Ask any dozen cannabis entrepreneurs what they perceive to be the greatest obstacles to growing their businesses and chances are they’ll name a dozen different challenges ranging from state to state product inconsistencies to commerce and banking restrictions. Take closer look and it becomes clear every challenge originates from a single common problem: lack of standardization from state to state. If the same level of prohibition were suddenly imposed upon the conventional pharmaceutical stakeholders, chances are they wouldn’t experience the same issues. Why, is simple. Unlike the cannabis industry, which has been fragmented by state regulation where companies operate within state boundaries under rules that apply only to a single state, the pharmaceutical industry has been standardized by regulations established at the federal level. Regardless of the state from which a pharmaceutical company originates, each and every one relies upon the same industry nomenclature and abides by the same set of rules and standards governed by the same regulatory agencies, the FDA and DEA.
While cannabis innovators in nearly every regulation state have created work-arounds to overcome some of these obstacles on a state level, the industry as a whole remains fragmented at the national level.
Take variances in required testing methods for instance. One state may require quality assurance testing that rules out 20 different pathogens, heavy metals and other inorganic profiles, while another state requires only testing for pesticides. Joshua Crossney, founder of JCanna and CSC Events, is a former recruiter in the biosciences industry who began hosting the annual Cannabis Science Conference events to raise awareness about this problem and bring industry professionals together to explore ways to bridge the gaps. According to most medical researchers he works with, consistent testing is especially critical for vulnerable patients who are undergoing chemotherapy and other toxic treatment protocols that compromise immunity.
“Jaws drop when I tell people that California did not require quality control testing at all when they started their medical program,” said Crossney in a recent interview. While it became the first state to allow medical use of cannabis in the 1990s, California only recently adopted a mandatory testing policy to fix the problem of contaminated product when it implemented the new adult-use regulation. “If we give a pediatric cancer patient cannabis that hasn’t been tested for pathogens like fungus and mold, we could be doing more damage than good to their already compromised systems. The last thing we want to do is make people sicker with a medicine that is supposed to make them feel better.”
Another related problem is the variance in product profiles from one state to another.
“There is also a real gap in consistent, reliable information about the effects, indications and cannabinoid profiles of different strains to inform doctors and patients. When you break down the cannabinoids of a certain strain in one state, chances are it won’t resemble the profile of a strain with the same name in another state,” Crossney added. “Blue Dream grown in California will be quite different than Blue Dream grown in Nevada and Blue Dream grown in Massachusetts.”
Prior to prohibition, cannabis was one of the medicines listed in the United States Pharmacopeia, the comprehensive reference manual that identifies the profiles of naturally- and synthetically-produced pharmaceutical drugs used by conventional medical practitioners. The medical cannabis community has had to rely upon more general strain descriptions provided by cannabis producers and online media outlets. While the World Health Organization is currently working on uniform standards, there are currently no established standards in the U.S. at the national level to ensure strain profile consistency from state to state. Not only does this limit information available to inform patient care, it also limits the way clinical research is both conducted and reported. Mass spectrometer equipment used to ascertain cannabinoid profiles will vary as well, depending upon the sensitivity, capability and quality of the machines used.
Another common hurdle has to do with variances in banking, labeling and inventory reporting. Since each state has different rules, software developed to accommodate seed-to-sale tracking in one state may not be adequate to serve another state. While emerging crypto currency is helping to solve some of the commercial banking challenges, it can be vulnerable to hacking and the wide variety of digital currencies available can create confusion for consumers and, like foreign currency, leaves room for value fluctuations when converting it from digital to cash currency as needed. These issues can be especially challenging for entrepreneurs expanding enterprise into multiple states.
All of these problems stem from the fragmentation caused by the constraints of federal prohibition.
While the lack of federal regulation has created a window of opportunity for grass-roots innovators to carve out market share in a way that is nearly impossible for new entrepreneurs seeking entre into the pharmaceutical industry, they would be well-served to get in front of federal regulation by coalescing uniform standards and industry best practices that can transcend state lines while navigating within current regulatory framework.
