The rapid global adoption of cannabis legislation has accelerated the need to secure and validate cannabis supply chains from seed-to-sale, because even though technology such as RFID or bar codes can track cannabis supply chains they cannot forensically track derivative products back to a specific source after the physical tags and packaging have been removed.
Molecular "tag & trace"
TheraCann International is just one of many companies to capitalise on the legal cannabis ruling expanding its ETCH Biotrace brand, a molecular "tag and trace" system, in partnership with Applied DNA Sciences CertainT platform, to accommodate different sizes and types of growers in the industry.
Its molecular tags, considered GRAS (Generally Recognized as Safe) are non-GMO and typical tagging levels are in parts per billion, too small to have any impact on the form, function, or the biological properties of cannabis.
According to Jason Warnock, managing director, TheraCann International, ETCH biotrace will transform the cannabis regulatory environment by allowing the forensic tracking of cannabis and cannabis derivatives across the supply chain, at the cultivator, processor or manufacturer level.
“When we embarked on this project over two years’ ago we saw it as a glaring opportunity not just for North America but for the rest of the world and we needed a technology that can survive conversion or extraction and can be performed at any point in the supply chain to verify compliance,” he said.
“Cannabis is more than about people getting high. It has cannabinoids, which have a psychoactive ingredient but also cannabinoids, which regulate the functioning of the body, anti-inflammatory properties and can help people to sleep. There are over 480 different compounds present in the plant, and only around 66 are termed cannabinoids.
“The impact of countries such as Canada legalizing marijuana goes beyond what people think about the drug. A company like Coca-Cola wouldn’t invest in using cannabis to get people high, there are other reasons why beverage companies look towards the benefits of cannabinoids, for energy drinks, for example.”
There are over 80 cannabinoids in the cannabis plant. The most commonly-known and researched being THC (tetrahydrocannabinol), the main psychoactive ingredient in cannabis and CBD (cannabidiol).
Coca-Cola announced recently it was "closely watching" the development of the cannabis industry and looking into a possible "functional wellness beverage".
The product would include as an ingredient CBD, or cannabidiol, a non-psychoactive component in cannabis, not THC.
"Along with many others in the beverage industry we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola said in a statement.
"The space is evolving quickly. No decisions have been made at this time."
Lifestyle brand Recess claims it has already launched ‘the first-of-its-kind’ CBD and adaptogen-infused sparkling water in three flavors; Blackberry Chai, Peach Ginger and Pomegranate Hibiscus, ‘to help people feel more balanced in an increasingly stressful world’.
And, earlier this year Constellation Brands said it was investing $4bn in Canadian cannabis company Canopy Growth, because ‘the cannabis space is opening up much more rapidly than originally expected’.
“Cannabinoids will have a big impact on the energy drinks market. It is having an effect on a lot of products and it is not likely to go away any time soon so having something like the ETCH Biotrace would be super beneficial to the industry,” said Warnock.
“I would love to say we invented this molecular technology but we already knew it existed in the cotton industry and high-end tuna production. We can’t take credit for inventing it but we do understand the cannabis industry, not just cannabis an agricultural crop but how it can be smoked, or extracted. It can be adjusted in so many ways.”
TheraCann and Applied DNA debuted its Cannabis Tagging System (CTS) at the NCIA Cannabis Business Summit & Expo in San Jose in July and will be exhibiting at CannaTech in Sydney, Australia, from October 28-30.
Gordon Hope, director, Cannabis Business Development, Applied DNA Sciences, said thanks to the interest it received at the show it plans to expand its tagging technology further, to meet the varied cannabis market conditions, including size of grower, indoor, outdoor or hybrid grow, and size of the plants.
The tagging system will scale in increments for larger grow operations, giving growers an efficient way to tag their cannabis or hemp, including a grow facility's dry or staging rooms which can be fitted with moveable and expandable POD tagging systems depending upon the size of the room.
He said CTS is designed to tag plants directly during harvest and any data on the harvested plants and cannabis derivatives such as cannabis oils, will be available on an “integrated platform” designed by Applied DNA and TheraCann.
With momentum building, the domestic legal-cannabis market reached $7 billion in revenues in 2016 and, according to Applied DNA, is expected to eclipse $50 billion by 2028.
“While the cannabis supply chain does not differ much from state to state in that the product is grown, processed, broken down into by-products, transported, and then sold, there is significant variation in how businesses track and report on the supply chain to their respective governing agencies,” said Warnock.
