• Food/Beverage
  • Wine/Beer/Spirits
  • Cannabis
  • Supply Chain
    • More Perishables
  • Hispanic Market Focus
  • Resources
    • About Supply Chain Sparrow
    • C.E.O. Insights
    • Contact Us
    • E-news Sign-up
    • Inspiration
    • Privacy Policy
    • SCSparrow Custom
    • Winging It! News Bites Podcast
  • VinRoutes Wine Supply Chain Summit 2020 – 2021
  • Advertise with SCSparrow

VinRoutes Wine Supply Chain Summit 2020 – 2021

  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Supply Chain Sparrow –Supply Chain News and Resources

The Perishables Ecosystem –Food, Wine, Cannabis & More

Perishables

Help Wanted: The Cannabis Industry Needs Supply Chain Talent

Lara L. Sowinski · July 2020 ·

  • Share on Twitter
  • Share on Facebook
  • Share on LinkedIn
  • Share via Email

When it comes to business success, a “million dollar idea” or slick marketing campaign cannot compensate for a less than optimum supply chain. There are endless examples of delivery disappointments, manufacturing mishaps, and compliance catastrophes—some relatively minor, others more severe—that have impacted the reputation, operations or financials of companies representing every industry. 

The emerging cannabis industry is increasingly confronting its own supply chain challenges, while the highly regulated nature of the industry adds more complexities. However, unlike more established industries, the cannabis industry is severely short on supply chain talent, notes Max Simon, CEO and co-founder of Green Flower, a creator of e-learning content for the cannabis industry.

New skillsets for a new industry

“There are knowledge gaps and training needs throughout every nook and cranny of the cannabis industry,” explains Simon, which stem from “three basic truths about this industry that many people don’t understand,” he says. 

“One is that the compliance requirements are insanely aggressive. Secondly, every single jurisdiction has different requirements, not just state-to-state, but locally as well. For instance, in California, the state basically grants local governments the ability to create their own framework. So, in order to comply with the state framework, you have to comply with the local framework too, and they’re all different. Los Angeles County is different from Riverside County, and so on. And third, everybody in the cannabis industry, including the industry itself, is a start-up.”

While Simon does see supply chain talent migrating to the cannabis industry, what works in another industry, may not transfer to the cannabis industry. Moreover, there’s an open mindedness that’s necessary, while general inexperience and lack of knowledge about cannabis can also pose problems. 

Many newcomers to the industry don’t understand, or underestimate, the complex regulatory framework, which means “a lot of what they did in their previous life flat-out doesn’t work in this space—marketing, branding, packaging, communication protocols, distribution—all of that needs to be re-thought,” he says. Furthermore, while supply chain experience is a requisite starting point, “people oftentimes have a huge [cannabis industry] knowledge gap,” says Simon. 

That can result in “a lot of arrogance and over-confidence, which leads to a person’s demise because they make mistakes. They are not accurate. Or, they make product development choices that are not based in the current market standards or distribution standards,” he says. “You have to be humble in this space, which is not something you tend to find with people who come with a professional career in another industry.”

However, for those who can adapt and learn, there are plenty of opportunities in the cannabis supply chain, says Simon. 

Logistics expertise is in high demand, along with testing analytics, tax aggregation and delivery. “You can choose one area, or you can be involved in all of these areas, plus retail distribution, where you’re selling and marketing brands to retailers,” he says.

Each of these areas requires unique and specialized knowledge and skills, “so the cannabis supply chain is ripe with opportunity, but also ripe with obstacles and challenges at the same time.”

Regulations and restrictions

The numerous and complex regulations related to cannabis are not only challenging from a supply chain talent perspective, they are also an operating and financial barrier. 

In 1996, California voters approved Proposition 215, which legalized medical marijuana. Twenty years later, the passage of Proposition 64—the Adult Use of Marijuana Act—legalized recreational cannabis.

The transition from a medical market to a regulated market has had a significant impact on the industry. 

“We went from about 30,000 licensed cannabis growers just in the Emerald Triangle,” says Simon, referring to the Northern California counties of Humboldt, Mendocino and Trinity, which grow over half of all cannabis consumed in the U.S., “to about 7,500 today.”

