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Wana Brands Dominates Oregon Market, Expands to East Coast in 2018

Wana Brands launched their products in Oregon’s market in July 2016, about a year ago. Since then, their brand presence has grown considerably and their products are now in 240 of Oregon’s 375 dispensaries, according to a press release issued this morning.

Wana Brands is an infused products company; they make sour gummies, hard candies and caramels. The business originally launched in Colorado back in 2010 and as of 2016, they own 23% of the market share and had the most sales revenue of any edibles company in Colorado, according to BDS Analytics. The next closest competitor owns 12% of the market share.

Nancy Whiteman holding a batch of cannabis gummies

According to Nancy Whiteman, co-founder and co-owner of Wana Brands, becoming a market leader in Oregon is a result of their product’s consistency and taste. At the end of last year they launched in Nevada and this year they will launch in Arizona and Illinois. In 2018, they expect to make a big East Coast push, expanding into Massachusetts and Maryland as well.

Election Day last year legalized recreational cannabis in a number of states, including Massachusetts, Maine and Nevada. About a week before Election Day, we interviewed Whiteman about those states coming online and her drive to expand. She said she saw a lot of potential in those markets and she was right. Nevada witnessed a massive surge in demand with the opening of recreational sales in the beginning of July and Massachusetts is expected to be another huge market potential.

In that interview, she explained a bit of their growth model: “The model we are pursuing is a licensing agreement where we partner with existing or new license holders in their state,” says Whiteman. “In many ways they are doing the heavy lifting, but we are providing an enormous lift by licensing our intellectual property to them.”

Now that her company has found enormous success in established markets like Oregon, Nevada and Colorado, they want to make a big push in those fledgling markets on the East Coast. “In both markets [Massachusetts and Maryland], we will be working with a partner who will be licensing our products,” says Whitman. “I think the East Coast is a huge opportunity.  There are major population centers in New England, NY and FL and the markets are almost completely undeveloped at this point.” Wana Brands is also currently entering talks with partners in California, Florida and Maine.

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Senate Committee Votes to Keep Medical Cannabis Protections

The Senate Appropriations Committee approved the amendment to continue protecting state-legal medical cannabis markets from the Department of Justice. The amendment, previously known as the Rohrabacher-Farr Amendment, prevents the DOJ from using funds to target medical cannabis operations, patients and businesses in states where it is legal.

Every time Congress reviews the budget, this amendment needs to be included to keep protecting the medical cannabis community. While the rider still needs to make it through the final version of the appropriations bill, it is a big win for the status quo.

According to Aaron Smith, executive director and co-founder of the National Cannabis Industry Association (NCIA), this indicates that Congress is resisting Attorney General Jeff Sessions’ calls to end the protections. In a letter sent back in May, Sessions urged the Senate on both sides of the aisle to stop protecting medical cannabis.

Many see this morning’s vote as Congress standing up to Jeff Sessions, and standing up for medical cannabis patients. In a letter to NCIA members, Smith says that a lot of work still needs to be done, but this is an important first step. “This is not the end of the story. There are still many steps to go before a new budget is finalized,” says Smith. “But this is an important indicator that our allies in Congress are standing up for us, even in the face of DOJ opposition.” In an official NCIA statement, Smith acknowledges the hurdles that still face the amendment. “Now it’s time for the House to do the same,” says Smith. “Patients deserve access to care, states deserve respect, and members of the House deserve the opportunity to vote on amendments like this that have the strong support of their constituents.” Bipartisan support like this in Congress is needed to prevent the current administration and the DEA from meddling in states with legal medical cannabis.

 

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Cannabis Industry Needs Leadership, Not Pesticides

The medical cannabis sector is currently attracting increased attention, as patients, doctors, regulators and investors take a closer look at our industry. There is a lot for them to learn and to benefit from as our industry matures under the glare of the proverbial spotlight. And there’s a lot for those of us in the industry to be proud of. We’re helping patients manage pain, for example. We’re helping them get their lives back.

But that same spotlight is also revealing some problems in our industry.

