Cannabis infused edibles are a big hit, but the delivery method poses a concern with regards to dosing.

Edibles are a hit with cannabis consumers. Cannabis consumers have gobbled up the new edible products introduced last week in Ontario’s legal cannabis shops. The OCS was sold out of its edibles products within an hour. Retail stores reported that gummies, cookies and chocolates also sold out within an hour of hitting store shelves. Edibles are the heavy favorites because they allow consumers to try products without having to resort to smoking. Consumers must be wary of the timeline that it may take to feel the high as a result, and not ingest more than recommended by Health Canada. With the use of edibles increasing, the delivery method poses a concern with regards to dosing.

Consumers who have not smoked or used cannabis products before could be at risk of overdosing. Inexperienced or first-time users must be aware of their own tolerance and be cognizant of avoiding snacking away while waiting for a high. Being careful and mitigating how users consume cannabis infused edibles will help prevent issues such as a racing heartbeat, anxiety and panic attacks that will ultimately lead to a trip to the emergency room. Users must be aware that edibles can take several hours to digest and get absorbed in their system. The type of food consumed with it, before or after, the type and size of a person, weight and time of day will also have an impact on the onset and duration of the “high”. It is a very different absorption method when compared to smoking cannabis that is quickly inhaled through the lungs.

Seniors are especially at risk because of slower metabolism and the possibility of having other prescription drugs in their system. Current federal regulations limit the individual size to a 10ml maximum dose of THC per package, the psychoactive ingredient of cannabis, in order to control how much and how quickly dosing can happen. In general, consumers need to be aware that the onset of the effect of THC or CBD based edibles is within a 60-180 min window, with the affect lasting up to 4-6 hours.
Cannabinoids can be infused in a variety of ways and if there is an uneven distribution of active ingredients it may lead to unpredictable results. Production of edibles must adhere to the highest standards in order to make sure that each batch is exactly controlled, measured and infused properly. It is a much longer onset and a longer affect then smoking or vaping. It has less of an odor, more convenient, discreet and much more controlled.

The greatest allure of this growing segment of the industry if that new technologies and products are developed continuously and improvements are vast. That is also the greatest drawback. As with any new industry, time tested products and technologies are not available and it’s a trial and tribulations type of growth. Being aware of the risks and rewards of cannabis consumption is crucial to maximizing the user experience while minimizing negative affects.

Marketing Cannabis

Effective marketing and advertising are imperative to the success and growth of any business, especially in the Cannabis industry. With the launch of Cannabis 2.0 still in its infancy stage, marijuana start-ups and established companies in the space are finding it difficult to navigate the tangle o advertising restrictions from Health Canada. What can you do for your cannabis business to reach and build the audience of cannabis consumers your brand is hoping to attract? Although the industry is severely limited in the type of marketing and advertising it can utilize, there are various tactics cannabis companies can implement to legally increase awareness of their brand. Before diving into them, let’s start by keeping in mind general do’s and don’ts when crafting your marketing initiative.

Don’t market your cannabis business or products to or near minors

Be smart about the branding you use and the locations you choose to advertise at and keep age restrictions in mind. There are several questions being raised on the legalization of cannabis and its impact on minors. To ease those fears, plan and make appropriate marketing a top priority.

Don’t infringe on any existing brands copyrights, regardless of the industry

Established mainstream companies will be diligent about keeping their brands and trademarks from being mimicked by a cannabis company. A great example is when Hershey’s sued a dispensary for trademark infringement after the dispensary began carrying edibles called “Reefer’s Cups.” Companies such as Hershey’s have an abundance of capital to go after smaller companies for infringement and copyright.

General Guideline for Marketing Cannabis. Please see Cannabis Act for more information.

Do have a clear message on what your company stands for 

How can your company help mitigate the stigmas that years of prohibition and propaganda have placed

on the plant and its use? Maintain fair labor practices and avoiding sexist and derogatory messaging will go along way in building a successful brand identity as your effort will attract a broader and more diverse audience.

Mainstream Marketing

Traditional marketing outlets include media like newspapers, magazines, radio, and TV. These mediums are tricky to utilize due to the strict constrains of the Cannabis Act, and these traditional channels will be very limiting. However, that does not mean that these avenues should be discounted all together. Although these avenues often carry high costs, and measuring results is nearly impossible, you might be able to get creative and identify an opportunity that’s appropriate for your business. By finding alternative, non-mainstream publications such as a cannabis focused magazine will allow you to get your message out there. Television ads are a little too progressive for most corporate networks and service providers to be open to partnerships with cannabis companies at this juncture, but with the right approach some companies have begun to successfully advertise in movie theatres. For example, since 2017, Tweed Inc has been running commercials about their company in Cineplex VIP 19+ movie theatre rooms.

Digital Marketing

Digital marketing encompasses all web-based or electronic communication such as websites, blogs, search engine optimization, advertising and email marketing. Digital marketing is becoming increasingly appealing for several reasons. Because more people are going online for their news, social media etc., making digital marketing a forefront to your marketing campaign is a no brainer. You can better measure the success of your digital strategies using key performance metrics like impressions clicks and conversion rates. You can learn a great deal about your marketing campaign and whether or not your messaging needs to be tweaked. Make a list of cannabis- specific websites and online communities and either list your business there or investigate advertising opportunities. Furthermore, as the old age saying goes, content is king, and that’s especially true for the cannabis industry. As more people become curious about cannabis in the wake of Cannabis 2.0, you can take the opportunity to create blog posts, infographic, videos, and other compelling media for your website or in partnership with a larger industry publication. Lastly, building a list of your customer emails and data base is crucial to successful communication because it will help you build a targeted list that will give you the ability for direct communication.