The solution could be as simple as taking a page from the pharmaceutical industry’s play book.
According to Dr. Randall Hoggle, a pharmaceutical scholar based at Johns-Hopkins University in Rockville, MD, the cannabis industry is in dire need of consistent standards and methods to “ensure research and product development leads to safe and effective healthcare products.” Highly credentialed with several related post-graduate degrees including DPh, RPh and MBA, Dr. Hoggle has made a career of developing intellectual property and guiding best practices for the pharmaceutical and nutritional supplements industries. As Chairman/CEO of Domaine Healthcare, Inc., he has been serving high-profile clientele in both the private sector and government regulatory settings. In recent years, he has begun to apply his vast knowledge of the pharmaceutical industry into developing new IP and information technology processing solutions specific to the emerging cannabis industry.
In 2015, Dr. Hoggle joined forces with Vitreon America, Inc. to help develop Cannacopeia™, a comprehensive botanical database featuring molecular profiles of cannabinoids, phytonutrients and other nutrient compounds found in all species of the cannabis plant from data compiled by with renowned botanist, Dr. James Duke, author the standard botanical reference known as Botanicopeia®. In addition to molecular profiles, Cannacopeia™ features a host of clinical studies and medical data such as compounding formulations, delivery techniques and patient indications similar to the way the way such information about pharmaceutical drugs is presented the U.S. Pharmacopeia, the standard text commonly used by medical professionals and researchers.
Last week, when Domaine Healthcare was acquired by Verax Research Services, Inc., Dr. Hoggle assumed the position of Chairman of the Board. In that capacity, he will help to govern the rollout of Cannacopeia and development of additional intellectual property geared toward providing solutions to common challenges faced by cannabis entrepreneurs and bridging gaps the fragmented regulatory environment. In addition to providing standardized data in the Cannacopeia database, Verax is rolling out a standardized quality testing, evaluation and certification service along with a new e-commerce platform to be announced later this month, which will address some of the barriers to commercial banking caused by federal policy.
Applying their vast knowledge gained from decades of prior experience and established relationships with regulatory agencies, pharmaceutical service providers and universities authorized to handle scheduled controlled substances, Dr. Hoggle and his colleagues at Verax will have authority and license to offer a centralized testing service located in a licensed university where cannabis producers from any state can send products for uniform testing and evaluation from anywhere in the U.S. without DEA interference.
Verax principals have also modified the Product Safety Assurance Services (PSAS) protocols and system for cannabis-specific standardization to comply with pharmaceutical best practices that meet U.S. requirements as well as international standards established by Globally-Harmonized Government Agencies insure the security, integrity and continuity of raw material and finished product in multiple supply chains. To complete the suite of services bridging variances in transmission and secure transactions auditing of hemp and marijuana constituent ingredient purchases from state-to-state, Verax Research licensed Advasur, LLC systems that will streamline transactional and auditing processes from raw ingredients to finished products, from seed to sale.
“Over the last twenty years, 15 of the top-30 pharmaceutical companies have utilized PSAS for these critical product development and manufacturing requirements to insure the products’ safety for their patients,” said Dr. Garrett Lindemann, CEO of Verax Research and Chairman of its sister company, Marigold Research Services, which focuses primarily on medical marijuana. “Our goal was to deploy the most advanced tools industry-proven infrastructure capabilities to address some of the most common challenges facing product development and manufacturing clients in the cannabis industry. By merging these three companies, we are tapping the knowledge of former pharmaceutical executives to create uniform standards and turn-key solutions currently not available on a national level.”
“We believe the cannabis industry can benefit from adopting tools, strategy and best practices that have worked to streamline commerce and standardize data the pharmaceutical industry,” Dr. Hoggle said. “We are bridging the regulation gaps for healthcare product development and manufacturing by providing all of the tools that can support standardization of research, product development and raw material testing as well as, validation and certification of Hemp constituent raw materials across state lines.”