Take ingredients for example. When I look at the ingredient list in my natural medicines, I don’t expect to see Myclobutanil, Piperonyl Butoxide, Pyrethrin, Bifenezate, and Avermectin listed. Yet, that’s exactly what some licensed producers of cannabis in Canada and some cultivators in California have been selling to their patients. You have to ask yourself why, when pesticides are the only toxic substances released intentionally into our environment to kill living things. Patients don’t take cannabis to harm themselves. They do it to improve their quality of life.

Yet some cannabis companies have violated their patients’ trust in supplying them with something that could harm them. Indeed, recalls for cannabis, unfortunately, are now becoming somewhat commonplace on both sides of the border. These licensed producers – audited and approved by government – are entrusted to produce safe, reliable, consistent medicine for patients. They are entrusted to put safety at the core of their business at all times. But that is clearly not the case in certain circumstances.

In the past year, a few of the 52 licensed producers in Canada have been found to have pesticide contamination in their cannabis products. From what I can see, the explanations given for the presence of these pesticides don’t make sense. Pyrethrin, for instance, has been found on some medical cannabis products shipped out of certain growing facilities. However, pyrethrin does not naturally appear on plants. It has to be intentionally applied, accidentally or otherwise.

That means, in cases where this pesticide has been found on products after they left the growing facility, two things had to have happened. First, someone introduced it onto the plants to deal with an insect infestation. And second, lax quality control standards – perhaps influenced by a short-term focus on profits over patients – allowed infected products to enter their supply chain and, in many cases, to be consumed by patients.

When revealed, those responsible for companies using pesticides such as pyrethrin say they are “shocked”, publicly declaring that they have no clue as to how these toxic substances entered their cultivation processes. The fact is, if you don’t test your inputs, if you fail to test your outputs, and if you manage your business for short-term profits, you shouldn’t be producing cannabis.

There’s no place in healthcare for people who disregard a patient’s well being, because – from a patient’s perspective – what you don’t know could hurt you. No one who grows something can absolutely guarantee that a mistake will never be made, granted. But as the cannabis sector expands, experienced cannabis firms know there’s a direct correlation between attention and leadership: as the world pays more attention to our sector, the onus on us to be stewards in and for our industry also rises.

That means putting patient safety at the centre of everything we do. And that means ensuring patients are consuming safe cannabis produced by licensed companies that are committed to the long-term health and prospects of our growing industry.

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Harborside, CanPay Announce Partnership, Launching Debit Payment System

CanPay, a debit payment solution for the cannabis space, announced today their partnership with Harborside, the largest medical dispensary brand in the United States. The partnership will allow Harborside’s more than 200,000 patients to use a mobile debit app when purchasing cannabis through their delivery service, instead of bringing cash.

For deliveries, patients would use the CanPay app on their device “to generate a secure, single-use payment token that includes no personal identifiable information,” according to the press release. A Harborside delivery employee scans the token and the money is transferred from the patient’s checking account to Harborside. This allows for delivery employees to make less cash transactions and affords patients the luxury of not having to take out cash to get their medicine.

Harborside, founded in 2006, is recognized as the largest nonprofit cannabis dispensary in California, and the United States. They were reportedly the first dispensary to lab test their products. Being an advocate for patients and their safety, they offer a variety of free health and wellness services. “It’s important to us that we stay on the forefront of patient care and access to the products our community needs to improve their quality of life,” says dress wedding, co-founder of Harborside. “CanPay enables us to continue delivering on those goals by normalizing the payment process for our patients and staff.”

CanPay launched last year in November and has since expanded to over 50 dispensaries and six different states. The premise of their system is a secure and safe transaction for customers or patients of dispensaries. “To ensure privacy and security, all purchases are made using non-identifiable, single-use, and random payment tokens generated in the CanPay App,” reads the press release. CanPay is currently serving businesses in Washington, California, Colorado, Maine, Florida, and Oregon.

