From Food to Cannabis, CSQ Founder Tyler Williams is All About Safety and Quality | Cannabis Business Executive – Cannabis and Marijuana industry news

Tyler Williams is the founder and Chief Technical Officer of St. Louis, Missouri-based CSQ, short for Cannabis Safety and Quality. Founded in 2020, the seed-to-sale third-party cannabis certification provider is a subsidiary of ASI Food Safety, which for decades has offered a range of safety and quality audits and certifications in the Food and Beverage,…
The post From Food to Cannabis, CSQ Founder Tyler Williams is All About Safety and Quality appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.

Tyler Williams is the founder and Chief Technical Officer of St. Louis, Missouri-based CSQ, short for Cannabis Safety and Quality. Founded in 2020, the seed-to-sale third-party cannabis certification provider is a subsidiary of ASI Food Safety, which for decades has offered a range of safety and quality audits and certifications in the Food and Beverage, Dietary Supplement, and Consumer Goods sectors. This is a part of the business that does not get a lot of attention, but in the course of developing a mature cannabis industry it is surely an essential piece of the puzzle. However, as Williams made clear during a recent ranging conversation about why he got into cannabis and what CSQ/ASI does, and despite my own assumptions, the cannabis industry is not necessarily as challenging a certification environment as some other industries.

“I can start with a little bit about my background in the food industry, since that’s where I came over from into the cannabis space,” said Williams as we settled into our call. “I have my Master’s in Food Science, and my certificate in international food law from Michigan State University. I started with ASI Food Safety when I graduated undergrad, and have been with ASI, which is a much larger organization, for about seven years. When I was running the Food Safety Certification division – I was the VP of Operations at the time – I was running all of our food and dietary supplements standards, and we had not gotten to cannabis yet. And with that, we started getting some inquiries from the industry looking to get some type of GMP (good marketing practices) certification, and that’s really when I started getting involved in the industry. That was probably about five years ago, and now we have facilities coming to us asking for GMP certificates.

“ASI has been in the food industry since the 1930s,” he added. “They were a pest control company, and created one of the first pest control formulations that was able to be used in food manufacturing facilities. At this time, the early to middle 1900s, as you can imagine, there were no food safety rules or regulations, nowhere near to what we have today. A lot of these facilities had never even heard of a third-party audit while they were going in and doing pest control. With that, the large food manufacturers and distribution companies started asking, ‘Since you’re in here doing our pest controls, do you mind doing this food safety checklist for us?’ And that’s how they got into food safety certification.

“Fast-forward almost 100 years,” he continued, “and there are currently three divisions – our standard developer division, ASI Global Standards. That’s what I fall under, and all that division does is develop standards for various industries. Typically, these are consumer products, things you’re consuming: ingestibles, topicals, dietary supplements, pharmaceuticals, anything along those lines. We’re not like NSF, which certifies dishwashers, aircraft, things like that. We have a very small niche we’re in. We have the standard developer side of the business, we have the training and consulting side of the business, and then we have our actual certification side where we go out and perform the audit.”

The difference between a third-party audit and what the FDA does also is significant. “This is how I like to explain it,” said Williams. “The FDA is the bare minimum requirements that any licensed U.S. food company has to follow, and its bare minimum for good reasons. If we had very strict government forced regulations, we wouldn’t have these small mom-and-pop operators in this space. It would be far too difficult for them, and far too expensive for them to enter the market. That’s why FDA regulations are essentially the bare minimum requirement, and then you have our third-party certifications, which range from all kinds of levels, if you will, from GMP being the lowest, to GFSI, the Global Food Safety Initiative, which is a benchmarking agency for higher-level food safety standards. So, you have a range of levels within the food industry, and this goes for other regulated industries. I’m just using food as an example.”

