Tag Archives: CAPA

Don’t Reinvent The Wheel: A Tour of ASTM Standards for Cannabis and Hemp – Part 2

By David Vaillencourt, Bethany Moore
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In our previous article, we delved into the foundational ASTM International standards that are shaping the cannabis and hemp industries. We explored the first true universal symbol for cannabis, water activity controls, and Hazard Analysis and Critical Control Points (HACCP) standards. As we continue this journey, we turn our attention to four additional ASTM International standards that are pivotal for ensuring public health and safety and streamlining operations for cannabis and hemp operators. These include standards on conducting a product recall, Corrective and Preventive Action (CAPA), how to establish a Quality Management System (QMS), and management responsibilities in an effective cannabis business. In this article, we speak with experts who contributed a significant amount of time and knowledge in shaping these standards, including Trevor Morones of Control Point Consulting, Cary Black of CK Black Group, and Steven Cooper of Quality Initiatives LLC.

Recall/Removal Procedures: Ensuring Swift and Safe Actions

When seven people died from taking unknowingly contaminated TYLENOLⓇ in 1982, it was the swift actions of Johnson & Johnson in initiating a costly but prudent recall that salvaged their reputation. Since then, numerous companies in the food, beverage, and pharmaceutical industries have been subjected to recalls. The reality is, that even the most robust processes are susceptible to human error or unforeseen circumstances. And in that worst case scenario, having a tested recall plan in place is critical to be able to respond efficiently, minimize harm to consumers, and maintain brand trust. The ASTM standard for recall/removal procedures provides just that; a structured approach to swiftly and effectively remove potentially harmful products from the market. Imagine a cannabis producer discovers that a batch of edibles has pieces of metal shavings in it. With this standard implemented, this company would have the ability to immediately initiate a recall, contact the distributors and retailers that received the product to remove the product from shelves and notify consumers. Within hours, the potentially dangerous product is no longer available, and public safety is safeguarded. This swift action not only protects consumers but also helps maintain the company’s reputation for quality and safety.

Cary Black, ASTM Fellow, ASQ CQE, PCQI, and Principal Consultant for CK Black Group, Inc., and Technical Contact for the ASTM standard ‘D8220-20 Standard Guide for Conducting Recall/Removal Procedures for Products in the Cannabis Industry’ said, “Effective recall procedures provide the final fail-safe for consumer safety. As in the food industries, the supplement industries, the pharmaceutical industries, cannabis industry must hold the same capability to effectively, quickly, and efficiently recall products that have been determined to be a risk for consumers. For an efficient recall program, there is a vetted series of protocols that have been employed to quickly recall adulterated products. From forming the recall team and maintaining clear and accurate traceability records from your raw materials, your inventory, and shipping to your customers; all these elements come together to create a seamless series of steps to initiate an effective recall when needed.

For an effective recall program, not only should the proper elements be in place for a recall, additionally there should also be provisions for conducting mock recalls to allow the recall team to practice the efficacy of their record keeping and procedural implementation.

Any supplier of cannabis products for human or animal consumption is required by all authorities having jurisdiction to a program in place and the ability to quickly recall adulterated products.”

CAPA (Corrective and Preventive Action): Proactive Problem Solving

As we stated above, even the most robust processes are susceptible to human error or unforeseen circumstances. Wouldn’t it be nice if there was a way to prevent those mistakes from ever happening again? Enter Corrective and Preventive Action (CAPA). A foundational tried and true component of every quality management system is that it is designed to identify the true root cause of a mistake, implement a corrective action, and verify the effectiveness of the corrective action to prevent the recurrence of such a mistake. Even better, CAPA is a tool to prevent the occurrence of problems before they occur in the first place. The ASTM CAPA standard guides operators in systematically addressing problems to avoid recurrence, leading to streamlined operations and enhancements to overall product quality and consistency. In the example above where the cannabis edibles producer has identified contaminated products and recalled the products from shelves, the next natural step would be to become proactive about ensuring that it does not occur again. That’s one of many examples where the CAPA standard steps in and provides a valuable solution.

Trevor Morones, Control Point founder and Chair of ASTM’s Cannabis Subcommittee on Personnel Training, Assessment, Credentialing (D37.06), who was involved in developing the ASTM CAPA standard D8299, said, “Implementing effective corrective action processes within an organization yields substantial benefits. Proactively preventing recurring incidents is key, but the commitment to continuous improvement is equally crucial. Open and effective communication with all involved parties is not just essential; it’s a way of showing that everyone’s input is valued and included in identifying and implementing the best solutions. Moreover, embracing ASTM standards can greatly enhance an organization’s competitive edge in the marketplace.”

Kara Lavaux, CP-FS, CQA, Compliance Consultant for Allay Consulting, said, “To build on what Trevor said, a CAPA plan is a hard-working component of a quality management system. CAPA works for times when you need to react to an issue, and for times when you have the foresight to prevent a future issue. The key to an effective CAPA program is learning to shift the focus away from the symptom of the issue and instead focus attention and action on the root of the issue. It’s the root of the issue that needs a corrective action, which will result in both the correction of the symptoms and the prevention of the issue in the future. In the example above of distributed edibles with mold contamination, the issue (risk to the public) was “fixed” by completing a quick recall of the products. But this correction does not prevent the issue from occurring again in the future. If we do not put control measures in place to prevent the mold on the edibles, we could continue distributing moldy edibles and will continue conducting reactionary recalls to protect consumers. Opening a CAPA and doing a deep dive into what caused the mold will reveal the root issue that needs to have a corrective action. Is it a water activity issue with the recipe, or perhaps a handling issue during packaging, or perhaps a storage issue at the dispensary? The CAPA investigation will reveal the root cause. Fixing the root cause leads to continual improvement of the process and prevents the issue from recurring.”

