This is the first article in a two-part series on the future of medical cannabis.
Cannabis is an industry with untapped potential. We are witnessing the demand for cannabis as regulations evolve, pre-clinical evidence on the benefits of cannabis and the endocannabinoid system strengthens, and the stigma around cannabis use decreases.
However, a critical undersupply is standing in the way of markets optimizing this potential. In this two-part series, we have engaged cannabis industry experts at Plena Global to assess their views on the future of medical cannabis. In part one, we focus on cultivation and production, an area that the experts interviewed predict will require effective upscaling of cultivation, and industrialization of production all while maintaining compliance with globally accepted quality standards.
To address the undersupply of medical cannabis across the globe, the experts we spoke to are working to make this prediction a reality. Plena Global’s Chief Strategy Officer, Stefan Meyer, claims that “cannabis cultivation on a small scale has been figured out.” Looking forward, he believes the industry “must [now] focus on upscaling cultivation and industrializing processes to produce mass amounts of cannabis products required to meet global demand while ensuring compliance to strict quality standards every step of the way.”
At Plena Global, a company with extensive and scalable land available for cultivation, upscaling efficiently is top of mind. Building a large-scale industrialized operation for cannabis cultivation and production is required to meet the growing demand for high-quality medical cannabis products globally. The question on many people’s minds is, how is it done effectively while maintaining high-quality product specifications.
Through interviews, six key elements were identified as being required to effectively industrialize the cultivation and production of high-quality medical-grade cannabis.
- Scaling of cultivation and production in equatorial countries with optimal growing conditions.
Equatorial climates are ideal for growing cannabis due to the 12-hour sunlight and year-round growth opportunity. Many politically and economically stable countries, such as Peru and Colombia, have recognized the economic and public health potentials of medical cannabis and have established laws and regulations supporting its cultivation, production and export. The attractiveness of the equatorial region is compounded by lower labour, land and electricity costs, making it cheaper to produce at scale than North American and European locations.
Growing strategically in the equatorial region allows for upwards of four to five crops per year, leading to higher annual yields while reducing the risk of crop failure on business operations faced when cultivating in North America and Europe. Despite the benefits of cultivating in this region, the current global legal framework around cannabis, particularly it’s classification as a controlled substance, brings the challenge of moving it across borders. This has resulted in countries cultivating domestically at a higher cost. As international regulations evolve and this challenge is lifted, we expect to see a shift from domestic cultivation to equatorial cultivation and production.
“Latin and South America is one of the largest coffee grower regions in the world. We expect the same can occur for cannabis,” says Meyer. “Over the next few years, I believe we will start to see domestic cultivation in non-equatorial countries shift to cultivation and production in equatorial regions to supply countries around the globe, especially for products that might become commodities such as CBD for wellness, cosmetic or nutraceutical products.”
- Seed bank of genetics optimized for the growing environment.
Some genetics grow better under certain conditions than others. Understanding your genetics and the growing conditions under which they thrive is essential. With this knowledge, growers are able to influence the characteristics of their plants and optimize yields. With more than 550 varietals available in the seed bank and eligible for registration, Plena Global is working on selecting the most suitable plant genetics, with desired cannabinoid profiles and high yield performance, for the growing condition.
Establishing a breeding program to optimize plant characteristics is going to become increasingly important for industry players. Breeding can be complex and should be viewed as a long-term strategy through which plant characteristics are constantly improved and product offerings are expanded.
- Selecting the right type of cultivation and processing methods based on the desired end product.
Upscaling cultivation brings about the challenge of space. Indoor grow can be expensive and, as a result, it can be limited. Outdoor grow is less expensive, but exogenous threats are more common with open fields and can affect the plants and their quality. For Meyer, the choice of indoor vs. outdoor grow should be considered based on the desired final product. “For companies selling flower as their final product, indoor grow with controlled environmental conditions is important because it provides the highest degree of standardization over the crops,” he says. “For companies selling a processed product, outdoor grow is cheaper and more scalable and through strong quality control embedded in the production process, quality can be maintained.”
Producing cannabis products using a combination of types of cultivation and processing methods will become increasingly important as it creates greater opportunity for competitive product offerings. “Plena Global cultivates using indoor grow in a high-tech greenhouse using a combination of natural and artificial light, indoor grow in standard greenhouses using only natural light and outdoor grow in protected fields,” says Richard Zwicky, CEO, Plena Global. “This allows us to optimize capital expenditures while ensuring high-quality cultivation and scalability across a diverse product offering.”
