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Your cannabis business is only as strong as the weakest link in your supply chain

Product consistency is the most important factor in achieving the holy grail of product manufacturing: return customers. Yet, too many companies are producing inconsistent products due to their lack of insight into their own supply chains. Running the risk of invoking the costliest mistake of all, a product recall. How do you prevent such a disaster from happening? One solution is to perform a supply chain audit.

We’re about a year into cannabis 2.0, a.k.a. the legalization of edible cannabis products in Canada, and we’ve learned a lot – most emphatically that we have a lot left to learn. The way certain ingredients interact (such as chocolate’s effect on cannabinoid potency), developing palatable flavour profiles, even formulating appetizing product textures has been surprisingly challenging… or not surprising, depending on whether you’re a CBD beverage glass-half-full or glass-half-empty type of person.

We’re also seeing a lot of edibles claiming a “premium” product positioning and failing to deliver on that promise, in part because there isn’t a whiff of regulatory guidance on what a premium-level product actually is. But whether you’re developing a premium edible product, or hoping to occupy a more “palatable” price-point, it’s crucially important to focus on the big product picture – your supply chain.

How deeply do you know your supply chain?

Think about all the ingredients that go into a basic THC milk chocolate bar: sugar, bittersweet chocolate, whole milk powder, cocoa butter, lecithin, vanilla. Now think about each one of those ingredients separately. What is the quality of sugar you’re using? Where does it come from? How is it farmed? Is it organic and GMO-free and, if so, is the certifying body trustworthy? Is the vendor able to guarantee that you’ll always access their product, especially if your production volumes ramp up as hoped? Do they have a reputation for consistently producing high-quality sugar each and every time? 

There are a lot of questions you need to ask, and hopefully, trustworthy reassurances you’ll need to receive before you can confidently believe your vendor can support your production benchmarks and market-share goals. Next, you’ll need to repeat that QC process with every other ingredient that goes into your product. And factor in that you’re mashing all these constituents together with cannabis, a non-traditional ingredient that also happens to be a medicine-rich plant with a cannabinoid makeup that can fluctuate from batch to batch. When you dive deep into all the links in your supply chain, it can seem more like a tangled web.

A supply chain audit can help reduce your blind spots

Product consistency is the most important factor in achieving the holy grail of product manufacturing: return customers. Yet, too many companies are producing inconsistent products because of their lack of insight into their own supply chains. They’re also running the risk of invoking the costliest mistake of all, a product recall. Not only is a recall hugely expensive and a waste of resources, but it’s also a logistical nightmare and erodes consumer confidence. 

How do you prevent such a disaster from happening? One solution is to perform a supply chain audit. An effective supply chain audit can help to identify a variety of risks and opportunities. Some elements you’ll want to include in an audit include the following:

Vendor management: Increasingly tight profit margins, unrealistic consumer expectations and a competitive market dictate that producers continuously offer more and spend less. There’s constant pressure to provide a top-quality product at a reasonable price. A supply chain audit can help assess whether your existing suppliers are helping you receive value for money, or whether you might find a better alternative with another supplier. 

Inventory management: It’s essential that your suppliers provide you with a consistent inventory of raw materials. If they’re liable to run out, this can have a dramatic domino effect on your own ability to supply demand. A supply chain audit can also evaluate current systems, software and processes to highlight areas where your business might operate more efficiently. 

Contract management: A supply chain audit can also zero-in on the contracts you hold with your existing suppliers. The audit will create definitions around which person or department is responsible for managing your supplier contracts, and when those contracts need to be renewed. An audit may also evaluate whether your contracts are fair and look after your best business interests.

Comprehensive analytical testing reduces risk and protects your brand 

Another way to ensure consistency is to expose your product ingredients to rigorous testing. Remember, your products are only as good as the ingredients they’re made with. At Labstat, we offer comprehensive testing for all your edibles’ raw materials. We can help you identify if you have a strong supplier network capable of delivering on your brand promise.

It’s important to remember that cannabis edibles are both a food and a medicine. If we want edibles to achieve the same level of acceptance and legitimacy as the foods we purchase in a grocery store and the medicines we get from a pharmacy, we need an uncompromising testing protocol, too. Labstat works with natural health products, and these medicines are exposed to excruciating scrutiny to ensure that what patients put in their body is pure, the product is what it says on the label, and the consistency is achieved from one batch to the next. 

We understand that there is a large amount of money at risk every time a product goes out for testing. There’s an even greater amount of risk involved if you haven’t bullet-proofed your supply chain. This risk can be minimized by the appropriate choice of a laboratory partner.  From a risk control perspective, the proper choice of a laboratory is one of the single largest mitigation strategies a grower or producer has at their disposal. 

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