Q&A: Global Widget CCO says CBD industry at regulatory ‘tipping point’

With industry regulations still developing at a federal level and a patchwork of state laws to contend with at the local level, the company’s goals are besieged with legal and regulatory hurdles. Few realize this more than Global Widget Chief Compliance and Legal Officer Margaret Richardson, who caught up with Compliance Week to talk about the company’s self-proclaimed “relentless focus on federal and state compliance” and how it’s leading the way in a currently unregulated, but burgeoning, industry.

Q: First, tell us about Global Widget.

A. Global Widget is a manufacturer, distributor, and marketer of hemp-derived CBD products that went into operation in 2016. We currently have over 200 employees and three facilities, all located in Tampa, Fla.

From the beginning of the supply chain for CBD products, including extraction—bringing in the industrial hemp—we have a dedicated extraction facility where we produce our own CBD isolate, a chemical compound found in the cannabis plant. We also have our own manufacturing facility. We’re registered with the Food and Drug Administration (FDA). We make dietary supplements and over-the-counter-products (OTCs) that contain monographed ingredients, like menthol and lidocaine, which are FDA-registered OTC topical medications. Then we have our distribution center.

The business itself is primarily focused on retail brick-and-mortar stores, which make up about 80 percent of our revenue. We have an online presence, but our whole organization is really built to support our brick-and-mortar partners. Our products are available in more than 25,000 retail locations nationwide.

As part of that, we did a program called CBD University, where—obviously, before COVID—we flew our brick-and-mortar partners into Tampa and had them spend two days here, so they got a chance to actually see the facility where we do the manufacturing, ask questions, meet with myself on compliance and quality issues, and then we had a panel forum. We brought in outside experts, so our partners could be armed with the knowledge they needed to be prepared to answer any questions from their customers.

Q: Speaking of COVID, how has that changed Global Widget’s operations?

A. We were always using personal protective equipment in our manufacturing facility—booties, gloves, masks, and hairnets—long before COVID. We already had hand sanitizer all over the facilities. From that perspective, it wasn’t so much of a change, other than making sure we came up with a way to run the floor with social distancing guidelines. To come into the office, we require temperature checks. The staff wears masks when they’re in the facility. We keep our facility up and running and continue to keep delivering products while also ensuring the safety of our team members and products.

Q: How did you come to join Global Widget as chief compliance officer?

A. I joined Global Widget in 2019 from the pharmaceutical industry. The two founders of Global Widget—Kevin Collins and Donald Biedrzycki—are very good at looking at where the industry is going and looking at trends, and they realize the FDA is going to come out with regulations. Many states already have their own set of rules as it relates to CBD products, and so Kevin and Donald decided we need to be running our facility following current good manufacturing practices (CGMP) regulated by the FDA. So, they were looking for someone with that experience. Having been in pharmaceuticals for over 20 years, it was a good opportunity to come into an emerging industry using a lot of the experience and skill set that I already had, just applying it in a different industry.

Q: How are Global Widget employees trained on current good manufacturing practices (CGMP)?

A. Every employee when they’re hired goes through initial CGMP training. I do the training myself, because we think it’s important they really understand CGMP and why it’s important to their job. That applies to every single employee, not just the folks on the floor making the product.

Each person’s training is different, depending on their job function. If they’re out on the floor, they have to take some tests that they have to pass. As we learn new things, employees are retrained. And every year we have annual, in-person CGMP training to remind folks about the importance of CGMP. It’s always good to look at what other people have done wrong, and that helps understand why it’s always important to follow the rules.

Kevin and Donald are very passionate about quality. And it’s something we can lead and drive. Everyone that joins the company knows that is what the expectation is, and we hold them to it.

Q: What unique challenges and opportunities does the CBD industry face from a compliance and regulatory standpoint?

A. The industry is at a tipping point. In terms of opportunities, if you’re embracing CGMP, it puts you in a really good position for when the FDA starts examining companies.

