An interview with Lezli Engelking, Founder of FOCUS – Foundation of Cannabis Unified Standards
Could you give our readers an overview of your professional background, and what led you to set up FOCUS in 2014?
Most of my career has been in the field of healthcare. I spent my early career in the mental health field, working to change the stigma around mental illness. I then spent 13 years in the pharmaceutical industry. As I left pharma, Arizona passed a law legalizing cannabis for medical use. Some friends encouraged me to apply for a license, given my background and existing relationships with public health officials and regulators. I was leery at first, but we ended up winning the first vertically integrated medical cannabis chain in Phoenix, Arizona. I spent 2.5 years there as Executive Director, learning firsthand about the challenges and risks involved with commercial scale cannabis cultivation, manufacturing, processing, dispensing, etc. I also realized how difficult it was to be a cannabis operator due to the lack of guidance and standards. My knowledge of the innerworkings of the cannabis industry, combined with my extensive background in quality, safety, and compliance, and my passion for public health, led me to believe I was the perfect person to lead a global effort to standardize cannabis. Knowing the only way to accomplish this goal was to remain a truly independent, unbiased, third-party, I sold all of my financial interest in the cannabis industry to found FOCUS.
Working with clients across the US and Canada over the last six years, you must have seen it all! With this in mind, what would you say European and other international operators can learn from the early cannabis market entrants?
- A preventative mindset is the best way to protect the long-term success and sustainability of your cannabis business.
- The cost of quality should be considered – and budgeted for – from the outset.
- Effective training and consistent communications are your best friend.
It is rare that any of these things are considered up front – at least not effectively…Instead, it takes some sort of issue or problem arising, before most operators understand the importance of prioritizing quality and compliance through preventative measures. The issues and problems that drive operators to this realization run the gamut: failed test results, accidents and injuries, loss of product/revenue, recalls, brand damage, lawsuits, potential license revocation, and on and on.
This type of mindset creates an astounding amount of unnecessary costs and delays, most of which are not measured or accounted for. The amount of money, time, and resources required to fix issues that arise will always be enormously higher than planning for and addressing potential risks to quality and safety ahead of time.
Certification provides a proactive methodology for meeting legal, regulatory and quality related obligations. Operators that recognize this and live by their quality management systems on a daily basis will achieve benefits that greatly exceed any cost or effort.
The complexities of setting up and maintaining a cultivation facility are vast, especially for those looking to do business internationally. What are the key considerations for such companies looking to ensure their operations begin – and remain – compliant?
Be proactive. Not reactive. Being proactive focuses on eliminating problems before they have a chance to appear. Unfortunately, the majority of cannabis operator’s we have encountered over the past 6 years spend most of their time putting out daily fires, as a result of not being proactive in the first place. This limits an operator’s ability to be strategic and makes change and progress very difficult.
Take the time to do things right the first time. Running a successful business in any industry requires a strong foundation for growth. Sadly, we see many operators rush to get their products into the market and as a result do not take time to properly verify and validate their processes – which eventually ends up costing them dearly.
Train. Retrain. Train Again. It does not matter how well the facility is designed, the quality of the equipment and materials, or the effectiveness of the procedures – if the people working in the facility, operating the equipment, and following the procedures are not adequately trained. So many cannabis companies overlook this critical component to success.
If You Didn’t Document It, It Didn’t Happen. Documentation is a cannabis operator’s best friend. Without documented processes and records of what has occurred in a facility, there is very little recourse when something goes wrong. A well-designed documentation system has many benefits, it ensures quality standards are routinely met, minimizes the potential for error, reduces downtime when deviations occur, and allows for easy monitoring of processes.
Control Your Supply Chain: Even the most well-run cannabis operation can find itself in trouble without proper control over their supply chain. A well-controlled supply chain directly improves customer service, allows for the quick diagnoses of problems and disruptions, reduces operating costs, increases efficiencies, and minimizes waste. One important aspect of supply chain management that is often overlooked in the cannabis industry is the concept of fit for purpose. This includes assuring the ingredients and materials being sourced are not only of good quality, but also being used as intended. (Think Vitamin E Acetate)
If an organization finds themselves non-compliant months/years into operating, hypothetically, would they be able to incorporate certified standards at this point (and reverse-engineer their operations)? If yes, do you have any [anonymous] case studies of companies that have found themselves in this position, and how their issues were rectified?
Yes – Absolutely! At least half of FOCUS clients are operational before they begin working with us. Cannabis operators always have the option to improve their business through the implementation of standards and certification- regardless of the age or current state of their operations.
The first step in the certification process is a Pre-Assessment, where you compare the client’s current operational state with the requirements within the standards. We review the client’s existing documentation, policies, procedures, quality management system, and facility to determination any gaps that need to be filled. A detailed report is generated that lists all of the specific gaps identified, as well as the work that needs to occur for the client to become certified. From there the client has the option of working to make those changes on their own or seeking the assistance of a consultant.
While the most efficient and practical option will always be implementing standards from the outset – even in an already existing operation-standards implementation is definitely more straightforward than reverse engineering! While on occasion we certainly do encounter issues with facility construction and design, the vast majority of work to meet certification requirements is documentation related.
If a company follows a set of industry standards by the book, is there a way in which they can still be found non-compliant? If yes, how and why?
Certification to standards ensures the successful implementation of preventive steps throughout a cannabis operation. Success is then confirmed by a disciplined and consistent audit program. While certification does not assure absolute results, the preventive steps imbedded in business processes dramatically increases the likelihood of consistent product and overall business success.
That said, the potential for a business to be found non-compliant – even certified businesses – always exists. Compliance is based on the daily activities of an operation. So, even an operation that has been certified can potentially be found non-compliant based on actions that have occurred since the audit took place.
One example of noncompliance, that occurs frequently, is through illegal marketing and labeling claims. Often times, the people who manage a cannabis company’s marketing, social media, PR, etc., do not possess the requisite knowledge to be able to do so compliantly. So, a company could have all of their operational processes effectively in place under certification, but marketing and labeling claims make them non-compliant. Contractual issues are another way cannabis operators can suddenly find themselves noncompliant. Cannabis regulatory programs around the world have specific requirements in place regarding contractual obligations, ownership, investment, etc., and frequently operators do not keep these requirements in mind during business negotiations, making them immediately non-compliant.
You can hear more from Lezli Engelking at the GCI Europe Virtual Summit.
Check out other interviews on the GCI Content Hub by clicking here.