Green Farmers Leads the Australian Industry in Addressing Viroids in Genetics

The Cannabiz article published on the 15^th of February titled “Growers’ worst nightmare: Hop Latent Viroid detected in Australia” made specific reference relating to testing results on one of the Green Farmers’ sites. Steve Jones of Cannabiz spoke directly with Biortica Agrimed’s managing director Tom Varga about Green Farmers’ response.  As the article highlighted the great work of the Green Farmers’ cultivation team, we thought it was important to share the company’s experience to assist others in building confidence that viroids, including HLVd, can be managed and do not have to be commercially devastating.

Last year Green Farmers did experience an outbreak of HLVd in one of its facilities linked to a client’s genetic. We were able to identify the outbreak at an early stage due to the persistence of our Chief Horticultural Officer Ben Ellerton and the Green Farmers team, as well as drawing on the expertise of Professor Vinay Singh from Apollo Green, Biortica Agrimed’s wholly owned genetics division.  As a result, we were able to contain the spread and have now all but eradicated the virus.  We share below the challenges we faced and how we were able to beat the virus while operating a commercial facility.

As one of Australia’s leading B2B cultivators, Green Farmers has worked with several brands who already had genetics in the Australian market for some time. This includes the provision by B2B customers of cuttings (rooted and unrooted), teens, mother stock and recently pheno-hunting services where seeds had been brought into the facility. Working with other people’s genetics, we have to operate on the basis that the genetics delivered to us were viroid, pathogen and disease free. As pointed out in the CannaBiz article referencing the North American market, that isn’t always the case.  Cannabis is a difficult plant to manage and so we expect to experience a multitude of challenges.  It’s how we dealt with those challenges that sets Biortica Agrimed, Green Farmers and Apollo Green apart from the North American experience referred to in the article.

Identifying the problem

The first step to dealing with a problem is to be able to identify that you in fact have a problem, and be able to deal with it a timely manner.  A key component to Green Farmer’s success is its highly refined Standard Operating Procedures (SOPs). Through regular monitoring of performance, quality and quantitative predictive lead indicators on plant health the performance of a subset of the 14 genetics in the facility were delivering lower yield than the business had historically expected from the same cultivar albeit still delivering the cannabinoid profile. A series of in-house testing methods for a wide range of viroids and pathogens was undertaken with no confirmed positives.  It became clear that an issue had developed, with the most likely sources being a recent batch of seed-based material delivered into the facility or a new cultivar. A roughing and testing program for HLVd, or dudding as commonly referred to, was implemented following appropriate compliance approvals.

As we say to anyone who will listen, cultivating cannabis is 85% horticulture and 15% cannabis.

Having narrowed down what we thought the issue was, we then needed to verify our hunch, which is where we hit our first hurdle.  With strict ODC requirements on the movement of THC plant material external testing pathways were difficult and limited. Over a period of months, and through the efforts of our compliance and cultivation team, an appropriate pathway to a recognised testing facility was established.

Chief Horticultural Officer Ben Ellerton said:

“As a result of this process, we have been fortunate enough to develop a local testing pathway which is compliant with ODC Guidelines.  That testing regime identified that less than 1% of the 30,000 plants in the facility at any one time return positive test results. As a consequence of our rigorous standard operating procedures (SOP), which involves continued and thorough testing, strict hygiene controls and early detection methods, we have seen a return to negative testing results within the facility. As a consequence of our protocols and experience, we have seen little commercial impact and we have returned to business as usual in terms of production and quality.”

Working the solution

The ability to implement appropriate risk mitigation and eradication protocols are critical to dealing with any viroid or other form of outbreak, including HLVd. The question every cultivator must be ready for is ‘how prepared are you to deal with an outbreak, like HLVd, in your facility when testing shows that you have a positive case?’.

International examples show that there are few companies prepared to invest in the testing regime required to be verified as HLVd free.  There are a number of reasons for this such as` cost, the potential financial ramifications within the business in dealing with rough affected plants and the willingness to dedicate the resources needed to deal with an outbreak and still run a commercially viable business in the process.  The decision not to invest is often made despite the overwhelming evidence that a consequence of keeping them in the facility can be terminable for the business.