Social Media

Social media is included in digital marketing, but it’s a powerful medium that deserves its own set of considerations. Many social media platforms prohibit paid cannabis advertising and thus your business may need to get creative and persistent with organic tactics. For instance, think of your Facebook page as a mini version of your website. Post news updates, articles, deals and specials, questions to your followers and play around with different messaging to see what works with your audience. Instagram is quite popular among the cannabis community, and having an account is key to your marketing initiatives. Share beautiful pictures of your products, your business, and any other imagery that both reflects your brand and will resonate with the community. LinkedIn is great for posting business updates, job openings, and finding business communities in your niche that you can potentially partner or negotiate deals with.

Other

Marketing at events give you the opportunity to connect face to face with your customers, vendors, collect opportunity leads, and build relationships. Look for communities of cannabis enthusiasts and other like-minded interest groups. Take advantage of face to face time with your audience by handing out merchandise and apparel. This can help your customers keep your brand as a part of their everyday lifestyle.

Effective marketing and advertising are imperative to the success and growth of any business, especially in the Cannabis industry. With the launch of Cannabis 2.0 still in its infancy stage, many marijuana start-ups and established companies, no mater which marketing area they choose to focus on, it is important to keep Health Canada marketing restrictions at the forefront of your campaign and adhere to all the regulations.

 

 

The Next Cannabis Craze – Infused Topicals

As 2019 has come to an end, it will undoubtedly go down as one of the strongest years in a long time for the broader market and likely the worst year for marijuana stocks.  What started out as a profitable investment in the first quarter turned into a major buzzkill for the remaining nine months.  Since the end of the first quarter, most cannabis stocks have lost a significant chunk of their market cap as questions rose concerning the growth trajectory of the global cannabis industry fell short of expectations.  This has left the industry struggling to answer one simple question: What does 2020 hold in store for cannabis stocks.

Topicals are lotions, balms, salves, creams and oils that are infused with cannabis and absorbed through the skin to provide countertraded relief for pain, inflammation and soreness. Although they have cannabinoid elements, topicals are non-psychoactive and are generally used by patients who want therapeutic relief without a “high.” Infused topicals can be used for a variety of ailments such as burns, inflammation, skin infections and overall skin conditioning, chronic pain, and treating some side effects of cancer treatments.

Several cannabis derivative products are poised to breathe life into an already staggered industry such as infused beverages, vapes and concentrates with the biggest mover being topicals.  Derivates offer significantly higher margin products than traditional dried cannabis, making this past Decembers launch particularly important for the financial well being of marijuana stocks. What’s more, derivatives are particularly popular with younger adults and first-time users, thereby providing a bridge for the pot industry to a new generation of cannabis consumers.

Cannabis derivative products such as topicals work effectively at creating a bigger overall marker for the former Schedule 1 drug, for example, for users who may not feel comfortable inhaling a rolled cigarette or vape pen. They offer significant advantages for producers as well, namely the prospect of higher margins and expanded profitpotential. Cannabis infused topicals involve a significantly greater deal of processing before they’re ready for market. That means they’re more expensive and complex to manufacture, but it also allows space for producers to differentiate themselves, allowing them not only to charge a higher margin for their products but to differentiate themselves from a branding perspective as well.

For processing companies in the cannabis industry who own their own IP, such as XTRX Solutions, for topical formulations are poised to become winners in the race to market.  Having a handful of topicals developed ahead of time and have them ready to be personalized for the client, with scents, texture, CBD and THC to name a few options, will come out ahead.   Licensed producers will be able to cut wait times while formulating their own formulations, avoid finding a manufacturer, cut down on lead time, and not to mention avoid any importing fees associated with purchasing a ready-made base from outside Canada. This will enable a company to develop and produce an infused topical much faster and have their product readily available on the shelves than most of their competitors.

With the state of the cannabis landscape as it is today,  more and more Licensed Producers are bound to pivot from the stagnant dried flower and pre-roll revenue streams and move to a  more lucrative means of selling their products through vapes and tinctures with the majority of the profit margins coming from topicals. Topicals are poised to be the leading derivative product this year as profit margins are high and they appeal to wider audience at the end of the day. Companies that have established partnerships with processors who have cut the lead time by having their own IP on several products are bound to hit their growth trajectory in 2020.

Black Market Still Thriving

 

It’s become very apparent that, the black market, rather than dwindling and disappearing like many experts predicted, is still going strong and thriving. The fact that illegal sales have continued and thrived could potentially dissuade lawmakers in other countries from adopting similar legislations. All of this begs the questions “what’s really going on?” Is the legalization argument flawed or are there other factors at play that we have been ignoring? One could argue that excessive regulations, quality problems, pricing and a lack of supply in the legal markets that are keeping the black market alive.

