Conversion License Cannabis Testing SOP Requirements for Manufacturers, Cultivators and Dispensaries

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In New Jersey’s regulated cannabis program, conditional licenses are temporary and do not give businesses allowance to operate. Awardees must fulfill all incomplete licensing requirements and apply for conversion to an annual license before they can be permitted and allowed to operate. The conditional licenses are issued by New Jersey’s Cannabis Regulatory Commission (CRC) and are prioritized over annual licenses. After an applicant has received their conditional license, a conditional license conversion application must be completed within 120 days in order to receive an annual license.

The annual license is the primary license that requires applicants to submit a descriptive application. The details of the conversion license application include the proposed site for the business (owned or leased), municipal and zoning approval. Applicants must also submit an operating summary plan detailing their experience, history and knowledge of operating a cannabis business. A major part of the conversion license application for the annual license includes submitting the standard operating procedures (SOPs) that are critical components of any efficiently-operating business.

Do’s and Don’ts for Cannabis SOPs

The SOPs are a big part of the conversion license application requirements and incredibly important. The CRC will be inclined to look favorably on applications with strong SOPs that demonstrate a command of how to safely and effectively run a cannabis business. SOPs should not just repeat the regulations verbatim. The focus needs to be on how you are meeting the regulations. Do not quote specific regulations because they could change with incoming updates. Instead, cite the section of the regulations and include the regulations as references or appendices. Keep the SOPs short and flexible where possible because regulations change frequently in this new industry and taking a broad view will help avoid the need to update your SOPs too often. Your internal processes may also change frequently as your new business grows and workflows develop.

Note that in addition to the many SOPs that are required, a specific laboratory testing SOP is also required for batch release testing. This is required for all license types, including dispensaries.

Testing SOP Recommendations for NJ Cultivators/Manufacturers

Here are a some specific recommendations for cultivation and manufacturing protocols to include in the SOP for batch release testing:

• Establish a process to ensure the batch size is equal to or less than the maximum established batch size. If it is over the maximum batch size, ensure it is split into smaller, labeled batches. Your lab will take a representative test portion and retention portion of each batch pursuant to the most recent CRC testing guidance.
  
• Have a procedure for allowing the lab access to your facility for sampling once the batch is ready to be sampled. It is required for a representative of your business to be present with the lab sampling agent during sampling. Ensure the lab has access to the entire batch for sampling. After each manufactured batch or cultivation batch is ready for testing, it should be labeled “awaiting testing” or put in a designated location to be sampled by the lab.
  
• Include how the retention/stability sample is stored under the same conditions that the product is typically stored in your facility. This portion will be used for the required 6- and 12-month stability testing, or if requested for additional testing by the CRC.
  
• For sample transportation, the sample should be created in METRC from the parent package, and transportation manifests should be created in METRC for transfer to the lab.
  
• Once the sample is taken, ensure that the batches that are out for testing are properly quarantined – e.g. labeled “do not release—test pending,” and / or located in a designated quarantine area until the certificate of analysis (COA) is received and reviewed by a designated employee.
  
• A designated employee should verify that the sample has passed all contamination testing, check that the cannabinoid potency is within the required variance of the labeled amount and release the product from quarantine if a passing result is received.
  
• There should also be a protocol established for retesting, remediation or destruction of a product that fails.
  
• Also note the process to provide the COA with every order to clients, whether for wholesale or direct to the consumer (if applicable). While optional, it may be a good idea to have a plan to add QR code labels to containers for direct lab report access – some labs, like us, will have QR codes available to download from your client portal for each test sample.
  
• And finally, it is required to archive and keep records of all COAs for all products manufactured, so make sure you have a system for that.
  

The SOP for the process for R&D sample submission—not for batch release—should indicate that samples submitted for R&D purposes can only be taken by your staff and submitted to the lab or transported by the lab itself.

Testing SOP Recommendations for NJ Dispensaries

While dispensaries are not directly involved in batch-release compliance testing, it is still required for those license types to submit a lab testing SOP.

Here are some specific recommendations for include in the testing SOP for for retail / dispensary locations: 

• Upon receipt of a new product batch, have a process in place and a person designated to review the COAs to verify testing information and conformance to the most recent testing guidelines. Section 17:30-9.7 (c) of the state’s administrative code says that, “a cannabis business shall retain every written report from a testing laboratory for any cannabis item that the cannabis business cultivated, manufactured, or sold to a consumer.” So be sure to detail your record retention plans for the COAs.
  
• Make it clear in the SOP that you have a process that gives customers the option to receive a hard copy of the COA. Section 17:30-12.3 (i) says that a cannabis retailer shall offer to provide a copy of the written report from the testing laboratory pursuant to N.J.A.C. 17:30-16.6 as a supplemental informational document to the adult consumer. 

Something that is optional for dispensaries, but that we would recommend to help verify your vendors, is to include an R&D sample submission SOP, so that you will have a process for submitting non-batch release samples to a testing laboratory for verification of potency or contaminants.

Any successful business uses SOPs to document the standards, policies and processes needed for it to succeed. They are the best way to increase efficiency, prevent possible errors and ultimately increase profitability. They establish a culture of safety and provide guidelines to resolve issues and overcome roadblocks. They are critical to continue to properly develop the nascent cannabis industry. For more information and suggestions for crafting quality SOPs, please reach out to our team.