Green Farmers, with the assistance of Apollo Green and Biortica’s extensive international partners who are experienced in dealing with HLVd, is fortunate enough to be one of the few companies that can identify, address and control almost any outbreak in the facility while at the same time ensuring continued commercial success.

The design of the Green Farmers facility makes managing such issues easier and quicker compared to how other facilities might operate. Perpetual harvests of smaller batches spread across multiple genetics mitigates the risk from any pest or viroid, including HLVd, as it allows for rapid resets of batches, more manageable mother replenishment and minimal financial impact from a few effected batches through the year. With glasshouse 2 on our Victorian site coming on-line shortly and glasshouse 8 in northern NSW already operational, we can further ameliorate the risks through multi-site and multi-facility separation of crops.

Staff training is critical.  “We have gone to great lengths to ensure that almost any team member can identify HLVd and many other viroids on sight.” said Ben Ellerton. “This means that we can extract any symptomatic plant in a facility, effectively eliminating the potential spread.  This protects against HLVd or any other virus or disease having an impact on the performance of the business.”

Our production response was also important to minimising any financial impacts while we eliminated the viroid from the facility. To ensure that we continued to deliver on time, in full and on specification for cannabinoids and terpenes to customers, we ensured that we increased batch size to address any roughing, daily monitoring of plant health and increased production volume to mitigate any customer impact.

Measures of success

Our response to the outbreak seems to have worked.  This is evident in both the December 2023 and January 2024 financial results that saw record revenue for Green Farmers as well as delivering significant positive EBITDA on annualised sales equivalent to 6,000 kg, a number that is ahead of the designed capacity of the facility by 20%.

We still have further testing of plants to go before we declare an absolute victory however with a few more rounds of negative results we expect to have completely eliminated the virus from the facility.

“The presence of HLVd in the Australian market has likely been around for some time. The reality is that the “L” stands for latent and therefore many cultivators, in the regulated and illicit markets, are likely to already have HLVd present without knowing it.” said Dan Thibault, Chief Cannabis Officer for Biortica Agrimed. There are very few companies testing for HLVd and therefore the potential spread is difficult to control, as Green Farmers experienced.

With the work and commitment over the past few months from the Green Farmers team, the business now has verified pathways for clean product of both proprietary and customers’ genetics underpinned by the continuous heavy testing regime within the business and stringent protocols.

Without regular testing by facilities, and acting on potential positives, the Australian industry will continue to expose itself to a risk from a latent viroid.  It is just something that the industry is going to have to manage.

Green Farmers has proven that the presence of HLVd does not mean devastating commercial implications for any cannabis cultivator.  We have a program to address any presence of HLVd which leads to the eradication of the viroid from the facility. Whilst there is a temptation to panic in situations such as these, Biortica Agrimed and its divisions of Green Farmers and Apollo Green, have built a culture of facing down challenges, mitigating the risk, protecting the commercial results and delivering value to shareholders, employees and customers.

Response to article

Biortica Agrimed, and the Green Farmers team, appreciate the time Steve Jones and Cannabiz had shown in researching and presenting this story to the industry. Steve Jones and the Cannabiz team were provided with the opportunity to visit the site and see first-hand the current state of the facility, health of the crops and confirm that there is and has been no serious commercial or yield issues within the facility. This will be scheduled for the near future and the Green Farmers team is looking forward to hosting Mr Jones and Cannabiz on site.

The source of the information on which the article by Cannabiz was based is said to have come from a confidential source and shared testing results from AgVic that at all times should have been confidential.  This was not just our confidential information but also that of our clients.  We are aware of the sources of the information provided to Cannabiz and that Cannabiz was provided with a coloured and ill-informed view of the event.  The information was sourced unlawfully and in breach of contractual obligations to maintain confidence at all times.  In the context of knowing the source and circumstances of the breach, Biortica Agrimed will now pursue all legal remedies available to protect further such breaches from impacting other companies in the industry.