Arnaud Dumas de Rauly, co-Founder and CEO of The Blinc Group, addressed the virtual crowd at MJBizConNEXT Direct.
For the nascent cannabis industry, many are still discovering the efficiencies that can be gained with automation to ramp up processing. “Now there's a lot of those efficiencies that can actually be built in from the ground up,” explained Arnaud Dumas de Rauly, co-Founder and CEO of The Blinc Group, to the virtual crowd at MJBizConNEXT Direct.
Arnaud Dumas de Rauly, co-Founder and CEO of The Blinc Group, addressed the virtual crowd at MJBizConNEXT Direct.Dumas de Rauly noted that some processors are still filling by hand. “That's a process that not only introduces human error, but potentially contaminants. That process can be fully automated with filling machines, whether they're semi-automatic or automatic, and you can de-risk that part of operation. I can guarantee you, instead of having 25 people filling by hand and introducing those potential 25 failure modes into the entire supply chain, you could use one machine that's going to require two people to use, and that's automatically building in operational efficiencies, but also cost savings because those machines are able to fill at a quicker rate.”
Certifications and compliance
As a company that creates, distributes, and support cannabis vaping hardware and complimentary ancillary products, Blinc works with ISO and cGMP certified manufacturers to deliver its services, which include process optimization and packaging.
In terms of filling and capping machines, looking at an original equipment manufacturer’s (OEM’s) certifications is important, and is often missing from the buying process. “Will you be able to use it in a clean room? Is that machine UL certified to avoid any kind of electrical damage?” Dumas de Rauly asked. “You should have a UL number that you can request from the manufacturer and go check that on the UL website.”
He said it’s critical to take the time to understand what you are buying and not just buy something because someone told you to buy it. Go into depth and understand how the machine fits in your process and how it will boost efficiency. “It’s not like buying a TV at your local Best Buy,” he noted. A major part is the certification, “because down the road, you don't want anything to happen. What if that machine is not UL certified and it explodes an injures your employee, what are you going to do about that? You can't do anything if you don't verify the compliance documents that your suppliers are giving you.”
The compliance aspect of machinery is the same across the board in the U.S. “There is no state right now that says you have to use this machine. Some states will tell you how to set those machines, for instance, to do testing so do have to make sure that that machine is able to use those parameters that the regulator is asking for,” he said.
Leaching tends not to be an issue with filling machines because of the materials used, but it’s important to ensure packaging remains safe across the product’s shelf-life. When you test a product in a cartridge after 60 days, does it have more lead or other compounds than when it was packaged? Unfortunately standards for testing aren’t consistent across the board yet. He said if you cut one cartridge in half and send the pieces to two different labs, you're going to get two different results for the exact same product and “that's really a pretty big issue.”
Filling options
For a small startup company that’s looking to automate, there can be sticker shock. “In the grand scheme of things the equipment is not very expensive when you're at large scale. But when you're starting out an extraction business, it can become a big CapEx expense,” he said.
Dumas de Rauly noted that there are three different filling options:
Fully manual filling is usually how people start out, with all operations done by hand.
Semi-automatic filling means there is a filling machine with an operator placing cartridges for the machine to fill. “And that really ramps up the efficiencies. I think that any new process should be starting with that technology right from the start, and then as you grow, and as you scale, looking at products like fully automated lines.”
Fully automated systems handle tray insertion, filling, and capping. It’s possible to combine machines from different suppliers. Automating the process of tray insertion instead of manually placing 80 or 100 cartridges one by one into a tray can save significant time, gaining at least one hour per day. “Multiply that by 365 days and you can quickly see the efficiencies that you're gaining by using a system like that,” he added.
While some LED lighting companies will allow growers to try their lights before buying, this is typically not the case for cannabis processing and packaging machines. “There may be manufacturers that offer a free trail with penalties if you don’t move forward, but I think that's on a manufacturer by manufacturer basis,” he said.
Maintenance
Maintenance—where parts or service comes from—is an often-neglected aspect of the buying process. For some machines made overseas, “If you have an issue, you're going to have to wait at least four or five days before getting replacement parts,” he noted. In some cases, parts are made in China but there is access to replacement parts locally.
“If you have an outage, for instance, how fast can a technician be there to help you? I think that's also something that that's very important in building efficiencies around any kind of automation is understanding the support that you are going to be getting from your vendor… they all have their own specifics,” Dumas de Rauly said.