The eradication of the black market was one of the Canadian government’s main goals, it’s ironic that one of the factors feeding it is the regulatory framework which has been put it place.  Not only are the government restrictions on licensed producers extremely strict, but so are many of the provincial application processes for cannabis retailers and processors. Many of the laws that have been put forth surrounding the distribution, sale and advertising of cannabis are incredibly strict, and in many cases downright bizarre. If you walk into one of the Toronto dispensaries, you will get a sense of how heavy-handed everything is.  The windows are blacked out, the labels and logos on the packages have been stripped to the bare essentials, and the product is hidden away behind thick glass. All of this is the result of the federal government’s aim to legalize cannabis without normalizing its use.

One of the largest hurdles facing the legal market that hasn’t been well addressed are issues surrounding quality.  While it’s definitely a more difficult variable to quantify, a number of surveys and reviews have shown that many consumers are dissatisfied with the quality on offer.  Many of the quality control issues ultimately tie into supply.  Canada already had some of the highest rates of consumption in the world, and that number has only increased since legalization. Put simply, the supply of cannabis is still being outstripped by the incredible demand.  Most of the licensed producers are struggling to simply get enough product out the door, meaning that a lot of inferior pot is being shipped out in the process. To offset the issue, it’s the experienced users who routinely hit up their black market dealer during prohibition that are the least likely to tolerate these problems.

Another major culprit behind the persistence of the black market is a simple case of basic economics. While many are attracted to the idea of purchasing cannabis from a regulated source, at the end of the day there will always be those who simply aren’t going to buy legal when unregulated product is cheaper. For example, the average price in April 2019 for a gram of cannabis sold legally in Canada was $9.99 verses $6.40 for a gram of black market cannabis.  To make matters worse according to statistics Canada the gap between legal and illegal cannabis is $4.72 per gram on average.

One of the biggest issues and probably the simplest explanations is that there’s not enough of the legal stuff to go around. While the issue has improved in many regions in the past year, cannabis shortages have plagued provinces throughout the country, particularly in the early days of legalization.  Many retailers found themselves unable to stock product for days at a time. Health Canada is showing high levels of inventory, but critics have rightly pointed out that a significant amount of that product is unfinished and not ready to sell.

Despite all of these problems it’s important to put things in perspective.  First and foremost, one fact that has been pointed out constantly is that legalization is still in its early days. The hope is that as the Canadian government and the cannabis industry continue to evolve, we’ll start to see these problems work themselves out. Despite what many anti-cannabis proponents are claiming, the situation is not actually that bad. A number of reports have indicated that the black market sales are indeed declining. One study by Statistics Canada found that illegal sales decreased by 13% over the last year. So while it may not be happening as quickly as the government hoped, it is clear that things are trending in the right direction.

Benefits of outsourcing

Let’s talk about the elephant in the room. Outsourcing. It’s the latest buzzword these days, as more and more cost and quality conscious businesses all over the world are turning to specialized companies for outsourcing their non-core business processes. So, what exactly are the benefits of having a partner do your work for you? Specifically, in the cannabis industry. Canada is preparing for a slew of new cannabis delivery methods to hit the shelves in December with the launch of Cannabis 2.0 and for those Licensed Producers who have already partnered up with processing companies, well, lets just say, shareholders will be ecstatic in the next few quarters. Having the ability to transition into new products and services quickly and efficiently will have a small number of LPs first off the starting line. I mean, don’t get me wrong, for those Licensed Producers that have processing abilities in-house are sure to get a significant share of the market. However, that comes at a significant infrastructure and technology cost, efficiency issues, and loss of focus in key competency areas.

For those looking to expand their product lines, working with a dedicated production facility that has the infrastructure and technology to help facilitate product expansion projects for their customers should be a no brainer. Licensed Producers save in many areas. First, expansion costs. The cost associated with expanding or even building a new facility to house the processing branch are astronomical. Then add in the cost of the equipment, finding and training personnel, and let’s be honest here, the countless months spent dealing with consultants and waiting for Health Canada to approve your Standard Processing Application. It’s much more lucrative to invest in core competencies, develop products to continuously bring to market and outsource the rest to a processing partner.

Outsourcing the processing needs to a partner brings years of experience in research and development, manufacturing, packaging, business practices and expertise in delivering complex outsourcing solutions to Licensed Producers. Thus, they can do the job better with their knowledge and understanding of the domain. This leads to an increase in productivity and efficiency in the process thereby contributing to the bottom-line of their clients. Working in conjunction with lab staff these outsourcing partners can help their clients benefit from ongoing research that is being conducted to enhance the product development and flow structure that is in place. They also have the ability to work on proprietary investigation and methods to reduce time to market. Strides in the area of innovation and improved production capacity are additional advantages to working with an outsource partner.

Lastly, outsourcing to a processing partner provides Licensed Producers with much more energy to enable them to focus on building their brand, invest in research and development and focus on providing higher value-added options to their customers. With any competitive market, the ability to focus on product developments, sales and marketing and customer experience is a fundamental business advantage that companies strive to achieve. Furthermore, a lack of resources available to devote to production could affect an organization’s ability to meet fulfillment obligations. An outsourcing partner can supplement existing in-house manufacturing efforts and make it easier to meet those new demands.

It’s generally true that it’s cheaper to rent a processing plant and its employees than to maintain them yourself. With labour often being among a company’s largest costs, outsourcing processing work to a third party leads to a significant decrease in production expenses. One of the greatest advantages of outsourcing is to utilize assets already in place without having to make an investment in fixed costs and maintaining them. Whatever the case may be for Licensed Producers trying to launch new Cannabis 2.0 products, for those who stay lean, focus on their core business and outsource processing needs to a third party will likely be a lucrative decision for their shareholders.

