences and events for Cannabis Conference at GIE Media, has been selected in the “Corporate Champions” group, comprised of women “who’ve steered their companies into new markets, new opportunities, new audiences and strong, measurable growth.”
Miller celebrated 22 years with GIE Media this past January and has been integral to the success of Cannabis Conference—the industry’s leading education and expo event for plant-touching cannabis businesses—since the event’s launch in March 2017. Cannabis Conference 2020 will take place Sept. 1-3, 2020, at the Rio All-Suite Hotel & Casino in Las Vegas (www.cannabisconference.com).
Miller
“Noelle and Maria have been extremely effective at finding innovative and competitive solutions that bring the industry the highest level of education and exhibition the cannabis market has to offer,” said GIE Media’s Cannabis Conference Group Publisher Jim Gilbride. “They’re hyper-focused on putting our audiences first, and that’s reflected in the integrity and professionalism of our events and media. It’s a privilege to work with them every day—and I look forward to seeing all they’ll continue to accomplish in their already-successful careers.”
About Cannabis Conference:
Cannabis Conference is produced by industry-leading magazines Cannabis Business Times, Cannabis Dispensary and Hemp Grower.
Now in its fourth year, Cannabis Conference 2020, scheduled for Sept. 1-3, 2020, at the Rio All-Suite Hotel & Casino, will bring together more than 70 of the industry’s leading voices to educate attendees about the biggest opportunities and challenges facing plant-touching businesses in the legal cannabis market.
Cannabis Conference 2020 will expand on the successes of previous events’ cultivation and dispensary education and will include for the first time a track dedicated to the cultivation and sale of hemp and hemp-derived products. The conference features in-depth educational programming on cannabis cultivation and business operations, as well as the most informed industry perspectives on retail management and customer engagement. The Cannabis Conference exhibition hall will feature cutting-edge technologies, solutions and services for professionals in cannabis cultivation and dispensary businesses. More information can be found at www.cannabisconference.com.
archjeff/Adobe Stock
‘High Times’ Acquires 13 More Dispensaries in California
The $80-million deal with Harvest Health delivers on the publishing company’s January message that it would be moving into retail.
Hightimes Holding Corp., owner of High Times magazine, is purchasing 13 California dispensaries from Harvest Health & Recreation Inc. The stock-and-cash deal totals $80 million, building off retail assets that Hightimes acquired in January.
And similar to those earlier deals, rooted in Los Angeles and Las Vegas, this California transaction will see all 13 planned and operational dispensaries converted to the High Times brand. Hightimes Holding Corp. expects to close this deal by the end of June. Harvest locations in California include: Napa, Venice and Palm Springs.
“We’ve long supported Harvest and the other cannabis-retail-trailblazers as they pushed forward despite changing legislation, insurmountable licensing fees, political stigma and, frankly, through a process that was designed to be difficult,” Adam Levin, Hightimes Holding Corp. executive chairman, said in a public statement. “We have enormous respect for the Harvest brand and look forward to ushering in the next generation of retail experience with Harvest as a significant shareholder in our company.”
Hightimes Holding Corp. is in the middle of a Reg+ IPO, a type of pre-public capital raise that allows investors to maintain liquidity. The company plans to list on the OTC markets under the ticker symbol “HTHC.”
In January, Hightimes expounded on its plan to integrate its decades-long publishing history and Cannabis Cup event management experience with the burgeoning state-legal retail sector. CEO Stormy Simon highlighted the Cannabis Cup legacy in particular, pointing out that retail shelf space will allow the winners of those events to be placed more visibly in the consumer market. At the time, she also announced that California cannabis executive Paul Henderson, who headed Grupo Flor for two years, would head up the company’s retail efforts as president of Hightimes Holding Corp.
Photo courtesy of Columbia Care
Columbia Care Launches Virtual Dispensary Experience to Connect with Customers During COVID-19 Crisis
The multistate cannabis operator digitally pairs customers with personal shoppers to tour the dispensary and explore its product offerings.
