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.
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.
ststoev | Adobe Stock
Adult-Use Cannabis Legalization Has Strong Support in New Jersey, According to New Poll
A poll conducted by Monmouth University found that 61% of respondents plan to vote in favor of a legalization initiative on November’s ballot.
New Jersey voters will get to decide whether to legalize adult-use cannabis in the Garden State this November, and a new poll conducted by Monmouth University indicates that legalization has strong support, according to The Motley Fool.
Sixty-one percent of roughly 700 registered voters who participated in the poll said they would vote in favor of legalization, while 34% said they would vote against it, according to the news outlet.
The poll also revealed that while the issue has strong support among Democrats, 40% of Republican voters polled said they would also approve the legalization measure, The Motley Fool reported.
New Jersey Gov. Phil Murphy campaigned in support of adult-use legalization and lawmakers fought unsuccessfully to pass a legalization proposal last year, when efforts ultimately stalled in the Senate over the summer.
Lawmakers introduced a resolution last fall to kick the issue over to voters on this year’s ballot.
Gov. Kevin Stitt said the state’s medical cannabis program “looks a lot like recreational,” and that a taxed and regulated adult-use program wouldn’t do much to boost tax revenue.
Oklahoma Gov. Kevin Stitt recently told KTUL that legalizing adult-use cannabis will not help the state’s budget shortfall.
The governor said the state’s medical cannabis program “looks a lot like recreational,” and so a taxed and regulated adult-use program would not do much to boost tax revenue.
“By calling it recreational, I don’t think you have any more users or any more tax revenue off of that,” Stitt told the news outlet in an interview. “Pretty much, it looks a lot like recreational in our state as well.”
At least two groups are competing to bring adult-use cannabis legalization initiatives to Oklahoma’s November 2020 ballot, and Rep. Scott Fetgatter announced plans earlier this month to begin work on a legalization bill in the hopes that a taxed and regulated market would provide a new source of revenue in the wake of the COVID-19 pandemic.
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
Melissa Schiller
