THE confluence of hundreds of cannabis industry professionals from over 30 countries at this year’s Cannabis Europa London saw a recurring talking point emerge, the need for a global standardised model for the regulation of cannabis.
One company, Swiss compliance software and supply chain management platform Cannavigia, believes the fastest and most efficient way to achieve this is through technology.
Following his appearance on both stages of the conference last month, we spoke to Cannavigia’s CEO Luc Richner about his platform, blockchain, and what cannabis can learn from other industries.
Hi Luc, thanks for joining us, for those who might not know, can you tell us a bit about Cannavigia and the work you do there?
I come from a background of logistics, international trade, and supply chain management, working in production, facility management and so forth, but more on the non-medical side of things just in general trading. I then wanted to do that for cannabis.
I was living in Asia at the time. When cannabis first came to Thailand, I thought ‘you know what I see my gap in the market here, I can do supply chain management and help people to reach those new markets because of the fragmented industry’. It’s a fragmented regulatory framework, it would be a niche to fill.
Very soon we realised that’s not really possible. After studying all the different standards that are out there from the US compliance standards to Health Canada, and then EU GMP and Global GAP.
Out of that then we saw a gap between the existing software that was out there, and what I thought could work from a global harmonisation system point of view, instead of just copying what our American friends are doing. And then we started from scratch and built the software
I started conceptualising this in 2017, I then fully committed to this in 2018, and came back from Asia to Switzerland and started full time on Cannavigia.
Then down the line, we got my co-founders involved. Together, we then founded the company and have all been fully dedicated for about three years.
Cannavigia seems like a fairly comprehensive service covering a lot of different avenues. Can you walk me through how it works and what services you offer customers?
On one hand we have the software, where we have the cultivation, manufacturing and distribution module. These then cover the entire supply chain.
And in the back end you have a life audit trail, which allows you to do automated reporting, or it allows you to do customer engagement or link with governments and so forth.
At the end of the day our philosophy was that through full transparency, we can bridge the gap of different regulatory standards and also different market needs.
When we got into this we realised it is a very complex business model. Though there was a lot of need for it at the same time there was a lot of understanding about what compliance means and what you have to put in.
So while we were developing the software we brought in our subject matter experts to the team. Once we started to install the software we realised that nearly all of our customers needed help.
And out of that we then were really further developed the consulting services, but always in line with the different parts of our software. It’s a very complimentary part, because we only consult you on added things around the software. It covers cultivation, manufacturing, distribution and a lot of the parts of your supply chain.
Everybody was telling us: ‘Look, we need this. Can you help us with this?’ And there’s only so many times that you go ‘that’s not part of my service’, until you just make it part of your service.
How would what you offer look from a customer’s point of view?
From our customer’s point of view, whenever you produce a health supplement, or food grade standard product or a medical product or whatever, in the end it always falls into some kind of transparency or compliance bracket.
First of all, what we offer is guidance on what is needed to reach a level of compliance under different end products, depending on your jurisdictions and where you send it to in the world.
So we always try to figure out who is a potential buyer, and then help them to start to build a starting point from that.
Ninety percent of companies that are going for EU GMP will never have a medical and medical product that they will sell, so usually they can start a bit lower.
What the software initially does is allow you to have full control over your processes, over your facility, over your cultivation.
It allows you to control things like whether a machine is maintained, whether the maintenance is done by a person that is trained to do this maintenance. Is the maintenance of the machine done before the next batch goes through, and therefore in compliance with the terms and standards?
But the best way to do that is to create a digital twin of your whole environment, then the software makes your life easier by managing all the aspects of your organisation.
Efficiency is one thing, throw in compliance and transparency and you become much more commercially competitive.
It is also modular, we built it together with a small, medium and a large cultivator and manufacturer to create a mix of all their needs.
A lot of facilities will not have access to an experienced quality control manager who has run larger facilities, so it’s also a really nice tool to help guide them in the right direction and take a lot of work out, so they can focus on what they really have to do. Anyone who had ever hired a person for that job description will know they’re not the cheapest to find.
Does your system utilise blockchain technology?
We actually developed a blockchain system in the beginning that we then discarded because very simply, we came from the compliance angle and the regulator said: ‘Look, if you really want to pursue cannabis with Blockchain, we don’t understand blockchain, we don’t understand cannabis, choose one battle at the time’.
So we discarded the blockchain part and all our software is hosted on cloud based service in Europe, and it falls under the highest level of data security, enforced by law.
Because we believe in blockchain, and we know it’s gonna go down that route at some point we’re basically doing timestamps of every single movement and adding those timestamps to blockchain through an external company.
So it’s like an external audit at all times, that makes it immutable towards us and toward our customer, but if needed, can still be audited.
Another reason why we discarded blockchain was that we processed too much data. Those transaction costs would have been too high, especially with the speculative bubble around the different coins, and we would have to charge the customer for this.
We believe in certain aspects of the blockchain. Of course, we also use it as the external audit on ourselves and our database. But we’re not a fully blockchain based solution.
One of the recurring topics at Cannabis Europa, was the need for a global standardised model for regulation. How important is this and do you see Cannavigia playing a role in its creation?
I think it’s extremely important. In general, for any commodity or any other industry where you have global trade, the most efficient way to get something started is a global harmonised system.
Now, do I believe we have to reinvent the wheel just because it’s cannabis? I think that’s nonsense, we have different existing standards that we can take parts from.
If anything, we can get rid of some. Most standardisation companies are basically doing the same thing, but giving you different standards so they can charge a different fee.
Our slogan is literally ‘vigilance beyond certification’, because we believe modern technology can make a lot of these standards obsolete through full transparency.
That way through self regulation and full transparency we’re able to create a bridge between all those different standards that the same system allows them to tap into and be compliant with all of them.
So yes, I believe in global harmonisation of standards. And also I do know and I do believe it is a very tough thing to do.
Are there any other industries cannabis can learn from in terms of supply chain management and standardisation?
I believe the cannabis industry can learn that we’re not that special. The world has worked out international trade before. We also should stop taking ourselves more seriously than the rest of the world takes us.
It’s very simple, if your end product is an API that goes into a medical product, you have a set of standards. Those are medical standards. They have been done for many, many years like that. There’s a reason, things have been thought through and that’s why they’re like that.
So it’s time now to formulate and really be part of creating an environment that allows for a thought through harmonisation of different standards.
I believe because the cannabis industry is not yet that defined, we have a chance to actually create something that through full technologically-enabled transparency builds a bridge between these different standards. This is why for us it’s super exciting to be in this momentum in this industry.