Pubdate: Thu, 18 Aug 2016
Source: Globe and Mail (Canada)
Page: B4
Copyright: 2016 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Author: Michael Armstrong
Note: Michael Armstrong teaches courses on quality improvement at the 
Goodman School of Business at Brock University.

LEGALIZATION WILL WEED OUT 'MIKE' FROM MIKE'S GENUINE (TM)

Recent Globe and Mail reporting has uncovered a "Wild West" of 
grey-market marijuana sales where product quality ranges from uneven 
to potentially unsafe. Given this situation, the federal government 
should proceed promptly with its legalization promise. This will not 
only protect consumers from hazardous products, but also enable 
industry self-improvement.

Many products are easy for customers to evaluate before purchase. For 
example, before buying a sweater, I can see colour, feel texture and 
test fit. In product-design terms, these are "search" 
characteristics. I can judge quality while searching for the best 
product to buy.

Recreational pot isn't one of those products. Like a restaurant meal 
or a massage, it instead has important "experience" characteristics, 
such as the high it produces. Consumers can evaluate these only through use.

Marijuana also has "credence" characteristics consumers can't easily 
assess, even after use. Some are desirable, such as 
tetrahydrocannabinol (THC) and cannabidiol (CBD) content. Others are 
hazardous, such as bacteria and pesticide contamination. For these, 
buyers must rely on sellers' claims.

Because these unseen factors affect consumer health, government 
regulation is appropriate. As others have argued, the products 
themselves need standards, such as for minimum THC content and 
maximum pesticide levels. Likewise, processes need defining, such as 
for product testing and retailer licensing. Some of the new cannabis 
grower and retailer associations could participate in this.

Regulatory standards and oversight will help prevent defects that 
could harm consumers. In the quality field, these are part of 
conformance quality: ensuring products meet the minimums and maximums 
set for them.

But quality isn't just about avoiding the bad; it also involves 
creating the good. From a consumer viewpoint, what is a high-quality 
high? What are the best THC and CBD levels? Do the answers vary by 
market segment?

Those issues are part of design quality: making products great for 
consumers. This is where marijuana producers and retailers should 
take the lead, once government sets the baselines.

Marijuana's credence and experience aspects will likely make branding 
important. Name brands allow products to establish trustworthy 
reputations. Given a choice, would customers buy weed from some guy 
allegedly named Mike, and risk an unpredictable result each time? Or 
would they purchase Mike's Genuine (TM), knowing it consistently 
provides the desired effect?

To create and protect those brands, retailers and producers will need 
reliable supply chains that provide product traceability. Industry 
associations can also help by creating guidelines that encourage 
higher quality, much as the Vintners Quality Alliance does for wines.

The industry's eventual structure will largely depend on the details 
of legalization. Will marijuana be treated like tobacco, widely 
available but with restricted advertising? Like alcohol, with sales 
only through licensed (often government-owned) retailers? Like 
medicines, available only from pharmacies? Or like dietary 
supplements, with relatively few limitations?

In any event, controlling chemical compositions and establishing 
brand images won't come cheaply. So the recent proliferation of small 
retailers and suppliers likely won't last. Some will consolidate into 
regional or national firms, while others will get marginalized.

(For parallels, look at the personal-computer industry. Decades ago, 
many small shops built homemade computers. Now, big companies, such 
as Dell and Lenovo, dominate sales to mainstream consumers.)

But before any of this can happen, governments need to create the 
legalization framework. The sooner this happens, the better, as 
marijuana's current in-between status is the worst of all worlds. 
It's increasingly available to consumers, but impossible for 
regulators to control or for entrepreneurs to develop.

In this budding industry, it's time to not only weed out the bad, but 
also cultivate the good.
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MAP posted-by: Jay Bergstrom