Building a cannabis processing facility/lab requires companies to consider everything it will take to be successful, including who is needed on the team to both launch and manage the facility, how much it will cost, and what goals and products the facility will ultimately achieve and produce. Here, Alisia Ratliff, who has experience launching and operating cannabis processing facilities and will speak at the 2020 Cannabis Conference, explains what cannabis companies need to consider when planning for and managing processing facilities, common pitfalls to avoid and more.
Cannabis Business Times: What are some of the most common pitfalls you’ve seen with facility/processing lab buildouts and how do you avoid them?
Alisia Ratliff: One of the most common pitfalls I’ve noticed is the lack of expertise involved at the design/planning phase of the project, specifically people with a scientific and/or engineering background. Most investment teams will hire consulting firms to guide them through the application process to startup of operations. Employing a qualified scientist to approve and/or modify suggestions involving scientific processes, equipment and staffing is key to avoiding large downstream failures and impact to the operation. Inclusion of the right people on the team specifically during the design/planning phase, will create a proactive environment rather than reactive as I’ve seen in countless business models.
CBT: Where should cultivators who want to process onsite start when determining what kind of extraction processes would be best?
AR: These decisions should be made as early in the planning phase as possible. Making the decision to process cannabis and infuse products will affect the starting inventory you are cultivating. You will want to consider genetics that are popular for retail cultivation, but also take into consideration infused products and what inputs they require. For example, if you plan to infuse high-CBD edibles, you will need to grow a significant amount of a high-CBD, low-THC cultivars consistent with the expected unit output of edibles. The company could then evaluate the pros and cons on the extraction method necessary to meet the assumed demand for that product.
If a cultivator is already in full production and makes the decision to start processing, they would need to first look at the history of harvests. The history would give pertinent data such as average yields, cannabinoid content and frequency per strain, which would allow one to make data-driven decisions when evaluating the extraction method and technology.
CBT: What kind of education/training is required to properly launch a facility? What continuing education is recommended?
AR: The education required to properly launch a facility really depends on the individual. I am a scientist by trade, but I’ve spent many years acquiring skills from other industries that allow me the oversight needed to accomplish such a large task. It is my opinion you should have a solid initial group of individuals who encompass experience from engineering, law/compliance, science, finance and project management. There are so many moving targets to hit during a facility launch, overall project management is key.
One of my favorite parts of launching a facility is hiring and training the staff. Mentorship and development are at the core of my leadership, so I recommend continuing education in their respective fields as well as attending webinars applicable to the position and industry, reading scientific white papers, attending conferences and any local community engagement events.
Again, the extraction method a company chooses to use is based upon initial investment, operating costs, throughput and capacity. It is also dependent upon the company vision and values. For example, if the company decides to be green and vegan, extracting with solvents would challenge the business model.
CBT: In light of the vaping crisis, cannabis companies who produce high-quality, third-party tested products were compared with those in the illicit market. Is there anything companies can do when establishing these facilities to further promote standards and safety in extraction and developing these products, that maybe is not yet standard in the industry?
AR: There is a whole lot of unknown pieces to the vaping crisis puzzle currently, but what we do know from the CDC is additives, specifically vitamin E acetate, cause lung trauma, along with leachates. When launching a facility that will be creating vape cartridges as a product offering, do your due diligence when procuring equipment. Double check the equipment was manufactured in a GMP-compliant facility and all metals used during manufacture meet food-grade specifications of steel. Certify your facility as GMP-compliant so that all cannabis infused-products manufactured are considered safe for consumption. When vetting cartridge manufacturers, ask for appropriate credentials and documentation (child-resistance, certificates of analysis (COAs), etc.) as well as sample cartridges. Have the cartridges filled and tested by a third-party laboratory to compare to the COAs provided. Conduct short- and long-term studies to show any degradation of APIs or leaching of metals over periods of time. Try to avoid using additives or cutting agents in your formulas that do not have sufficient data showing long term affects through inhalation. Overall, be transparent with your consumer base. Be explicit on your packaging and websites divulging what goes into your cartridges as well as providing current COAs for all batches without being asked.
CBT: What do you hope attendees will bring back to their business from your session at Cannabis Conference 2020?
AR: I hope attendees will walk away with an understanding of the 5W1H concepts in cannabis processing facility build outs:
Who – is necessary to be on the initial team to make it happen? Who’s expertise do I need to accomplish the business goals and accelerate growth within the company. What – is my business model going to reflect? Do I want to build a business to share the market or drive industry innovation, research and development?When – is the best time to start constructing a processing facility? From conception or follow up phases?Where – is the best market to compete and location to maximize potential facility success?Why – do you want to build a processing facility? Future solutions to industry problems?How – are you going to accomplish success using the information and tools you’ve received from this session?Editor’s Note: This interview has been edited for style, length and clarity.]]>