3 Untapped Opportunities Cannabis Rescheduling Creates for Commercial Cultivators
/Rescheduling cannabis from a Schedule I to a Schedule III drug will significantly change the legal cannabis industry in the United States. For licensed commercial cultivators, some of the changes will be more difficult to navigate than others, but the end result will be worth it. In fact, rescheduling could create big opportunities for savvy growers.
Three of the biggest opportunities are still practically untapped prior to rescheduling. They focus on quality, economics, and the environment. Let’s take a closer look at each opportunity for licensed cultivators.
1. Quality Opportunities
While it will take time for new state and federal laws to be developed once cannabis is rescheduled, growers should start taking steps to comply with likely new requirements as soon as possible.
Many of these requirements will be related to quality and consistency, and it all starts with the plants. With proven superior quality, commercial growers can charge a premium price for their crops. The illicit market won’t be able to compete on the same level of quality.
What will quality and consistency requirements be? No one knows yet, but there are some existing guidelines that could be applied to or adapted to cannabis cultivation and manufacturing in the future:
Current Good Manufacturing Practices (cGMP)
Good Manufacturing Practices (GMP) is a set of regulations from the U.S. Food and Drug Administration (FDA) created as part of the Federal Food, Drug, and Cosmetic Act that establishes guidelines for manufacturing high quality, consistent, and safe medicinal products. With rescheduling, medical cannabis will be in this product category.
Current Good Manufacturing Practices (cGMP) is the same as GMP. However, the “c” is added to ensure companies are using up-to-date equipment, technology, and systems by requiring them to be “current” rather than outdated.
Good Agriculture and Collection Practices (GACP)
Good Agriculture and Collection Practices is a set of guidelines developed by the World Health Organization in 2003 to ensure consistent quality for the cultivation, collection, and production of medicinal plant and herbal substances. For cannabis, this includes cutting and drying plants.
Keep in mind, after cutting and drying, quality guidelines transition from the WHO’s GACP recommendations to the FDA’s cGMP requirements.
Good Agricultural Practices (GAP)
Good Agricultural Practices (GAP) is a voluntary program from the U.S. Department of Agriculture (USDA). The program uses a third-party audit to certify that adequate safety, packing, production, handling, and storage practices are used on a farm, cultivation facility, or produce handling facility. The purpose is to reduce the risks of microbial food safety hazards.
GAP was developed based on a requirement in the Food Safety Modernization Act of 2011 for farms that grow produce meant to be consumed without additional processing and fall under the Produce Safety Act. It’s not a stretch to assume these practices could extend to cannabis flower in the future.
2. Economic Opportunities
The tax benefits that rescheduling should bring will help every licensed cannabis cultivator improve profits and open cash flow for re-investment and even expansion. Fewer banking and IRS regulations will also lead to a more robust capital investment market and ultimately, interstate commerce.
In other words, economic opportunities will be available to those cultivators who want to cut costs and/or grow their businesses. For example, licensed growers will be able to develop more diverse crops to meet varied consumer and patient needs and attract more investors or merger/acquisition prospects.
3. Environmental Opportunities
Evidence has shown that the cannabis industry, particularly cultivation, negatively affects the environment in multiple ways. Some of those effects are quite significant. Rescheduling can help alleviate some of those negative effects by opening opportunities to cultivators that were previously unavailable to them.
When cannabis is rescheduled, growers and manufacturers may have access to more federal, state, and local programs, tax deductions, and credits when they implement certain energy-efficient and clean energy processes and equipment. That means becoming a more environmentally-friendly company will be more realistic to a larger number of commercial cultivators.
Furthermore, rescheduling will make it possible for cannabis cultivators to grow organically and will incentivize the true creation of organic cannabis. Today, all organic certification programs are associated with federal programs, so cannabis was excluded from certification as a Schedule III drug. With rescheduling, it’s expected that cannabis can be certified and bring the environmental and health opportunities of organic to the industry.
Conclusion
For cultivators who already operate controlled environment facilities, many of the quality, economic, and environmental opportunities rescheduling could deliver will come faster simply because these facilities already have quality controls for consistency and cleanliness in place.
Here are some first steps you can take to systematize and standardize your operations and prepare your facility, so you can seize the opportunities that may come with rescheduling cannabis:
Vet and control your source supplies and materials
Define standard operating procedures
Develop a comprehensive quality assurance program
Establish a testing protocol
Confirm your equipment, technologies, and systems are current
Train and manage your employees and visitors
Of course, these steps are just the beginning, but the key is to start now! The team at bio365 has worked with many clients to start a trial of our 100% clean and consistent, living soil and develop standard operating procedures for indoor cannabis cultivation facilities. Contact us for help!