Establishing a QMS for Consumer Products: Foundation of Quality

In the 1980s, manufacturers discovered the value of implementing a Quality Management System (QMS) to provide a high level of confidence both internally and to their customers that their products would deliver on the quality and consistency that they were expected to meet. Forty years later, being certified to having an effective quality management system is one of the most basic requirements of companies engaging in global trade. The ASTM standard for establishing a QMS for consumer products lays the groundwork for comprehensive quality management in the cannabis and hemp industries. For example, when a company is launching a new line of products, a QMS provides the structure to develop and document the process for everything from ingredient sourcing to final product testing. This ensures that when this production line is scaled and commercialized, the process will be validated to provide the confidence needed that consumers will receive a safe and consistent product time and time again. Additionally, companies with a QMS will more easily be able to adapt to regulatory changes and stay in line with compliance requirements.

Cary Black, author of the ASTM standard, ‘D8222-21a Standard Guide for Establishing a Quality Management System (QMS) for Consumer Use of Cannabis/Hemp Products’ said, “Having a functional QMS is typically the first set of requirements for governing the manufacture and distribution of products. For products consumed by humans or animals a functional QMS sets the base for practices aligned with GMP. For most authorities having jurisdiction, relative to products that are consumed by humans or animals, a QMS supporting GMP compliance is required.

A functional QMS additionally provides the platform for a system that not only drives regulatory compliance, but also adjusts to and supports continuous improvement efforts, provides systems for manufacturing and distribution, and can foster increased productivity, improve efficiencies, incorporate risk management approaches, and ultimately ensure the safety of the products to its consumers.

The more participants within the Cannabis industry embrace the value of implementing a functional QMS, the more sustainable their manufacturing and product lines will become and the closer they will be to a risk management approach that aligns with most GMP requirements for cannabis products consumed by humans or animals.”

Management Responsibilities in Managing a QMS: Leadership and Accountability

You don’t have to be a retired Navy SEAL to understand the significant influence that leadership has when it comes to building a successful organization. Effective quality management requires strong leadership and clear responsibilities. The ASTM standard for management responsibilities in managing a QMS (D8398) outlines the roles and duties of management in developing, implementing, and maintaining an effective quality system. The symbiotic relationship between leadership and employees is crucial to fostering a culture of excellence. Ensuring that management is allocating the appropriate resources, providing adequate training, and regularly reviewing the system is paramount for employees to feel supported and confident in their understanding of how their roles are part of the bigger picture of maintaining high standards. And when employees have clear roles and responsibilities with the requisite support, businesses succeed. Research from Gallup has shown that companies with engaged employees benefit from 40% less quality defects and are more than 20% profitable compared to peer organizations with low employee engagement.

Steven Cooper, President of Quality Initiatives LLC, and author of this standard, emphasized the importance of leadership demonstrating support of quality and safety and how it can impact the entire company in the long term. “When I was involved in writing this standard, my main focus was to target the CEO or other top management of a company, or someone who is looking to start a company. My standard is intended for these types of people to help them simply understand some of the basic requirements to do things right and to ensure they get off on the right foot toward product quality. Most of the other standards written for GMP are rather long documents intended for a quality professional, and my document is specifically targeting someone who needs to capture the basic top-line requirements without spending a lot of time trying to understand an extensive detailed GMP requirements document. Ultimately, it’s easy for management to give lip service in saying “quality is important” but how do they get serious? How does an employee do their job to feed the need to satisfy quality requirements? What role does the employee have in the quality management system? And that’s where management needs to ensure a good understanding of the employees, which is achieved by training and follow through, but also by setting an example. And by that, I mean that the first time there is a quality problem, what does management do? Do they ignore it? Do they say it costs too much to fix? Are they serious? And that message really has to be very carefully delivered ot the employees so they are not only aware of the need for quality, but they have an appreciation of the importance. That can only be delivered by management walking the walk, not just talking the talk. 

As an example, a company can say they care about quality. They can hang posters and have meetings, but in one incident I observed, it wasn’t until there was a safety incident where someone could have been seriously injured or worse, and a mistake was made, at that moment, the reaction by management was critical. Did they just have a meeting to talk about it? Nope. The VP of Operations shut down the facility for three days, which is difficult to do when the company is demanding product, and customer orders are waiting to be filled, money on the line, etc, but when that decision was made, it sent a very serious message to all of the employees in the factory about the importance of quality. After that, the respect and appreciation for safety rose to a much higher level, and probably remained there for many years, all because of that one incident and the way management reacted. They walked the walk, not just talked the talk. They didn’t just take shortcuts to get the product out the door. 

Shaping The Industry

As the cannabis and hemp industries continue to evolve, the marketplace is going to get more competitive and only those with a high bar of quality, and the data to prove it, wil succeed.These four ASTM standards—recall/removal procedures, CAPA, establishing a QMS, and management responsibilities in QMS—are invaluable resources for operators to implement to not only maintain regulatory compliance, but ensure a future of success. By adhering to these standards, operators not only safeguard public health but also streamline their processes and build a stronger, more trustworthy industry.