The reason, he says, was that “the enormity of compliance and licensing requirements became so onerous that most small businesses couldn’t keep up. And if you could, you were only able to do it in a smaller, local region.”

Expanding a business within California is difficult, and shipping outside of the state is prohibited. Add to that the “crop restrictions on how much crop you can grow in a specific place; space restrictions on how much manufacturing capacity you can have—these types of restrictions make economies of scale virtually impossible in the cannabis space,” says Simon, even for those California companies that are merely interested in growing their market share in-state. 

Cultivating opportunities

Currently, cannabis is legal in 11 states, while twice those numbers of states have legalized medical marijuana. The prospects for legalization at the federal level are unclear, but Simon is optimistic.

“I think that no matter who wins the presidential election this fall, the benefits of a growing, taxable, job-creating industry will override any outdated political reservations attached to the cannabis industry,” he says. 

In the meantime, legislation such as the STATES Act, which would amend the Controlled Substances Act of 1970 to prevent federal interference with states that legalized marijuana, and the SAFE Banking Act of 2019, which would allow financial institutions to transact with cannabis companies in states where cannabis is legal, highlight the legislative movement underway with regards to decriminalization and legalization. 

“This is similar to what the alcohol prohibition road map looked like,” says Simon. “It wasn’t until states continued pushing their agendas forward that the federal government finally conceded and repealed prohibition. I think we’re going to see significant progress over this next term, no matter who’s in the presidency.”

As for the impact of COVID-19 on the cannabis industry, Simon notes that the designation of cannabis as “essential” during the pandemic is an indicator of how the political and regulatory climates are changing. The cannabis industry also creates jobs and generates tax revenues, he adds, making it very attractive.

Furthermore, “We’re haven’t seen health issues at cannabis companies, such as big spikes in COVID-19 outbreaks and safety concerns at businesses. We’re also witnessing a lot of public support, with consumers saying [access to cannabis] is really important to them.”

According to Simon, these factors are driving “a mass interest in professionals moving into the cannabis industry, because it’s a growing industry, and the cannabis ecosystem has such an enormous need for specialized talent.”

Filed Under: Cannabis Tagged With: cannabis, Perishables, Supply Chain, Supply Chain Talent

Canada’s Cannabis Market Benefits From Strict Regulations

Lara L. Sowinski · May 2020 ·

Iron Apple Article

Quality management and transportation best practices improve companies’ competitiveness and export opportunities. 

  • Share on Twitter
  • Share on Facebook
  • Share on LinkedIn
  • Share via Email

In 2018, Canada passed the Cannabis Act, which legalized recreational cannabis. One year later, in October 2019, cannabis edibles and concentrates were legalized.

Legalization ushered in strict rules throughout the cannabis supply chain, including production, packaging, transportation and distribution. 

For Nova Scotia-based Iron Apple, a provider of quality management systems (QMS) and training solutions, it was an opportunity to expand its offerings beyond the food industry to include cannabis, too.

“As a Canadian company, it made sense for us to jump in to the cannabis supply chain,” says Lindsay Glass, development and implementation manager. “There are a lot of similarities with the way food and cannabis are manufactured from a regulatory perspective.”

Iron Apple worked closely with a Licensed Producer in Canada to design and build the Cannabis Production & Cultivation QMS.

Iron Apple launched its Cannabis Production QMS a year ago, says Glass. 

Because cannabis is legal at the federal level in Canada, there is consistency with safety and standardization throughout the country’s 10 provinces and three territories with some slight variations on the distribution side. Some provinces have private retail stores, while others require government-owned stores. 

Nonetheless, “In the terms of safety, labeling and quality standards, the cannabis you buy in Alberta is exactly the same cannabis you’re going to find in Ontario,” explains Glass.

Stringent Rules For Transporters

The stringent regulations associated with the Cannabis Act also impact transportation providers.

Miriam Tepperman, a partner at Devry Smith Frank LLP in Toronto, Canada, says transporters that operate, or are considering operating, in the cannabis industry must exercise due diligence and understand the legal, insurance and regulatory aspects of the Cannabis Act. 

For example, transporters need to comply with the Cannabis Tracking System required under the Cannabis Act. The system is designed to track the movement of cannabis from cultivator to processor, on to the province or retailers, and to the final sale, in order to help detect and prevent the diversion of licit cannabis to the black market, and illicit cannabis to the legal market.

