GxP Lifeline
Cannabis Companies Can Build on 2020’s Success
Last year was nerve-wracking for most industries to at least some degree. Cannabis was no different. When everything shut down cannabis retailers were left wondering how they’d stay in business. Fortunately for the industry, cannabis was largely declared an essential business, which kept these companies afloat. In fact, cannabis companies more than stayed afloat in 2020. Worldwide the industry brought in $21.3 billion, a 47% increase over 2019 sales.1
Doing that well in the middle of a pandemic is impressive. To keep the momentum going, cannabis companies need to continually adapt and bring quality to the forefront of their organizations and the organizations of their partners and suppliers.
Supplier Management
It seems every industry has had trouble with their supply chains during the pandemic. Since the pandemic isn’t over, some of these problems persist. With backed up or completely cut off supply chains, cannabis companies had to get creative. They learned they could locate and qualify suppliers remotely. This usually requires an on-site visit to a facility, but with social distancing and quarantine measures in place on-site visits were impossible. Things have calmed down in some parts of the world to the point that on-site visits are making a comeback. However, that doesn’t mean supplier qualification and audits should completely revert to the way they were.
Being forced to go remote showed us that some qualification activities are just as or more effective if done remotely. A perfect example of this is looking at documentation. Reviewing documentation is simple to do off-site as long as the supplier has digitized. An electronic quality management system (QMS) makes it easy for the supplier to find the documents, and some systems enable remote, limited access for easy viewing. An organization’s quality manual and standard operating procedures (SOPs) can give cannabis companies an idea of how the potential supplier views quality. The entire supply chain needs to have a quality mindset for the cannabis industry to improve. Focusing on improving quality within an organization is important, but insufficient if suppliers aren’t aligned with those goals by having equally high quality standards.
Risk Management
Risk can play a big part in supplier management. Every company has limited resources, especially startups in a relatively new industry. Those resources should be used where they are most needed. That seems obvious, but it’s surprising how often companies all treat their suppliers the same. If a supplier has proven that they consistently deliver quality product when needed, they don’t need as much supervision as, say, a brand-new supplier or one with a history of running behind schedule. Risk-based thinking can be used with suppliers, but also in other areas of quality.
Quality management in general should use risk-based thinking. This is especially important in an industry like cannabis which can have dramatic effects on consumers’ health. When companies move into new territory, such as the edibles market, they increase their risk. There are new regulations to adhere to and if consumers aren’t familiar with the delivery form, they run the risk of taking too much. According to Dr. Dustin Sulak, D.O., “Edible forms of cannabis are most likely to produce unwanted effects and overconsumption symptoms.”2 This is because it can take longer for consumers to feel the effects of an edible. If they don’t feel anything, they may consume another edible before the first one really kicks in.
To protect your company as well as your customers, a risk-based approach to quality should be a top priority.
Data Analytics
Part of managing risk and quality in general involves data. At least, it should. Just in the day-to-day process of doing business, companies constantly generate data. In the cannabis industry, data collection and analytics are a must.3 There’s so much opportunity for improvement, but it’s hard to know where those improvements should be made and what their effects will be without data. The technology that can really help cannabis companies is becoming more affordable over time. These include solutions that bring together quality and manufacturing data with inherent artificial intelligence (AI) and machine learning (ML) capabilities to improve how you make business decisions.
Conclusion
Cannabis survived the catastrophe known as 2020. Worldwide sales were impressive and, while it wasn’t all smooth sailing, the industry came out on top. However, getting ahead is no guarantee that the industry can stay ahead. Unless cannabis companies are willing to adapt, they’ll fall behind in 2021 and beyond. Even without a global pandemic, other disruptions will come along, and it’s changes that companies make right now that will help them continue to see revenue increases and surpass their competition.
Sources:
- “BDSA Reports Global Cannabis Sales Exceeded $21 Billion in 2020, Forecasts $55.9 Billion by 2026,”Eric Sandy, Cannabis Business Times, March 2, 2021.
- “Edibles dosage chart: How strong is your cannabis-infused edible?” Dustin Sulak, DO, Leafly, March 2, 2020.
- “How Big Data and AI Help Drive The Cannabis Industry,” Nicole Martin, Forbes, June 26, 2019.
Sarah Beale is a content marketing specialist at MasterControl in Salt Lake City, where she writes white papers, web pages, and is a frequent contributor to the company’s blog, GxP Lifeline. Beale has been writing about the life sciences and health care for over five years. Prior to joining MasterControl she worked for a nutraceutical company in Salt Lake City and before that she worked for a third-party health care administrator in Chicago. She has a bachelor’s degree in English from Brigham Young University and a master’s degree in business administration from DeVry University.