In our next article, we will explore additional ASTM standards that are paving the way for innovation and excellence in the cannabis and hemp sectors. Stay tuned as we continue to highlight the standards that are shaping the future of this dynamic industry.

Call to Action: If you are a professional in the cannabis and hemp industries, consider joining ASTM and contributing to the development of these crucial standards. Together, we can build a safer and more efficient industry.

For more information on ASTM standards and how they can benefit your operations, visit https://www.astm.org/get-involved/membership.html.

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Quality Systems 101: CAPA Programs Drive Improvement & Prevent Costly Mistakes

By David Vaillencourt
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No business is perfect, especially when humans are part of the equation. But, how do you tackle fixing quality issues as they arise? The goal of this article is to shed some light on the value of a CAPA program and why many states are making them mandatory for cannabis businesses.

Let’s consider the following situations:

  • Analytical lab results for a production batch test above the limit for a banned pesticide or microbial contamination
  • You open a case of tincture bottles and some are broken
  • A customer returns a vape pen because it is leaking or ‘just doesn’t work’

Do you…

  • Document the issue?
  • Perform some sort of an investigation, asking questions of the people involved?
  • Ask for a retest? Then, if the test comes back positive, move on?

Let’s go through each one of these and understand why the suboptimal answer could be costing your business money:

You don’t document the issue

I hear excuses for skipping on documentation all the time.

  • “It’s not a big deal”
  • “It was a one off”
  • “The glasses probably broke in transit”
  • “They are cheap and easily replaceable”
  • “It’s not worth the time”
Tracking and documenting supplier shipments can help you identify supply chain issues.

In the situation of a couple of broken bottles in a shipment, what if it was the seventh time in the last two months? If you haven’t been documenting and tracking the issue, you have no way of knowing if it was a single occurrence. Remember when you were surprised that your filling team did not have enough bottles? Those broken bottles add up. Without documenting the incident, you will never know if it was truly a one-time mistake or the sign of a deeper issue. The reality is, it could be sloppy handling on the production line, issues with the shipper or even a sign of poor quality coming from the supplier.

Have you ever compared the number of fills vs the number of bottles ordered? How much money have you already lost due to those broken bottles adding up? Do you have the ability to answer this question?

You perform an investigation

Let’s say a customer returns a leaky vape pen. You perform an investigation by asking the production workers what they think went wrong. They say that it’s very difficult to get the seal for the cartridge into place. Their supervisor tells them to try harder, refunds the customer and moves on. But, why is it difficult to get the seal into place? Is it a design flaw? Should a special tool be used to assemble the cartridge properly? Without getting to the root cause of why the seals are leading to leaking cartridges, you are doomed to have repeat issues. Numerous studies have found that less than one in twenty dissatisfied customers will complain, and that approximately one in ten will simply leave for another brand or provider. How much is this unresolved issue truly costing your business?

Asking for a retest and if it passes, releasing the product and moving on.

labsphoto
In Colorado, 15% of the final tested cannabis flower products continue to fail.

Suppose a major producer of cereal received test results for its most popular cereal that were positive for levels of heavy metals that research has shown to be linked to cancer or developmental issues in children. Now, suppose the company stated that it was an isolated incident and a retest showed that the product met acceptable limits. Further investigation showed no paperwork, save for a couple of emails and a phone call between the lab and the producer. Would that give you peace of mind? This is known as “testing into compliance” and was the subject of a landmark lawsuit in 1993 that Barr Laboratories lost.

For many the answer would be a hard NO. But this happens every day. In Colorado, 12.5% of cannabis batches failed final product testing in 2018 and 2019. That’s one in eight batches! What happened to those products? Good question.

Enter: CAPA (Corrective Action and Preventive Action) programs! For people with a background in quality and GMPs (Good Manufacturing Practices), CAPA is a household name. And, it’s quickly becoming a requirement that cannabis regulatory bodies are looking at. Colorado was the first state to explicitly require CAPA programs for all license holders effective January of this year and has provided a free resource for them. But, for the large majority of people, including those in the cannabis industry, it’s just another acronym.

What does a CAPA program do?

The benefits are numerous but two major ones are:

An effective tool for investigating the true root cause

First of all, a CAPA program provides the framework for a tool for investigation – as Murphy’s Law posits – things go wrong all of the time. Whether you have a manual, labor-intensive process or a highly automated operation, the equipment is programmed, maintained and monitored by humans. The logical sequence of problem solving within a CAPA program allows you to thoroughly investigate and determine the root cause of the issue. With a complete understanding of root cause, you are then able to eliminate it and prevent future occurrences – not just in the one area investigated, but in all similar situations throughout the company.

System for continuous improvement

Gathering info from a customer complaint like batch or product IDs can be crucial in a CAPA system

Anyone who is in the market for a new car lately can appreciate the technological advances. In the 1980s, it was air bags and ABS brakes (those of you that drive in snowy climates and remember having to pump your brakes can appreciate technological advancements). Bluetooth technology for hands-free communication and radio control is another example of continuous improvement in cars.

This is one of the biggest predictors and differentiators between profitable and successful companies with satisfied clients and one that is barely scraping by. The cost of poor quality adds up!

Key inputs in a CAPA system 

If the output is an improved system and lower cost of quality, we need to make sure we’re considering the potential inputs. 