Standards are also driven by the industry in question. “These standards are voluntary and are not mandatory by any sense. Where the demand comes from is – say you are making pickles, and you want to sell your product to Walmart. Walmart, for good reasons, will tell you that the FDA requirements – while you should be meeting them because they are requirements to maintain your license and continue operating – they want you to meet higher requirements, because they don’t want the things on their shelf getting recalled, scaring their customers, and costing them money. So, the demand for these voluntary audits come from the retailers, whether it’s Walmart, Schnucks, Sprouts; whatever the grocery chain, they all have their own set of requirements that each one of their suppliers must meet. That’s where the demand comes from, and that’s why these standards are higher than the FDA requirements.”

Would diverse certifications, like organic, then be layered on top of these standards? “Exactly,” said Williams. “There is an array of what we call product certifications or label claim certification. You have organic, kosher, non-GMO, vegan, gluten-free, etc. All are what we call label claims, they all have different standards, and while some may have safety and quality components built into them, they’re specific to that niche.”

Still on the subject of ASI, I asked if it is considered a gold standard for certification. “Yes,” said Williams. “There are two types of audits. There are the private standards that ASI owns, and there are still private standards that are owned by a standard owner. And what I mean by that is they are not performing audits, by any means. They just license the use of the standard out. So, ASI operates under both of those types of standards. Our private standard – and I’ll just use our food processing GMP standard – while it may not be very well known in the industry, though we’ve been in the industry for a very long time, where the approval or disapproval comes from is whether or not those retailers accept your audit standard. ASI is accepted by most large retailers, especially within the United States. There is only one that I know of for sure that we’re not accepted by, and that’s only because they license out to a specific couple of certification bodies.

“That’s where private standards come in,” he added. “The other ones, the kind of gold standard that you’re referring to, falls under GFSI standards, which are the highest standards you can get in the food industry. And GFSI is a separate entity; they do not perform audits; they do not write standards; all they do is benchmark standards to their requirement. That organization consists of large food manufacturers, retailers, certification bodies like us, etcetera. There are a lot of stakeholders involved in that benchmarking process.

“And so, to tie this all in to CSQ and how I got into the industry, it was when these cannabis companies started coming to us saying they needed some type of GMP certificate, that we said, ‘We can give you a food GMP audit, or a dietary supplement GMP audit.’ But once we started, we realized that it didn’t fit. There were a lot of things that were applicable, but there were things that weren’t applicable, and there were things that needed to be added that were specific to cannabis.”

The Road to Safety

Williams in fact still works at ASI while also running CSQ. “ASI is our parent company, and ASI Global Standards is another parent company of CSQ, which falls under that standard developer division that I was talking about,” he explained. “CSQ is its own separate legal entity under that division. That’s where I’m at. My title is Founder and Chief Technical Officer.”

Before companies came calling, did ASI realize the cannabis sector was not only going to be a large industry, but it was going to be a global industry with global standards? “We had companies coming to us about a year or two before that,” said Williams. “I took that to senior management because I was pretty new in the company at the time, and I said, ‘We should be looking at this.’ It kind of got pushed away. ‘We’re nowhere near that.’ But I think there was probably only California, Oregon, Washington, Colorado that had laws and regulations in place at the time. Fast forward a couple of years, and once we started getting those requests, then we sat down as senior management. I had moved up in the company a little bit, and we said, ‘Okay, this is something we need to start taking seriously. None of our competitors are doing anything in this industry. Let’s see what the risk is.’ And of course, as owners of business we always are concerned about what the risk is, but once we got past those, we were able to put together a plan.

“And stepping back a little bit,” he noted, “CSQ does not actually perform the audits. We license out to certification bodies to do the audit. Obviously, ASI being our parent company, their certification branch is licensed to us, but we also license it out to our competitors. And when I’m going out to these other certification bodies and pushing CSQ to them, one of the things they always ask me is, what’s the risk? Isn’t [cannabis] a very risky operation to get into?”

What type perceived risk are we talking about? “Yes, perceived risk,” replied Williams. “The greatest example that I can give is, there’s obvious risks with banking and that kind of stuff, which aren’t really risks. The bank shuts you down, you just go to another bank. There’s some insurance stuff you need to figure out, but definitely today, it’s a lot easier than what it was five years ago. But the real risk, and the biggest risk for these companies, is no different than the risk you have in the food industry. If I have an auditor perform an audit, and he takes a bribe or messes up, and the company has a recall in the food industry and kills a bunch of people, how is that risk any different  than if it were to happen in cannabis?

