Growing Pains
The cannabis industry has been blessed (or not) with exponential market growth and an oversupply of products. So what’s the secret to success in such a dynamic, fluctuating market? It’s two things: Delivering the right products at the right cost of quality.
The Quality Assurance and Operations functions have seen many industry challenges. With direct responsibility for compliance audits, reducing the cost of poor quality, supply chain efficiency, and delivery of high-quality products, these functions are instrumental in managing a company’s risk.
Cautionary tales have put a spotlight on the risk of non-compliance seen when companies improperly handle routine tasks or deviate from standard operating procedures, costing careers, revenue, shareholders, loss of time due to corrective action, or loss of license.
C15 Solutions interacts with international cannabis professionals daily to discover the priorities and best practices of the industry. Cannabis’ unique, industry-specific events require a risk management plan to reduce a company’s cost of poor quality while ensuring compliance.
The Risk Management Process
Risk is simply the uncertainty regarding outcomes. Thus, it is important for every cannabis company to understand and engage in proper risk management.
Risk is mitigated by people, processes, and technology. With increasing employee churn within the space and a general lack of stability, we see increased human errors. With an overwhelmed workforce we often find unaddressed quality tasks, deviations from SOPs, or inadequate training. Without the right technology, you end up with inadequately trained staff and the inability to prove compliance to regulators.
The experts of C15 have identified some of the significant costs associated with the cost of poor quality and running product liability risks. In the cannabis sector, the cost of quality can range from 15% to as high as 30% of top-line revenue.
Here are some other considerations:
- Impact of complaints & recalls on your company’s brand reputation
- Loss of revenues – products could be recalled, destroyed, or impounded
- Loss to your stakeholders & equity value
- Potential class action lawsuits from consumers
- Potential license suspension and/or company closure and career-ending outcomes
Designed to foster a growing market, C15’s Quality Management Solutions (“eQMS”) enables cannabis companies to focus on their core activities and objectives while automating many critical, compliance-oriented processes across the operation.
Seizing Opportunities & Reducing Cost of Quality
Contrary to the traditional definition of quality, focused solely on consumer-facing product attributes such as freshness, bud integrity, and potency, operational quality permeates throughout the entire enterprise and production process.
The good news for cannabis is that the opportunity to reduce your company’s cost of quality significantly is at hand. C15 customers regularly achieve ROIs in excess of 1,000% and dollar savings from COGS in the millions per year.
C15 was created to fill a void in the industry - startups grow by finding a market niche that isn’t being served well by existing players. Focused on providing real utility to real people, C15’s products and services become vital to the success of cannabis companies looking to reduce the cost of quality and comply with jurisdictional regulations.
Check out our resource library to learn more.
Shifting from Reactive to Proactive
In an industry where the only constant is change, C15 ensures both emerging and established cannabis companies are in a better position to ensure compliance, quality, and data integrity.
With our experts’ extensive backgrounds in cannabis and its adjacent industries, this is what we have discovered are some of the main reasons cannabis companies ignore risk…
- Lack of coordination
- Mistaken over-dependence on people and processes rather than technology and industry best practices
- A short-term focus on budget pause on IT spending
- Lack of experience and expertise in GPP and GMP environments
- Staff turnover
- Little to no appropriate training
- Lack of independence of quality professionals due to the reporting structure
Do not fall into the all-too “herd-like'' mistake of thinking: “I do not have the budget nor the bandwidth to investigate eQMS”. The cannabis industry is in its infancy compared to most industries - it faces a unique set of considerations determined by things out of your business’s control like jurisdictional regulations.
Vendors like C15 ensure that you are future-proofed for the evolution of the industry. You are ultimately retaining all the risks of loss until you put a risk management plan into action and arrange the details.