Dustin Eide, CEO of CanPay

“Patients who rely on cannabis for preexisting medical conditions should not have to be inconvenienced or have their safety put at risk by a cash-only model,” says Dustin Eide, chief executive officer of CanPay. “Delivery is a mainstream solution and payments should be able to keep up with the industry. By partnering with Harborside, we are providing their patients the benefits of more secure, transparent transactions.” According to Eide, their service is compliant with federal medical cannabis policy and guidance. “CanPay’s service operates under compliance programs built around the Cole Memo and FinCEN Guidance issued by the Department of Justice and the Treasury, respectively, and updated on Feb. 14, 2014 which provided guidance to financial institutions on the conditions with which they can provide banking services to the state regulated cannabis industry without incurring federal action,” says Eide. “Also, CanPay utilizes the Automated Clearing House (ACH) network to affect our services in full transparency. While Visa and MasterCard have established clear rules prohibiting cannabis transactions on their networks, the ACH network relies on the individual financial institutions to determine what type of transactions may occur.” Because of that, Eide says, there’s no need to hide transactions, unlike services that use Visa or MasterCard that require using an obscure legal entity name or a financial intermediary’s name.

According to Dustin Eide, CanPay is designed to be a long-term solution for the cannabis industry’s cash transaction woes. “At approximately 2% fees to the dispensary (and no cost to the consumer), CanPay will be a low cost payment service compared to Visa and MasterCard when they do enter the market, which we’ve been told by our contacts at the companies that this won’t be until federal law changes,” says Eide. He thinks that when MasterCard and Visa begin working with cannabis businesses, they will charge higher transaction fees in the 3-4% range, given the high-risk nature of the market. “CanPay’s challenge is to gain sufficient breadth of coverage with dispensaries and adoption among cannabis consumers to be able to offer that value on a wide scale prior to Visa and MasterCard’s entry into the market.”

Looking to the future, Eide hopes the partnership with Harborside will lead to more business. “CanPay couldn’t ask for a better partner to enter into the California cannabis market, which is expected to top $20 billion by 2020, than Harborside, one of the world’s most respected and well-known cannabis organizations,” says Eide. “It is an honor to be chosen by Harborside, who has their pick of services for the cannabis industry, to facilitate their cashless delivery payments and enhance the safety and convenience of purchasing medicine from Harborside for both their patients and their employees.”

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SC Labs Santa Cruz Gets ISO 17025 Accreditation

Earlier this week, SC Labs issued a press release announcing they achieved ISO/IEC 17025:2005 accreditation for the cannabinoids panel at their Santa Cruz location.

“We are thrilled to announce our ISO accreditation as this is one of our most important achievements over the past seven years of serving the cannabis industry and demonstrates our commitment to serving our clients with integrity,” says Jeff Gray, co-founder and chief executive officer of SC Labs. ISO 17025 accreditation represents an international standard for a laboratory’s technical competence in producing accurate test results.

“Being accredited to this International Standard demonstrates our robust quality system, technical competence, the calibration and suitability of our instrumentation and our ability to produce precise and accurate test data,” says Gray. “For clients, it enhances their confidence in our services and their choice in a business partner, provides them with additional legal defensibility in complying with upcoming regulations, and enhances the integrity of their products based on SC Labs results.”

SC Labs is currently expanding in California, growing their Southern California and Santa Cruz locations, and adding field offices throughout the state, according to the press release.

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Massachusetts Lawmakers Reach Compromise on Cannabis Bill

On Election Day last year, voters in Massachusetts approved a measure to legalize recreational cannabis. With recreational sales beginning in July of 2018, lawmakers have tried to get a bill through the state legislature to settle on, among other things, a tax rate and regulatory framework.

On Wednesday, multiple news outlets reported that the legislature has reached a compromise on a bill that would change the measure that voters passed to allow for lawmakers to implement higher taxes, a strategy on local bans and a regulatory framework, reports The Boston Globe.

mpp logo
MPP logo for the Regulate Marijuana Like Alcohol Campaign in Massachusetts

In a statement to supporters, Matt Schweich, director of state campaigns at Marijuana Policy Project (MPP), the biggest changes are in local control and taxation. “After weeks of persistent advocacy from Massachusetts residents, the Senate and House have reached a compromise that largely respects the will of the people,” says Schweich. “The legislation adjusts the local control policy, allowing local government officials in towns that voted “no” on the 2016 ballot initiative to ban marijuana businesses until December 2019. For towns that voted “yes” in 2016, any bans must be placed on a local ballot for voters to approve.” Therefore if a town wants to ban cannabis sales, they need to bring it to a vote for the people to decide. 72% of the population voted in favor of the ballot initiative. “The maximum tax rate — which depends on whether towns adopt optional local taxes — will increase from 12% to 20%,” says Schweich. “Under the bill, the state tax will be 17%, and the local option will be 3%.” A major push behind increasing the tax rates concerned lawmakers’ worries that the original 12% tax rate would not cover regulatory costs and government expenditures on the industry.