Distillates

In the world of cannabis concentrates, the distillate has one of the highest percentages of THC. Be warned, a distillate can have a potency of up to 99%.  So if you’re not ready for a super potent dab, distillates will knock you out.  Be that as it may, studies have shown that 9% of Canadian cannabis users were already using distillate products prior to Cannabis 2.0. With an anticipated 21% of cannabis users eager to try it post October 17, 2019.  One of the main benefits of introducing distillates into the legal market is that it will allow for more accurate dosing.  Given the nature of the distillate, manufacturers can now provide users exact measurements of what they will be receiving and how to dose.

So what makes a cannabis distillate different from every other concentrate? Well, the answer lies in the extraction process referred to as “shot path distillation.” The process takes your average dabs and makes them safer and stronger. The process is spit into two parts. First, a machine cuts the terpenes and removes them from the cannabinoids.  The second half of the process removes the lipids, impurities, and solvents, leaving a clear concentrate with no smell. Distillate appears as a clear, golden oil that is odourless, unless the terpenes have been reintroduced.  Under the new regulations introduced in Cannabis 2.0, Licensed Producers of Cannabis can now introduce distillate products into the market for recreational consumption.

Cannabis distillate has many alternative uses.  For advanced users, distillate can be consumed in its post-production state without further enhancements, through vaping, or dabbing. The effects of this consumption method can be experience immediately.  As an alternative, distillate can also be added to dry flower in a bowl or joint, to intensify the users high without altering the flavour or odour.  Alternatively, consumers may opt to use a dropper.  Through this method, distillate can be ingested sublingually, under the tongue. For those novice users, however, distillate can be mixed into topicals or oils creating a transdermal solution that allows for the dosage to be absorbed through the skin. Although, one of the most highly anticipated consumption methods of distillate are edible product lines. Through infusing distillate into various foods such as gummy candies, chocolates and baked goods, cannabis companies can effectively create a micro-dose without compromising on taste.

The purity and potency of a distillate are unmatched.  It takes a long time to make than other concentrates.  Not to mention the advanced equipment needed to make distillates makes them more expensive than other dabs.  With no residual solvents, they hit smoother than most other concentrates. The estimated market size for the new cannabis consumable goods is estimated to be over $2.7 billion, with $1.6 billion being generated from edibles alone. Licensed Producers who are first to market with distillate and distillate infused products are sure to garner a large profit from the market share.

All eyes are on the upcoming launch of Cannabis 2.0 in Canada

Cannabis is poised to be one of the fastest growing industries on the planet over the next decade.  Worldwide sales have more than tripled to $11 billion over the last four years alone, and they could grow by as much as 18 times that over the next decade.  Over the next couple of weeks, all eyes are on Cannabis Legalization 2.0 in Canada.  The great white north officially launched adult-use cannabis sales on October 17, 2018, making it the first industrialized country in the world to legalize and monetize recreational cannabis. Now a year later, a new line of cannabis products are getting ready to launch. This new line of Cannabis 2.0 products are nondried-flower products, such as edibles, vapes, infused beverages, concentrates and topicals.

These new pot products will not begin appearing in licenced cannabis stores until the earliest being mid-December.  The excitement surrounding Cannabis 2.0 revolves around the fact that they’re a significantly higher margin product than traditional dried cannabis flower.  For example, by comparison, U.S. Cannabis 2.0 products have not faced oversupply concerns or subsequent pricing pressures.  Furthermore, Cannabis 2.0 products tend to speak to a younger generation of cannabis users, who are, ultimately, the future of the global cannabis industry.

The Canadian cannabis industry is poised for perfect growth. However, Cannabis 2.0 is not without growing concern of the likelihood that history could repeat itself on the supply front.  Ultimately, leading to the same nuisances that growers have been dealing with since the initial launch of recreational cannabis use last year. There have been persistent supply issues with dried cannabis since the initial launch in 2018.  The 3 main issues were first Health Canada being overwhelmed with cultivation, processing, and sales license applications, leading to wait times lasting up to if not more than a year. Second, LP’s have had to contend with compliant packaging solution shortages. Third, with the slow licensing application process, most growers are still scrambling to complete their projects.  Cannabis 2.0 is very likely to face the same trials.

With new regulations now in place to help with backlog of applications, Health Canada hopes that the supply issue will be tackled. The main issue is that none of these solutions are viable options to tackle the supply levels needed with alternative consumption options.  It will still take quiet a bit of time for Health Canada to work through its growing pains.  In the end, Cannabis 2.0 should be a major margin driver for the cannabis industry. But the upcoming launch could wind up disappointing a lot of investors due to supply issues. Only time will tell, but those who are at the forefront of the industry have much to gain. ​

Daily Dose of Cannabis

On the advent of Cannabis 2.0 in October 2019, the cannabis consumer finds themselves confused. The culprit for this tribulation is indecision stemming from conflicting opinions around consumption methods for cannabis. While there is a surplus of knowledge on the topic of consumption through smoking, vaping, oral ingestibles, mouth spray and topicals, but as for advice based off documented clinical trails, not so much. To put this issue in perspective, in a study conducted by Maccallum and Russot, “Practical Considerations in Medical Cannabis Administration and Dosing,” published in the European Journal of Internal Medicine, 89.5% of USA surveyed doctors in residents lacked confidence to prescribe cannabis.  Additionally, according to the study, only 35.3% believed themselves competent enough, on the topic, to comfortably answer questions. One could argue that the lack of confidence stems from a bias towards old mentalities and trouble adapting to new approaches.  One of the most iconic consumption methods is smoking and recently, vaping.  However, the recent back lash that those delivery methods cause (through illegal sales and production), consumers are looking for other delivery methods such as oral delivery, mouth sprays and topicals.