As dispensaries find ways to maintain a retail connection with their patients and customers during the COVID-19 pandemic, multistate cannabis operator Columbia Care is rolling out a virtual dispensary experience to allow customers to shop digitally.
The Virtual.Care program pairs customers with personal shoppers to tour the dispensary and “sample” products. Patients can even enroll in their state’s medical program and apply for Columbia Care’s credit card through the virtual experience.
“We launched Virtual.Care as a way to try to keep our patients and customers connected to our dispensaries, and more specifically, to keep them connected with our staff on site,” Jesse Channon, Columbia Care’s chief growth officer, told Cannabis Dispensary. “We understand that even with people staying at home, there are still lots of questions to be answered. … So, being able to create a seamless experience to allow people to still have that personalized experience and that direct engagement with our sales associates [and] our operations team members was super important for us.”
As states initially implemented their stay-at-home orders, Columbia Care began considering ways to virtually connect the dispensary’s staff with its customer base. While some dispensaries turned to FaceTime and Skype to maintain a virtual connection with their customers, Columbia Care wanted to implement a more secure, scalable solution.
Channon and his team wanted a one-on-one connection between the dispensary staff and customers for a more personalized experience, where customers could ask questions and explore Columbia Care’s product offerings.
With Virtual.Care, the company launched what Channon calls a powerful, approachable and easy-to-use experience that allows the company to service the largest possible percentage of its customer base.
“The technology was designed … to be incredibly simple and incredibly approachable,” he says. “One of the largest communities that we serve in many of the states in which we operate are senior communities. We know that for this to be something that was going to be leveraged at scale by that community, it had to be something that was easy to use [and] that didn’t require the downloading of any additional applications or the creation of any additional profiles.”
To launch its solution, Columbia Care has developed a standard SOP that can be implemented in many of its individual dispensaries to ensure regulatory compliance in each market.
The company first launched Virtual.Care in its San Diego dispensary to test the concept, and upon simply spreading the word through an email campaign to its customer list, the dispensary staff was booked solid with back-to-back virtual appointments on 4/20.
“People really are using it the same way that they would shop if they were there personally,” Channon said. “They’re looking at things and asking the same kinds of questions that they would ask in person, so we’ve seen the distribution of product fall in line with what performs well at that dispensary.”
The program has been so well received that Columbia Care plans to offer it even after the COVID-19 pandemic is behind us.
“I think this platform is definitely something that will have staying power, and we’re going to continue to add and expand the services and experiences that you’ll be able to get through this,” Channon said. “I think the more connected, more consumer-friendly experience … is something that is going to have staying power."
Photo courtesy of HUXTON
Catching Up with HUXTON: Modified Business Model, Record-Breaking Sales
When HUXTON sold off its plant-touching business licenses in 2018, it created the bandwidth to expand into new markets with a strengthened brand.
The Phoenix, Ariz., based brand HUXTON—run by co-founders and siblings Dustin Johnson and Chelsea Johnson—has evolved quite a bit since Cannabis Business Times published their “10 Questions” interview in April 2017.
At the time, the Johnsons spearheaded a house of brands in the state’s medical cannabis market under the parent company Adakai Holdings, which included a retail dispensary (Monarch), an indoor cultivation facility (Omaha Farms), as well as the lifestyle cannabis brand HUXTON.
In 2018, amidst an industry ripe with M&A activity, they made the choice to sell their plant-touching license assets to the vertically integrated multi-state operator MedMen. However, they said it was important that they kept the rights to the consumer-facing brand that they’d built, HUXTON, which now has an exclusive licensing deal in Arizona with MedMen. At that time, HUXTON had already begun naturally evolving away from the medically focused patient market and more toward the lifestyle/consumer focus associated with adult-use markets.
“Since then, we’ve been working with growing that brand and using all of the knowledge and … operational background we have in the space to help move into as many markets as possible,” Dustin Johnson said. Today the HUXTON brand is geared toward consumers like creatives and athletes. Their digital branding often includes images of young skateboarders, hikers, musicians and muralists, most frequently boasting Western American vibes and modern, neutral color palettes.