Boston, MA
Photo: Trenton Kelley, Flickr

The ballot initiative created the Cannabis Control Commission, the regulatory body overseeing the industry, with three board members. That agency will remain in the new bill, just with five board members that will write the rules on things like marketing, safety, fines and penalties and fair business practices.

Schweich says the MPP helped orchestrate over 1,000 calls to legislators, urging them to reject the House’s version of the bill, which some have called draconian. “The bill isn’t perfect, and we preferred the original language of the ballot initiative,” says Schweich. “However, given how problematic the House bill was, we are satisfied with the final compromise.”

The bill is expected to pass votes in both the House and Senate on Thursday and Governor Charlie Baker is expected to sign the bill that same day.

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Las Vegas Gets First ISO 17025-Certified Cannabis Lab

According to a press release published earlier this week, DB Labs achieved accreditation, becoming the first ISO 17025-accredited cannabis laboratory in Las Vegas. DB Labs received their accreditation with the help of Perry Johnson Laboratory Accreditation, Inc., an organization that provides third-party assessments to ISO/IEC 17025:2005. DB Labs was also the very first cannabis-testing lab in the state of Nevada.

According to Susan Bunce, president of DB Labs, ISO accreditation is one way the cannabis lab space is being standardized. “As the first cannabis-testing laboratory in Nevada, DB Labs has always taken patient safety very seriously and has always tried to raise the bar,” says Bunce. “The world of cannabis testing is often compared to the Wild West: each lab uses state regulations to set their standards, but it leaves a lot of room for subjective interpretations. The ISO accreditation removes the ambiguity and guarantees a consistent level of testing to users. We are proud to be a part of that.”

According to Tracy Szerszen, president and operations manager at Perry Johnson, ISO/IEC 17025:2005 is an international standard utilized to accredit testing laboratories. “This accreditation provides confidence to end-users that the test results they receive are reliable,” says Szerszen. “Laboratories achieving this accreditation have demonstrated their ability to adequately perform tests using appropriate equipment, environmental conditions and technical staff.” She says another requirement for that accreditation is a quality management system, which essentially helps manage operations and client needs. “Achieving this type of accreditation is quite challenging for laboratories especially with all of the new up-and-coming regulations, technologies and methods in the cannabis industry,” says Szerszen. “Laboratory testing is such a critical part of this industry and becoming accredited provides assurance that they are performing to the highest standard.”

As Szerszen points out, laboratory accreditation can provide a consumer that sense of confidence and trust in the product’s lab testing. “PJLA would like to commend DB Labs for achieving their ISO/IEC 17025:2005 accreditation and their commitment towards meeting the standard,” says Szerszen.

The news of their accreditation comes at an opportune time: With surging consumer demand at the outset of recreational sales, the state has raked in millions of dollars in sales within the first weekend. Recreational cannabis sales in Nevada began on July 1st, and a statewide cannabis product shortage recently led to Governor Sandoval issuing a statement of emergency, allowing more applications for distribution licenses to be considered.

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Uruguay Becomes First Country to Implement Legal Cannabis Sales

According to an article on Reuters, Uruguay’s pharmacies opened for recreational cannabis sales on Wednesday for those over the age of 18. Uruguay beginning recreational sales marks an important milestone as the first country to fully legalize cultivation, sales and recreational use of cannabis.

The country legalized cannabis more than three years ago, but it has taken a while for the government to work out and implement their regulatory framework. Only two companies, Symbiosis and Iccorp, received government licenses for growing, packaging and distribution, according to Reuters.