“And actually, it’s less of a risk [in cannabis],” he added, “because companies on the medical or recreational side at least can only distribute within their state, whereas these large food manufacturers are shipping their products globally. So, when you look at it on a granular level like that, it’s a lot lower risk than the food and beverage industry.”

That said, wasn’t the vape episode of a few years ago a prime example of the type of a risk that no one sees coming? “That is exactly right,” said Williams. “Most of that was coming from the illicit market, though I’m not convinced that all of it was, but the big thing was that there was an additive in these cartridges that shouldn’t have been there. And so, once again, just preaching best practices and CSQ, one of our requirements is making sure that doesn’t happen. You’re doing product development, you’re testing the product out, you have these functions in place before you ever release that product, so you would know whether or not that additive is safe. And then, you also have supplier approval programs, so if you’re getting cartridges in and maybe you’re just doing the final packaging or something along those lines, then you need to be making sure that those suppliers are meeting the specifications and things like that. In a perfect world, if everybody was following CSQ or similar standards, this would never happen.”

Do insurers require companies to meet these standards in order to be insured? “Yes and no,” said Williams. “There are some minimum requirements that companies do have to meet. We work with insurance companies, and actually did a webinar a couple months ago with an insurance company that’s specific to the cannabis industry. One of the things these insurance companies do is they’ll go to your facility, and say, ‘Are you practicing good manufacturing practices? Do you have a certificate? Do you have a recall program in place?’ Well, if you can just hand them a binder of all your CSQ SOPs and procedures, that just checked off all their boxes for them. There are insurance companies that say they can give you a discount or possibly a cheaper rate, but it’s also very important and is a requirement for those captive insurers. These are companies that get together in a group, and they pay a lot less premium because they’re carrying all the risk in this group, and if no one has any incidents, everything works out that year. If somebody does have an incident, the rest of the group can kick them out, and because this group is so selective, they make sure they are meeting some type of requirements like CSQ, like GMP.”

If someone wants to open a kitchen that’s going to make cannabis-based products in, say, Long Beach, California, who signs off, the city, the county, the state? Will they also require certain third-party standards or certification be met?  “It’s going to vary from state to state who controls it,” said Williams. “Some states have departments that are specific to cannabis, and in some states – for example, here in Missouri, my home state – it falls under the Department of Health and Senior Services. So, it just depends on what department and what state you’re in.

Does it ever get more local than that in terms of certification? “Typically, it’s always the state level,” he said. “Local requirements are normally going to approve the zoning and things like that, and a lot of pre-construction stuff. A lot of times you have to go to city council meetings and make your case on why you need to be there. But that’s pretty much it on the local level. They’re not actually going out inspecting the facility. That’s typically done at the state level.”

I mentioned a story I did years ago on a cannabis company in the edibles field out of Denver, and the founder of that company, who had come out of the food industry, said that when they were starting out the regulators knew nothing, and they had to train them. And this has been happening state to state. Regulators have been overseeing all of these products, but do they have a real handle on the processes, the standards? Are we in safe hands?

“That’s a great synopsis of what we still see in the industry,” said Williams. “One of my biggest tasks is educating regulators. When new states come online, what we try to do is reach out to them and offer our help, which we do for free, because one, we want to understand what the rules are going to be so we can adjust our standards and requirements if need be, and two, we are there as a resource, because the information that they provide those processors or growers within that state ultimately affects everything that we do, and if those processors and growers don’t understand the regulations or they’re being mistold things, then it makes our job a lot harder. So, we always try to get ahead of it.