Information that feeds into your CAPA system:

Customer complaints

Every complaint must be recorded. Gather as much information as possible, but at a minimum: the product type/SKU, the customer name and date of purchase. If possible, the batch or product ID.

This is not necessarily to identify products for a recall, but to prevent…

Laboratory test results

This should not be restricted to final product testing, but include any in-process inspections. Say you have a product repeatedly failing final testing, what if it’s actually been consistently failing or very close to failing at the very first in-process inspection? It’s also important to work with your laboratory to understand their method validation process, including the accuracy, precision, robustness, etc.

Infrastructure & environmental controls/monitoring

Most people consider “environmental controls” to be things like temperature and humidity control. While that is true, it can also include pest and contamination control. Poorly designed infrastructure layouts are major contributors to product cross contamination as well.

Supplier information

Undetected supply chain issues (remember the broken bottles?) can add up fast! CAPAs for suppliers cannot just include supplier monitoring, but improvement in how you communicate your needs to your suppliers. It’s easy to overlook non-cannabis raw materials as sources of microbiological and chemical contamination. Conduct a risk assessment based on the type of contact with your product and the types of contamination possible and adjust your supplier qualification program accordingly.

Are you ready to recognize the benefits of a CAPA program?

One more major benefit of CAPA programs to mention before we go is … Preventive via predictive analytics.

In Colorado, 15% of the final tested cannabis flower products continue to fail, mostly due to mold and mildew. A quality system, with effective data capture that is funneled into a CAPA program can easily reduce this by 75%. For even a small business doing $2M per year in revenue, that equates to a revenue increase of nearly $200,000 with no additional expenses.

Whether you are operating in the State of Colorado or elsewhere, a CAPA and Recall program will provide immense value. In the best case, it will uncover systemic issues; worst case, it forces you to fix mild errors. What are you waiting for?

How Effective is Your Internal Auditing Program?

By David Vaillencourt
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The word “audit” evokes various emotions depending on your role in an organization and the context of the audit. While most are familiar with and loathe the IRS’s potential for a tax audit, the audits we are going to discuss today are (or should be) welcomed – proactive internal quality audits. A softer term that is also acceptable is “self-assessment.” These are independent assessments conducted to determine how effective an organization’s risk management, processes and general governance is. 

“How do you know where you’re going if you don’t know where you’ve been” – Maya Angelou

Internal quality audits are critical to ensuring the safety of products, workers, consumers and the environment. When planned and performed periodically, these audits provide credible, consistent and objective evidence to inform the organization of its risks, weaknesses and opportunities for improvement. Ask yourself the question: do your clients/vendors rely on you to produce reliable, consistent and safe products? Assuming the answer is yes, what confidence do you have, and where is the documented evidence to support it?

Compliance units within cannabis businesses are typically responsible for ensuring a business stays legally compliant with state and federal regulations. This level of minimum compliance is critical to prevent fines and ensure licenses are not revoked. However, compliance audits rarely include fundamental components that leave cannabis operators exposed to many unnecessary risks.

Internal quality audits are critical to ensuring the safety of products, workers, consumers and the environment.

As a producer of medical and adult-use products that are ingested, inhaled or consumed in other forms by our friends, family and neighbors, how can you be sure that these products are produced safely and consistently? Are you confident that the legal requirements mandated by your state cannabis control board are sufficient? Judging by the number of recalls and frustrations voiced by the industry regarding the myriad of regulations, I would bet the answer is no.

What questions do internal audits address? Some examples include:

  • Are you operating as management intends?
  • How effective is your system in meeting specified objectives? These objectives could include quality metrics of your products, on-time delivery rates and other client/customer satisfaction metrics.
  • Are there opportunities to improve?
  • Are you doing what you say you do (in your SOPs), and do you have the recorded evidence (records) to prove it?
  • Are you meeting the requirements of all applicable government regulations?

There are potential drawbacks to internal audits. For one, as impartiality is essential in internal audits, it may be challenging to identify an impartial internal auditor in a small operation. If your team always feels like it is in firefighting mode, it may feel like a luxury to take the time to pull members out of their day-to-day duties and disrupt ongoing operations for an audit. Some fear that as internal assessments are meant to be more thorough than external assessments, a laundry list of to-do items may be uncovered due to the audit. But, these self-assessments often uncover issues that have resulted in operational efficiencies in the first place. This resulting “laundry list” then affords a proactive tool to implement corrective actions in an organized manner that can prevent the recurrence of major issues, as well as prevent new issues. The benefits of internal audits outweigh the drawbacks; not to mention, conducting internal audits is required by nearly every globally-recognized program, both voluntary (e.g. ISO 9001 or ASTM Internationals’s Cannabis Certification Program) and government required programs such as 21 CFR 211 for Pharmaceuticals.

Internal Auditing is a catalyst for improving an organization’s effectiveness and efficiency by providing insight and recommendations based on analyses and assessments of data and business processes. Additional benefits of internal audits include giving your organization the means to:

  • Ensure compliance to the requirements of internal, international and industry standards as well as regulations and customer requirements
  • Determine the effectiveness of the implemented system in meeting specified objectives (quality, environmental, financial)
  • Explore opportunities for improvement
  • Meet statutory and regulatory requirements
  • Provide feedback to Top Management
  • Lower the cost of poor quality

Findings from all audits must be addressed. This is typically done in accordance with a CAPA (Corrective Action Preventive Action) program. To many unfamiliar with Quality Management Systems, this may be a new term. As of Jan 1, 2021, this is now a requirement for all cannabis licensed operators in Colorado. Many other states require a CAPA program or similar. Continuing education units (CEUs) are available through ASTM International’s CAPA training program, which was developed specifically for the cannabis industry.