“The Cannabis Tracking System requires monthly reporting by LPs (Licensed Producers), inventory reporting, and reporting from the health care practitioners. The obligations of the transporters needs to be determined and needs to comply with this regime,” writes Tepperman and co-author, Janet Son, in an article entitled, “Moving Cannabis: The Canadian Perspective.”

Aside from the significant regulations transporters are required to comply with when transporting cannabis, the product itself demands specialized handling to insure the integrity of the product, as well as the security.

“Cannabis and its products can be very delicate. There can be light issues, heat issues and moisture issues that can damage the product. More importantly, it is a high value-to-weight product that has significant demand on the black market, and therefore is a target for theft,” writes Tepperman and Son. 

“Consideration therefore needs to be made to transporting the products with the necessary type of vehicle that can supply the necessary conditions and security needed to keep the product safe and viable. Damage to the product and theft will lead to significant expenses for companies and/or its insurers.”

Transporters need to weigh the pros and cons of “unmarked trucks, versus armored trucks, versus security guard escorts, versus police escorts,” according to Tepperman and Son. “They should also consider the number of drivers per truck, predetermined or blind routes and geo-tracking shipments. While there is little regulation in this regard, the costs associated with theft for companies and the risks prevention measures an insurer may impose will likely create a standard that exceeds any regulations.”

Iron Apple’s Glass concurs. “There’s so much more than temperature-control. For instance, cannabis edibles must be produced in a clean, safe, and sanitary environment that has preventive controls in place, just like a regular food item, such as a chocolate bar.” 

Iron Apple’s deep expertise in food safety compliance solutions that are used widely throughout North America for transportation and cold storage facilities was key to developing a robust and comprehensive Cannabis Production QMS. The solution also helps cannabis producers remain “audit ready” while reducing the risk of getting their license suspended or revoked.

While Iron Apple is continually updating its QMS and training modules, Glass says the company is also interested in making the Cannabis Production QMS compliant with the European Union’s Good Manufacturing Practice (GMP) rules, which sets forth standards that a manufacturer of medicines must meet in their production process. 

“It’s a really hot topic right now, because in order to sell to the EU, a company has to be GMP compliant, and a lot of companies want to start off being GMP compliant right away and will often simultaneously apply for their cultivation and production licenses while building a facility from the GMP standard,” says Glass.

Germany, in particular, is an important export market for Canadian cannabis producers. The country has legalized cannabis for medical use, but it cannot produce enough domestically to satisfy demand. 

Since Canada legalized the export of cannabis for medicinal purposes in 2015, exports of dried cannabis have tripled. 

  • Share on Twitter
  • Share on Facebook
  • Share on LinkedIn
  • Share via Email
scsparrow-sowinski-headshot

About Lara L. Sowinski

Filed Under: Cannabis Tagged With: Canada, cannabis, cold chain, GMP, Iron Apple, Perishables, quality management system, Supply Chain, tracking and tracing

Press Release: Digital Media Brand “Supply Chain Sparrow” Launches

SCSparrow Staff · May 2020 ·

Filed Under: Uncategorized Tagged With: Perishables, Supply Chain, Supply Chain News

“Winging It!” Supply Chain News Bites Ep. 1

Lara L. Sowinski · April 2020 ·

Podcast: Play in new window

NEWS BITE: Food producers have lost sales to restaurants and schools, yet grocery stores are struggling to fill shelves. How do we fix the food supply chain?

Filed Under: Winging It! News Bites Podcast Tagged With: Perishables, Supply Chain, Supply Chain News

Primary Sidebar

I VOTED (for cannabis)

No matter their political stripe, many Americans are in agreement with efforts to legalize recreational and medical cannabis.

On November 3, voters legalized marijuana for adult use in Arizona, Montana, New Jersey and South Dakota. Initiatives to legalize medical cannabis passed in Mississippi and South Dakota. The rapid expansion of legalized cannabis throughout the U.S. has a direct impact on the supply chain.

Let’s start by considering the food supply chain–a valuable case study with COVID-19 as the backdrop. Early on, Americans experienced food shortages at the retail level. Manufacturers and distributors scrambled to realign networks to supply grocery stores where demand was spiking, while shifting away from restaurants and the hospitality sector where demand was tanking. In a matter of months, online shopping and food delivery to consumers’ homes grew dramatically. As a result, the food supply chain is in the midst of reinventing itself.

