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CBD Supply Chain Challenges

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June 11, 2019
6.11.19
Tuesday
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It’s hard to deny a bigger trend in consumer products than Cannabidiol, known as CBD. A naturally occurring compound found in the flower of cannabis, CBD does not produce the typical “high” of cannabis and is marketed as a relief for inflammation, anxiety, and even depression.

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Bringing together leaders in industry and technology to drive innovation.
Matthew Wright
Founder & CEO
About Matthew
Matthew Wright is the founder & CEO of Specright, the first cloud-based platform for Specification Management. Specright has been recognized as a Gartner Cool Vendor, received the Salesforce Innovation Award and was named one of the Top Places to Work by the OC Register and Built in LA. Wright is also a published author and his book, “The Evolution of Products and Packaging,”was named to the Amazon Hot New Release List for Industrial Relations Business and has a five star rating.

Prior to founding Specright, Wright spent more than 25 years in the packaging industry, holding leadership positions at International Paper, Temple Inland, and rightPAQ — a packaging company he co-founded. He has also been involved in leading multiple M&A deals in the packaging industry and sits on the Packaging Advisory Board at Cal-Poly San Luis Obispo.
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CBD Supply Chain Challenges

It’s hard to deny a bigger trend in consumer products than Cannabidiol, known as CBD. A naturally occurring compound found in the flower of cannabis, CBD does not produce the typical “high” of cannabis and is marketed as a relief for inflammation, anxiety, and even depression.

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Blog

CBD Supply Chain Challenges

It’s hard to deny a bigger trend in consumer products than Cannabidiol, known as CBD. A naturally occurring compound found in the flower of cannabis, CBD does not produce the typical “high” of cannabis and is marketed as a relief for inflammation, anxiety, and even depression.

Posted on 
June 11, 2019
6.11.2019
Tuesday
Zach McAnany
RegisterRegister
Download Presentation

It’s hard to deny a bigger trend in consumer products than Cannabidiol, known as CBD. A naturally occurring compound found in the flower of cannabis, CBD does not produce the typical “high” of cannabis and is marketed as a relief for inflammation, anxiety, and even depression.

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Zach McAnany

It’s hard to deny a bigger trend in consumer products than Cannabidiol, known as CBD. A naturally occurring compound found in the flower of cannabis, CBD does not produce the typical “high” of cannabis and is marketed as a relief for inflammation, anxiety, and even depression. While CBD is in a variety of products ranging from creams and supplements to infused cocktails and makeup, this growing industry faces many hurdles. According to the Brightfield Group, “the hemp-CBD market is projected to grow from just under $600MM in 2018 to $22BB by 2022”. This sudden emergence of a global market has lead to a myriad of supply chain challenges.

Keeping Up with CBD Demand

As demand increases for cannabis extracts, farmers struggle to keep up. The process to produce a high quality medicinal extract is not an easy one. Farmers must perfect every step of the production process from selecting the right seeds to drying a finished product and scaling supply to fulfill the demand. This has put a massive pressure on companies to properly select suppliers and track the quality of raw materials.

Managing Rigorous Testing

Although not legally required, third-party testing has become almost mandatory for CBD products to make it to retail. Companies are typically testing products for potency, terpenes, residual solvents, residual pesticides, and heavy metals. Once tested, results must be stored, associated to suppliers, and typically made available online.In addition to supply and quality challenges, companies have to maneuver through a web of national and state regulations. In December 2018, Congress passed the Farm Bill, which made the production of hemp federally legal and removed CBD from the Controlled Substances Act. Although a huge first step toward the acceptance of CBD in consumer products, the laws are still murky and companies face regulatory uncertainty.

Navigating the Regulatory Landscape

While the FDA does not have precise guidelines for CBD products today, most companies follow existing food & supplement requirements. This means ensuring they have proper labeling that outlines nutritional facts and ingredient statements, while excluding medical claims.

Preparing for the Future of CBD with Specification Data Management™

While regulations are still in flux, CBD companies can take steps to create nimble supply chains to prepare for future changes. This starts will managing critical specifications.Today, many CBD companies are using spreadsheets or shared drives to manage critical information such as formulas, ingredients, and packaging. By using Specification Data Management™ software, CBD companies can easily manage all aspects of an ever-changing supply chain.This results in multiple benefits for CBD companies, ranging from supplier management to quality and traceability. First, CBD companies can easily standardize raw materials, formulas, and ingredients into cloud-based specifications. This helps ensure product consistency. Companies can also create, manage, and version all packaging and label specs directly in the platform, making it easy to see what's in market so they can stay compliant with changing regulations.Second, companies can share these specifications with suppliers to ensure accuracy and traceability. Sharing specifications with farmers, testing labs, and others ensures everyone in the CBD supply chain is accessing the right data. For example, suppliers and third-party testing labs can upload critical documents such as Certificate of Analysis to products for traceability. This enables CBD brands to quickly compare expected versus actual results. Co-manufacturers can access the most up-to-date formula or be notified of changes instead of having to dig through emails or spreadsheets. Third, CBD companies can leverage reporting and dashboards to visualize any kind of specification data. This visibility is critical, as future regulations may require sweeping changes to existing packaging, labels, or formulas.While the CBD supply chain is filled with challenges, consumer demand continues to rise. For a CBD company to survive the uncertainty and competition, they must document and manage all steps of the production process.With Specification Data Management™, CBD companies can start to digitize specifications and create connected, nimble supply chains. In a fast growing industry, the right systems will allow CBD companies to focus on scaling businesses instead of managing data. [/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_empty_space height="25px"][/vc_column][/vc_row][vc_row][vc_column width="1/2"][grve_single_image image="22227"][/vc_column][vc_column width="1/2"][grve_slogan title="Download the Latest eBook on Specification Data Management ™" heading="h3" button_text="Access the Free eBook" button_link="url:https%3A%2F%2Fspecright.com%2Febook-why-specification-data-management-is-the-future-of-supply-chain%2F%3Futm_source%3Dhomepage||target:%20_blank|"]Learn why Specification Data Management ™ is the Future of Supply Chain[/grve_slogan][/vc_column][/vc_row]

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