- Adoption of the highest globally accepted quality standards.
Plena Global’s VP of Compliance, Ron Hudcosky – who has more than 30 years of experience in the pharmaceutical industry working in R&D, quality operations and compliance – knows about compliance to global quality standards. His pharmaceutical industry experience is vital in an industry he predicts is “moving quickly toward global agricultural and pharmaceutical standards” and away from country-specific quality standards and the outdated cannabis cultivation trope of the “backwoods grower.”
Agricultural and pharmaceutical quality standards, such as Good Agricultural and Collection Practices “GACP” and Good Manufacturing Practices “GMP” already exist. When adopted together, these standards ensure quality is maintained across every step of the cannabis cultivation and production process. The big challenge is that these certifications are difficult and expensive to receive: On average, it takes a company approximately six to 18 months to attain GACP certification; GMP certification requires approximately 18 months to attain; The EU GMP standard is more expensive and can take even longer.
Companies that invest the time and resources into GACP and GMP certification will eventually stand out and be the difference between cannabis production companies that survive and those that thrive.
- Industrialization of production equipment and processes while maintaining quality.
Large volumes of raw material are needed to industrialize cannabis production. Growing in Latin and South America alleviates this issue as harvest season is every season. However, cultivation volumes must be considered together with the industrialization of production to compete in the future and ensure processing of large volumes, at high speed and quality.
“Extraction and purification of CBD takes approximately 30 hours, while cannabis harvest requires 10 weeks, from cutting to harvest,” says Dr. Xavier Nadal, Head of Extraction at Plena Global. “To be successful in the industrialization of production, one must take the time to plan in detail the infrastructure, equipment and processes for production that matches cultivation volumes; they need to work in sync.”
As cultivation scales, there is a tendency for companies to just upscale the production equipment and technology they already use in smaller operations. For Nadal, this is a problem. “When you move to industrial-scale from a small lab, you cannot just make the equipment bigger, you must get new industrial equipment and spend time working through the details of the full end to end process. You really need to think outside the box to fully optimize processes at a large scale.”
Growing methods are already well developed. Being a young industry, there still is a lot to discover and optimize as it relates to processing. However, there have been important investments in upscaling extraction and processing equipment for cannabis and developing effective processing methods that comply with the GMP certification. We expect that the evolution of innovative industrial production equipment and processes will continue to emerge and provide opportunities to optimize the cannabis production process.
- Automation across the end-to-end cultivation and production process.
Upscaling cultivation paired with the industrialization of production will require automation across the entire process. In five to 10 years, we can expect to see a greater presence of robots, automated assembly lines, and rapid and integrated QA testing to be the norm. This is already occurring in more established industries such as the production of decorative flowers.
The focus has been on streamlining the automation of traceability and overall farm management. With a significant number of clones grown per a week at Plena Global, counting by hand is no longer an option. “The industrialization of the process requires a lot of biomass,” says Nadal. “You need an automated system to track and manage the entire production process.” Seed-to-sale traceability is important in all agricultural sectors to ensure quality and compliance: If someone gets sick from consuming a product, it is essential to be able to trace back to where it came from. In the cannabis industry, traceability has an added regulatory importance as it also works to mitigate the risk of product being diverted to the black market.
Automation will go beyond traceability and farm management toward the cultivation and production of cannabis that maximizes yields with almost no human intervention. We predict that automation technologies will also include equipment for plant monitoring and quality spot checks, robotic cultivation and production assembly lines and increased adoption of existing technologies that scan and treat identified molds and plant pathogens without leaving any harmful residues. Further, we will see laboratories that run full analytical chemistry and automated sample preparation for Quality Control which will help to reduce human error.
The future of medical cannabis is bright. As the demand for cannabis products continues to increase, we can expect to see greater investment in equipment, technology and process innovations; This will contribute to a more efficient and scalable cannabis cultivation and production operation and high-quality products for patients and consumers. A focus on maintaining high-quality standards while scaling is going to become increasingly important. Strategic consideration into the location in which large-scale cultivation and production operations are established is essential to optimize quality, yield and overall cost. The equatorial region is primed to become the global leader in high-quality, low-cost cannabis production.