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4 Key Challenges to Scaling Cannabis Cultivation

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Editor’s Note: This article has been adapted from Chapter 2: Grow Rooms Today: A New Dawn from Getting Grow Rooms Right, written by Geoff Brown, Quest’s VP of Technical Solutions, and Dan Dettmers, Quest’s Applications Engineer.

Just as the cannabis industry has grown at a rapid rate over the past five years, the grow room environment has also experienced significant evolution. 

Growers have gone from amateur to pro, seemingly overnight. As they seek to produce massive harvests and secure a place in the market, they’re coming up against several major challenges associated with producing at scale. This is a new frontier for many and a new field that requires different ways of thinking — novel solutions, many of which are unfamiliar to both long-time growers and the new entrants into the industry like engineers and equipment vendors.  

The four key challenges of scaling up in this landscape are:  

  • Lack of experience across multiple domains,
  • market and regulatory pressures,
  • lack of standards,
  • misapplication of traditional equipment. 

These four challenges have combined to put tremendous strain on the new, modern-day cannabis companies. However, before we can hope to solve these problems, we need to first understand what the problems and challenges are and how they came to be. 

 

1. Lack of Experience Across Multiple Domains 

There are severe knowledge gaps in this industry that need to be closed before it can truly progress and mature. 

The issue is not necessarily knowledge related to cultivation. As noted, master growers are experts when it comes to growing cannabis. Some of them were once amateur growers operating out of their basement or small-footprint operations, others have a Ph.D. in related fields — now they’re bringing their world-class knowledge to a newly legitimized market as employees, shareholders, executives or even founders, of new cannabis companies. Naturally, any industry that started in a basement is bound to experience some growing pains.  

We want to talk about the knowledge that is missing or has serious inconsistency as it relates to how best to scale up the production environment. The ideas that applied well to basement grow-ops are not applying well to commercial indoor grow facilities — something the industry is discovering through great pain and expense. 

Lack of understanding also persists among those who are ancillary to the industry, such as third-party equipment suppliers. Manufacturers are paying serious attention to the grow industry these days, as they hope to provide some much-needed solutions to many of the challenges growers are facing. Doing so successfully means big profits and the possibility of significant repeat business. 

But getting traditional suppliers involved with the cannabis industry has its risks. It’s a mixed bag — you could benefit, or you could lose. They don’t all necessarily understand the growing environment. On top of that, growers — who do understand — are now dealing with products and services they never had to before, or at a scale they never dealt with before. The result is confusion, poor communication and poor implementation of proposed solutions, which often don’t hit the mark. 

“It’s important to select and work with manufacturers who know the industry and offer products that are purpose-built for it.”

The inconsistency of knowledge has led to major harm, especially to growers in new markets who are scaling up to meet the demands of the market and investors looking for outsized returns on investment before commoditization at massive volume. Facilities of a million or more square feet are under construction, and huge amounts of money are being poured into these developments. But with technology and knowledge in its infancy, it’s an open question whether those dollars are being invested intelligently and put toward a facility that will work and deliver value. 

2. Market and Regulatory Pressures 

Pressures related to the market or regulations are a very modern challenge facing growers. Obviously, under the illicit market, someone growing cannabis at home didn’t have to worry about following any government regulations. Additionally, there were very few market pressures for them to worry about, as they most often had a captive customer base — as long as their prices were reasonable, clients were not likely to seek out another supplier. 

The legal market has brought about a new landscape that changes that game dramatically.  

For one, many growers are now large publicly traded companies with regulated facilities. This brings some transparency requirements, including quarterly releases of financial results. Producers are also typically expected to publish in their quarterly reports the grow yields they are achieving. There is  pressure to improve financial results on a quarter-to-quarter basis, and investors want to see that production is being maximized at all facilities as quickly as possible.  

The public nature of these companies means more diversity in the types of investors who hold stocks in them. Many of the new investors on the scene have less patience than the early venture capitalists or angel investors. There is now an expectation among many investors that there will be a certain level of market maturity in the cannabis industry, but that market maturity is still evolving. The industry is simply too new to expect anything else. However, with many growers relying on investors to supply the capital needed to take on the market and build up, falling short of expectations is not an option. 

Cannabis markets are unpredictable and rapidly evolving. Any new markets under development  are experiencing major supply shortages, as few were prepared to meet the tremendous demand among people in areas where cannabis has become legal for adult and medical use. It drives the pace of facility development to dizzying levels as growers, seeing an opportunity to grab market share early on, scale up to fill the demand. By having a large supply and brand recognition in markets where there is little product available, growers improve their chances of gaining large market share at an early stage – which has huge business and strategic value. But the execution must be done properly. For one, they need to be able to consistently produce — so avoiding mistakes that could lose crop or create inconsistent product is necessary. They also need to ensure quality and consistency even as they attempt to grow lots of crop very quickly.

Therefore, it is critical that growers scale up the right way. This is no area for a “rush job.” The idiom “buy once, cry once” applies well here — while it is slower and more expensive at first to take time to do things right, you’ll save more in the long run by way of avoiding headaches and unnecessary ownership costs. 

Adding to this pressure, the varying regulatory environments also challenge growers a lot. 

Some regulatory set-ups may make business less flexible and require different approaches. For example, some may require a full grow to be evaluated before the producer can receive a production permit. To minimize their capital exposure early on, this may motivate the grower to build a small first stage of their facility simply to satisfy this licensing requirement. After they go through the required harvests and receive the permit, the facility can be expanded to accommodate full production. This is a good example of how local regulations can have an impact on all aspects of growing, because it impacts the HVAC system type and design. Some types of HVAC systems are not conducive to incremental expansion. The ideal HVAC solution is one that can cost-effectively scale with additional rooms or square footage. 

Another example of regulatory pressures relates to the economics of growing in a given market. Some markets that have low barrier of entry for growers and don’t limit the number of licenses are having the opposite of a supply shortage – they have an enormous glut. These markets are at or near saturation, causing the market price per gram to drop. This results in even more pressure for growers to cut costs so they can offer cheaper products. In a saturated market, one of the drivers of success for a producer is lower cost.  

The economics of growing is discussed more in the next chapter, but the key takeaway is that your choice of HVAC equipment can vary significantly depending on variables like what kind of company you are, where you’re located and what the regulatory landscape looks like. These factors further contribute to challenges in the new frontier of growing at-scale. 

3. Lack of Standards 

One of the main reasons there is lack of consistent knowledge in the grow industry is because there are no standards in place regarding buildings and their systems. It’s seriously hurting the industry right now by contributing to the information vacuum.  