Uruguayan flag Photo: Jimmy Baikovicius, Flickr

Consumers are required to register with the government and are only allowed to purchase up to 40 grams of cannabis per month. 5-gram packages are the only products for sale currently at $6.50 a piece. As of now there are only two types of cannabis that consumers can purchase: “Alfa 1”, and indica, and “Beta 1”, a sativa. According to Reuters, neither has a particularly high concentration of THC.

The government says they will carefully monitor production and registrations to prevent diversion and cannabis leaving the country. Only citizens of Uruguay over 18 are permitted to register to buy cannabis. With over 3.4 million people residing in Uruguay, less than 5,000 have registered by Wednesday. All sales must go through a pharmacy, according to the Reuters article.

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Should PA Revoke a Cannabis License For Their Parent Company’s Past?

Pennsylvania Medical Solutions, LLC (PAMS), won a license to grow medical cannabis in Pennsylvania, but some think the Pennsylvania Department of Health (PA DOH) should reconsider awarding that license. PAMS is a subsidiary of Vireo Health, which has medical cannabis licenses in New York and Minnesota, as well as quite the blemish on their business record. In December 2015, two former employees were accused of breaking state and federal laws by transporting cannabis oil from Minnesota to New York. Because of that history, some are questioning why exactly they were awarded the PA medical cannabis license.

A part of the PAMS application

In that school of thought is Chris Goldstein, a Philadelphia-based cannabis advocate and author of an article on Philly.com, which calls PAMS’ license into question. According to Goldstein, Vireo Health could lose their licenses in New York and Minnesota, and those former employees involved might even face federal prosecution. “On the surface it would seem that Vireo broke every rule in the book,” says Goldstein. “Not only could the company lose its permits in both of those states, but employees could face federal prosecution for interstate transport and distribution.” But does that previous wrongdoing by two former employees have any bearing on their application in PA? In Maryland, it did. According to The Baltimore Sun, concerns surrounding MaryMed’s parent company, Vireo Health, is the main reason why their permit to grow medical cannabis was revoked.

In response to some of those concerns about their PA license, Andrew Mangini, spokesman for Vireo Health, issued the following statement, which appeared in Goldstein’s article: “While we’re aware of allegations against two former employees of an affiliate, those individuals have never had a role in our application or in the management of PAMS,” says Mangini. “It’s also important to note that our Minnesota affiliate and our parent company Vireo Health have not been accused of any wrongdoing in connection with those allegations.”

Below is a timeline of events leading up to the PA DOH defending their decision to give PAMS a license:

  • December 2015: Two former employees of Minnesota Medical Solutions, a subsidiary of Vireo Health, transported a half-million dollars worth of cannabis oil from Minnesota to New York, violating state and federal laws.
  • February 9th, 2017: The two former employees were formally charged with crimes in Minnesota for illegally transporting cannabis across state lines.
  • February 20th-March 20th, 2017: PAMS submitted a license application to the PA DOH between these dates, listing their business state as Minnesota on the application.
  • May 2017: Maryland DOH suspended the licenses of MaryMed LLC, a subsidiary of Vireo Health, over concerns that the company did not provide information related to the Minnesota and New York licenses on their application, according to the Washington Post.
  • June 20th, 2017: PA DOH releases a list of license winners; PAMS was listed among winners for a cultivation license in Scranton.
  • June 26th, 2017: PA DOH officials defend their decision to award PAMS a license, according to a Philly.com article. That same day, The Baltimore Sun reported the Maryland Medical Cannabis Commission revoked MaryMed, LLC their license, citing concerns about Vireo Health.

April Hutcheson, spokeswoman for the PA DOH, told Philly.com in June, “Remember, the permits are given to business entities, not people.” The point she is making refers to the charges being filed against former employees, not any of the businesses who hold medical cannabis licenses.

Steve Schain, Esq. practicing at the Hoban law Group

Steve Schain, Esq., an attorney with Hoban Law Group in Pennsylvania, has seen no objective evidence of anything wrongful in either PAMS’ application or the DOH’s processing of it. “Marijuana related businesses often have distinct, affiliated components and the Department of Health faces two critical issues,” says Schain.

