Also referred to as “Total Quality Management”, quality management is the art of overseeing every task and all activities needed to maintain a desired level of excellence. This often includes certain important steps such as the determination of company quality policy, the creation, and implementation of quality planning and assurance, and, ultimately, quality improvement and quality control measures. In short, quality management involves the formulation and implementation of short-term initiatives to achieve long-term goals. These principles are the same in every industry as well as the cannabis field.
At its core, quality management is a highly complicated yet basic business philosophy that seeks to foster the idea that a company’s long-term success depends on the satisfaction of its customers. And that often translates to a wide range of areas including products, associated services, culture, internal processes.
To achieve complete quality management, all stakeholders must be on the same page when it comes to the processes that go into product or service delivery. In its entirety, though, the burden of quality management isn’t only shouldered by the stakeholders in a given business. There are third parties that also come into play. These third parties are often federal and, in some cases, based in local government. This is particularly true when dealing with the cannabis industry which is fairly new and needs a great deal of oversight as far as quality management is concerned.
What is Quality Management for Cannabis Brands?
The cannabis industry is rather unique in that it touches on a wide range of sectors including production, distribution, health and wellness, and recreation.
For the most part, each of these sectors has its own quality standards by which they must adhere. The cannabis industry seeks to bring all of these standards into a single platform that caters to a wide range of clientele who have different needs and uses for cannabis, needs that fall under either medical care or recreational use.
Quality management for cannabis brands is a fairly new area considering that weed wasn’t legal in most states until recently. Now, there are 33 states plus D.C that have legalized it for medical use and 10 other states for recreational purposes. You must understand that this is a whole new sector of the economy that was previously illegal. As such, quality control is still very much in its infancy and there are still many changes expected to come into play in the future.
Apart from state regulatory bodies tasked with overseeing state cannabis cultivation and sales, several other bodies have since come into play thanks to the widespread legalization of the herb. Some of these agencies include the FCC and OSHA. While these agencies often use the same playbook when it comes to quality management, this kind of inter-agency corporation is bound to make quality control within the industry as stringent as possible.
Stages of Quality Management in the Cannabis Industry
Granted, there are certain quality standards demanded of the cannabis industry by all the regulatory bodies that are now also stakeholders in this industry; however, quality management isn’t always just about complying with regulations. It’s also about protecting and satisfying the customer. In fact, this is the very reason why quality management standards are enacted in almost every industry.
In the cannabis industry, it’s up to every business owner to ensure that they offer the best quality product to compete in what has quickly become a very fiercely competitive business environment. This means that business owners have to do the following:
- Plan their path to achieving top quality.
- Build and monitor their own quality management environments that support TQM (Total Quality Management).
- Find ways to elevate their own operational excellence to set their brand apart.
As a business owner, building a quality management plan in the cannabis industry calls for a three-step process. Here are the steps to ensure that you manage quality within your own cannabis business:
Step 1: Create a Plan that Includes the Elements of Quality Management for your Cannabis Business
As is the case with every plan you create within your business, you must first identify a few key things:
- Your quality objectives and goals.
- How you are going to measure progress.
- The contingency plan you’re going to use in case your first plan doesn’t pan out.
When building your cannabis brand, quality objectives and goals should reflect your ambitions. What priorities do you have for your business and how big a market share do you want? It is also important to remember that there are external and internal stakeholders who have demands and requirements that will, in one way or another, impact your plans. With that in mind, here are some elements that you include in your plan:
- How you will attain compliance with government regulations (attaining and maintaining compliance will make or break your business and is, therefore, one of the most important aspects of your quality management plan).
- How you will produce products that meet quality standards that are in alignment with your vision as well as brand mission.
- What criteria you will use to measure product and service quality.
- How you will track and react to those measurements.
- How you intend to create and drive brand loyalty.
- How you will deal with both external and internal outliers such as investors whose requirements impact your plan.
Once you have established all the possible elements of your quality management plan, you can take care of the next step.
Step 2: Find Out What this Quality Management Plan Will Cost You
Every business owner will probably tell you that you should never implement any policies or strategies without first carrying out a cost/benefit analysis. That advice holds true with quality management in the cannabis industry as well. Once you have established the necessary elements of your quality management plan, you need to determine how much it’s going to cost you to implement.