“Standards are important for any industry because they help ensure the right solutions are applied, because those involved in the sector already discussed and agreed on them. The cannabis industry does not yet have any standards for buildings and systems, which makes the design process more challenging.” 

In the mainstream, engineers rely on proven and documented standards in order to properly handle buildings they are not familiar with. An example are codes published by the American Society of Heating, Refrigeration and Air Conditioning Engineers — or ASHRAE. ASHRAE’s codes are used as well-defined standards relating to built environments and are applied in all kinds of buildings across North America, as well as implemented as the basis for countless local building codes. ASHRAE’s handbook has been published for many years with continual updating, with the earliest version dating to the 1920s. 

However, ASHRAE’s codes are geared toward residential and commercial buildings that are primarily designed for humans. There currently are no ASHRAE standards that relate directly to indoor plant environments and few of their standards are sufficient to address the unique needs and demands of these spaces. 

Of particular note in the hyper-competitive grow industry: even the folks who think they have found the answers to these challenges are not inclined to share information or insights. This “secret sauce” mentality has exacerbated the challenges by ensuring no research or data-sharing occurs in the industry. If this secrecy continues, there can be no hope for developing industry standards and best practices. 

As a result, engineers are without guidance as they get involved in the design and construction of modern grow rooms. It forces them to improvise and feel their way along. They wind up inventing solutions based largely on guesswork and the application of best practices from other environments or industries. The result is a bit like trying to put a square peg in a round hole. It doesn’t quite fit.  

Benefits of Standards

Standards in any industry are critical. Countless industries before have faced a similar challenge and wound up developing their own sets of standards. It’s the mark of a maturing industry and has served many useful purposes. 

One key benefit of having standards is that it reduces risk for businesses. As companies in the grow industry navigate their way to market, they need a clear set of guidelines to streamline the process and minimize false moves. Investments can be made with more confidence by knowing there is a body of work that backs up any decisions that have been made. This provides a clear sense of direction for executives and investors, as well as people directly involved in projects, like engineers. It would help all parties involved to learn strategies to repeat success and create consistent and sustainable outcomes — something that’s good for everyone! 

By seeking out the best standards, the grow industry can benefit from improved business economics, better efficiency, better ROI and a reduced environmental footprint. 

Standards also provide a framework for innovation. As the British Standards Institution notes, agreed-upon guidelines establish “rules of the game” by “defining common vocabularies, establishing the essential characteristics of a product or service, and by identifying the best practice within the ecosystems that will ensure successful outcomes.” Most relevant for the grow business is that standards allow everyone to identify what the main issues are and then work together to find solutions. This is especially critical in the early stages of a new business ecosystem, which is exactly where this industry is in the present day.  

While innovation exists to a great degree, the industry would benefit from the kind of scope and direction that comes from having a set of standards in place. That could signal to ancillary manufacturers exactly what the market needs and remove the guesswork involved in providing it by breaking down communication barriers. 

Medical Cannabis

You may think some standards would have been created in the 25 years of medical cannabis. While it’s certainly true that some things have changed since that industry got started, it isn’t necessarily true that the experience of the industry has translated into formalized guidelines. Nor would those standards reflect the extraordinary advancements made in industry technologies just in the past couple of years. The main standards borne out of medical grows are governmental regulations relating to quality of crop and specific chemical contents, such as level of CBD vs. THC, for example. But these are of little help to someone building a new operation today with questions relating to facility design and operation. The medical grows of before are not necessarily similar to what is being built today, especially for adult use grows — which, as a reminder, are expected to be the fastest-growing market segment in cannabis for the next few years.  

The game is different now. A lot of medical cannabis operations from before were at a lower scale than what growers want to accomplish today with adult use crops and medical crops. While the plant is similar, and the facility operates in much the same ways, we know the scale is a lot bigger and that presents its own challenges. 

As well, the nature of medical grows is quite different than adult-use grows. It’s important to recognize this difference, because it can have consequences in the cost of designing and operating a grow room. For example, medical cannabis operations and products are typically regulated very tightly by both the grower and government. There are a different set of regulatory requirements to follow, and there may potentially be more stringent testing required. Medical crops must be very consistent, because successful patient outcomes depend on it. People usually choose their medical product based on trial and error. Once a good solution is found, they stick with it and expect that it will be regularly available and provide the same results every time. This is obviously important for both the patient’s health and consistency of medicinal benefits as well as the grower’s business success.  

Adult-use cannabis grown at scale similarly must be consistent, but its needs are driven more by the brand and its target market rather than certain regulations. A facility for adult-use grows may have different requirements in terms of its design than one intended for medical cultivation. What works for medical may not be the best or most cost-effective solution for adult use.  

Standards In Progress

Clearly, the grow industry is missing out on a lot by not having building standards in place. So, what kind of work is underway now to create them? 

The American Society of Agricultural and Biological Engineers (ASABE) has taken notice of the vacuum that exists today and has partnered with ASHRAE to create a new guideline for indoor growing environments: ASABE X653 guideline “Heating, Ventilating, and Air Conditioning (HVAC) for Indoor Plant Environments without Sunlight.” The author of this book is a contributing member on the developing committee. This guideline is intended to provide clarity for engineers regarding the design and operation of isolated indoor plant environments — in other words, warehouses that do not have windows and totally rely on high-performance HVAC systems to control the environment. 

Certainly, one reason engineers may be prone to make mistakes in this context is because grow rooms are so different from other indoor environments. For example, unlike most other types of facilities, grow room HVAC systems normally don’t introduce any outdoor air. They are typically 100% recirculation with CO2 added, to the tune of about three times the normal ambient concentration. This is just one of many examples, all of which contribute to significantly different requirements for the design of grow room HVAC systems that engineers who are unfamiliar with this space may not realize. Not having any standards certainly does not help. 

4. Misapplication of Traditional Equipment 

In many cases with new grow rooms, certain solutions have been used simply because they’ve worked before in other applications. As noted, the unique nature of the cannabis growing environment means different approaches need to be taken. Many of the solutions proposed in the recent past for grow rooms are simply not sufficient and deliver poor value for growers.  

There are potentially many approaches to HVAC that could be applied to this space. But some of them would be a misapplication of technology. One example is standard commercial air conditioners. These types of air conditioners been a typical choice because they’re cheap and are often used in similar large facilities. The setup is quite simple, and many engineers are familiar with how they work, so they feel comfortable applying them here. 

