As the cannabis industry continues to expand and evolve, we’re starting to recognize certain patterns and traits among those brands that not only rise to the top – but stay there.
The most significant of these indicators? Quality.
Quality control – or QC – may not be the most exciting part of the burgeoning cannabis industry, but it’s arguably the most important, and as such, demands a special focus.
See, it’s great quality that forms the foundation of a great brand. It’s not packaging, hype, your sales team, or the claims made in your marketing materials. And – unless you can guarantee there’s a top-tier product at the heart of your strategy, anything you do to promote your brand is useless – if not, profoundly damaging to both brand and bottom line.
In this article, we’ll discuss cannabis quality control in more detail, then outline a basic plan for implementing a quality management program for lasting success.
Why Cannabis Companies Need a Formal QC Program
Quality control is often seen as a cost center rather than a source of value creation.
However, a solid QC program can actually be a competitive advantage, especially for cannabis companies, which aren’t (yet) required by law to comply with a specific set of standards.
QC represents an important step toward making sure you consistently deliver great products to your customers — that both do what they’re supposed to and don’t cause any harmful effects (remember the 2019 vape crisis?).
Now, it’s important to note that just because there’s no official cannabis quality standards doesn’t mean that testing is optional. While the exact rules vary between states, part of the legally-mandated track-and-trace requirements involves testing cannabis products for things like heavy metals and moisture content.
Failing to meet state-specific compliance requirements creates additional costs (both financial and reputational) for cannabis companies. For example, you may end up taking on the effort and expense of notifying customers of a product recall, retesting products, handling returns, refunds, and disposal, and pulling defective stock from shelves.
So – there, you’re looking at extra work, inventory losses, and potentially, getting third-party labs or QC experts involved, depending on the scale of the problem.
You’re also potentially facing a loss of customer confidence in your company and its products – and the bad reviews and poor sales numbers that come with the territory. Worse, instances of noncompliance can trigger enforcement actions (aka fines, audits) or the loss of your license.
But seed-to-sale systems don’t cover everything — and ignoring “optional” QC tests can land you in hot water. For example, failing to implement proper safeguards for handling controlled substances or cash-based transactions could lead to massive fines, enforcement actions, even jail time.
If we’re talking about improper handling of waste, chemicals, or other contaminants, customers, employees, and innocent bystanders could experience adverse health outcomes. Think — poisoning, respiratory issues, or worse. In that case, you’re looking at massive class action lawsuits, high-profile media coverage, criminal investigations, etc.
And quality assurance isn’t just about products. How you capture, store, and secure patient, customer, and employee data, as well as valuable IP (think — information about seeds, growing conditions, dosing, formulations, etc.) could make your company a prime target for cybercriminals.
The point is, regardless of what legal requirements are officially on the books, quality control protects your company from the kinds of threats that can take down your business — and ensure you (and your key stakeholders) never work again.
Developing a Quality Management Plan for Cannabis
We’ve gone over some of the reasons that quality control and assurance should be a top priority for any cannabis company.
In these next few sections, we’ll share a few best practices that can help you start building out your own quality management plan.
Embrace Total Quality Management (TQM)
Total quality management – or TQM is a management approach aimed at driving long-term success by focusing on improving customer satisfaction through continuously improving the production and delivery of products and services.
While not an official part of the Lean manufacturing process, TQM is often used alongside other Lean tools, tactics, and training methods.
Below, we’ll look at the eight core principles of TQM and how they can be applied to the cannabis industry to increase customer loyalty, attract new business, and boost profitability long-term.
Keep in mind, you don’t need to go all-in on Lean or start running your cannabis operation like the Toyota plant. These principles can be adapted to fit your existing processes and philosophies.
Customers Must Always Come First
Quality always starts with the customer. What are their requirements? Expectations? For starters, they probably expect reliable, safe, and consistent products. So, that means you’ll start by looking for ways to avoid chemical and biological hazards that put customers at risk — or undermine product quality. Then, you might move on by focusing on improving production processes to deliver more consistent products (aka eliminating defects and waste).
Make Continuous Improvement a Priority
Product testing is a fundamental part of cannabis quality management. But – in our experience, successful companies want to do more than simply test products and store the results. Instead, they seek out ways to use testing data to inform their overall quality strategy and drive improvements.
Focus on “Process Thinking”
Process thinking essentially means that processes should be built around customer expectations. So, in part, it’s about making sure you implement and follow processes that prioritize health and safety. But, it’s also about listening to customer feedback and adapting existing processes around changing needs.