Weighing that against the potential return on investment gives you a clear picture of which elements are most likely to serve you best and which ones should be prioritized. That said, even as you determine which elements have a lower priority, you should be cognizant of the cost of non-conformance as well as that of conformance for each one.
The Cost of Conformance
The cost of conformance is the cost required to achieve and manage a certain level of quality. It can be broken down into two areas: preventive costs and appraisal costs.
These are any expenditures your company incurs as you try to minimize defects in your cannabis products. Judging from how expensive recalls can be for a company in terms of revenue loss, reputation damage, and regulatory penalties, it’s logical that preventive costs are much less than trying to sell defective or substandard cannabis products. Here are some questions to ask yourself while considering preventive costs for your cannabis business:
- How clearly have you defined the level of quality that you want your brand to represent?
- How thorough was your market research? Do you know exactly what your customers need or what they could be inclined to take up?
- Do you have the right equipment to achieve the level of quality that you are targeting?
- Do your employees have the right training to maintain the level of quality you require for your brand?
- Do you have the right kind of suppliers who would help you achieve your quality vision?
- Do you have well documented standard operating procedures to achieve and maintain the level of quality you envision for your brand?
Once you have answered all these questions and any others as you can think of, it’s time to think about appraisal costs.
As the name suggests, appraisal costs are the costs your cannabis company incurs as it strives to provide the best non-defective products. These are costs that go into things like testing, inventory inspection, and so on. The cost you incur as a result of appraisal costs is less expensive than shipping out substandard products, losing customers, and ruining your brand image. Here are some questions you should consider when thinking about appraisal costs:
- What are the quality attributes you want for each of your products?
- Are there tolerances for every quality measurement?
- Have you employed the right testing equipment?
- Are you capturing the right kind of data to analyze and improve the quality of your products over time?
- Should you detect an errant measurement, are there quality control measures in place that you can rapidly trigger?
- How well informed are your employees and can they respond quickly to quality control issues when detected or as they arise?
Once you have considered all the possible costs of conformance, it’s time to look at the costs of non-conformance.
Cost of Non-conformance
When your cannabis business doesn’t achieve the right kind of quality management, the total cost of that failure is referred to as the cost of non-conformance. This can be broken down even further:
- Internal failure costs: These are the costs that come about when you find defects and quality issues with your products while inspecting your own production process. They are often driven up by the expenses associated with either reworking the product line or scrapping it altogether.
- External failure costs: These are the costs that come about when your customers find faults with your products. These are the worst kinds of costs because they could include dire consequences such as legal action, loss of business, tarnishing of brand image, and warranty work among many other unwanted consequences.
Step 3: Elements of your Quality Management Program
While planning your quality management approach is very important, plans are nothing without action. The next step in your quality management journey is to come up with guidelines and metrics to measure your results against the previously laid plans. These metrics show you whether or not you are making progress and alert you to any changes that need to be made to get your cannabis brand to the desired quality standard. Technically, this process is referred to as quality control.
To implement an effective quality control program, you must first take the time to consider and document all of its elements. These may include:
- Clearly defining the desired quality standard of each and every product your brand sells.
- Choosing an effective quality control method for these products (potency, weight, ).
- Determining who will be carrying out your product testing, either in-house or outsourced.
- Determining just how many products or batches will be tested at any given time.
- Choosing the right juncture along the production cycle that testing will occur.
- Thoroughly training your employees for quality control.
- Instituting a robust and efficient communication system through which the reporting of defects or potential issues will occur.
Once you have all that figured out, there are still a few other things you need to put in place before you actually have a robust quality control program.
How You Will Handle Defects
As much as you like to think that you create the perfect product for your customers, the reality is that defects can occur somewhere along the production chain. This is inevitable and you need to put measures in place to handle them when they do occur. Here are several practical considerations that may come in handy when trying to handle defects:
- Do you reject the entire batch if you find defects within it?
- Should you find defects, will you carry out further testing and maybe even do some repair work to the batch?
- Will you bring production to a standstill to make sure that no more batches are acquiring the same defects?
- Will you institute a recall? If so, how?
- How will you make sure that new product versions don’t have the same defects?