But ordinary air conditioners are not necessarily well-suited to the grow space. This is because they have some technical limitations that may cause them to be poor performers on the metrics that growers care about, like control of humidity and ability to cool the indoor space when it’s cold outside, not to mention energy efficiency and optimal room control. 

This has led to some growers to spend  a lot of money on new projects that involved equipment that doesn’t work for what they need. This results in underperforming grows that cost even more money in terms of reduced yield to the company and higher operating expenses. 

As a result, the predominant technologies applied are actually band-aid solutions meant to mitigate the limitations of existing equipment that was already installed. For example, supplemental dehumidification has exploded as of late. These only have a moisture removal capacity in the hundreds of pints and typically include no outdoor heat rejection device because they’re so small. This means they have no capacity to do air conditioning — only dehumidification, and any heat generated by the compressor goes back into the space. It solves the biggest challenge with air conditioners — lack of latent capacity — but this comes at the cost of adding more sensible heat to the space and thus requiring more air conditioning, which reduces efficiency.  

This may not always be the best solution and is often used as a quick fix for the grower in a jam. In the long-term, more growers need to look at unitary HVAC solutions instead, particularly for large-scale operations where installing a large number of separate, low-capacity dehumidification units, paired with traditional air conditioners, is likely to represent a larger installation and maintenance cost than fewer high-capacity unitary systems. It would require hanging multiple small units inside a space, all with separate electrical and condensate lines, along with related maintenance costs due to filter changes and repairs.  

Fundamentally, the misapplication of technology is largely due to lack of knowledge and understanding of the products available on the part of many different stakeholders in the industry. This goes back to engineers, but also contributing to this information vacuum are traditional HVAC suppliers and contractors.  

On the side of manufacturers, one issue has been the lack of purpose-built HVAC equipment for grow rooms. Traditional large-scale manufacturers have been reluctant to invest R&D capital into producing a dedicated product for this marketplace for potentially many reasons: Indecision over how to approach the design, questions about liability due to legal uncertainties and uncertainty over whether the market opportunity was worth the required investment to make a new type of product. The cannabis market has had an arguably questionable trajectory until late 2018, with federal adult-use legalization in Canada, so the potential market size for HVAC manufacturers up until that point had been unclear.  

Few manufacturers are offering purpose-built HVAC systems specifically for cannabis growing, due to reluctance to invest in R&D for a new market that was quite small until relatively recently.  

The Limitations of Repurposing

For those who have entered the market, most are repurposing existing products designed for a different application. It’s not necessarily that the solution has to be designed from scratch — there are some applications that bear similarity to grow rooms that can provide a starting point. For example, indoor swimming pools have similar latent loads and operating conditions in terms of temperature and relative humidity levels. This has meant manufacturers of indoor pool dehumidifiers have been well-positioned to provide for the cannabis market — but only to a certain degree. There is still a requirement to further develop their product line specifically for grow rooms and not all have been willing to invest significantly in doing this. 

Then there are applications that are not as compatible with grow rooms. One example is data center air conditioning. At face value, it would appear data centers are quite like grow rooms — they’re both isolated indoor spaces with significant heat loads that originate from equipment that require active air conditioning year-round. For data centers, the heat comes from servers while, for grow rooms, it comes from lamps. But data centers have no need to dehumidify the air — in fact, most add humidity to help reduce static electricity. Meanwhile, grow rooms have a large humidity load due to plant transpiration and evaporation from the watering system. That makes a huge difference from a science and technology application perspective. Therefore, the air conditioning equipment that works well in data centers does not usually apply well to grow rooms.  

Air conditioners for data centers are great for cooling the air but are not usually designed to effectively remove moisture — that’s because data centers typically want slightly humid air to control static electricity, but grow rooms want to control humidity in fine detail to protect the plants. 

Related to misapplication of technology is the poor implementation of it. For example, not all growers are familiar with the modern and high-tech building control systems of today. After all, they have never needed to use these systems before. Some growers are still sorting out their approach to building and equipment controls and not everybody understands how to properly implement them. This requires more involvement from equipment manufacturers and start-up contractors to solve. Building control systems, or specific equipment controls, may require software engineering to tailor their logic to the grower’s needs.

 

 

Advances in Edible Nanoemulsions – CBD Health and Wellness

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Nanotechnology has been a powerful source of innovation in the cannabis industry and has removed one of the greatest barriers to the realized potential of cannabinoids – their hydrophobic nature and their low bioavailability.

An overview of the advances in this niche was published in the journal Advances in lipid research and highlights nanotechnology in relation to food and nanoemulsions.

Advantages of nanoemulsions

The two most common types of nanoemulsions are oil-in-water (O / W) and water-in-oil (W / O). O / W nanoemulsions consist of small oil droplets that are dispersed in water, while W / O nanoemulsions have the reverse structure, with small water droplets dispersed in oil.[1] Nanoemulsions are in the middle of the emulsion size spectrum between emulsions and microemulsions and as such form a happy medium.

From a kinetic point of view, because of their smaller size, nanoemulsions are much more stable than emulsions, which “reduces the tendency towards gravitational separation”.[1] This quality extends the shelf life. The smaller the droplets, the faster and more completely they are digested in the gastrointestinal tract, which increases and decreases the onset time.

Conversely, their larger size offers several advantages over microemulsions. They can be formulated from a much wider range of ingredients, and most importantly from natural emulsifiers, as opposed to the synthetic surfactants which are a driving force behind microemulsions.

Approaches to the production of nanoemulsions

There are two main approaches to making nanoemulsions: low-energy and high-energy.

Low energy processes rely on a spontaneous emulsion triggered by a specific change in the composition or temperature of a system containing oil, water and surfactant.

In contrast, high-energy processes use intense mechanical forces to set the emulsion in motion.

Nanoemulsions based on natural ingredients

This is an increasing demand and an increasing scientific interest in nanoemulsions that are made entirely from natural food ingredients and especially vegetable rather than animal based, such as oils, phospholipids, proteins, polysaccharides, biosurfactants or saponins from vegetable materials.

This is very difficult with low energy methods because these natural ingredients alone are not soluble enough to spontaneously emulsify. However, high energy methods work with a wide variety of emulsifiers.

“Typically, vegetable-based emulsifiers must be highly water-soluble, surface-active, rapidly adsorbing, and present in a concentration high enough to cover all of the oil droplet surfaces formed during homogenization,” the review authors say.[1] “Nanoemulsions are highly effective in increasing the bioavailability and bioactivity of orally administered hydrophobic bioactive agents.”