Smoking involves the inhalation of gasses released from the combustion of cannabis at 600-900ᵒC. This has been the most prevalent delivery method for centuries and despite its popularity, this is also one of the unhealthiest methods of consumption. Continued consumption, using this method, is associated with several adverse and series effects such as respiratory issues ranging from bronchitis, couch and phlegm. Similar to smoking and gaining traction in the past half a decade, vaporizing involves the inhalation of gasses where the cannabis is only heated to temperatures of 160-230ᵒC. This reduces the amount of harmful side products being inhaled, however, it does not completely eliminate them completely. Health issues aside, smoking and vaping cannabis is the fastest delivery method to date.  With the onset taking 5-10 minutes and duration lasting 2 -4 hours.  There are several pros and cons related to this delivery method.  Pros include rapid action and advantage for acute or episodic symptom relief.  However, it requires dexterity and vaporisers may be expensive and a number of them are not portable.

Oral ingestion of cannabis has three particularly promising avenues through oil, gel capsules and mouth sprays.  All three allow the user to dose themselves with a high degree of accuracy with essentially no reported adverse effects.  Another method that is gaining popularity is edibles, however, this method presents concerns with regards to dosing.  Depending on how the cannabinoids are infused, there can be uneven distribution of active ingredients leading to unpredictable results. Another method that faces issues is infused teas as the temperature of the water is not sufficient to decarboxylate the acidic forms of the cannabinoids.  This severely limits the effectiveness of the teas as a dosing method. The onset of orally ingesting cannabis is 60-180 minutes due to having to pass through the GI tact and then through the liver.  This longer route to the blood-brain barriers means the effects take longer to set in, and some CBD can degrade while passing through the digestive tract, which means you would need to take much higher doses than you would through smoking or vaping,  but the duration of effects is longer usually lasting 6-8 hours.  It has less odor, more convenient and discrete and is suitable for treating chronic disease and symptoms.

The last delivery method that is gaining popularity is topicals.  This is a site-specific approach and has shown some promise in treating certain conditions.  The cannabinoids are suspended into a carrying solution which is applied directly to the location of interest.  This is especially important for medical cannabis users who need targeted relief in a specific area of the body and would otherwise have to use a large amount of cannabis to get the desired results through inhalation or edibles. The pros of this delivery method are that it is has a less systemic effect on the user and is excellent in treating localised symptoms.  However, the onset of the effects and duration vary greatly.

One of the greatest allures to this rapidly growing industry is the continuous stream of new technologies and products being developed. This, however, is also one of the greatest drawbacks to this industry as well.  The luxury of time-tested products and technologies is not available.  This can be especially stressful when dealing with potential impacts to one’s health. Being informed of the risks and rewards for cannabis consumption methods is crucial to maximizing the users experience while minimizing potential negative implications.

Global Giants Flocking to get a Piece of the Cannabis Industry

Cannabis is poised to be one of the fastest growing industries on the planet over the next decade.  Worldwide sales have more than tripled to $11 billion over the last four years alone, and they could grow by as much as 18 times that over the next decade.  The launch of Cannabis 2.0 on October 27, 2019 will allow a new line of products to be sold to consumers that are nondried-flower products, such as edibles, vapes, infused beverages, concentrates and topicals.  This new launch has sent big brand-named companies flocking to invest in Cannabis projects to get some skin in the game.

The upcoming launch of Cannabis 2.0 has sent several brand-named companies into sinking their teeth into the Cannabis Industry.  Liquor giant Constellation Branks sunk $4 billion into Canopy Growth in November, giving it a 37% stake in the company, while tobacco giant Altria sent $1.8 billion to Cronos Group for 45% stake in the company. Global giant Teva Pharmaceuticals announced its entrance into the growing cannabis industry.    Known as the biggest generic drug manufacturer in the world, topping the industry in almost all aspects including market cap and revenue. Teva has partnered up with Israeli firm Canndoc to supply products to consumers in hospitals, health maintenance organizations and all Israel pharmacies.  This collaboration is considered the biggest deal between pharma and medical cannabis companies thus far. The pharmaceutical sector is treading with caution when it comes to entering the cannabis market thus it may be quiet a while before we see a deal of this magnitude.  Aside from Teva, Contelation Brands, Cronos, and Canndoc, and a number of other companies have put some skin in the game in some capacity including Novartis, Johnson & Johnson, Sanofi, Merck, Abbvie, and Pfizer. The continuous growth and demand for cannabis guarantee that more pharmaceutical companies will likely join the growing trend.

THC to THCA chemical chart

THCA to THC

Most people are under the false impression that cannabis contains THC initially, however, this is not the case. THC (delta-8-THC and delta-9-THC) is found naturally in an acidic form called THCA. The reason why people smoke, vape and bake cannabis before consuming it, is because heat is required to convert the THCA through a decarboxylation reaction to THC. 

