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How 3C Identified and Fixed Operational Issues that put a $55 Million Investment at Risk
Last year, an investment group contracted 3C to conduct an on-site operational audit of a cultivation and extraction facility in South America. The group had already invested heavily in the company, and the operators were requesting further investment. The audit uncovered an operational disaster. The company failed to incorporate the processes and equipment necessary to meet essential Good Practice Standards (GAP, GMP, GRASP), which, if not corrected, would eliminate access to international markets and stop their cash flow. The company had constructed substandard greenhouses that received 30% less sunlight due to incorrect orientation to the region's sun-exposure angles. The greenhouses also had no ventilation installed, giving the operators little to no control over the growing environment.
Additionally, we discovered over a dozen worker safety violations, which, if found by the local government, would have shuttered the operation (at least temporarily). 3C produced a report detailing a litany of problems with the investment, and the investors halted additional capital infusion. Investors are now working closely with the operators to fix the issues and salvage the operation.
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