More research in this area can lead to products with a higher bioavailability of cannabinoids and thus a faster noticeable effect.

Credit: Wikipedia

Image source: https://upload.wikimedia.org/wikipedia/commons/e/ec/Nanob.jpg

reference

  1. McClements, DJ. Advances in Edible Nanoemulsions: Digestion, Bioavailability, and Potential Toxicity. Advances in Lipid Research. 2021; 81: 101081.

Recommendations on cannabinoid dosage and opioid rejuvenation for chronic pain

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In the United States, opioid overuse and abuse has skyrocketed in recent years, as tens of thousands of Americans die from opioid-related overdoses each year. According to the National Institute on Drug AbuseApproximately 21% to 29% of patients prescribed opioids for pain management abuse them, and between 8% and 12% develop an opioid use disorder.

To address the ongoing problem of opioid addiction, many patients and physicians are increasingly turning to medicinal cannabis to curb opioid use while relieving chronic pain. However, there are currently no guidelines on how to get rid of opioids or use cannabinoids effectively to properly relieve pain.

In a recently in the International journal of clinical practiceResearchers used a five-step Delphi procedure to develop recommendations on how and when to use cannabinoids in the presence of opioids to control chronic pain, and ultimately limit opioid use using cannabinoid titration.[1] The Delphi process is a technique of reviewing and summarizing the opinions of various experts to develop a consensus guide.

Regardless of the physical or psychological intervention, the researchers agreed that cannabinoids could be a viable option for patients with chronic pain who do not experience adequate pain relief from opioid use, especially those who experience complications related to opioid use occur. There are no age restrictions on eligibility.

Instructions for using cannabinoids:[1]

  • Cannabinoids should be avoided in pregnant / breastfeeding individuals or in the presence of cannabinoid side effects
  • During the day, an oral extract consisting primarily of cannabidiol (CBD) should be used
  • Patients may be able to add tetrahydrocannabinol (THC) as needed with a starting dose of 0.5 mg to 3 mg. The dose can be increased once or twice a week to 1 mg to 2 mg to a maximum of 30 to 40 mg per day
  • Smoking was discouraged and vaporization was recommended instead for breakthrough pain

Instructions for Opioid Rejuvenation:[1]

  • With an improvement in function and less need for medication to combat pain, opioid rejuvenation can be initiated by 5-10% every 1 to 4 weeks
  • The aim is to reduce pain intensity by at least 30% and the opioid dose by at least 25% and to achieve a significant improvement in function and quality of life

Healthcare providers should monitor the patient’s progress once or twice a month and every 3 months after stabilization. You should also evaluate other medications or recreational substances the patient is taking to minimize side effects or interactions.

This review can help healthcare providers and patients optimize their outcomes by providing guidance on how to properly administer cannabinoids and tapered opioids for safe pain relief.

Credit: Brent Barnett

Image source: https://pixabay.com/photos/cannabis-pot-weed-marijuana-drug-2152602/

reference

  1. Sihota A et al. Consensus-based recommendations on cannabinoid titration and opioid rejuvenation for chronic pain control. Int J Clin Pract. 2020; e13871.

Cannabidiol and its effects on cerebral blood flow

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Now that cannabidiol (CBD) is readily and legally available for research purposes, more and more studies are being conducted into the medicinal properties of the cannabinoid. The results of many of these studies have shown that CBD offers a wide variety of health benefits for treating a wide variety of diseases.

In a 2020 study funded by the British Medical Association Foundation’s Margaret Temple Award for Medical Research, a team of researchers examined the effects of CBD on cerebral blood flow (CBF) and its relationship with memory.[1]

Healthy and strong CBF is important to human health. A decrease in CBF in the hippocampus, a key region in the brain that supports learning and memory, has been linked to a variety of diseases.[1] If CBD affects CBF in certain regions of the brain that are important to memory, it could have a number of useful uses.

In this study, the researchers recruited 15 participants for a placebo-controlled, double-blind, randomized study, including nine women and six men.[1] The subjects received either 600 mg of oral CBD or a placebo (inactive substance) in gelatin capsules on different days.

Three hours after taking CBD or placebo, the researchers measured the regional CBF at rest. They also tested working memory using the digit tension and N-back tasks and episodic memory with a prose recall task. These are common tests used to clinically assess learning and memory function.

Although the memory tasks showed no significant drug effect, the researchers found that CBD increased CBF in the hippocampus.[1] Many diseases are made worse or caused by decreased blood flow to the hippocampus, including Alzheimer’s and neuropsychiatric disorders.

It is important to note that these results contradict the results of other studies. While measuring CBF is an important way of looking at brain function, there are many different factors that affect CBF levels and so it is not directly related to function as CBD does not affect memory performance.

Credit: Anna Shvets

Image source: https://www.pexels.com/photo/person-holding-white-and-black-wall-decor-4226139/

reference

  1. Bloomfield M et al. The Effects of Acute Cannabidiol on Cerebral Blood Flow and Its Relationship to Memory: A Magnetic Resonance Imaging Study Using Arterial Spin Marking. Journal of Psychopharmacology. 2020; 34 (9): 981- 989

Canopy Growth is suing GW Pharma

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Two cannabis industry powerhouses are on trial after Canopy Growth Corporation filed a lawsuit against GW Pharmaceuticals, the company that makes cannabidiol (CBD) -based drug Epidiolex®, last December. Canopy claims it has exclusive rights used to the extraction process to make the drug.

Larry Sandell, a patent attorney in Washington DC, said Forbes that the Canopy patent “largely covers CO2 Extraction, the most widely used and perhaps the most important extraction technique. “

Canopy supports his claim with hers patent Granted in 2020 to protect his right to control a certain type of cannabinoid extraction in the United States. The company’s original patent, issued in 2014was significantly narrower in scope. If the lawsuit is successful, it could have far-reaching consequences for cannabis companies outside of GW.

“It could really be a huge threat to the extraction industry… Although there are steps that can be taken to reduce the risk of liability for breaches, CO2 With extractors, this anvil can essentially hang over your head if business goes on. ” said Sandel.

If Canopy wins its suit, it will have a huge advantage over its competitors. Many CBD companies use the proprietary extraction method. Canopy could potentially decide to defend its patent by filing a series of lawsuits following its GW case.

Epidiolex® is currently the only cannabis-based drug (that is not a synthetic drug) approved by the U.S. Food and Drug Administration (FDA). However, GW has also developed other cannabinoid therapies that are currently being tested in trials.