“For example, even though labeling of products is required, the information is customizable and any specific mandatory information will differ from state to state, which means there is a lack of consistent track-and-trace guidelines.
“Our early pilot tests show that with our combined expertise with Advanced DNA we can produce a seed-to-sale system that will provide an unparalleled level of transparency for growers, processors and dispensaries to stop it entering the black market or grey illegal supply chain.”
Lagunitas & Heineken
Dan Hooper, director of client services, at drinks marketing specialists YesMore Agency, which has offices in London and New York, is divided in his opinion about tracking and tracing cannabis at source.
“From a brand’s point of view, it may be a good idea to track some crops, as we start to see cannabis being used in consumables within big companies like Lagunitas/Heineken,” he said.
The main active ingredient in cannabis is called delta-9 tetrahydro-cannabinol, commonly known as THC. This is the part of the plant that gives the "high." There is a wide range of THC potency between cannabis products.
Cannabis is used in three main forms: marijuana, hashish and hash oil. Marijuana is made from dried flowers and leaves of the cannabis plant. It is the least potent of all the cannabis products and is usually smoked or made into edible products like cookies or brownies. Hashish is made from the resin (a secreted gum) of the cannabis plant. It is dried and pressed into small blocks and smoked. It can also be added to food and eaten. Hash oil, the most potent cannabis product, is a thick oil obtained from hashish. It is also smoked.
“There’s a benefit in some sort of guarantee to make sure the THC/CBD they place in their drinks is sourced from reputable sources, especially as they operate across markets where the legal status of the product varies. So there’s clearly something here that may appeal to many brands.
“However, from a consumers’ perspective, I wonder if this will change as the market matures and cannabis becomes like any other ingredient. And, I wonder how much this sort of tracing technology will matter to consumers - they may feel reassured by simply buying products from a reputable brand - or it may turn them off.”
Hooper added, with any new development in the market, there’s always an influx of creative technology but he doesn’t know if there will be an influx of products like TheraCann’s ETCH Biotrace.
“Whilst this technology is innovative, there may be less complex or invasive ways to track the cannabis as it makes its way into products, which may be as appealing. There are other models here - for example, the way that we certify Fairtrade, or the Soil Association in the UK verifies organic ingredients.
“It may come down to simply having a trade body that regulates and certifies producers. This would not discriminate against smaller or artisan producers for whom there may be a cost barrier to implementing technology like this.”
He said in both of these processes (organic and fair trade), consumers trust the producer to manage that supply chain.
“I would be interested to know how the price of schemes like these stack up against this new technology - especially when you factor in the price premium that organic (and similar) products can command,” added Hooper.
“On the subject of ethical concerns - tagging in this way doesn’t tackle other issues consumers are concerned about - things like ethical or organic production. It might sound crazy to be talking about organic cannabis, but there’s no reason why a consumer who chooses organic or fair trade products in other areas of their life wouldn’t want to do the same with cannabis.
“In addition: the technology is complex, and not well understood by the general public. There are definitely communication issues around this sort of tracking molecule - which can obviously be consumed. We know this information will be supplied digitally to “appropriate stakeholders” so there needs to be some clear communication around when the tracking stops.
“Ultimately, consumers need to feel reassured that their consumption of these products is not being monitored.”
Hooper says he can see positives for brands, but questions whether this kind of technology is necessary at this stage.
“It would make cannabis unique in the food chain for this sort of monitoring and there are other systems which may be better received by the public. I wonder whether the perceived ‘need’ for this may decrease as cannabis consumption becomes legitimised.”
Ellutia potency testing
Speaking to FoodNavigator earlier this year, Andrew James, marketing director, Ellutia, which supplies gas chromatography (GC) instruments for potency testing, terpenes profiling and residual solvents analysis, said the cannabis industry knows it needs to do testing but many do not know where to start.
“There is a real need through the production chain and the people we speak to know they need to do the testing but they don’t know where to start. I don’t think many people that went into this industry originally were ever planning on the need for analytical testing. But they recognise it is a requirement now," he said.
“At the moment, certainly in the US, you will have some large testing laboratories and besides that the growers, or people that process, extract and then use that extract to refine it into a final product, many of them are relying on external testing labs and they are finding it takes a long time to get results.