Examples of common audit findings that require CAPAs include:

  • Calibration – Production and test equipment must be calibrated to ensure they provide accurate and repeatable results.
  • Document and record control – Documents and records need to be readily accessible but protected from unintended use.
  • Supplier management – Most standards have various requirements for supplier management that may include auditing suppliers, monitoring supplier performance, only using suppliers certified to specific standards, etc.
  • Internal audits – Believe it or not, since internal audits are required by many programs, it’s not uncommon to have a finding related to internal audits! Findings from an internal audit can include not conducting audits on schedule, not addressing audit findings or not having a properly qualified internal auditor. Are you looking for more guidance? Last year, members of ASTM International’s D37 Committee on Cannabis approved a Standard Guide for Cannabis and Hemp Operation Compliance Audits, ASTM D8308-21.

If you are still on the fence about the value of an internal audit, given the option of an inspector uncovering a non-conformance or your own team discovering and then correcting it, which would you prefer? With fines easily exceeding $100,000 by many cannabis enforcement units, the answer should be clear. Internal audits are a valuable tool that should not be feared.

GMPs & Cannabis Manufacturing

By Kathleen May
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Editor’s Note: While CIJ typically omits the word “marijuana” where possible due to antiquated nomenclature and prejudicial connotations, we understand the legal distinction between cannabis containing THC and hemp requires the use of the word when referencing federal government policies and legislative language.

Despite the rapid evolution of the cannabis industry, the assurance of safe manufacturing practices remains unclear.Both the Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA) have imposed significant hurdles for cannabis operators to remain on the “right side of the law.” Therefore, manufacturers of both hemp and marijuana products have been left to figure things out on their own, or choose to ignore existing guidance because the lack of federal oversight allows them to do so. Inconsistent regulation on manufacturing, packaging, labeling and testing of cannabis products offers the potential for unsubstantiated, non-scientific and often times blatantly false claims on product safety and efficacy.

Science vs. Law

Hemp and marijuana are both species of the Cannabis family, Cannabaceae. Genetically they are identical but are arbitrarily defined by the presence of delta-9 tetrahydrocannabinol (THC). While science does not differentiate between hemp and marijuana, the law does.

The hemp industry declared a small victory with the passing of the Agricultural Act of 2014 (2014 Farm Bill). Under this bill universities and state agriculture departments were allowed to grow hemp under state law. Additionally, “industrial hemp” was officially defined by establishing the legal limit of THC at 0.3% on a dry weight basis. The Agricultural Improvement Act of 2018 (2018 Farm Bill), under the guidance of the United States Department of Agriculture (USDA), took things a few steps further by authorizing the cultivation of hemp and removed hemp and hemp seeds from the CSA. The bill however provides no language that mandates the safe manufacture of hemp-derived consumer goods. The 2018 version also preserved the FDA’s authority to regulate products containing cannabis and cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act). To the surprise of most, listing cannabidiol (CBD), even hemp-derived, as an ingredient on consumer product labels remains illegal under the bill. Furthermore, CBD product manufacturers are not protected under the current regulations. Since 2015 the FDA has issued warning letters to firms marketing CBD products as dietary supplements and/or foods, and in December 2018, FDA declared it illegal to introduce food containing CBD (or THC) into interstate commerce, regardless if it is derived from hemp. To date, the only FDA approved CBD product is GW Pharmaceutical’s Epidiolex.

Marijuana remains classified as a Schedule I controlled substance under the CSA. Thirty-six (36) states have approved comprehensive, publicly available medical marijuana programs, and now 14 states have approved adult use programs, with New Jersey passing legislation on February 22, 2021. However, the industry has seen minimal movement toward mandating GMP requirements in the marijuana market. Only a handful of medical programs require manufacturers to follow GMP. Furthermore, the requirements are inconsistent between states and the language in the regulations on how to approach GMP implementation is vague and disjointed. This fragmented guidance supports the complexity and difficulty of enforcing a coherent, standardized and reliable approach to safe manufacturing practices.

What is GMP and Why Should You Care?

Good Manufacturing Practices (GMPs) are a system for ensuring that products are consistently manufactured and controlled according to quality standards and regulatory guidelines. The implementation of a GMP compliant program ensures consumer health and safety, allows manufacturers to understand the intended use of their products, allows manufacturers to defend product specifications as being appropriate, considers the risks to vulnerable populations and minimizes overall business risk. In a nutshell, GMP equals product safety and quality, and defines the responsibilities of the manufacturer to ensure consumers are protected from the distribution of unsafe and ineffective products. Currently, the GMP “landscape” in the cannabis space is complicated. The various “flavors” (food, dietary supplements, cosmetics and drugs/devices) of GMP leave many confused and frustrated when making the decision to implement GMP. Confusion is a result of unclear regulatory requirements as well as operators not fully understanding how to classify or designate the end use of their product(s). Implementing an effective GMP program requires proper planning (both short and long term), financial commitment and qualified resources.

Where Should You Start?

As the regulatory landscape continues to evolve and mature in the cannabis space, your business model must consider GMP implementation if you wish to remain successful and sustainable.