And GW isn’t the only company taking this path. Several other pharmaceutical companies are currently conducting clinical trials for their own cannabinoid-based drugs, which will also be submitted for approval if tests show positive results.

In the Canopy lawsuit specified“This case is not about restricting patient access to Epidiolex®. Rather, Canopy is doing this to stop GW’s knowledge and unauthorized use of Canopy’s intellectual property.”

Unfortunately, if Canopy wins the suit, it could restrict patient access.

“For political reasons, we do not comment on pending legal disputes, except that we are convinced of our position based on our preliminary examination of the complaint and will vigorously defend ourselves against this lawsuit,” said a GW spokesman said.

Credit: CQF avocado

Image source: https://www.pexels.com/photo/scrabble-tiles-613508/

Preliminary data: THCA can reduce liver inflammation

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A study published by the Biomedical Research Institute at the University of Cordoba found that Delta-9

Tetrahydrocannabinolic acid (THCA) shows promise in relieving inflammation associated with non-alcoholic fatty liver disease (NALD), which is common in people with type 2 diabetes mellitus, obesity, and dyslipidemia.[1]

NAFD is widespread in the western world and affects approximately 25% of the US population. Essentially, liver disease develops due to the build up of fat in the liver. As the name suggests, this damage is not caused by high alcohol consumption, but rather by a high-fat diet.

Because many cannabinoids have anti-inflammatory properties, the researchers used a preclinical model to study the effects of THCA, a non-intoxicating cannabinoid acid, on NAFD.[1] Mice were given a 23 week high fat diet to induce liver fibrosis and THCA was given during the last three weeks of the diet. Cellular and genetic analyzes were used to determine the presence of liver damage or fibrosis.

The researchers found that THCA “significantly decreased” liver fibrosis and inflammation by reducing body weight and improving glucose tolerance.[1] They concluded that THCA could prevent liver fibrogenesis, suggesting potential future uses in humans.

While the results of the study are promising, much more research is needed before any definitive conclusion regarding THCA and NAFD can be drawn.

This study was published in bioRxiV, a magazine that publishes preprinted forms. This means that the study has not been peer reviewed or that other experts in the field will review the results and determine whether the work is suitable for publication. Therefore, it is always worth rereading the study once it has been properly reviewed and published in its final form. Take this into account before drawing any conclusions about the results.

bioRxiV notes:: “As a reminder, these are preliminary reports that have not been peer-reviewed. It should not be considered conclusive, directing clinical practice / health-related behavior, or reported as established information in the news media. “

Credit: Artem Podrez

Image source: https://www.pexels.com/photo/a-man-looking-through-the-microscope-5726834/

reference

  1. Carmona-Hidalgo B. et al. Δ9-tetrahydrocannabinolic acid significantly reduces liver fibrosis and inflammation in mice. Phytomedicine. 2021; 81: 153426.

Cannabidiol & Skin Health: Exploring Molecular Pathways

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A recent study shed light on the antioxidant and anti-inflammatory properties that explain how cannabidiol (CBD) promotes skin health.[1]

To explain these mechanisms, we first need to introduce terminology:

Oxidative stress from reactive oxygen species can damage the skin.[1] The core factor Erythroid 2-like 2 or NRF2 is “the main regulator of antioxidant reactions”. NRF2 targets several genes that affect the antioxidant response, including heme oxygenase 1 or HMOX1, an important protective enzyme.

Still with us? Good!

NRF2 has a positive effect on the HMOX1 function, while BTB and CNC Homology 1 or BACH1 have a negative effect on HMOX1.[1]

Where does CBD fit into this picture?

Previous studies showed that CBD stimulates HMOX1 expression in different cell types. Therefore, the researchers wanted to find out whether CBD has the same effect in keratinocytes, the cells on the top layer of skin, and whether it also affects BACH1 and NRF2.

Using molecular techniques, the researchers found that CBD affects these goals in different ways by:[1]

  • Stimulation of HMOX1 expression in keratinocytes
  • Inhibit and dismantle BACH1
  • Influencing HMOX1 levels by influencing NRF2

The researchers hypothesize that this pathway could explain CBD’s antioxidant properties, meaning that NRF2 activation could be an indirect result of its effects on BACH1.

“We have for the first time identified the main pathways that are regulated by CBD on human primary keratinocytes … which may explain some of the possible beneficial effects of CBD on the skin,” the study’s authors said.[1]

While many people are already using CBD themes for skin conditions, these results show how CBD can work on the skin Molecular level to promote skin health:

“Our validation of CBD as a BACH1 inhibitor suggests that a CBD treatment a) would protect the skin from external influences: e.g. B. from damage caused by UVA irradiation; and b) in a variety of skin diseases, e.g. In eczema or atopic dermatitis. “[1]

In an interesting and perhaps surprising side note, the scientists point out that CBD might actually do more damage as well when it comes to psoriasis. This is because the pro-proliferative effects of CBD can flow directly into the keratinocyte overgrowth that defines psoriasis – meaning that CBD may be better than others for certain skin conditions.

Credit: Aleksandar Pasaric

Image source: https://www.pexels.com/photo/close-up-photo-of-woman-s-face-2464535/

reference

  1. Casares L, et al. Cannabidiol induces antioxidant pathways in keratinocytes by targeting BACH1. Redox Biol. 2020; 28: 101321.

The Return of the SAFE Banking Act: Week in Review

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This week’s big news turns our attention to Washington, D.C., where U.S. Rep. Ed Perlmutter (D-CO) reintroduced the SAFE Banking Act—this time with more than 100 bipartisan cosponsors. It’s yet another opportunity for his House colleagues to approve the banking reform bill, and the 2021 outlook is slightly brighter with a thin Democratic edge in the U.S. Senate.

Who knows what will happen? Democratic senators have promised “comprehensive” cannabis legislation in the coming weeks or months, so it remains to be seen how the federal government under a Biden administration will address the increasingly hard-to-ignore problem of cannabis prohibition.

Of course, that’s not the only headline in cannabis this week. States around the U.S. are moving on cannabis proposals at a lively clip previously unseen in this industry. Optimism abounds, though there are many angles and causes for political debate.

We’ve rounded up some of the key cannabis headlines from the week right here.