The cannabis supply chain faces some similar challenges. Most importantly, there’s an opportunity now to learn and adopt best practices from the food and pharmaceutical supply chains with which it shares key commonalities.

What are the risks to the cannabis supply chain? California’s unprecedented fires this year threatened growers throughout the state. How quickly can infrastructure scale-up to meet demand, and at what cost? Commercial and industrial real estate is currently at a premium with the proliferation of e-commerce. What about transportation, distribution and logistics capabilities, including reverse logistics in the case of product recalls? Facilities, equipment, and skilled workers are in high demand, and as competition for these various assets tightens, what does that mean for the entire perishables sector (food, cannabis, wine, beverages, pharma, etc.) that need them? Collaboration and creativity can provide critical solutions across the board.

On a related note, a small handful of American and European companies are in talks with Rwanda now about exporting cannabis to the country to meet rising pharmaceutical demand. Supply Chain Sparrow has previously identified cannabis exports as a massive opportunity for the U.S., which of course, would require legislative changes at the federal level.

Vote. And keep on voting.

Be Brave. Fly Right. And keep in touch at info@scsparrow.com.

Lara L. Sowinski, Executive Editor

UPCOMING EVENT: Navigating Wine Logistics in a New World

VinRoutes Wine Supply Chain Summit 2020 – 2021

Join Alejandro MacCawley Vergara for our VinRoutes Summit 2020

E-news Sign-up

Supply Chain Sparrow Newsletter

Podcast: News Bites & Insights

featured cover art

Cannabis in Deutschland!

Podcast: Play in new window

Germany is the biggest market for medical cannabis outside of North America. Companies in Canada, and even the U.S., are eyeing opportunities.

Subscribe to Podcast

Google PodcastsAndroidby EmailRSSMore Subscribe Options

C.E.O. Insights: Eden Amirav, C.E.O. of Become

C.E.O. Insights

4 Ways Transportation and Shipping SMBs Can Get Back on Track After COVID-19

Logistics companies can emerge stronger post-pandemic by focusing on digitalization, creating new vendor partnerships and relationships, and getting lean, according to Eden Amirav, C.E.O. and co-founder of Become.

INSPIRATION

OFF THE EARTH WITH NASA

WE ARE BETTER WITH BACH

Support Netherlands Bach Society https://www.bachvereniging.nl/en

More Inspiration

Recent Posts

  • Now is the Time for Food Manufacturers to Embrace Digitalization Technologies
  • Q&A With Diageo On 2020 Sustainability Goals, Commitment to Diversity
  • Cheers to Robot Supported Happy Hours
  • Molecular Tagging Takes Cannabis Tracking & Tracing to the Next Level
  • Convenience Stores Pivot to Meet New Consumer Demands

Need Some Air? Contact Us

sparrow-contacts

Supply Chain Sparrow

1001 SW Emkay Dr., Suite 100
Bend, Oregon 97702

1 (408) 792-7005

TOPICS

Resources & Assets

  • SCSparrow Mission
    • Contact Us
    • Advertise with SCSparrow
    • Privacy Policy
  • Resources
  • SCSparrow Custom
  • Training & Certification
  • E-news Sign-up
  • Subscribe to Podcast
  • About Supply Chain Sparrow
  • VinRoutes Wine Supply Chain Summit 2020 – 2021

Tags

AI automation black market cannabis Canada cannabis cannabis compliance China climate change cold chain compliance conveniencestore coronavirus demandsensing Diageo digital supply chain Diversity Excise Tax financing foodservice foodsupplychain Germany GMP IOT Iron Apple Latin Trade legal cannabis manufacturing maquiladoras NAFTA Perishables ports quality management system reshoring robots Supply Chain supplychain Supply Chain News Supply Chain Talent Sustainability tracking and tracing USMCA wineindustry

Make Your Advertising Spend an Investment

logo for Supply Chain Sparrow

Advertise with SCSparrow

SCSparrow Archives

Footer

FLY BACK HOME

home-button

Copyright © 2021 • supply chain sparrow • Subscribe • privacy policy