The problem with most companies – and this isn’t unique to the cannabis industry – is that they tend to insert the quality control process right at or near the end of the production cycle. This is in an effort to save time and money; however, the main issue with this approach is that by the time you catch a defect, the product is so far up the production cycle that it’s almost impossible to reverse the effects and often the only option left is to recall the batch, scrap it, or eat the losses.
Best Quality Management Practices for Cannabis Brands
The legalization of weed across all those states has had the predictable effect of increased demand. What that means is that most producers have had to ramp up their production processes to keep up with this increase in demand. The problem with such accelerated growth in any given industry is that there are going to be those players who want to cut corners and make a quick buck.
In the cannabis industry, cutting corners is the fastest and surest way to get your license revokes, produce substandard products, and put your customer’s health at risk.
To avoid quality control and assurance issues and the consequences that come with them, it’s often best to institutionalize robust quality management practices. These ensure that, no matter how heavy your production becomes, the same protocols are followed throughout the production chain to give your brand the best possible weed for your market. Here are some quality management practices you can adopt to enhance your cannabis brand:
1. Proactively Adopt a Cannabis Hygiene Program
This is particularly important if you are going into large scale production. Adopting a proactive cannabis hygiene program means that you recognize the inherent risks involved in every cannabis production environment. The cannabis leaves, roots, flowers, and even equipment used within a grow house are all surfaces that present microbial risks if not managed well.
You can manage biosecurity by enacting controlled zones and investing in a microbiology lab or facility designed to maintain the highest level of hygiene. There are several safety features that you can incorporate including:
- Climate-control for the entire grow house.
- Linear operational flow which ensures that you minimize cross-contamination occurrences.
- Isolated processing pathways.
You could also partner with your local university or health center where you can periodically send potential pathogen samples for analysis. These institutions act as the assessing authority on potential plant pathogens and give treatment recommendations based on regulatory-approved and data-backed interventions.
2. Use the Cleanest Genetic Material for Your Seeds
Most of what you do to ensure quality management is wasted if the seed isn’t up to par. The best way to ensure that you have a starting advantage is to invest in the best and cleanest genetic material you can find on the market. The best weed producers use micropropagation to come up with the cleanest genetic inputs as well as achieve isolated batches with a strong biosecurity foundation upon which they can build their crops. Some practical steps that can help you achieve this include doing things like:
- Using a sampling program that includes things like surface and air sampling.
- Having a robust integrated strategy for pest management.
- Constantly monitoring the cannabis plant by analyzing the bioactivity of leachate, it’s root zones and tissues.
To top it all off, you can adopt modern agricultural practices which include a great deal of automation and controls that tend to reduce the levels of contamination risk.
3. Focus More on Quality Rather than Quantity
While all these quality management steps might seem like a nuisance, as a cannabis brand owner, you simply must focus on the big picture. It’s already been established that the government is highly leaning towards legalizing weed for both medical and recreational use. As time goes by, more and more states join the fold and with that comes greater, more stringent regulations to protect the public against substandard products.
Your focus now should be to establish yourself as a brand that produces high-quality products as opposed to the brand that has the most products. Focus more on quality than quantity. That way, whenever the regulatory sector changes again, you will be protected against any possible penalties.
The best thing about all this is that there is seed-to-sale software that can help you implement all these quality management strategies and more. All you have to do is buy and install the right seed-to-sale software.
The Benefits of Quality Management for Cannabis Brands
You have probably seen it in the news or heard it making the rounds on social media: such and such a brand had to recall millions of finished products because of some safety issue or other. The reason such information stays in your mind is the fact that it could affect you. What if it’s a brand that you use on a day to day basis? What if the products they are recalling are products that you and your family use? The fact that it poses a health risk to you and your loved ones means that you will never look at that brand in the same light again. Chances are high that you might change brands completely.
That is the risk that cannabis brands run if they do not take quality management seriously. In such a competitive market with a rather shadowy past, consumers are ever wary of red flags. Should your brand be caught up in any sort of recall saga, there is a good chance that you will not only lose your market but also your license. That is why quality management is so important in this industry: it’s the core of the entire business. Here are some other key benefits of quality management in the cannabis industry:
1. It Reduces the Risk of Quality Failure
The idea behind brand management is that every business owner can create the kind of image they want the public to have of the brand. The more positive and trustworthy the image, the better the chances that the brand gains a reasonable piece of the overall market. Now, imagine being the owner of a brand that is synonymous with quality failure? Imagine that the first thing consumers think about when they hear your cannabis brand is “bad batches”?