Intended Use

Before you can implement GMP you must first understand what GMP regulations apply to the intended use of your product(s). Are you manufacturing food, beverages or dietary supplements? Get acquainted with the FDA Code of Federal Regulations (CFRs) on GMP. 

Conduct a Gap Assessment

A gap assessment allows you to determine your deficiencies in relation to GMP compliance. The assessment should include, but is not limited to facility design, equipment design, supply chain, risk management and employee training.

Develop an Action Plan

Once the gap assessment is complete a comprehensive action plan will be developed to map out the steps required to achieve GMP compliance. The action plan should follow the SMART Goal principles:

  • Specific (simple, well-defined)
  • Measurable (meaningful)
  • Attainable (achievable, agreed upon)
  • Relevant (resource-based, reasonable and realistic)
  • Timely (time-based, defined due dates)

The plan will include prioritized deliverables, due dates and allocated resources in order to strategically plan and execute and complete the required tasks.

Schedule a Mock GMP Inspection

A mock inspection verifies that the action plan was adequately executed. Hire an experienced resource familiar with related GMPs and QMS to conduct the inspection. A successful mock inspection is a perfect litmus test if the end goal is to achieve GMP certification.

Cannabis manufacturers that ignore the obvious progression toward an FDA-like industry will not survive the long game. Those that embrace the momentum and properly plan to mitigate product and business risk – those who demonstrate integrity and are truly in this space to ensure safe, effective and quality products to consumers will come out on top, gain credibility and secure brand recognition.

References:

  • 21 CFR Part 111, Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements.
  • 21 CFR Part 117, Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food and the Food Safety Modernization Act (FSMA).
  • 21 CFR Part 210, Current Good Manufacturing Practice in Manufacturing, Processing, Packing, or Holding of Drugs; General.
  • 21 CFR Part 211, Current Good Manufacturing Practice for Finished Pharmaceuticals.
  • 21 CFR Part 700, Subchapter G-Cosmetics.
  • 21 CFR Part 820, Subchapter H-Medical Devices; Quality System Regulation
  • Congressional Research Service, FDA Regulation of Cannabidiol (CBD) Products, June 12, 2019.
  • United States Food and Drug Administration-Warning Letters, Current Content as of 02/19/2021.

Links:

Due Diligence for Suppliers & Cannabis Supply Chain Partners

By Mark Slaugh
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Between the patchwork quilt of rules and regulations that is the modern cannabis industry, products pass through many hands before being sold to a customer. From sourcing, cultivating, manufacturing, distributing and vending, the relationships between a licensee and their vendors/partners up and down the supply chain is complex and touches many stakeholders along the way.

While the focus on quality packaging, dope labeling, delicious ingredients and consistently potent cannabis is a priority for most companies, what often isn’t thought about is the liability in bringing these components together in terms of compliance.

Compliance responsibility falls on licensees as a direct term and condition of licensure within their state. To operate, licensees must maintain and be able to demonstrate compliance with a plethora of rules and regulations. Compliance is the name of the game in cannabis.

While most operators understand this, what most do not think about is how the compliance or noncompliance of their vendors affects their own liability.

Sharing Noncompliance & Liability

Supply chain partners are automatically segregated by whether or not they are plant touching licensees or not.

Licensees are the only entities in the supply chain that can be fined, administratively held, suspended, revoked or even arrested due to noncompliance. This fundamental nature means that supply chain partners are automatically segregated by whether or not they are plant touching licensees or not.

In the case of mutual licensees such as a manufacturer and dispensary, the liability for compliance falls on both entities. A single manufacturer that makes an error on labeling language or a cultivator using the incorrect containers both pass on their liability to any downstream partners.

iComply has seen regulators quarantine hundreds of products among multiple dispensaries who never checked the compliance of the supplying manufacturer. Surprisingly, most dispensaries don’t think of the liability passed to them amid hundreds of SKUs and multiple manufacturers and cultivators. Confounding the issue further is that everyone in the industry can interpret the same rules in completely different ways.

Assuming your supply chain partners are 100% compliant is a dangerous pitfall.

By not checking noncompliance from supply chain partners, operators accumulate evidence dating back years. Like METRC being off, these issues tend to snowball until they seem overwhelmingly difficult to handle. And it doesn’t just stop at labeling issues. Noncompliance can fall on all supply chain partners and be left in the hands of a licensee in a variety of ways.

Business partners like security contractors can often run afoul of regulations and put their licensed partners at risk.

Even worse, are supply chain partners who don’t have a motive to be compliant as they do not own licenses and often have a poor understanding of cannabis compliance. A packaging provider, marketing company, CBD provider, security company, vending machine providers, waste disposal companies and other commonplace suppliers and partners can often run afoul of regulations and put their licensed partners at risk.

Since regulators can only enforce the licensed entity, many states have made it clear that licensees are ultimately and fully responsible for any actions of noncompliance taken by third parties contracted by the company – regardless if they touch cannabis or not.

Areas of Common Noncompliance in Cannabis

Like a game of “Hot Potato” (worth millions of dollars), we’ve seen common noncompliance liability get passed down the supply chain in the following areas of cannabis operations:

  • Product liability
  • Packaging and labeling
  • Test result manipulation
  • Expired licenses
  • Input or ingredient defects
  • Inventory tracking errors
  • Recordkeeping and manifest errors

Some of these areas of noncompliance rely with non-licensed supply chain partners such as packaging, ingredients or third party printed labels. Often, these folks simply don’t know what they don’t know and make mistakes – not knowing the thousands of dollars they could be costing their licensed partner down the line.