The challenge is there are other competitors in the marketplace that are not taking that approach and, unfortunately, that taints the whole industry. You have a lot of people who are working really hard to produce high-quality products pursuant to CGMP, but, as in so many industries, you have so many who are just trying to get by with the minimum. As time moves forward, and the FDA finally release its regulations, we will be well-positioned because there will be a lot of consolidation in the marketplace. A lot will fall out, and it’s only going to be those that have invested time and resources that are going to remain.

Q: Tell me a little bit about the structure of Global Widget’s compliance function.

A. Our compliance quality team is made up of 11 folks. I report directly to Donald and Kevin. We do that for the purposes of the FDA, which likes to see compliance has a direct line of sight into senior management, so that you’re not reporting into operations or manufacturing. That helps to reduce conflicts of interest.

We have our own quality control (QC) lab in-house. We have a QC lab manager that manages the day-to-day: Testing all our products, developing methods for that testing, and testing all our raw materials as they come in. Then we have our quality assurance team. They’re the folks on the floor every day, making sure batch records are being followed as required and the product is being manufactured appropriately.

Then we have our compliance team, and they primarily focus on lots of different rules that states continue to generate. We collaborate a lot with the states and federal agencies in terms of where we think CBD is going to go and what type of regulations and oversight make sense for the industry.

 

Q: Global Widget states on its Website that it’s ‘raising the bar for quality manufacturing in the CBD industry.’ How so?

A. We have a three-pronged approach. First, we actively collaborate with either state, local, or federal agencies. For instance, I attend various public meetings with state agencies to talk about what makes sense from a regulatory perspective.

Our second effort is in the industry itself, working with our partner companies to raise the bar. For example, we participated in the ValidCare study, which was a self-funded study with many other companies in the CBD industry to look at liver and reproductive toxicity for those subjects that are chronic users of CBD. So, that’s an example of how we collaborate within the industry.

Finally, we regularly communicate with the FDA. We work on the standard label template the FDA has put out—whether it is nutrition facts; supplement facts; or drug facts, with the focus on compliance and driving the industry to do the same thing for all our partner companies—because the reality is we want the customer ultimately to make a decision based on information that is easy to read and that they can understand. That’s where we try to be a leader, by making sure we are doing all the things correctly.

Q: What sort of lab-testing standards are third parties expected to uphold?

A. All the third-party labs we use are ISO-certified, which is a standard from a third-party organization. The third-party organization audits the lab to make sure their methods are accurate, repeatable, get the same answers every time, that they have standard operating procedures that tell employees how to do everything, and that all the employees are properly trained. We use that third-party certification, because that lets us know that particular lab is competent to test our products.

Q: In what ways do you see Global Widget—and the CBD industry, generally—evolving?

A. I think everyone in the industry would agree that they really want the FDA to step up and release some guidance. Even without guidance, the industry itself has taken a lot of steps to make the product safe and make sure the manufacturing environment follows CGMP. Absent FDA guidance, most states require CGMP. So, no matter what, the industry is going in that direction.

I think CBD will become like most other ingredients; people probably won’t be as concerned about it as more data becomes available. Outside the U.S., most countries are implementing country-wide rules [for the CBD industry]. In the United Kingdom, you can now apply for a Novel Foods application, meaning it will be regulated no different than any other food ingredient. That’s soon going to be true in Europe as well. You see it in a lot of other countries where they are heading in that direction. Eventually, I definitely see that happening in the United States.

Q: What advice would you give other skilled compliance professionals with interest in working in the CBD industry?

A. While it is an emerging industry, the good news is you can take your skill set of understanding how to read regulations and CGMP established standards—which is universal—and really put that to your best use. If you’re going to be in this industry five years from now, if you haven’t already started down the road of CGMP, thinking about continuous improvement, you’re behind the curve right now, and you’re going to have to run to catch up. But good quality compliance experts who have that already existing experience can step in and drive the industry forward.