Get Everyone Involved
QC needs to involve all departments and teams within an organization. For example, operations might monitor the manufacturing process to ensure consistency in output, while product engineering is responsible for identifying and fixing product design issues. Customer service reps can capture customer feedback and route that information to the team best equipped to solve a specific problem.
Follow a Strategic, Systematic Approach
Avoid taking on too much at once. Instead, focus on one specific, measurable goal at a time – prioritizing critical issues before moving on to secondary improvements. For example, addressing hygiene issues should probably happen before you try to automate parts of the testing process or update product packaging.
Prioritize Effective Communication
You’ll also need to make sure that all processes, responsibilities, and expectations are clearly documented (in writing) and communicated to the team. TQM (and QC) is a coordinated effort – and as such, everyone must be on the same page and working from the same set of goals, the same strategy, and using the same language and data to analyze and interpret situations.
And Fact-Based Decision-Making
Additionally, decisions must be made based on real evidence. Not emotion, gut feelings, or best practices. This will help you stay focused on driving quality improvements where it counts.
Use an Integrated ERP System
According to the FDA, many companies face issues related to data integrity caused by manual and/or fragmented systems and processes. Issues include back-dated entries, disabled audit trails, missing information, and more. An integrated ERP system can help you avoid these problems and make the most out of the data you have. It can also help you avoid noncompliance, IRS audits, and increase the ROI of your QC program.
Ultimately, TQM is primarily about creating a collective mindset and environment that prioritizes QC and infuses quality standards into everything you do – whether that’s customer service, IT, or the measures you take to protect your plants, products, and public safety.
Embed QC Into the End-to-End Process
Cannabis companies often wait until the tail end of the production cycle before they begin quality testing. The problem is, this approach isn’t especially efficient and can only catch “after the fact” defects – issues that reveal themselves well beyond the point where you could do something about it and save the batch.
Successful companies know how just important it is to ensure that all product standards are checked and verified at each step in the production process. And as such, they document QC checkpoints in their standard operating procedures (SOPs), processes, and training materials.
While checkpoints will vary based on your business model, products, and other factors, here are some common ones you might work into your plan:
- Hygienic practices that prevent contamination
- Policies for mitigating biological/chemical/physical contamination risks
- Sanitation requirements, equipment, and best practices
- System for handling sanitary waste and disposal
- Pest control policies & processes
- Dedicated water supplies for production and hand-washing
- Visual & physical inspection for quality at all stages of production
- Analytical testing during mid-production and post-production
- Visual inspection of all raw materials and finished products
- Routine audits of processes and procedures
- QC product sampling to ensure quality standards are consistently met
A quick note, these “checks” are based on the FDA’s current good manufacturing practices (CGMPs) for food and drug products and manufacturing processes.
For now, following the same QC standards that ensure food products and medications are fit for consumption is a great way to ensure your products are safe and reliable. NIST is currently developing cannabis-specific quality standards that go further than CGMP standards to help cannabis companies measure dosing, potency, and chemical makeup of marijuana products.
Enforce the Plan
A quality control plan is worthless without an effective way to analyze and track the data you collect and use it to enforce the quality standards you’ve defined.
- What metrics will you use to measure success?
- How will you analyze and present data?
- How will you adapt reporting tools/insights to individual teams/roles?
- What processes will you use to raise new issues, assign them to the right people, ID & implement solutions, and circle back to measure the impact of those changes?
Again, having a flexible ERP system is crucial for quality control and assurance, as the cannabis regulatory landscape remains in a constant state of flux.
Data becomes more accessible. AI-powered insights and automations can surface (and in some cases, address) quality issues as they emerge. This, in turn, means companies have the chance to course correct before problems fall through the cracks and snowball in a more public arena with higher stakes.
Many ERP applications include QC functions to help companies trace quality-related elements throughout the production lifecycle. However, in a highly-regulated industry like cannabis, off-the-shelf functionality may not be adequate.
Cannabis ERP applications, tailor-made for the challenges of this industry, offer extended QC capabilities – including the ability to create user-defined test groups, automatically quarantine items that fail QC, and more.
As the industry matures, more stringent quality testing requirements and standards are bound to follow. By focusing on building quality control into the big-picture plan now, before regulations become official, businesses have the rare opportunity to prepare for future challenges and opportunities just on the horizon.
Velosio is a certified Microsoft partner that offers industry-specific solutions that enable cannabis companies to reach their quality, productivity, and profitability goals.
Contact us today to learn more about how we can help you hit your cannabis QC goals, boost profits, and optimize your business processes.