The byproduct of this reaction, CO2 is also released. This is also commonly referred to as activating the THC. This information is vital because it helps explain the efficiency level of different consumption methods. To put this into perspective, if one was to keep cannabis at a constant 100 degrees celsius it would take a full three hours to convert the THCA into THC, four hours at 98 degrees, versus 10 minutes at 160 degrees, or temperatures exceeding 200, a matter of seconds.

When creating other cannabis related products such as “shatter” (a glass like cannabinoid concentrate), the THC and THCA levels are vital because it will dictate the nature of the product. The higher the concentration of THCA, the more brittle the glass becomes. This product can range in concentration as high as 80% THCA and THC. This means that adequate heating is essential when producing the concentrated products to limit the THCA concentration.

When shatter is consumed, it is usually heated, so the THCA will be converted regardless. However, products such as cannabinoid oils, which are consumed without the application of heat, are more susceptible to this issue. This requirement proves more challenging for certain production methods, such as alcohol extraction, which have to have additional steps added to ensure the THCA converts THC because the alcohol extraction is done at room or cooled operating temperatures.

Decarboxylation Reaction of THCA to THC

Cannabis leaf and oil bottle

Effects of Particle Size on Extraction Efficiency

Cannabis is a rapidly emerging market, with the technologies traditionally utilized being optimized or outright displaced in favor of better solutions. This metamorphosis is still in early days and much research and development needs to take place.

However, what may be a surprise to some is where significant innovation is taking place; it’s not only in the greenhouses, but the processing rooms downstream of grow rooms. The processing of the cannabis produced is a budding niche, in this industry, specifically the production of extracts which can be used in consumables.

Extracts offer an alternative to smoking that comes in a concentrated form that makes it easier to monitor dosing. Due to the numerous benefits associated with this delivery method, especially in medical applications, consumables are rapidly gaining popularity. Thus, the race is on to optimize the production of cannabis extracts.

There is two primary methods of cannabis oil extraction, they are; supercritical carbon dioxide extraction and ethanol extraction. Each one of these methods has their benefits and shortcomings. They both however, are competing to be the most prominent method of extraction in the industry because both offer a green solution that has demonstrated potential of greater than 90% terpene and cannabinoid extraction efficiency.

Unfortunately, reaching this extraction efficiency is no guarantee for either of these methods as the results are dependent on a substantial number of interconnected factors. One of these is average particle diameter of the feed biomass.

By changing the average particle size of the feed biomass, you are altering the available surface area for the extraction to occur on. This in turn directly influences the mass transfer kinetics of the system. The result: a threefold benefit to be realized.

First, if you are using supercritical carbon dioxide extraction, less severe conditions and, for both methods, shorting operating times can be used leading to savings in the amount of energy per gram of product. Two, for both methods, shorter residency times means more processing capability for the same set-up. Finally, in the case of supercritical carbon dioxide extraction, the less severe operating conditions means higher selectivity of the extracts, resulting in less unwanted high melting point contaminants to be removed by the winterization process.

Put simply this means less intense purification is required to achieve the desired product. For ethanol extraction, despite the conditions not necessarily changing, higher yields at any operating condition can be expected. This results in lower energy consumption per unit product as well.

The goal of the research XTRX solutions is conducting is to find the optimal average particle diameter of feed stock that achieves the benefits mentioned above, while still balancing the resources required upstream in the process to reduce the particle size.

Advances in technology cannot be utilized to their maximum without first gaining an in-depth understanding of the theory behind the mechanisms driving them, that leads to the manipulation of operation variables. None of this is achieved without empirical data correlating the effects of manipulating these parameters in conjunction.

This data can only be gained through rigorous testing and numerous trials. Cannabis is an underdeveloped industry, that is in desperate need of such experimentation to optimize the magnitude of new manufacturing methods becoming available with the new technology coming into the industry. These trials will help to elucidate the best operating practices around cannabis oil extraction.

Drying Cannabis

Effective Drying Time on Cannabis Cannabinoid

The yields from extraction of cannabinoids and terpenes from cannabis are subject to influence from a magnitude of interconnected variables. People commonly mistake the yield variables as being exclusively associated with the extraction process itself. This, however, is not the case. The upstream steps, such as the preparation of the cannabis, are equally as important to the product yield. In the simplest case, you cannot extract what is not there.

One of the main bottlenecks of the preparation process, is that drying the cannabis is both time and energy intensive. If this step is not done correctly, the water levels remaining the in the cannabis will be too high. In the best case, this causes a poorer yield, but in the worst-case scenario, where individuals are using the supercritical extraction method, too much water can actually cause damage to the extraction equipment. On the flipside of this, however, excessive drying at high temperatures and/or over a long period of time, can cause reduced levels of cannabinoid content. This inefficiency leads to additional costs of time and energy, increasing overall costs per unit. This is only exaggerated by the lower yields, due to low cannabinoid content; which leads to a negative multiplier effect.

The clear challenge that is presented from the issues above is finding the optimal drying conditions that will maximize yield, while simultaneously minimizing the costs per unit. At XTRX Solutions we are actively pursuing this formula for ideal drying parameters. The major issue that we will be solving for our clients is that: trying to use elevated temperatures to reduce drying times, reduces the cannabinoid content of the material, leading to a reduced or subpar yield. On the other hand, however, using low temperatures for extended periods of time, leads to bottlenecks in the process, leading to lower operational efficiencies, which also raises the cost per unit. To add to the complexity of this issue THC degradation into CBN (the degraded form of THC that has only a fraction of the potency) is positively correlated with drying temperatures. Oxidation, however, can also lead to the degradation of THC into CBN. The implications of this being that the longer exposure period (drying time), the lower the THC yield.

