Jessica McKeil   |   February 06, 2019

Cannabis Labs Differentiate as Competition Grows

The driving need for accurate and trustworthy cannabis testing has lead to some intriguing developments in the cannabis testing industry.
Jessica McKeil is a freelance writer focused on the medical marijuana industry, from production methods to medicinal applications. She personally found relief through cannabis for the treatment of her panic and anxiety disorder. She is lucky…

Cannabis testing is a growing auxiliary industry to the recreational and medical markets. Its role is crucial for consumer trust and a key aspect of progressive regulation for consumer safety. It’s no surprise that as the global cannabis market explodes, so too does the testing market. Over the next decade, the need for accurate and trusted testing is going to push the industry from a $910 million annual market into $2 billion one. According to a recent 2018 report, that's roughly 12 percent per year in compound annual growth.

This expansion of testing in the cannabis laboratory is driven by the extremely localized nature of the testing industry. The more than 30 states with medical marijuana all require some level of testing, but in all cases, there are different parameters. From the types of pesticides to possible microbial contamination - no two states are alike.

The costs, security measures and legal issues surrounding cross border shipping of cannabis also ensure local labs capture the local market. Although there are a few big names in cannabis testing, largely cannabis laboratories remain independent, or at the very least, they adopt a customized approach to their regional market. The market so far is fiercely competitive and segmented, depending on the level of regulation. Arizona, for example, has minimal state-mandated cannabis testing, and therefore fewer labs than Oregon. In Oregon, a state with some of the strictest cannabis regulation, there are 18 accredited laboratories.

An Ever-Expanding List of Contaminants and Compounds

Only a short time ago, when Colorado and Washington legalized recreational sales, testing was almost exclusively focused on potency. Today, the depth of testing goes far beyond a simple THC level - it often includes:

  • Potency (THC, CBD, etc.)
  • Heavy metals
  • Terpene
  • Microbial
  • Pesticide
  • Residual solvent
  • Genetic

Not all legalized markets require the full breadth of this list, but increasingly consumers are demanding it. Considering the frequent reports of cannabis recalls, the many contamination scandals, and the potency problems plaguing the edible industry - consumers don’t necessarily trust an untested product.

Cannabis labs are working overtime to provide the producer (and subsequently the end-user) with as much detailed analysis as possible.  Not all labs offer all services, but increasingly labs are investing in the necessary equipment to expand their services beyond a simple test for potency.

Cannabis Laboratories - Testing New Services

While the average cannabis consumer might envision the testing industry as more or less homogenesis, laboratories are fighting for market share through differentiation. There are of course the government mandated requirements for all licensed labs, however that doesn’t mean that privately owned testing facilities cannot offer a wide range of services to producers in an attempt to get a competitive edge over others within their region.

Laboratories are developing services focused on ease-of-use for the end-user. The services expand on the basic and state-required testing procedures and strive to make the entire process easier, faster, and more informative for the cultivator or producer submitting samples.

Some of the innovations include:

Mobile services

KB Labs in Arizona and Molecular Science Corporation based in Toronto are only two examples of many labs now offering mobile testing services. Producers no longer have to send samples off just to wait days, if not weeks for results. Now testing services are investing in fully-equipped mobile laboratories capable of testing for almost anything a conventional laboratory can. The laboratory, positioned on site, processes samples without the lag times.

Express services

Steep Hill Labs, a large company with locations in Arkansas, California, Hawaii, Oregon, and many more, offers an express service - specifically for potency. They provide the relatively low cost and barrier-free service on site. Anyone with a 1.5-gram sample can request a $50 test which returns THC, THC-A, CBD, CBD-A and moisture levels within minutes. This service uses Near Infrared (NIR) Spectroscopy and returns the sample to the consumer within 5 minutes.

Research and Development Services

Larger cultivators and producers can move testing in house, specifically when it comes with research and development. Whether it's cannabinoid and terpene profile of new hybrids or testing for lingering solvent residues on extractions - testing is an integral aspect of cannabis product development. However, not all brands have the technical know-how or the budget for the expensive equipment required in a testing facility. It’s in this space where some labs, like SCLabs, are making a name for themselves with a service explicitly geared towards research and development.

Customer Friendly Online Portals

SCLabs (among many other examples) also relies on a comprehensive laboratory information management system (LIMS) for the management of data, and as a customer interface. It’s another way cannabis testing facilities are making testing more user-friendly and information more accessible. Software companies like Khemia, and their Omega LIMS, integrate seamlessly with invoicing systems and provide a clear audit trail for compliance. Through an online portal, clients see updates on sample status, in-depth reports, and a searchable database of historical test results.

The driving need for accurate and trustworthy cannabis testing has lead to some intriguing developments in the cannabis testing industry. Due to the continued national and global regulatory hurdles, there is no clear monopoly or a "Walmart" of cannabis testing. Regional labs are focused on providing services specific to the needs of their local clientele. Whether that means mobile testing or express potency testing, or just the addition of a customer friendly web portal, the innovations spreading across the industry are making testing faster, easier, and more informative.

 

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