Aspergillus. What is it? Where does it come from? How is it pronounced?
Those that have spent some time around the cannabis plant are likely familiar with this pesky fungus. Present on surfaces, in the air, and in water throughout facilities and open spaces alike, Aspergillus is little more than another species of spore-forming mold.
It’s when you start thinking and talking about mycotoxins that Aspergillus’ risks really come into focus. Mycotoxins are toxic compounds produced by Aspergillus that can be harmful, and in some cases fatal, when ingested by humans. The scary thing about mycotoxins is that they remain a threat even when they’re dead – so those aiming to prevent Aspergillus and mycotoxin contamination need to be thoughtful about the preventative method they choose.
For Oregonian cultivators, this topic is front of mind. As of March 1st, 2023 the OHA has mandated that all cannabis batches be tested for Aspergillus, in addition to reducing passing thresholds to non-detect for Salmonella and E. Coli as part of their larger microbial testing guidelines.
What can Oregon expect from these new regulations?
Cannabis professionals in Oregon are well-equipped to handle change; with the OLCC, the OHA, and the state legislature churning out rule changes as quickly as they can. But what does this testing change really mean for the cultivators and customers of Oregon’s legal cannabis market?
To better frame this regulatory shake-up, we can look to the Colorado cannabis market. Regulators in the Centennial State initiated Aspergillus testing as a compliance requirement back in July 2022. We can draw some general conclusions based on Colorado recall data pre and post-rule change.
In 2022, there were 10 total cannabis recalls for microbial failures. 2 of these 10, or 20%, were failures specifically for Aspergillus following the rule change in July. That’s 20% of statewide failures, accounted for in only the last 5 months of the calendar year. If we annualize that number to project recalls for a full year with the Aspergillus testing mandate, it’s not out of this world to forecast up to 48% of annual recalls could be for Aspergillus only moving forward.
To further drive home the exponential loss in revenue due to these failures, industry experts place cannabis dispensary margins typically within the 15-20% range. Keep in mind that dispensaries are also generally viewed as more profitable than cultivation. Now imagine a cultivator working with, say a 10% annual margin, losing half of all his harvested product to Aspergillus failures! Nobody can operate a business like that for long.
So what are cultivators going to do? Here at Willow, we’ve been advocating for a science-based approach to microbial management for years. We maintain that Oregon cultivators who go long on microbial management, investing in a proactive kill-step with scientific support will be far less affected by additional testing requirements than their more reactive competitors.
We can conclude with some confidence that the added burden, both financial and compliance-based, of Aspergillus testing will likely drive some operators out of the market. Those who adapt, lean into upstream cultivation contamination controls, and implement processes proactively rather than reactively, will emerge from this shake-up stronger than ever.
Ultimately, the most important conclusion to be drawn from Oregon’s regulatory changes is that this market is dynamic. Cannabis as a legal industry is still very much in its adolescence. Rest assured that more regulatory mandates, which will include additional testing and supply chain oversight, will be coming down the line as the industry continues to mature.
Willow will be here, advocating for better growing practices and pushing for a brighter future for cultivators across the nation.
Written by Jack Clark, Customer Success Manager