Other areas in which compliance should be expected from licensed partners lies in product liability, test result issues, inventory tracking, manifests and recordkeeping. No one usually wants to be out of compliance and usually these issues arise from licensed partners who are simply confused, mistaken or ignorant to the requirements of ongoing and changing rules.

It’s hard to keep all of one’s suppliers and supply chain partners on the same page over the long run and amid a multitude of changing rules. But what you resist, persists…

Managing Compliance in the Cannabis Supply Chain

Nothing worth it is ever easy; but it is possible to identify common areas of noncompliance in one’s cannabis operation and supply chain partners and to do something about.

To identify problem areas, iComply recommends conducting regular auditing at a macro level; but to also dive deeper into micro level audits of all of one’s books and records (covering vendor files) and packaging and labeling for at least 12 months.

You don’t know what you don’t know, so one must begin by investigating and understanding where liabilities are occurring between themselves and their supply chain partners. Once valid feedback and noncompliance is discovered, it can be remediated.

Like triage, you have to stop the bleeding before you can prevent further injury.

Consistency in quality standards requires meticulous SOPs

It is always more expensive and time consuming to continue reacting to noncompliance and trying to fix issues after the fact. This is how snowball effects happen until the problems seem so overwhelming, operators tend to simply ignore the liability. While it is human nature, it is also extremely dangerous and detrimental when multimillion dollar licenses are on the line.

An ounce of prevention is worth a pound of cure –Benjamin Franklin

By implementing proactive compliance measures, cannabis businesses can avoid costly noncompliance consequences and position themselves as proactive checkpoints of supply chain compliance. We recommend integrating the following procedures, documents, training and tools into one’s operational compliance infrastructure:

  • New vendor checklist
  • Packaging and labeling checklists by product type
  • Virtual review of labels/non-cannabis packaging
  • Calendar expiration dates for licenses and products
  • Compliance auditing of key vendors and strong contracts regarding liability
  • Input product checklists and tracking as per GMP compliance

This snapshot is just the tip of the iceberg when it comes to the depths of liability a cannabis business is exposed to by its supply chain partners. To truly manage compliance, one must be aware of shared risk and implement proactive measures to prevent suppliers and supply chain partners from inadvertently affecting the operational compliance of your cannabis business.

Selecting Supply Chain Partners

There are plenty of fish in the sea and plenty of suppliers vying to do business with you. iComply has seen the good, the bad and the ugly. We’ve been on the front lines of developing markets like California where we warned our clients to steer clear of companies like Kushy Punch long before they finally lost their license for noncompliance.

control the room environment
Preventing contamination can save a business from extremely costly recalls.

We advise our clients on the importance of being selective and conducting due diligence in vetting supply chain partners and vendors. Most fundamentally, how aligned are the values of potential partners? Are they in the business for the same reasons you are? What brought them to the cannabis space? How do they value relationships and what do they know about compliance?

Too often when focused on price or speed, people miss the more important fundamentals of relationships. We serve as vetters for our clients whether they are shopping for a POS provider, a bank or a waste disposal company. Beyond the cultural alignment, the more objective questions begin to take shape in vetting a potential partner. This can differentiate between license holding and non-holding supply chain partners.

For plant-touching licensed partners, we recommend answering the following before entering into business partnerships that affect your supply chain:

  • Copies of licenses, contracts, and a catalogue of products
  • For products being selected, prior to ordering a sample, obtain a copy of the label by email first. Or an EMPTY sample of product packaging and labeling to vet against a packaging and labeling checklist.
  • Search news articles on the company and ask if they have had compliance issues before. Obtain documentation if there have been compliance issues previously.
  • Ask how they manage their compliance and prevent noncompliance down their supply chain. Do they train their staff? Do they conduct regular audits internally? How often do they update SOPs and reconcile inventory?

For non-plant touching partners, we recommend answering the following:

  • Obtain any certifications for quality assurance or in credentials for services.
  • Ask for references from other customers who have cannabis licenses.
  • Discover how familiar they are with the cannabis industry AND the rules and regulations in your market.
  • Ensure they have an understanding of how they impact your compliance. Discover how they plan on preventing areas of concern together.
  • Make sure they know you are ultimately responsible for noncompliance and understand what they are willing to do to protect you.

Ensuring accountability across the supply chain means selectively choosing partners who share the same values of integrity and professionalism. On more complicated deals, such as licensing IP or your brand to operators in new states or markets, we recommend that you mandate a compliance program that offers third-party validation to ensure the internal integrity of your partners. Too often, brand risk isn’t considered in the fast-paced expansion of the industry and operators must not only be vetted, but held accountable, when representing one’s brand and products.

For all intents and purposes, the wild web of the supply chain in cannabis is the industry. We are a collective of collaborators who all serve the goal of delivering high quality and safe products to cannabis consumers globally. For those committed to minimizing their risk to protect their profits, cannabis compliance is the key to success.

Ensuring accountability across the supply chain means selectively choosing partners who share the same values of integrity and professionalism. In doing so, the industry elevates its legitimacy and more effectively expands in a sustainable manner that protects all stakeholders involved.