  • Without banking reform, like the Secure And Fair Enforcement (SAFE) Banking Act, which was reintroduced by Rep. Ed. Perlmutter (D-CO) in the U.S. House of Representatives on March 18, financial institutions that work with cannabis clients have yet to receive full confidence in safe harbor at the federal level. According to Perlmutter, passage of SAFE Banking would allow cannabis-related businesses in states with some form of legalization and strict regulatory structures to access the banking system. Read more 
  • Three bills, which were passed by the Denver Finance and Governance Committee on March 16, would allow cannabis delivery, cannabis hospitality businesses and on-site smoking. They stand a good chance of passing into law. Read more 
  • At the state level in Colorado, a draft bill reveals one legislator’s 15% THC content proposal for cannabis products across the board. It’s up for debate, however, but the low-potency threshold certainly got the attention of the state’s cannabis industry. Read more 
  • Oklahoma may make it a bit more challenging for businesses to enter the medical cannabis industry, as the Oklahoma House passed a bill that would put a temporary license cap on medical cannabis businesses. Read more 
  • Want to follow the Emerald Cup festivities this year? The cannabis competition is going virtual with a new streaming option on SocialClub TV. Read more 

And elsewhere on the web, here are the stories we’ve been reading this week:

  • The Daily Beast: “Dozens of young White House staffers have been suspended, asked to resign, or placed in a remote work program due to past marijuana use, frustrating staffers who were pleased by initial indications from the Biden administration that recreational use of cannabis would not be immediately disqualifying for would-be personnel, according to three people familiar with the situation.” Read more 
  • Associated Press: “Legislation to legalize cannabis in New Mexico advanced Thursday toward a decisive Senate floor vote under a framework that emphasizes government oversight of pricing and supplies along with social services for communities where the criminalization of pot has led to aggressive policing.” Read more 
  • Yahoo! Finance: “Another quarter of financial metrics from U.S. cannabis company Green Thumb Industries topping Wall Street expectations was marked with at least two price target upgrades Thursday.” Read more 
  • Baltimore Fishbowl: “A bill set to legalize recreational cannabis in Maryland aims to give back to the community.” Read more 
  • Spectrum Local News: “[New York] State lawmakers are close to reaching an agreement on legalizing adult use cannabis in New York, but a familiar hurdle to its final passage remains: Reconciling the concerns raised by some Democratic lawmakers over traffic safety.” Read more 

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Massachusetts Hemp Producers Left in Limbo as They Await Relief from Cannabis Market

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After three full years of hemp cultivation, Linda Noel was confident 2021 would be a success.

Those beginning years were rife with issues, including two broken contracts, an entire crop that went hot and cannabidiol (CBD) regulatory hurdles. She learned along the way, though, and hemp grown for CBD had become her primary crop at Terrapin Farm in Franklin, Mass., where she also grows tomatoes. 

But Noel wouldn’t have grown hemp a fourth year if not for the MA Hemp Industry Survive and Thrive amendment included in the state’s 2021 fiscal budget. The amendment allows licensed hemp producers and processors to sell their products to medical and adult-use cannabis dispensaries in the state. Because hemp-derived CBD is only legal for sale as a topical in the state, it’d bring about a lifeline for Massachusetts’ struggling hemp industry.

That amendment passed in December and was expected to take effect March 11. But so far, Massachusetts’ Cannabis Control Commission (the Commission) has yet to administer an update, guidelines or even a timeline on when the industry can expect the market to open up.

“I’m hopeful by the time we go to harvest, there will be a market to sell in the state,” Noel says.

Now, a sense of urgency permeates the state’s hemp industry. The cultivation season is quickly approaching, and producers like Noel are left to decide whether to grow based only on the hope that regulations will be administered in time. Meanwhile, processors say they’re fielding a boom in calls from interested dispensaries, only to hang in limbo as they await guidance.

“There’s not going to be a hemp industry in Massachusetts if this isn’t implemented in a timely fashion,” says John Nathan, president of Bay State Hemp Company, a licensed hemp extractor and processor in the state. “We’re in a legal [cannabis] state that’s about to drop the ball on hemp—the most benign form of the cannabis plant.”

A Struggling Industry

Massachusetts legalized hemp in 2016—the same year it legalized adult-use cannabis—but hemp production in the state didn’t start until 2018, according to telegram.com. That year, the state issued 13 hemp cultivation licenses, the outlet reports.

That number more than tripled in 2019, when nearly 70 people received cultivation licenses, telegram.com reports.

But trouble came that year when the Massachusetts Department of Agricultural Resources (MDAR) issued policy guidance in late June that stated all hemp-derived CBD products aside from topicals were prohibited for sale in the state.

“Right before harvest, they changed the rules,” Noel says. “We were all growing for the CBD market … and they took the whole market out from under us.”

The industry’s struggles continued into 2020, when 40% of the state’s crop tested above the federal 0.3% THC limit and had to be destroyed, according to Noel and Hillary King, who wrote the amendment to sell hemp products into dispensaries. (The MDAR could not immediately be reached for comment.)

Noel attributes the widespread hot crop to a drought in the state that year. Her 2-acre crop was included in that statistic, though she believes her crop went hot because she waited too long to harvest it.

“Year two went into the freezer, where it still is …. Year three went into the fire pit,” Noel says.

Industry Lifeline

The budget amendment was created to address farmers’ ongoing struggles and help a now-stagnant industry grow. In 2020, MDAR licensed 69 growers for hemp cultivation, nearly on par with the previous year.

SEE MORE: 2020 Hemp Cultivation Data By State

Multiple sources Hemp Grower spoke with for this story say many farmers in the state only planned to grow hemp again because of the amendment.

“As of right now, [farmers] throw seeds in the ground and either have to burn [their crop] or are offered nickels, and it’s just not right,” says Nathan, who currently sources hemp from about 15 farmers in the state.

The amendment would also help hemp processors in the state, who say dispensaries have already begun inquiring about CBD products.

“We’ve had probably two dozen dispensaries reach out to us. There’s this crazy demand,” says Laura Beohner, the president and co-founder of The Healing Rose Company, a hemp processor and manufacturer of finished skincare products, as well as co-founder and director of the Massachusetts Hemp Coalition. “This would be everything for our business.”

Dispensaries in the state are looking to broaden their offerings beyond THC, says King, the author of the hemp amendment who is also the director of wholesale at Northeast Alternatives, a state-licensed dispensary serving both the medical and adult-use markets. But sourcing cannabinoids besides THC from cannabis cultivators is difficult, as THC still by far presents the most lucrative market for these growers.

READ MORE: CBD vs. THC Flower: Why The Price Difference?