“Now, I can tell you, some states are very easy to work with,” he added. “They’re willing to work with what we call subject-matter experts, where some states don’t want you involved at all. They think you’re just trying to push your product by them. I’ll give you two examples where there were regulators that did not use subject-matter experts. Both Florida and Michigan put out their requirements that facilities had to be certified to SQF (safe quality food) standards. Well, one issue is that SQF doesn’t allow for the certification of cannabis products within the United State or in Canada because it is federally illegal, and the Michigan law, which is a standard that was around when I joined ASI and we’re on edition nine now. This is something that is written into law that these facilities literally cannot get certified to. They put something into law without even reaching out to subject-matter experts, or reaching out to SQF by themselves and asking, does this work, is this applicable?

“So those are kind of states where they jumped the gun on putting regulations out there without talking to subject-matter experts,” he continued. “But then we have states like New York. I know not everybody is happy with the way New York came out, but I played a big part in helping them develop the certification requirements specifically for those laws. It’s easy for me to go to a state and say, ‘You should require all of your facilities to be CSQ certified, because we’re the only globally accredited certification program for cannabis.’ That’s easy, but I don’t want to do that. That’s what the track-and-trace programs did with all the states, and you understand that there are a lot of companies that don’t want to use that system. They would rather use a better system out there and just let the state have access to it. We didn’t want to make something like that where you have to use our standard or nothing at all.

“But to your earlier point, most of these individuals have no experience in cannabis, some may not even have experience in food and beverage, and they’re the ones inspecting these facilities,” he concluded. “Just because there are state requirements or regulations in place doesn’t mean that the people who are regulating them know what they’re doing and have the appropriate training.”

While Williams is educating the regulators, is his own learning curve also straight up in the sense that this industry is always playing with new processes, new products?  “The product list has definitely grown over the past couple of years,” he said, “but I come from food and beverage. I always get asked which industry I like over the other – and each industry has their own things that I like about it – but when you’re strictly talking to me from a technical and scientific level, the food and beverage industry interests me a lot more. And the reason is because there’s a lot more risk, you have a lot more ingredients, a lot more things involved, a lot more different processes, especially when you’re on the Ag side with meat and produce and things like that. There’s just a lot more risks, so to me, as a food scientist, that’s what I nerd out on the cannabis industry. If you’re just making oils, vape cartridges, anything outside of edibles, it is pretty much low risk, and an easy process. The processes can vary a little from company to company, but they all follow the same pattern or flow.”

What is the risk in cultivation, because everything flows from there, Is it also a simple process? “No, it is not by any means a simple process,” replied Williams. “Cannabis plants are very hardy and can be grown in more difficult conditions. But the strains that are the desired strains that people want to grow, with high potency and things like that, and all the different hybrids that we’ve read about over the years, those are what I call needy bitches. They require a lot of attention, so it’s by no means easier, but it is less risky than normal traditional produce, the reason being that microbes thrive and produce, that’s what they want, that gives them the nutrients that they need to thrive and grow in.

“Cannabis can provide that, but the biggest risk there is total yeast and mold counts because of the way the flower, the buds, grow, and the way the temperature and humidity controls where they have to be,” he added. “The nice thing, which makes it a little less risky than traditional produce, is that unless you’re on the West Coast most cannabis is grown indoors, so you have a lot more control over the process, whereas most produce is grown outdoors, so there’s obviously external factors to that. And then obviously, cannabis that’s grown outdoors does have a little bit higher risk than that grown indoor.”

The Granular Gummy

I asked Williams about gummies. They are a produced product that’s a food, but there is cannabis oil derived from extraction technologies being used. It sounds like a complicated mix.

I can talk to CSQ specifically, because when we designed the standard, it was designed to certify processes in an entire system,” he replied. “We look at the whole picture, not just the finished product, and the finished project determines what requirements you fall under. Gummies is a great example, and I always use this example because there are certain people out there that want to regulate it, and especially CBD, like a dietary supplement, or it should just be regulated like food. Well, that’s not how it works. You take a gummy that just is a candy gummy, and you take a vitamin gummy; those are both gummies, but they’re two different regulations. The reason why they’re two different regulations is because of how they are marketed. This one is marketed as a supplement because it’s supplemental to your dietary needs, so that’s what makes it a dietary product.”