Quality failure is an expensive occurrence that could lead to a slew of potentially brand-damaging eventualities such as:
- Hefty fines from the regulating bodies.
- Hefty bills in terms of compensation should your customers choose to sue.
- Greatly reduced revenue due to the loss of consumer trust and business.
- Greatly reduced future revenue due to the loss of potential customers who hear about your quality woes as they research their next brand.
Creating the right kind of quality management systems for your cannabis brand helps you minimize these risks to a great degree. If done correctly, you can all but eliminate them.
2. It Enhances Your Cannabis Brand
This point is very much in the same line as the above. If your brand becomes synonymous with quality over time, it’s image is enhanced as more and more consumers believe that you will always deliver top products, as is your tradition. The thing about having a highly reputable brand is that you will get a lot of leeway with both current and potential customers.
Savvy customers indeed expect high-quality products and services at every turn. It’s also true that in reality, a standard product isn’t expected to deliver at the same level as a premium product. If your brand already has a reputation for delivering the best at any given level, even your standard products will be highly competitive within your market niche. This gives you some room when it comes to pricing. Should you happen to price your standard product within the same range as a premium product from a less reputable brand, customers are more likely to assume that your standard product is of better or, at the very least, the same quality as the premium product of the lesser brand. That kind of benefit of the doubt will grow your market share as well as your margins.
Because your standard product won’t cost nearly as much to produce as a premium product from a less reputable company, the margins you get also help you edge out that lesser brand. They simply won’t be able to keep up with a pricing war when your margins are far better. Which leads to the next point.
3. Good Quality Management Leads to and Supports New Business
To survive in any market place, you have to find ways to grow your business and capture a bigger piece of that market. There are several ways to do that:
- Bring your already established product to new markets.
- Create new products for the existing as well as new markets.
- Enhance your reputation through quality management so that new markets find you.
The best way to go about it is to combine all three methods to create exponential growth. You cannot, however, do any of this if you don’t have the right quality product. With mediocre cannabis, the new markets you are trying to capture actually prove to be your downfall as more people may end up giving your brand a bad review, spreading poison within the medical or recreational marijuana community faster.
Your reputation is key to attracting any kind of new business. Today, reputation and information about any given brand are so easy to come by. All one has to do is go on the internet and search for your brand name. With good quality management practices, that search will most likely return excellent results and with every search return, your reputation will grow and so will your business.
There is also another angle to consider. Customers today know that there is false information online. Yes, many brands try to manipulate their reputation online by posting false reviews about themselves. So, what customers are doing now is turning to the people they know for recommendations. This is much harder to manipulate. You actually need to produce top-notch products and services for people to recommend you to people they know. By recommending you, these people are quite effectively tying their name to your brand. If they aren’t proud of that fact, they won’t recommend you.
4. Quality Management Can Help You Reduce Costs
Granted, there are some initial costs (often hefty) that go into creating the right kind of quality management system for your cannabis brand; however, once this system is in place, the associated costs of producing and maintaining high-quality products will reduce drastically.
The idea behind that is that, initially, you will be trying to find all the possible areas where quality failure can occur. This means a lot of testing, failing, recalling, scrapping, and completely starting over with almost every batch. With each test, you document protocols that help your brand achieve the desired quality standard. Once the entire system is in place, you will know exactly what to do and what not to do. As such, the right quality management and quality control protocols are documented and disseminated across the entire organization. Every department knows what to do to cut costs while maintaining a high-quality standard.
The key to achieving quality management and control within your cannabis brand is to align all this advice with your quality control strategy. While it is true that the governing regulatory bodies have strict guidelines that must be followed to maintain the desired quality standards within the industry, the truth is that these standards are rather basic. Yes, these guidelines all aim to maintain and promote public safety. What they don’t do is try to give you an edge within the industry. They just give you ways to remain compliant.
To get an edge, you have to go above and beyond the federally stipulated quality management regulations and find a way to make your cannabis brand stand out as a brand that goes the extra mile.