Meanwhile, the hemp industry has an oversupply of CBD biomass (and is also increasingly producing other minor cannabinoids), allowing dispensaries to purchase these products at lower price points.

“For me, it came down to the viability of the hemp industry in Massachusetts and wanting to see a functional and vibrant local market that provides these more therapeutic and less psychoactive [cannabinoids] to people in the state,” King says.

But the delay has caused also issues for both dispensaries and processors, who are unable to meet the demand until the Commission provides guidance.

Beohner says she expected the amendment to double her sales for the 2021 season, so she began hiring new employees in anticipation of the demand. But with its status at a standstill, Beohner had to backpedal on the hiring of one new employee. Much like farmers in the state, she is now taking a wait-and-see approach.

Beohner points to the flagrant disconnect of the two industries in the state. “We’re allowed to sell our products everywhere in the state except dispensaries,” says Beohner, who only sells topical products. “It’s frustrating.”

Sense of Urgency

Notably, one potential pitfall of the amendment is that dispensaries are unlikely to be considered as an outlet for hot hemp. King says this is because the amendment focuses solely on hemp products, which are legally defined as containing below 0.3% THC. However, King sees opportunity for MDAR and the Commission to collaborate on developing a pathway for crops that test above the legal THC limit but below the 1% negligence threshold to be sold into cannabis dispensaries.

When asked for comment, spokesperson for the Commission told Hemp Grower the agency has begun talks with MDAR about how to “safely introduce” hemp products into the cannabis supply chain.

“Compliance with Commission testing protocols, seed-to-sale tracking, and packaging and labeling are just a few of the many requirements that the Commission must consider in order to uphold public health and safety when products are sold to patients and consumers,” the Commission spokesperson said. “At MDAR’s invitation, the Commission expects to provide feedback to MDAR on specific areas of concern for its licensees in the months ahead that clarifies these issues and more.”

But some in the industry say the need is urgent as hemp growers make their final decisions whether or not to plant a crop this year.

“This needs to be implemented probably within the next 30 days, or there will be irreversible damage to our hemp industry,” Nathan says.

Despite the hemp hardships over the past few years, some growers, like Noel, retain optimism. But time will tell how long she and other farmers in Massachusetts hold on to their faith in the industry.

“Being a farmer, we tend to say, ‘This is the year, this is going to be a good year,’” Noel says. “I really hope it is.

Bills Proposed in Denver Could Allow Cannabis Delivery and Hospitality Locations

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Shannon Price | Adobe Stock

State-legal cannabis companies aren’t stashing large stacks of cash behind walls or rubber-banded bankrolls in hidden vaults.

Helping motor more than $17.5 billion of legal cannabis sales in the U.S. in 2020, there were 515 banks and 169 credit unions providing services to cannabis-related businesses at the end of last year, according to Financial Crimes Enforcement Network’s (FinCEN) quarterly cannabis banking update.

But those banks are not the “national associations” of the world. Big financial institutions, like JPMorgan Chase, Wells Fargo and PNC, are not going to get into the cannabis space directly, unless there’s more formalized federal reform, said Jonathan Havens, a partner at Saul, Ewing, Arnstein and Lehr’s Philadelphia-based law firm.

Counseling clients on regulatory, compliance, enforcement and transactional matters, Havens has companies in the cannabis industry turn to him for advice on how to get and keep their products on the market, where access to banking comes in handy.

According to the U.S. Department of Treasury’s FinCEN, banks can accept cannabis-related deposits, but there are several compliance steps those institutions need to take, such as filing Suspicious Activity Reports (SARs). When the FinCEN issued guidance in 2014 to clarify the expectations for financial institutions seeking to provide services to cannabis-related businesses, it opened the door for banks to jump into the space—but that door only opened so far.

“I think a lot of these bigger banks said, ‘You know what? The cannabis industry is just not big enough business to us. And, so, it’s not worth it to us,’” Havens said. “The risk isn’t worth it to them.”

Without banking reform, like the Secure And Fair Enforcement (SAFE) Banking Act, which was reintroduced by Rep. Ed. Perlmutter (D-CO) in the U.S. House of Representatives on March 18, financial institutions that work with cannabis clients have yet to receive full confidence in safe harbor at the federal level. According to Perlmutter, passage of SAFE Banking would allow cannabis-related businesses in states with some form of legalization and strict regulatory structures to access the banking system.

Read the full text of the bill below.

“SAFE is a win, win, win, for providers and their communities,” said Dr. Chanda Macias, the first vice chair of the National Cannabis Roundtable. “It will create more jobs, more opportunity and more public safety. We will work hard for passage of this key piece of bipartisan cannabis reform in this Congress.”

The SAFE Banking Act on 2019 overwhelmingly passed the House, 321-103, but it never saw the light of day in the Republican-controlled Senate. The House passed the measure once again in May 2020, as part of the second federal coronavirus relief bill, but it was stripped from the Senate version later in the year. As a result, state-legal cannabis companies don’t have full access to traditional banking options as they operate in a sector that is not federally legal.

But with Democrats now controlling both chambers of Congress and the White House, there’s optimism for banking reform to take shape, said Cresco Labs CEO Charlie Bachtell, who also serves as the chairman of the National Cannabis Roundtable. With legal expertise in corporate governance and regulatory compliance, Bachtell served eight years as the executive vice president and general counselor of Guaranteed Rate—the nation’s seventh largest mortgage bank—and was a leading attorney during the reform of the U.S. mortgage industry.

“There’s a feeling that some sort of banking reform is more likely than less,” Bachtell said. “And I don’t know that that was the case under the prior administration and with the prior makeup of the legislature. So, I think just as a starting position, optimism is key.

“As far as what we’re hearing on the ground, of substantive change, we are hearing that it looks likely that we’ll get something in the very near term that is some form of SAFE that has already been approved by the House on a couple of different occasions, but maybe in a slightly enhanced version of SAFE that will provide that level of clarity and safe harbor for the banking industry as it relates to state-licensed regulated cannabis operators.”

According to FinCEN, there were 55 fewer banks and credit unions providing services to cannabis-related businesses in 2020 than in 2019. But part of that decline coincided with the FinCEN’s release of regulatory guidance in December 2019, which stated financial institutions were no longer required to file SARs for legalized hemp producers.

Without passage of the SAFE Banking Act, Havens said the number of financial institutions servicing the cannabis industry likely won’t experience any major upticks. The banks and credit unions currently participating in the space, by and large, are local, state and regional institutions that are willing to take the compliance risks, he said.

