Committee Blog: Future-Proofing Your Business – How Adopting Industry Standards Improves Your Bottom Line and Reduces Your Risks

by NCIA’s Facilities Design Committee

By developing and adopting standards now, operators in the cannabis space can avoid unnecessary future expenses they might incur when needing to rework established facilities to meet upcoming federal standards or third-party compliance

Upton Sinclair’s The Jungle in 1905 led to the Pure Food and Drug Act in 1906. The food sector has matured through additional governmental regulations, industry-led initiatives, consumer and trade guidelines and standards, and more recently, the Food Safety Modernization Act. Over one hundred years of progress helped to ensure what is arguably the safest food supply in the world. By comparison California, in 1996, 24 years ago, legalized Medical Cannabis. Since then, 36 states have legalized cannabis for medical or adult use. Confusingly, that is 36 different sets of regulations, none harmonized. And no consensus on how FDA will regulate cannabis when it is descheduled.

But investors and producers in the cannabis sector are seeking direction on how to future proof their businesses so they can manage the transition from fragmented state-level regulations to rigorous federal oversight. Developing and adopting cannabis industry best practices may be the greatest insurance available. 

NCIA’s Facility Design Committee is one of the few groups beginning this effort. The group has representatives from operations, regulatory compliance, quality, equipment vendors, design and construction, and allied industries. 

Standards can focus on several areas. Because the cannabis industry deals with substances that are ingested into the human body, standards that support consumer health and safety are paramount. Much of the current practice in the food sector, organized under the topic of current Good Manufacturing Practices (GMPs), can port over to Cannabis with some adjustments. These practices protect consumers and your brand. GMPs have, as a foundation, many aspects of facility and process design, but standards for these don’t yet exist. However, by developing and adopting standards now, operators in the cannabis space can avoid unnecessary future expenses they might incur when needing to rework established facilities to meet upcoming federal standards or third-party compliance. They also can control their own destiny, in effect, by establishing approaches that later can be considered as regulators write the rules in the future. 

As operators themselves, a number of our committee members have felt the direct impact of product recalls due to a lack of clear delineation at the intersection of cannabis and food safety regulations. Depending on the scope of the recall, a company can be crippled by not properly understanding and adhering to a common set of standards across the industry, especially when concerning safe food handling practices and similar regulations that control consumable product manufacturing. For example, one of our committee members had to recall a batch of infused gummies because public health regulators used safe food handling regulations to determine that the gummies were exposed for too long in a potentially contaminated environment during the setting process. Had the operator adhered to standards commonly used in food production, they would have avoided the costly impact of the product recall. With nearly 15% of flower failing tests for yeast and mold in Colorado, the cannabis industry has become no stranger to costly recalls.

Standards not only minimize risk to the consumer and the business, but also improve quality and consistency. Improve employee NPS (Net Promoter Scores). Reduce cost and production downtime. Increase the inherent value of the business. And offer a brand message that increases sales. 

Nearly all related industries follow best practices, known as cGMPS (current Good Manufacturing Practices), which can be adopted for our industry. If we look to examples from the food sector, you find mature and professional regulations at the federal level and experienced inspectors from USDA, FDA and state departments of Health or Agriculture, as well as global standards from the International Organization for Standardization (ISO) and the World Health Organization (WHO), initiatives from trade customers such as Global Food Safety Initiative (GFSI), equipment certifications from European Hygienic Equipment Design Group (EHEDG), NSF International, and 3-A Sanitary Standards. This constellation of resources is not yet published for the cannabis sector.

But the work is beginning with NCIA’s Facility Design Committee. Groups including 120-year-old ASTM International have established the D37 Committee on Cannabis, Safe Quality Foods (a GFSI scheme) is working on a Cannabis Supplement program, and Underwriters Laboratories (UL) and ISO recently announced the launch of a standards initiative at the end of November 2020. 

Join us in this exciting journey. Become involved, and stay aware of and ahead of the pending regulations. We don’t have 114 years to get this right! 

The Facilities Design Committee (FDC) focuses on providing NCIA members and regulators a framework and information about facilities design options through which legal producers can plan for GMP level production as the market transitions from a state to a federally regulated industry.