To further complicate this enigma in order to eliminate a processing step downstream, the conversion of THCA to THC through decarboxylation, which is catalyzed by heat, higher drying temperatures are required. This means that the higher the drying temperature, the lower the THCA yield and the higher the THC yield. Therefore, companies must find a balance that minimizes the degradation rate of THC to CBN, while also maximizing the conversion rate of THCA to THC. All while being conscientious of the precedent constraint that increased drying temperatures will negatively impact cannabinoid content. Therefore, XTRX will be solving a puzzle that has competing inversely related forces, with the goal of optimizing overall efficiencies in both time and energy consumption (i.e bottlenecks), that optimizes a firm’s’ yield of cannabinoid extract products.

In XTRX’s pursuit of the solution to this problem, new and innovative technologies are being explored on a regular basis. One of the more promising recent developments is known as “freeze drying”. Under this process, drying time is significantly reduced, and the process is carried out under low temperatures. The basic principle of this drying process is to create a low pressure environment, where energy will be passed through the material being dried, to instantly vaporize the water content. This means that the bottleneck effect caused by extended drying time and the loss of cannabinoid content as a result of high drying temperatures, are both greatly mitigated. The major drawback this process currently faces however, is the extremely high energy demand, which leads to increased energy consumption, that will increase overall costs per unit.

Cannabis Drops and Cannabis bud

THC Versus the Rest

THC Versus the Rest

The stereotype of cannabis is that, in a recreational capacity, individuals consuming it are seeking the psychoactive effects. However, this is gross misrepresentation of the plethora of applications that come from cannabis. This point is demonstrated even when one looks at the constituents that make up cannabis.

There are over 600 different constituents in cannabis, with the categories most focused on by end consumers being the terpenes and the cannabinoids. Terpenes are non-psychoactive components of the plant; however, they are believed to have medicinal properties and influence the effects certain cannabinoids, the psychoactive components, on the body.

There are thought to be 113 different cannabinoids, though research only exists on 71 of them, and these can be categorized into 11 main classes. Most of these cannabinoids are present in extremely low concentrations; of the classes only three form the majority of the cannabinoid content.

These are Cannabidiol (CBD), Delta-9-tetrahydrocannabinol (THC) and cannabinol (CBN); the first two are desired, most research into cannabinoids has been focused on them and the third, CBN, is the product of THC degrading. This occurs when the dried biomass is stored incorrectly, and the THC oxidizes. CBN has only 10% of the psychoactive potency found in THC and this highlights one of the advantages of extracts over dried flower: easier storage. THC is the main psychoactive in cannabis; the psychoactive effects of cannabis are caused by the binding of THC to a certain cannabis receptor in the brain, CB1.

It should be noted that there is another class of THC, this is Delta-8-tetrahydrocannabinol, it is present in much lower concentrations than Delta-9-THC and only possesses roughly 80% of the efficiency. The last major cannabinoid, and one that is rapidly gaining notoriety in the medical field, is CBD. In contrast to THC, this cannabinoid is a non-psychoactive class, in fact it has been shown to counteract some of the unwanted side effects of THC consumption, such as cognitive impairment.

This alleviation of side-effects is one of many medicinal properties that are associated with CBD. Another one of these being, its antipsychotic effects, which are claimed to help conditions ranging from epilepsy to dementia. It is hoped one day that CBD will be able to supplant many opioid based painkillers.

It is important to note that not all cannabis plants are equal when it comes proportions and ratios of terpenes and cannabinoids. Due to this, certain strains are more appropriate than others as source material for different cannabis products. THC rich cannabis strains are divided into two main strains, which are C.Sativa, C.Indica. 

These classifications are used commonly in relation to the type of effect one achieves through the consumption of cannabis products. However, this not accurate since the cannabinoids and terpene compositions, which give rise to the effects from consumption, form no distinguishable patterns based on this classification. The sub-strains contained in within these two strains are used as the staring biomass material to produce THC rich and balanced oils.

CBD rich cannabis strains can be divided into two main strains, which are C.Sativa and C.Ruderalis. Sub-strains contained in C.Sativa are what predominantly constitute  commercialized hemp cultivation. Hemp referring to cannabis high in CBD and low THC concentrations. These strains are suitable feedstock for production of CBD rich oils.

The important takeaway from all this, is that it is key as an end consumer to understand the important cannabis constituents, so that you can select a suitable product for you. Whether you are looking for stress and pain relief, in which case a CBD rich product is most appropriate. Or if you are looking for a psychoactive effect, in which case THC content is of primary concern. Another important point is shelf life, especially where THC is concerned, extracts provide easier storability and more control over dosage, which comes in a more concentrated form.

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Cannabis Extraction pills

Cannabis Extraction Processes

With a strong emphasis currently on the cannabinoid concentrate consumables market, it would appear as though extraction-based products are the future of cannabis consumables. There are currently two main alternatives for extraction process and these are through the use of: (1) supercritical carbon dioxide (scCO2), a relatively new method and (2) ethanol.