Used equipment
As laboratory, processing, and packaging equipment can be very expensive, an audience member asked about purchasing used equipment and whether that can be reliable. Dumas de Rauly explained that it is something to look into: “Especially in these times we all know about the cannabis markets crisis, and a lot of companies either going out of business or being gobbled up by bigger companies with the consolidation happening in the industry. There is a lot of high quality gear out there that you can purchase secondhand.”
But he cautioned that it’s important to look into how you’ll get support for those machines. “A lot of manufacturers provide buyback options or provide leasing options. Those are also great options to be looking at when you're trying to automate your entire processing facility.” In any kind of regulated environment, including cannabis, you should be able to access all of the maintenance records of that machine. There may be events you don’t see, so make sure that in the case it doesn't work, you have options to give it back, “unless you're dealing with someone going out of business and [they’re] selling at rock bottom. But it's really about understanding how that product has been used and what SOPs were in place to ensure that product was being used properly by the previous owners.”
Cost savings
One attendee asked how automation affects the cost of goods due to machine purchases, maintenance, and upkeep, and whether that would it cut into the profit margin. “It's going to affect the wholesale cost, but maybe not in the direction you are hinting at. One of the examples I gave is having a process or with 20 people filling by hand. I'm going to be very pragmatic here, sorry for the anti-capitalists… what is the cost of employing those 20 people when you can have a machine and employ just two people to do the same thing? You're saving there, not to mention that when you're buying machinery, that goes into amortization. So in your balance sheet, it's not going to go in the same area. That's part of an asset that your company has.”
In some cases, a fully automated line with bells and whistles will cost more, “and it's going to be up to you to decide if you want to eat that cost and still stay at the same price, because over time you're going to be amortizing this. So yes, it has an impact, but not necessarily a negative impact. On a very small scale and taking the example I gave earlier, the cost of 20 employees versus the cost of a $14,000 machine—that’s a no brainer to me as an entrepreneur. It’s really on a case-by-case basis.”
New technologies
Dumas de Rauly explained that there's an underestimation of the importance of data in cannabis cultivation and processing. “Collecting that data, whether you're growing, or processing, or even if you're a lab, is really looking at the trends in that data versus trends in the output of your current processing facility.” For instance, companies may look at how room temperature changing a few degrees affects the product.
Data loggers used in shipping will be helpful to producers. These small pieces of equipment—that have been used in pharmaceutical logistics for years—are placed in shipments to monitor the humidity, temperature, pressure, and more. “I think that data and actually doing something with it is going to be very important moving forward. And I think the companies that are able to take that data collected and use it will really benefit a lot in efficiency.”
Another aspect that’s missing at many new companies is a Quality Management System (QMS). “Being such a nascent industry, that's often something that people ignore when we're talking about automation or when we're at buying equipment for a lab or a processing facility. But when you have an issue with a batch, how are you going to deal with it? Of course you can have a recall plan, you can have a CAPA plan,” he said. “But if you have your SOPs in a QMS system—and there are many QMS systems that you can use online—you are going to be able to streamline that process and literally gain days of investigation to understand what went wrong. I think that's the utmost importance when,” especially for products people will ingest. This is something his company has been trying to spearhead, offering consulting with the quality control aspect “because we really think that is the future of cannabis.”
He pointed to the vaping crisis, and what producers plan to do if they have a bad batch. “In a few years, if we find out [a certain compound] is dangerous and is not absorbable by the lungs, we need to be prepared for that. And the only way to be prepared for that is to have all the risk mitigation put in place around the quality management system.”
Hardware and oils
It's very important that you match the oil to the hardware, particularly for highly viscous rosins. Changing an oil into an aerosol is a scientific process that involves numerous variables. “It’s a lot more than just looking at the intake hole size. It's all about the absorption rate, so you can be looking at the capillary action of your coil and understanding that if you have a highly viscous substance, you would need to be using a trimodal ceramic for instance, instead of bimodal ceramic. It also involves the airflow.”
Heat around the needle and temperature monitoring can be very important when working with live rosin. “We recommend using about 60° C—anything higher than that can potentially harm the terpenes and degrade your oil as you're filling. So that's very, very important to understand. There's, there's definitely an impact and a link between the hardware and the processing.”
Further reading
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Arnaud Dumas de Rauly, co-Founder and CEO of The Blinc Group, addressed the virtual crowd at MJBizConNEXT Direct.