Does that mean it is less about how it is made than how it is marketed?Exactly, in this particular instance,” said Williams. “This gummy can either fall under food or it can fall under dietary supplements, and the extraction is part of that. The unique thing that we see in the cannabis industry is that these processes are typically vertically integrated, so the company is doing the extract, they might be doing the growing as well, and they’re most likely doing both the extraction process and the manufacturing of the actual gummies. In the food industry, we see a lot less of this. Normally, extraction is done by a completely separate entity and then the manufacturing of the product is done by a completely separate entity. So really, the extraction company would be a supplier.

The way we built CSQ was to have separate modules for separate processes, so there’s one for growing in cultivation, there’s one for extraction, there’s one for food and beverage, and there’s one for dietary supplements,” he added. “You might, as a vertically integrated company, meet all of those standards or modules to be certified, or you can just get part of your operation certified. So, that’s how we built out CSQ, to manage that quirky thing that’s really only in the cannabis industry, because like I said, typically you don’t see that in the food and beverage industry, where you have these companies vertically integrated for essentially the entire process.”

The Evolution of Cannabis Certification

CSQ says it provides CSQ certification seed-to-sale. Per its website, the company currently offers certification for Cultivation (growing and cultivating cannabis plants and the packaging of raw flower); Extraction (extraction of cannabis compounds such as terpenes, cannabinoids, and flavonoids; Food & Beverage (manufacturing of shelf stable cannabis infused products such as baked goods, snack foods, candy, beverages, food ingredients, food additives, pet food, and animal feed; and Dietary Supplements (manufacturing of cannabis infused dietary supplements such as tablets, capsules, gummies, liquids, energy bars, and powders.)

Coming soon will be Cosmetics (manufacturing and infusion of cannabis into cosmetics – e.g. topicals); Packaging (manufacturing of cannabis contact packaging material; Retail (cannabis dispensaries, grocery stores, general retail stores that sell cannabis products; and Foodservice (restaurants, cafes, and bars that sell cannabis infused products.)

With this context, I asked Williams what CSQs priorities will be going forward. “We have a couple of primary focuses that are our top priorities right now,” he said. “I’ll start where we’re at. We are definitely still in our infancy. The industry is still in its infancy. There are facilities utilizing state regulations that apparently the state signed off on, but if I go in there and conduct an actual audit against those regulations, probably half of those facilities would not pass. And that’s due to a lack of knowledge and understanding of the industry, which is one thing we’re trying to change, and which we have trainings specific to our standards, which are honestly just best practices if you break them down.”

In 2020, two out of 10 companies passed audit. I asked Williams if that percentage would hold up today. I think we would be a little higher,” he said. “In fact, yesterday and the day before I was witnessing one of our licensed certification bodies conduct their first audit at a hemp facility. This company was coming from the tobacco industry into the hemp industry, and this was the first audit they’ve ever gotten, so it was kind of cool that they saw this as a new opportunity, and they did pretty well. I can’t disclose their score because it’s not public information yet, but it was just really incredible to see that transformation and see that facility do that well the first time.

So, to answer your question, I do think it is a higher number, but we are still not where we need to be as an industry,” he continued. “We have a long time to grow, but I think we’re on the right track, and just to give you a perspective where CSQ is, we are implementing our new audit management software called Intact, which will be implemented at the end of July. After that, we will start the benchmarking process with GFSI, the organization that benchmarks all of the food industry’s top food standards, so our edible standard will be benchmarked to GFSI. That’s not going to happen overnight, obviously, but we’ll start that process at the end of July, early August.

Those are our primary focuses along with that we have two licensed certification bodies right now,” he added. “Our goal is to have five by the end of the year, and our focus has been on turning to these facilities and then getting them on board. In the background of doing all of this, what we’ve been doing is working with different consultants in the industry to make sure that they understand the standards so they can go out and help these companies get certified. And that’s where we’re at now, especially with a lot of the large MSOs.

