The challenges of scale-up are not insurmountable. Resources are available for start-ups and small businesses to overcome and develop plans to scale-up. This support needs to be a holistic approach. Learning from others and planning can help entrepreneurs avoid common pitfalls of scale-up.
Here, we outline a holistic approach to scaling up.
Navigating Regulatory and Compliance Requirements Related to Manufacturing
If you were to eliminate every other consideration from effectively managing your facility, this would remain the lynchpin to becoming a successful long term manufacturer. This is the level barrier to entry.
From a risk standpoint, federal requirements are lacking in terms of testing procedures, compliance organizations, and so on.
In general, therefore, the industry is actually asking the government essentially to be regulated under some aspect of the Food Drug and Cosmetic Act or a similar regulation. This is to prevent unscrupulous aspects of the industry from shirking good manufacturing practices (GMP) as a shortcut to making money, even at the expense of releasing good quality materials to the market that people will ingest.
The fact that the industry is not really required to do anything in terms of regulation is obviously very dangerous. One tainted gel tab, gummy, or sucker could potentially destroy the industry. (Our firm in particular is working with a variety of other groups to encourage the federal government to apply some regulatory oversight as pre-emptive legislation to undermine a convoluted system where every state has its own guidelines, and no two may match completely.)
One aspect of federal legislation that might be applicable here would be the U.S. Food and Drug Administration’s (FDA) Code of Federal Regulations Title 21, pertaining to food and drugs (2). Part 111 of this code applies specifically to “current Good Manufacturing Practice in manufacturing, packaging, labeling or holding operations for dietary supplements.” We routinely encourage our clients to apply some of these guidelines for constructing and designing facilities for clean room environments, at a minimum.
Because regulatory information isn’t codified in the cannabis industry yet, manufacturers have an obligation to at least prepare their facilities to a level appropriate to what their output will be in general. The cannabis industry does not have the same level of granularity in compliance guidelines as the pharmaceutical industry has. It is still incumbent on companies to create products in an environment that suggests a level of cleanliness or control within that space appropriate to the product being created (for example, raw oil as opposed to a highly purified product).
There might be some pushback in the ranks within the industry to federal regulation, but it is no different to what is being done with the Food Safety and Modernization Act (FSMA), for example. From a business standpoint, FSMA asks food producers to prove that standards are being met for cleanliness and that operating procedures exist for food preparation and handling. To the extent that the end product is being ingested, some level of regulation and compliance is essential for the responsible growth of the industry.
The Importance of the Strategic Facility Methodology: Design with End Products in Mind
Before we get into the details here, let’s consider some strategic facility questions your organization must be prepared to answer:
• How well do our proposed facilities support our five-year business plan?
• How much additional space do we need to meet our growth projections? When do we need it?
• What deep-dives are needed to make key decisions?
• What is our roadmap for implementing our strategy?
That may be a lot to absorb, so let’s break it down a bit further. When planning for a scalable facility, the best strategy has two parts. The first is to begin with the end in mind. What is it you want your facility to produce? Whether you plan to be the leading manufacturer of cannabidiol (CBD) gummies, pet food treats, or something else, you’re trying to understand the inter-relationship of all the building blocks that go into the creation of a particular type of facility—from warehousing to production to purification and so forth.
The second aspect of strategic methodology is to understand the time frame in which a master plan for your business growth is to be implemented. That plan has milestones along the way—so in a five or 10 year plan, for example, there are things to be accomplished that can be extrapolated from your current capabilities.
Developing a strategic master plan starts with an understanding of what’s possible today (that is, the products that you are building from today), and where you know you want to go—and where you do not know yet whether you want to go or not.
About the Author
Charles Jabara is a senior project manager with CRB in Kansas City, Missouri. Direct correspondece to: [email protected].
How to Cite this Article
C. Jabara, Cannabis Science and Technology 3(2), 40–44 (2020).