Photo courtesy of HUXTON
HUXTON products are now available in three state markets under exclusive licensing agreements.
HUXTON products are now available in three state markets under exclusive licensing agreements with its former company Omaha Farms in Arizona, Phat Panda/Grow Op Farms in Washington (partnership launched in December 2019), and Flower One in Nevada (launched in February 2020).
While in Arizona the team has brought pre-rolls, all-in-one disposable vape pens, single-strain eighths and more to market—their foray into adult-use markets in Washington and Nevada began with their best-selling product: pre-rolls, packaged in recyclable tins and accompanied by a matchbook. “They’re meant to be grab-and-go. They’re easy to use. We’re all about consistency and simplicity,” Chelsea Johnson said.
In their out-of-state agreements, HUXTON works with their cultivator partners with genetics they already have to create custom blends for their pre-rolls that reflect an effects-based naming convention: Rise (uplift/focus), HiFi (energy/euphoria) and Zen (relaxation/rejuvenation).
Record-Breaking Sales
Attributing their expanded reach, as well as the widely reported coronavirus-related sales uptick, the HUXTON team reported that March 2020 was their best month of sales to date. In Arizona, their sales were up 83% year-over-year, and up 110% over the previous month. In Washington, sales were up 180% over the previous month. And in Nevada, their sales were unchanged compared to their launch in February, which the HUXTON team views as a success considering dispensaries had pivoted quickly to a delivery-only business model after the coronavirus outbreak.
“It was great for us because [Nevada] dispensaries not only had to figure out how to deliver, but we were a new brand, and not a ton of people were aware of us yet,” Chelsea Johnson said. “It was a little positive [thing] in everything that’s going on right now.”
Virtual Touchpoints and Merchandise Sales
As states implement and continue shelter-in-place orders, many of the in-person marketing strategies cannabis companies rely on, such as promotional events, vendor days, and in-store budtender trainings, are no longer an option. Reaching customers otherwise can be difficult because of strict regulations on advertising and promotions in some states.
So to keep the momentum going with consumers, HUXTON launched the “At Home with HUXTON” series on April 17 in an email newsletter campaign. The first initiative in the series was a virtual yoga class, which drew a global audience.
“We had folks from all over the world,” Chelsea Johnson said. “Everyone was introducing themselves in the chat bar; it was truly people from every single continent.”
In the coming weeks, they’re also releasing a custom adult-coloring page offered as a digital download, as well as a tie-dye kit with two HUXTON-branded bandanas that will offered free for order on the company’s website on a first-come, first-serve basis.
In addition to their cannabis sales and virtual initiatives, HUXTON also regularly promotes their brand through merchandise sales on their website—where customers from all over can shop backpacks, T-shirts, beanies and more. “The majority of our sales come from markets that cannabis isn’t even legal in, so I’m hoping we can touch a lot of folks with that,” Chelsea Johnson said.
Looking Ahead
While it’s still uncertain what the new normal will look like for the cannabis industry amidst the coronavirus pandemic, the Johnsons believe the industry is full of passionate and nimble professionals who are equipped for the challenge.
“Nobody’s putting a global pandemic at the beginning of their risk assessment at the beginning of the year,” Dustin Johnson said. “I don’t think anybody in the cannabis industry or otherwise was prepared for all of the ramifications and changes this would have caused. I will say that being the in the cannabis industry … we were, I think a little bit more nimble than other industries because we’re used to chaos and we’re used to changing regulations, a lot of having to make U-turns.”
“In the cannabis industry we’re constantly having to evolve and problem-solve, and this is no different,” Chelsea Johnson said. “I think that we’re just trying to make sure to do our part and help the community and those who need us.”
Correction (April 29, 2020, 9:51 a.m. ET): An earlier version of this story referenced a partnership between HUXTON and Caliva, a vertically integrated cannabis operator based in California. There is no confirmed partnership between the two companies.
Cassie Neiden is editor of Cannabis Dispensary and conference programming director for GIE Media’s Cannabis Group.
Legislative Map
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
Brian MacIver
Cassie Neiden
Eric Sandy
Melissa Schiller