“For example, Curaleaf and Cresco each have facilities certified with us, and they have plans to get many if not all of their locations certified,” he continued. “Using Curaleaf as an example, I think they are in 23 states, probably more than that by now. Getting all of those facilities certified – especially when you’ve acquired them through mergers and acquisitions and they’re not on the same wavelength – is a time-consuming process. And that’s where we’re at. We have the large companies building up, getting their facilities ready, and then hopefully, once they get certified, we would like to see them push it down to the smaller guys and say, ‘Look, we’ve done it as an industry, and this is the direction we need to go.’

“The little guys can then get on board, and it has this trickle-down effect later on down the road, once we have a bigger marketplace and dispensaries have more suppliers that they can buy from,” he added. “What I would love to see is what we have in the food industry, where the dispensary says, ‘I’m not going to purchase your product unless you have a CSQ certificate or equivalent. Otherwise, how do I know your product is safe, and how do I know that I’m protected in case of a recall or anything like that?’ That’s what we envision for the next five years, but we still have a way to go.”

I noted that many if not most of the MSOs I had covered developed their SOPs inhouse. Did that necessitate a conversation with potential clients that you’ve already done much of that work for them?

“That’s exactly what we do, and that’s exactly what Curaleaf has done with their safety and quality program,” said Williams. “They were a big part of our pilot program, and I can’t thank them enough for how much they have participated with the development of CSQ. They have taken the CSQ program and developed corporate safety and quality procedures for these facilities, but there are also state requirements specific to that location, and that just gets added on to the corporate SOP.

“To your point,” he added, “CSQ is obviously not for operational needs, but for safety and quality operations, and that is what can standardize your entire corporation across all these different states.”

Future Standards

As we wound down our conversation, I wanted to end on Williams himself, and whether he thought setting standards for safety and quality in food and cannabis was something he was meant to do.

“I have an extra interesting journey,” he responded. “When I went to undergrad, it was for general business, and when I was in college, my mom called, and said, ‘Hey, I think I’m going to buy the company that I work for,’ and that was ASI. I come from a lower middle-class family, not poor by any means, but my family was never rich. So, when my mom calls me up and says she wants to buy the company she works for, I was like, ‘You’re out of your mind. No.’ And then she actually got an SBA loan and did it. And pretty much after undergrad, I thought, ‘Okay, I’ll go into the company. I’ll do some behind the scenes back-office stuff and see where I want to go from there. So, that’s where I started out, and after three months, I realized I really love this industry, I think I want to further my education, and that’s when I started to go after my Master’s.”

Did he have his own entrepreneurial bent? “I do,” he said. “I’ve started several companies. I actually have my own licenses in Illinois for the infuser and craft grow, and we’re hoping to get the grow underway soon. I also have a nonprofit called Show Me Food Safety, based in my home state of Missouri. We help small mom-and-pop farmers and food manufacturers meet local regulations and things like that. So, yes, I definitely have an entrepreneur spirit. I love starting companies and then growing companies.”

Had that experience getting the licenses helped him in understanding the business? “It definitely did,” he said. “And the big thing was, at the time I was doing a lot of consulting work in the industry, and I was going out helping these companies win applications. And I go, ‘Okay, if I can help them with an application, maybe I can do this myself.’ And that’s what I did. Me and my partner put our brains together, put all of our life savings together, got a couple of investors, and went out and won a license.”

So, the promulgated standards are for him, as well. “Absolutely,” he responded. “All of my SOPs are written to the CSQ standard!”

And finally, was he still surprised by this brand-new industry or is it meeting his expectations? “It definitely exceeded my expectations, especially early on when we got into the industry,” he said. “Of course, you come into the industry with a lot of stereotypes, and sometimes you meet those types of people, and sometimes you meet people that are way smarter than you will ever be. I think one of the biggest things I love about it is that you can’t judge a book by its cover. You will meet people from all walks of life, from your stereotypical kind of hippie stoner guy all the way up to the corporate America suit-wearing guys. You have every walk of life, and I think that is what I love the most about the industry.”

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