“It’s not the larger banks,” he said. “It’s the banks that have said, ‘You know what, we’re going to get smart on this. We’re going to build up our compliance department. We’re going to charge a premium for accounts, and we’ll make that premium because these businesses are desperate for banks that will take their money. And we’re providing a service, but we know we’re taking some risk.’”

Can SAFE Banking clear the Senate?

Perlmutter has led the charge for cannabis banking reform for years. He was the author of the SAFE Banking Act in the last Congress, and he’s back in the driver’s seat this week with a group of bipartisan sponsors, including Nydia M. Velázquez (D-NY), Steve Stivers (R-OH) and Warren Davidson (R-OH), who reintroduced the bill with more than 100 co-sponsors on Thursday.

But the question remains: Does SAFE Banking have bipartisan support in the Senate to pass as a standalone bill?

The answer is likely yes, said Matthew Ginder, a partner in the cannabis law practice group at Greenspoon Marder, a national firm with more than 200 attorneys who have a presence in 25 cities across 11 states and the District of Columbia.

“I think there is bipartisan support for SAFE Banking to get to the finish line, and in both chambers,” Ginder said. “I don’t know, particularly in the Senate, whether the SAFE Banking Act will be swallowed up by a bill that covers broader reform. I know Schumer, Wyden and Booker are working on their bill to address cannabis reform.”

Sens. Chuck Schumer (D-NY), Ron Wyden (D-OR) and Cory Booker (D-NJ) issued a joint statement on cannabis reform legislation last month, in which they said ending federal cannabis prohibition is necessary to right the wrongs of the failed war on drugs.

“We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies,” they said. “The Senate will make consideration of these reforms a priority.”

That Democratic trio’s intentions might be more along the lines of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019, which would have removed cannabis from the list of scheduled substances under the Controlled Substance Act and eliminated criminal penalties for an individual who manufactures, distributes or possesses cannabis.

“If they include aspects of the MORE Act, which decriminalizes cannabis, then the need for SAFE Banking becomes less,” Ginder said. “The whole issue with banking and why it’s challenging is because marijuana is considered a Schedule I controlled substance.”

While broader-based reform, like the MORE Act, might be what some stakeholders prefer, Havens said he thinks smaller reforms, like SAFE Banking, are going to be a lot easier of a road to hoe.

Sen. Sherrod Brown (D-OH), the newly seated chair of the Senate Banking, Housing and Urban Affairs Committee, told Cleveland.com he’s willing to consider SAFE Banking but only if it’s complemented by sentencing reform in the Senate Judiciary Committee. The effects of pairing banking reform with sentencing reform in regard to attracting bipartisan support remain to be seen.

With a 50-50 makeup of the Senate, the Democrats do have the tiebreaker vote in Vice President Kamala Harris, but that’s more relevant for reconciliation bills, which can be passed on spending, revenue and the federal debt limit. For non-reconciliation measures, passage involves a 60-vote super majority to invoke cloture if a piece of legislation is partisan and draws a filibuster from opponents.

“I think when it comes to cannabis reform in the Senate, people shouldn’t be thinking about 51 votes necessarily,” Havens said. “They should be thinking about 60 votes and are there 60 votes. And as far as cannabis banking reform, or the SAFE Banking act, there might be 60 votes.”

Are cannabis stakeholders compliant?

In the 2017 motion picture “Molly’s Game,” attorney Louis Butterman (played by Michael Kostroff) tells lead actress Jessica Chastain, “There’s a saying in my business—don’t break the law when you’re breaking the law.”

While the movie was about a high-stakes poker game, a parallel to the cannabis industry revolves around stakeholders not wanting to expose themselves to more risks than they’re already exposed to. For example, if a state-legal cannabis business is compliant toward federal guidance and regulations, then there are fewer risks involved.

The state-legal cannabis industry supported more than 320,000 U.S. workers in 2020, and the majority of stakeholders in the industry are compliant with government mandates, Bachtell said.

“The only way that you can create change that we need for this industry is by showing the legislators, the people holding the pen that could make that change happen, that we’re all good actors, that this is a great professional industry that they should be able to rely on and get behind,” he said.

Like any industry, there still could be some bad apples.

Last month, Eaze Technology’s former CEO James Patterson pled guilty in a federal case accusing the online cannabis company of tricking banks into processing $100 million worth of credit-card based cannabis payments.

The fact that someone would need to develop workarounds to be able to simply engage in transactions with customers who want to participate in a regulated and licensed marketplace is indicative of the fact that the cannabis industry needs some changes that will allow for traditional banking and traditional transactions to take place, Bachtell said.

When it comes to concealing the true nature of credit card payments from banks, that’s where trouble lies, Ginder said.

“Something like that is where you’ll see issues in the space,” he said. “So, misrepresenting or masking the nature of what kind of business you’re conducting.”

More legalization means more pressure for reform

As more states come online with medical or adult-use cannabis legalization, there may be a state bank, a regional bank or a credit union that would seize the opportunity to service that market. State-by-state legalization alone, however, would not induce a huge national uptick in cannabis banking institutions, Havens and Ginder said.

But anytime a new state adopts a medical or adult-use cannabis program, that puts more pressure at the federal level for reform, Ginder said.

“If you’re a senator or a representative and your constituents in your state are now allowed under state law to conduct medical marijuana or adult-use activity, then that representative should be advocating for their constituents to do so in a manner that doesn’t create a risk at the federal level,” Ginder said. “So, I think any time you see another state legalize marijuana, that is just one additional pressure point for reform at the federal level.”

In the previous Congress, the chairman of the Senate Banking Committee was Mike Crapo, a Republican from Idaho, which has neither a medical nor adult-use program. Former Senate Majority Leader Mitch McConnell, of Kentucky, also had a say in SAFE Banking’s holdup in the upper chamber through his inaction of calendaring it for debate.

With the turnover of leadership, however, the optimism for banking reform may be more prevalent to some cannabis operators than others, Havens said. Having worked with several multistate operators, he said he’s never come across any of them that do not have at least one bank they’re banking with, and sometimes they have multiple banks.

“I think it might be harder for maybe the standalone operators who aren’t affiliated with a multistate outfit,” Havens said. “Maybe they don’t have enough business to support the fees that are needed to bank, maybe they’re not making enough revenue where it makes sense. Maybe they’re just, you know, sitting on their own money. But I don’t want to say that I think there’s a lot of businesses out there that just have their own safes and are storing a bunch of cash.”

The Safe Banking Act of 2021 by sandydocs on Scribd