With more and more states implementing legalized medicinal or recreational cannabis, the industry as a whole continues to grow. A recent online discussion, hosted by the Laboratory Products Association (LPA) Scientific Advisory Board and focused on the outlook of cannabis labs, predicted dynamic market movement in the next three to five years.
Consolidation of production operations may come as a result of multi-state operators and investors looking to capitalize on buying opportunities in market-leading areas. At the same time, small cannabis producers may benefit from state-regulated open licensing, brand authenticity, and opportunities to co-op and share resources.
As the industry grows and diversifies, the demand for high-quality cannabis testing labs will continue to increase. When starting and running a cannabis testing lab, there are many important considerations.
Setting up a testing lab
The first step in setting up a testing lab is defining the goals of the operation—what the lab will test and where will the lab be located and licensed. The types of testing to be done will dictate the instrumentation and the support equipment required. The location and the legal requirements for testing in that market, play central roles in determining the performance needed from the equipment and the lab as a whole. At the inception, be sure to:
- Conduct extensive research of instrumentation and learn the requirements for testing in the chosen area.
- Understand the equipment and the infrastructure needed to support the lab.
- Plan the logistics of the operation including: securing licenses, purchasing equipment, hiring staff, and forecasting operational costs.
- Create comprehensive budgets for lab start-up and operation.
Sourcing lab equipment and testing supplies
Once research is done and budgets are created, locating sources for the required testing instrumentation and support services is a crucial next step. The process of identifying quality equipment vendors can benefit greatly from knowledge and experience gained in the field. The online discussion hosted by the LPA Scientific Advisory Board included a panel of cannabis testing professionals to share their insight.
Brittaney Dowd, chief chemist at Dragonfly Wellness, suggests reaching out to your network of industry contacts. “Consult your network to see why people use certain companies and what that product can do versus others. Identify what products are reputable and available. Then shop quotes considering the budget, which is really important for a start-up.”
Stephen Goldman, chief science officer at Kaycha Labs and also a panelist for the LPA cannabis labs outlook discussion, agrees. “Consulting with your network will identify quality vendors at the onset. Technical knowledge will help in identifying vendors and instruments that can provide the best solution, and can provide insulation from wrong or overly expensive purchases.”
A few important details when qualifying equipment vendors include:
- Responsiveness—The vendor should be willing to take the time to research the proper equipment for your needs. They should be mindful of the details of your request(s) and provide information that is timely and helpful for your purchase.
- Knowledge—A knowledgeable sales representative should be able to explain the product, which is a good indicator of trusting the product to perform as needed.
- Customer service—Vendors that go above and beyond to research particular uses for your needs can be extremely helpful. Any future equipment issues that are addressed directly by vendor customer service, through a streamlined response, is very valuable and may go a long way toward formation of a repeat sales relationship.
“Ask vendor reps to identify and explain what [the products] are good at and what their limitations are,” suggests Goldman. “Inquire about fitness of use and applicability.” Have the instruments been tested, vetted, and validated for cannabis and hemp usage? Quality vendors may conduct special research on usage and publish data, which is strong evidence of performance for your intended applications.
Should your testing lab purchase used or refurbished equipment versus new? Here are a few key considerations:
- Capability—Are you able to locate the equipment needed for your testing methods? Researching both instruments and reputable vendors will help you determine whether used or refurbished equipment can fit your current requirements. Labs looking to add future testing methods, or safeguard against changing regulations, may take a closer look at the latest technology of new products.
- Reliability—Quality testing demands robust validation methods, which in turn requires instruments with high-quality components. What is the origin of these components? Are they available? Are they susceptible to supply chain disruptions? These are important questions, particularly in the current climate.
- Support—Who has the best customer service and, when things go wrong, where is the help? What are the chances I’m going to need support and how can I minimize instrument downtime? These are good questions to ask yourself when considering new, used, or refurbished instrument vendors.
- Budget—New instruments can be expensive. Used or refurbished equipment can be obtained at a lower price, but be sure to consider all the factors above, not just the price tag. After all, time is money.
“More complex equipment requires more research before reaching out to vendors and sales reps,” says Goldman. “Overall, plan to reach out well in advance of purchase for all products. Big ticket items require info on supply chain and availability, suitability for the regulatory environment in which it will be used, and other details.”
Consumables and supplies are areas that can often be overlooked when setting up a lab and securing lab equipment. Whether the vendor has knowledge of consumables and costs is another measure of a quality provider. Specialized vendors are often needed for solvents, gases, supplies, and other consumables required to operate the equipment, adding another logistics and cost consideration. Consumables such as analytical standards must be tested between vendors and within vendor production batches to identify the best quality. This quality vetting program can amount to additional costs as well.
Running a successful testing lab
When all the pieces are in place, a successful testing operation is ready to run. Further considerations include:
- Staffing—While some routine tasks in the lab can be performed by non-technical personnel, there is a strict need for lab professionals with knowledge and experience to lead operations. Technical analysts make critical purchasing decisions, oversee instrument and testing performance, interpret data, identify issues, fix workflow disruptions, and fulfill many other responsibilities.
- Process optimization—Instrument performance, instrument uptime, routine maintenance and validation, and support are all important metrics for a testing operation.
Running a successful testing lab through “operational excellence” can promote the growth of the scope and scale of testing operations, improve the ability to adapt to changing regulations, and aid in the successful navigation of market fluctuations.