“Some of the ones we have spoken to said they will send a sample off and won’t get a result for four to six weeks and that is hindering their business and almost forcing people to the point where they are not bothering to test.”
For now, Warnock said the market for TheraCann’s ETCH Biotrace includes any regulated cannabis economy typically North America, the US and Canada, Australia and some parts of South America; Colombia and Uruguay.
“In the future we hope to look for opportunities in Israel and we are keeping a keen eye on Germany, Poland, Greece and Ireland and any market that has a regulated medicinal framework,” he said.
In fact, all eyes will be on England, Wales and Scotland on November 1 when a change in the law will allow doctors to prescribe medicinal cannabis on a case-by-case basis for conditions including epilepsy for example.
Other industries who are capitalising on the recent ruling in Canada include Great North Distributors, owned by Southern Glazer’s Wine & Spirits, claiming to be Canada’s first national sales broker for legalized adult-use cannabis.
Great North is the exclusive manufacturer’s representative for Aphria, one of Canada’s lowest cost cannabis producers. The company will leverage its sales network to sell Aphria’s cannabis products.
In the meantime, LGC Capital, Creso Pharma, and Baltic Beer Company have formed a joint venture company, CLV Frontier Brands, to develop a beverage portfolio using cannabis terpene blends and hemp ingredients worldwide, starting with beer.
Molson Coors Canada and Canadian cannabis producer The Hydropothecary Corporation said they will form a joint venture focusing on non-alcoholic, cannabis-infused beverages for the Canadian market following legalization and Euromonitor predicts cannabis use will eventually become more common than smoking cigarettes.
“Another driver or rationale for why the tobacco and alcohol industries might want to move into a legal cannabis environment is declines in their own industries,” said Shane MacGuill, head of tobacco research, Euromonitor.
“The US has much bigger potential through the sheer scale and scope of the population, but it’s a very fragmented market currently,” MacGuill said.
“The lack of federal regulation makes it very difficult to invest in, if not 'uninvestable,' but it does contain some of the bigger individual markets (i.e. California and Nevada).”
Whatever the outcome the food and beverage industry agrees it is going to be an exciting time for manufacturers and consumers alike.
Where is cannabis legal?
- Canada is not the first country to legalise the drug. In 2013, Uruguay legalised it to cut crime. Spain and Portugal have a liberal attitude to its use, too. In Spain, it has been legal since the 1990s to use cannabis in private places and cultivate plants for personal use. The country also has cannabis clubs, although it remains illegal to sell it for commercial purposes.
- Portugal followed Spain in 2001 but went one step further and decriminalised possession of any drug, including heroin and cocaine, so long as the amount does not exceed a 10-day personal supply.
- In 2012 Switzerland introduced a fine of 100 Swiss francs if you were found to have the drug on you, but the federal court last year ruled the law was wrong, so police have stopped prosecuting people for keeping a personal possession of the drug. It’s also legal in the Solomon Islands, and last year Norway announced cannabis would be decriminalised for personal use.
- It’s not legal everywhere in the Netherlands, but you are allowed to smoke it in coffee shops. The government decriminalised up to 5 grams for public use.
- France’s laws on cannabis are as strict as the UK’s. In 2013 they ruled in favour for limited prescriptions for medical cannabis derivatives but only when no other medications have been shown to work.
- Australia, Argentina, Austria, Belgium,Chile, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Finland, Germany, Greece, Israel, Italy, Luxembourg, Malta, Macedonia, Mexico, Netherlands, Norway, Panama, Peru, Poland, Puerto Rico, Romania, San Marino, Slovenia, Solomon Islands, Sri Lanka,Turkey, Uruguay, Zambia and Zimbabwe say it is legal for medicinal purposes in some form.
- In the US there have been over $1 trillion (£757,845,000,000) spent on curbing drugs since 1969, when the then-US president, Richard Nixon, formally announced a ‘war on drugs’. With all the money spent some US states are relaxing their cannabis laws.
- In 1996, California was the first state to legalise cannabis for medicinal purposes. And another 29 states have followed suit including Alaska, California, Colorado, Maine, Massachusetts, Minnesota, Maryland, Mississippi, Nevada, New Hampshire, New York, North Carolina, Ohio, Oregon, Rhode Island, Vermont and Washington. This year, eight US states relaxed drug laws to allow marijuana to be legal for recreational use as well as medicinal. These are Maine, Massachusetts, Colorado, Washington, Oregon, California, Nevada and Alaska.