Noncompliance affects licensees the most and they must be the most vigilant, but it takes a village to raise an industry. Compliance affects most everyone in the supply chain and the loss of any operator hurts the entire industry.

Aphria, Inc. Implements Quality Management Systems

By Cannabis Industry Journal Staff
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According to a press release published today, Aphria Inc. has implemented Rootstock Software’s cloud Enterprise Resource Planning (ERP) solutions and ComplianceQuest’s Enterprise Quality Management System (EQMS). Aphria, one of the largest cannabis companies in the world, trades on both the Toronto Stock Exchange and the New York Stock Exchange.

Rootstock’s cloud ERP software includes things like order processing, production management, supply chain management, lot and serial number trackability and traceability, compliance reporting, costing and financial management. ComplianceQuest’s EQMS software provides support for GMP compliance and can help improve efficiencies in operations. The EQMS focuses on quality and risk management across Aphria’s business platforms, from sourcing to manufacturing to supply chain management.

Aphria is using the entire EQMS platform, which includes software to handle documents, training, changes, inspections, nonconformance, corrective actions (CAPA) and customer complaints which integrates to Rootstock’s ERP. According to the press release, the company is currently working to roll-out audit, equipment, incident and supplier management functions and will be fully live with the entire quality system in the next few months.

According to Tim Purdie, chief information officer & chief information security officer of Aphria Inc., both platforms delivered on their implementation. “Grounded in the scalability of the force.com platform, CQ transformed our quality management operating capabilities overnight and we are delighted at the fully integrated partnership result,” says Purdie. “We now have fully digital real-time informatics and ability to implement change in a highly transparent manner to meet the demands of our high growth business.”

Adding that Rootstock ERP will help facilitate their company’s production, inventory and supply chain management, Purdie says both platforms will enable Aphria to be increasingly responsive to market needs. “Aphria is setting the standard as a worldwide leader in the cannabis industry through a diversified approach to innovation, corporate citizenship, strategic partnerships and global expansion,” Purdie says. “With these system implementations, we’re now technologically equipped to take our competitive advantage to new levels of market leadership.”

Hemp-Derived Products with a Contract Manufacturer

By Aaron G. Biros
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Based in Santa Monica, California, Sagely Naturals was founded in the summer of 2015, with the goal to produce a sustainably sourced, topical CBD cream with no psychoactive effects to treat daily aches and pains. The co-founders, Kerrigan Hanna and Kaley Nichol, have extensive backgrounds in the food service industry, and as a result they pride themselves in quality controls and proper safety procedures. Since the launch of Sagely Naturals, they have been selling their Relief & Recovery Cream online and in a wide variety of retail outlets beyond just cannabis dispensaries. Their ability to distribute outside of dispensaries is due to the fact that the product’s active ingredient, Cannabidiol (CBD), is derived from hemp, instead of cannabis with higher levels of Tetrahydrocannabinol (THC).

kerrigan/kaley
Co-founders Kaley Nichol (left) and Kerrigan Hanna (right)

Their attention to detail in consistency and quality makes them stand out as cannabis processors, using a contract manufacturer with good manufacturing practices (GMPs) along with the proper standard operating procedures (SOPs) in place. “All of our contract manufacturer’s corrective and preventative actions (CAPAs) are outlined in the company’s SOPs, which are in place for everything including specific manufacturing processes, receiving and shipping materials and testing batches,” says Hanna. “The contract manufacturer also provides certificates of analysis (COAs) for every product they make.” According to Hanna, they exclusively use current GMP-certified facilities. One such SOP lays out the responsibilities for the quality control department in order to release and approve ingredients of their products.sagely_naturals_logo_400x400

There are some SOPs that could pertain specifically to the processing of hemp or cannabis products, according to Hanna. “Receiving and handling raw materials like hemp, batch coding, the actual formulation and manufacturing process, quality controls and cleaning and sanitation [could be tailored to pertain to cannabis],” says Hanna. Proper SOPs laid out in the manufacturing process include the cleaning and sanitation of machines, as well as adjusting settings, formula ratios and initialing and dating product labels on every batch, among more specific operating procedures.

The cream is made with natural ingredients like safflower seedily and peppermint.
The cream is made with natural ingredients like safflower seed oil and peppermint.

According to the co-founders, they spent a large amount of time vetting their hemp supplier, making sure they are using cutting-edge technology, growing it sustainably, and adhering to strict SOPs. “The team includes a Ph.D. chemist, who also is a founding member of our supplier and extractor,” says Hanna. “We work with CO2 extraction because we wanted the most control over the compounds that end up in our product. We are able to purposefully choose which cannabinoids end up in our product.” Through supercritical carbon dioxide extraction and post-extraction processing, the team is able to eliminate any trace of THC, guaranteeing the consumers will receive no psychoactive effects.

In looking toward long-term growth, the co-founders emphasize the importance of environmental sustainability. “Having honest ingredients is one of our company missions along with having honest practices,” says Hanna. “None of our ingredients are tested on animals so we are an animal cruelty-free organization.” Their hemp is grown using organic and environmentally friendly practices. “We prioritize using plant-based ingredients, so the formulation of our Relief & Recovery Cream relies on using organic and raw materials—such as essential peppermint and safflower oil.” Companies like Sagely Naturals using contract manufacturers to process hemp could represent the future of the cannabis industry. When safety, sustainability and quality issues come into the spotlight more, so will the need for outlined SOPs, proper documentation and extensive lab testing.