“First, whether grow applicant PA Medical Solutions, LLC (PAMS) had a duty to disclose alleged wrongdoing on its application, failed to fulfill this duty and, if so, whether PAMS’ application should be amended, re-scored or disqualified. Second, as part of its ongoing license reporting requirements, whether grow licensee PAMS has any duty to disclose the alleged wrongdoing. The answer to much of this hinges on whether criminal or administrative charges were leveled against just Vireo Health’s former employees or also included the entity and whether these individuals or enterprise fell within Pennsylvania Medical Marijuana Organization Permit Application definition of an “Applicant” (“individual or business applying for the permit”) or applicant’s “Principals, Financial Backers, Operators or Employees” of PAMS. Either way, it does not presently appear that the [PA] DOH missed anything.”

The list of permit winners in PA

This does raise the question of whether or not Vireo Health is under investigation, which is yet to be determined. According to Goldstein in his Philly.com article, the Minnesota DOH declined to comment on Vireo Health and the New York DOH says the department’s investigation is ongoing. “The selection of a Vireo Health affiliate to grow and process medical cannabis in Pennsylvania has cast a serious shadow over the integrity of the program even before it has started,” says Goldstein.

In Maryland, the DOH revoked their license as a direct result of those former employees in Minnesota committing crimes, according to The Baltimore Sun. Commissioner Eric Sterling said there is “a reasonable likelihood of diversion of medical cannabis by the applicant.” So should Pennsylvania do the same? Do those crimes by former employees have any bearing on their application? This story raises a number of questions regarding applications for state licenses that are largely left unanswered. One thing we know for certain: each state handles applications very differently.

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DigiPath Gets Rec Testing License, Renews Medical License In Nevada

According to a press release, Digipath, Inc. (OTCQB: DIGP) was awarded a recreational cannabis-testing license and a renewal of their medical cannabis-testing license in Nevada.

Digipath Labs is based in Las Vegas, NV

The news came the week following Nevada’s opening day for recreational cannabis sales, which began July 1st. Some estimates report up to $5 million in sales within the first weekend.

Todd Denkin, founder and president of Digipath

According to Todd Denkin, president of Digipath, that massive start hasn’t showed any signs of slowing. “I was in a dispensary yesterday and it was packed,” says Denkin. “There were 40 people in line and it was pouring rain outside.” He says the flow of customers to dispensaries hasn’t stopped since July 1st.

Because of that demand as well as the state’s testing requirements, Denkin is preparing to expand. “From a laboratory’s perspective, we expect a large increase in volume,” says Denkin. “Most of the medical cultivators we work with got their rec license as well so we’re working with a lot of the same clients and getting new clients on a regular basis.” Before the launch of recreational sales, DigiPath has been doing lab testing for medical cannabis for over two years.

Cindy Orser, PhD., chief science officer at Digipath

Cindy Orser, PhD., chief science officer at Digipath, says they are on their way to receiving ISO 17025 accreditation via the American Association for Laboratory Accreditation (A2LA). According to Orser, labs in Nevada must go out and do the sampling themselves, then bring the samples back to the lab for testing. The testing regulations overall seem relatively similar to what we’ve seen develop in other states with required pesticide testing and microbial screening. “We have a list of 24 pesticides, (two of them are plant growth regulators) that we monitor for,” says Orser. “We have specific allowable limits for that set of chemicals.” For microbial testing, Orser says they enumerate total aerobic count (TAC), total yeast and mold (TYM), pathogenic E. coli and Salmonella spp., enterobacteriaceae and bile-tolerant gram-negative, a subset of enterobacteria, as well as screening for mycotoxins. All of the testing in the state goes through just eleven laboratories, including DigiPath.

In preparing for expansion, they are looking at California in addition to other states. California released a set of draft regulations for lab testing in the spring, which many say is an example of regulatory overreach. “We still don’t know exactly what’s going to happen in California,” says Orser. “The draft regulations that have come out are so restrictive.” As Digipath looks toward expanding more in Nevada, California and other states, all eyes are on regulators proposing requirements for laboratory testing. “The future looks promising,” says Denkin.

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