Multistate cannabis producers share secrets for streamlining operations across markets

Every state with a legal marijuana program has a unique regulatory framework. Navigating those different rules while still maintaining quality standards can be a compliance high-wire act for multistate cannabis operators.

To ensure products don’t run afoul of state regulators while simultaneously adhering to internal quality goals, executives at several MSOs advise other marijuana companies to:

• Dedicate an entire team to quality control and compliance.
• Maintain an in-house testing lab and test often.
• Develop a library of detailed standard operating procedures that serve as a playbook for working in different markets.

“We have a compliance team that’s dedicated to all things around the legal side of the language that’s embedded in each state,” said Todd West, executive vice president of operations at Cresco Labs, a vertically integrated multistate cannabis company based in Chicago.

Finger on the pulse

Knowing the ins and outs of each state’s regulations and following them as they change is a full-time job.

At New York-based marijuana MSO Acreage Holdings, Senior Vice President Ellen Deutsch employs local regulatory experts in each state to maintain quality control and quality assurance. “We monitor everything that is happening at the state level on a granular basis,” she said.

Deutsch added that her team is “completely connected with every state and regulatory agency.”

“We monitor all of their communications, know when the hearings are and plan to execute on any changes,” Deutsch said, adding that staying on top of compliance is “a daily initiative.”

Changes in labeling rules are a particularly common headache. Acreage employs state-level general managers and regional managers to handle those issues. “We try really hard not to be surprised,” Deutsch said.

Gary Santo, chief executive officer of marijuana MSO Tilt Holdings, based in Phoenix, Arizona, takes a similar approach.

“It’s hard to run a centralized program when you have so many states and each state almost needs its own company,” Santo said. Establishing a centralized quality-control team has helped Tilt to ensure consistent products across different states.

Tilt works with third-party manufacturers for products in some markets, and the company’s goal is to make sure that consumers have the same experience with their products, no matter which state they’re in. To help with that, his quality-assurance team makes sure the products are manufactured with the same equipment and the same process in each state.

“Our kitchen in Ohio is going to be virtually identical to our kitchen in Massachusetts,” Santo said. That takes a lot of the guesswork out of it, he added.

Testing, testing

Each of Cresco’s locations has a laboratory with high-performance liquid chromatography equipment to test products in-house for qualities such as potency and impurities.

West said the company is constantly testing all product types, including flower, edibles and vape products.

Batches of products also go through a signoff process as they make their way through facility checkpoints.

A plant manager and a quality-control team will stop the production line, and senior management will evaluate a product if something is not quite right.

For example, if the color of the oil in a vape product seems off, it will get flagged, and the team will decide if releasing it would impact the brand perception or customer satisfaction.

Deutsch said her team at Acreage also watches test results very carefully.

“That goes for every batch we produce,” she said.

At Tilt, Santo said every harvest is analyzed, and plants are tested as they are growing, drying and curing.

By the book

Written standard operating procedures (SOPs) are crucial for maintaining quality as a company navigates the different regulatory requirements in each state, cannabis executives told MJBizMagazine.

Deutsch said Acreage compiles SOPs for each state and that quality control is imbedded in those documents. “We keep our own bible of all of this,” she added. “SOPs are part of the tools to succeed.”

West said Cresco has an entire department tied to working with SOPs, including developing the documents and using them to train employees.

Having all the company’s quality standards spelled out in this way helps Cresco expand into more states and secure new licenses, he said.

West said Cresco sends its SOPs to state regulators when applying for business licenses in new markets “to show we’re serious” about quality and safety.

At Tilt, Santo said the company’s SOPs will have target numbers such as THC potency, which the quality-control team will compare against test results.

For example, the SOP for a flower strain might indicate THC levels should be at least 20%. That guideline helps the company work with other providers and product companies, so everyone knows what to expect.

“We wouldn’t bring it to market unless it met our quality standards,” Santo said.