What Are GMP Standards And Why Should The Global Cannabis Market Care?

With thousands of legal cannabis companies operating worldwide, business owners are looking for ways to increase revenue while standing out from the crowd. What might be hard for those business owners to hear is that the key could lie in adding more compliance responsibilities to an already heavily regulated process. However, any brand willing to try could unlock access to coveted sectors of the global market in addition to higher profits. 

I am a leader in cannabis software and technology, specifically operational management software (often referred to as ERP systems) to help cannabis operators with product tracking and compliance (among many other things). Working with clients in 15 countries gives us access to data and insight that most don’t get to see. Based on my experience, here’s what I see as the future of the global cannabis market.

Why The Future of Cannabis Production Is ‘GMP-Certified’

Good manufacturing practice (GMP) is a system of regulations that ensure medicinal products meet quality standards that governments, brands and consumers can trust. These protocols touch on all aspects of manufacturing a product, from the base materials, production facility and equipment, to the training and even personal hygiene of staff. 

Unexpected contamination of products made for human consumption could cause severe injury or even death. Incorrect labeling on containers could mean patients receive the wrong medicine or dosage, and insufficient or excessive amounts of an active ingredient can result in an array of adverse side effects. As the cannabis market continues to expand globally, businesses must follow guidelines — whether located in California, Canada or South Africa — to help people quickly identify safe products.

Overseeing this level of quality control, however, requires documented proof that teams consistently follow safe production practices at every step in the manufacturing process. This added layer of compliance keeps many overworked cannabis business owners from taking the step toward GMP certification. 

GMP Could Potentially Have Financial Impact on the Cannabis Industry

Deciding to “Go GMP” could potentially have lasting financial impacts on cannabis businesses willing to do the work. The GMP stamp of approval on products undoubtedly creates the impression of an elevated brand compared to lower-quality competitors with no certifications to boast about. These products typically sell at higher prices as people usually spend money on peace of mind. 

More profit could also be made from higher prescription revenues when consumers are covered by state or private insurance providers. In my experience, these providers tend to pay more than what medicinal cannabis is worth on the regular market and that GMP designation is a medical-caliber quality signal.

Why EU GMP Is One of the Highest Standards Recognized Worldwide

Production standards are a significant obstacle for global cannabis brands to overcome in order to open up the lucrative European market. Standardizing quality control based on EU GMP might be the only way to gain access for outsiders — and this is not a cannabis-specific issue. Any manufacturer (or importer) of medicine intended for the EU market must comply with GMP standards, regardless of where production occurs. These are the rules if you want to play the game in Europe. The rest of the world is following suit, as many other countries on just about every continent have adopted these standards as well.

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Considered a forward-thinking regulatory agency in Europe, Infarmed is the Portuguese authority that regulates medicines and health products to ensure the quality, safety and efficacy of products intended for human use. The director of the Infarmed licensing unit, Vasco Bettencourt, spoke at the 2022 Portugal Medical Cannabis Conference about the critical role regulation plays in the industry. During his remarks on the PTMC, Bettencourt explained how regulations inform the licensing procedure.

Planning For GMP Standards From the Start

From my perspective, cannabis manufacturers need to understand the importance of GMP certification; it’s that simple. Rather than playing the waiting game, cannabis business leaders should take a proactive approach to compliance, whether they want access to the global cannabis market or are just looking to increase revenue at home. By spending the time and resources on new processes now, you could avoid a costly last-minute rush to meet the guidelines down the road. 

When a team chooses where to set up operations and how to design a facility for maximum profit, it’s important to ask questions related to GMP standards like:  

• Are the walls made of porous materials that allow bacteria growth?

• When managing inventory, how are digital signatures securely stored?

• Does your compliance management system incorporate GMP standards with quality risk management?

On that last point, GMP compliance requires detailed records from every step of the process. Businesses should evaluate cannabis management software that eases this burden while maintaining compliance. When evaluating what platform to use, consider asking if they have a built-in quality management system module or have ever managed GMP clients. If the answer is “no” to either of these questions, you might not be able to maintain GMP compliance.

The Global Cannabis Market Awaits — Don’t Get Left Behind

Companies not preparing to enter the global market could find it hard to compete with other cannabis brands that have followed these standards since legalization. Any business owner wanting to export products internationally must enhance their production practices. Some regions, like Europe, won’t even allow cannabis businesses to operate without following EU GMP.

This is a complex topic that I will continue to write about on this platform in the future.