Supercritical extraction process is a method under which carbon dioxide is used under supercritical conditions, as a solvent to solubilize organic components of biomass that has been placed in an extraction vessel. Through the supercritical pressure of the CO2, the fluid is able to retain its penetration properties of a liquid, but increase the speed at which the material can diffuse into the solvent. Once the biomass has been carried out of the system as the solvent, it is depressurized, meaning that the carbon dioxide is removed. This is one of the main advantages of this process as the products created are extremely pure. However, one of the main drawbacks of this process is the requirements to do “winterization”, where the high melting point lipidous materials are removed, creating an additional step in preparing the final product. Additionally, another benefit is the end product has a much lower level of toxicity in comparison to other methods. This is because carbon dioxide is considered to be a relatively safe solvent, especially when compared to the standard organic alternatives, such as benzene, which is a highly toxic carcinogenic. Also, because of the relatively low operating temperatures, the terpene and the cannabinoid portorios are preserved with little to no degradation. Finally, due to the inert nature of carbon dioxide, it will not alter the chemical compositions of the extracts.

Ethanol is a much simpler process of extracting cannabinoids, with a lower initial capital outlay, in most cases, than the supercritical process. This method utilizes ethanol as the solvent for the biomass to be suspended in before extracting the cannabinoids. Once the biomass has been submerged, the ethanol is drained from the container, and the biomass is pressed to remove any excess ethanol. All the recovered solution collected is then heated to boil off the alcohol, leaving only the cannabinoids, which were extracted during the time that the cannabis was suspended in the solvent. The more advanced method of this process adds an additional step of mechanically agitating the cannabis and solvent mixture. This is often done to increase the extraction yield of the cannabinoids to increase overall efficiencies. The product of this extraction varies not only on the advanced nature of the system, but also on the operating temperature during suspension. Systems range in operating temperature from room to cool, which dictates the yield and purity inversely. The cooler the operating temperature, the lower the yield, but the higher the purity and vice versa. In systems that operate at a cooler temperature, the product may be so pure that no further purification is required. Warmer systems on the other hand may require an additional purification stage called dewaxing, which is minor in comparison to the winterization stage of the supercritical extraction process.

In summary, both systems are relatively efficient, yielding greater than 90% extraction, if done correctly. Although on average the supercritical method will yield a higher efficiency, there is a trade off in terms of initial capital outlay and the added difficulties of winterization. Ethanol is currently the more common practice for extraction process, however, in order to achieve similar results to that of the supercritical method, more advanced technology is required, minimizing the advantage of a reduced initial capital outlay.

Cannabis prescription

Consumables

With the legalization of Cannabis, consumption is expected to increase. The licensed producers of cannabis are not expected to be able to meet the demand of the market when sales commence. The method of consumption however, is expected to evolve, as more people are moving away from smoking cannabis and towards food or oil cannabinoid concentrate consumables.

Consumables, like all current aspects of the cannabis industry are in flux and have gone through a number of distinct transitions in the past. Despite not yet being legal for the general public, in Canada, certain concentrates are legal for medicinal purposes. However, this has not stopped innovation, especially in other parts of North America where it is already legal.

Traditionally, when one thinks of cannabinoid concentrate consumables, such as “pot brownies”, they picture the ground dried flower being directly added to the mixture. The problem that this created however, was a poor tasting consumable and quite often a poor consistency in the distribution of the cannabis. The solution to this was to extract the cannabinoids and combine this concentrated oil with lipids, such as butter. In doing so people were able to achieve a much more even and consistent distribution of cannabis throughout their products. 

Additionally, they were also able to greatly diminish the negative tastes that had been associated with the addition of cannabis to the mixture. However, not all issues associated with distribution have been rectified with this advancement as the lipidous materials have a tendency to clump in small pockets throughout the mixture. This may not seem like an issue, as they are small pockets, but due to the nature of the highly concentrated cannabis additives, this can can create quite a drastic effect on dosage. Even with this critique however, it is still considered more efficient than the traditional method of adding finely ground dried flower cannabis directly to the mixture.

The most recent innovations in the edibles industry involves the fusion of THC to sugar and salt crystals. The ideology driving this innovation, is that products, such as a sugar and salt, are very versatile in nature as it can be added to almost everything. It also helps to further reduce the negative side effects associated with the poor taste. Additionally, it should, theoretically, resolve the distribution issues people are still experiencing, as it dissolves in a uniform manner. 

The implications of this being that the edibles market is now ready to meet much more of the demand in the medical cannabis space. This is as a result of being able to much more accurately measure dosage amounts, which is essential for patients. It will greatly reduce the risk for regular consumers as it becomes legalized, as they will have a better understanding of the amounts of THC they are ingesting. Simply put, it helps to remove the guesswork from this segment of the consumables market.

A huge driving factor for the innovation in the development of the edibles market segment is healthcare practitioners. Doctors will not advise their patients to smoke due to the detrimental damage to the lungs and heart caused by smoking. By making edibles a more available and reliable means of ingesting THC and CBD’s, they have a great appeal because they do not have the same negative side effects associated with consumption through inhalation of smoke.

Additionally, it should be noted that in order to create consumable cannabis edibles, all methods other than the traditional means of directly adding the cannabis, require THC extraction processes to take place. Therefore, the continued development of the extraction industry directly affects the future innovation and development of the consumables market.