Diversification: The Key to Surviving as a Cannabis Testing Lab
We live in uncertain times. Life is uncertain politically, financially and health-wise. For the goldrush-like emerging cannabis industry, it is very much a time of mixed signals. How does a QC testing laboratory ensure its survival in the face of federal-level law that conflicts with state law, changing government administrations, standards that vary from county to county and even city to city, and the volatile nature of the industry in general — and now with the added issues COVID-19 brings?
Since its initial state-level decriminalization, the cannabis industry has grown rapidly and continues to snowball into an ever-greater economy. This has of course required testing services in order to ensure safety, quality, conformance to specs and consistency. And labs have sprung to action to meet demand. Existing labs have added canna testing to their services and startups have emerged and spread with a sudden ubiquity not seen since Starbucks appeared.
But cannabis testing is not for the faint of heart — or the scarce of capital. To meet standard testing requirements, it’s necessary to have a fair bit of (not cheap) instrumentation. That means at a minimum a GCMS (usually two), LCMS, HPLC, ICPMS and PCR, plus moisture balances, water activity meter…and staff wages, plus the usual operating expenses.
Diversification Strategy
So now we have an unreliable market, and new health and safety issues to navigate — and a significant investment to protect and, hopefully, grow. What, exactly is the best move?
Well, the best hedge against unpredictable income is finding sources of more stable, reliable income to use as a platform for higher-risk strategies. Fortunately, if you are testing cannabis — or even if you haven’t started yet but are equipped — you have the capacity to extend your services into other, less elastic, areas of testing. These include food testing, nutraceuticals (less regulation), environmental (lots of regulatory and reporting hoops), materials testing, and agricultural.
Ways to initiate your diversification include simply adding services to your website, identifying and contacting potential clients and even contacting labs who already perform those services to see whether they may be able to use your lab as a sub-contractor to help them meet demand.
The Elephant In The Room
To anyone, even those not remotely involved with laboratories, it is obvious that there is an unprecedented demand for testing, and it’s in the area of COVID-19. Now, as a cannabis lab, you aren’t set up for clinical testing and don’t have a CLIA number. CLIA is the Clinical Laboratory Improvement Amendments of 1988, which are the US federal regulations that govern all clinical testing labs. Without CLIA certification, it is illegal to do any human clinical diagnostics — and that includes even simple COVID testing. Yet you, as a cannabis testing lab, already have an rtPCR instrument: the gold standard for testing for the SARS-CoV-2 virus that causes COVID-19. Wouldn’t it be great to be able to turn your resources to help meet the overwhelming demand — not only for workplaces and public health but for your own lab’s OSHA requirements? To find out more about what that would take, see my previous article How Labs Can Get Involved in COVID Screening Programs.
Equipped to Compete
Whether you diversify to strengthen your solvency or not, the other main area to look at is efficiency. No matter what services you offer, if your processes are inefficient you’re leaking money — through increased turnaround time, mistakes or transcription errors leading to result-reporting inaccuracies and more — all of which decrease your competitiveness in the marketplace and can ruin your reputation, ultimately resulting in business failure. That’s why labs who seek to survive sooner or later decide to leave spreadsheets and paper behind and adopt a laboratory information management system (LIMS).
LIMS Is Not Enough
The caveat in considering LIMS is that many (especially the free or nearly free ones) prove insufficient for your requirements. And sometimes that doesn’t become apparent until you have wasted a lot of time and money. But equally, it isn’t necessary to become mired in a system implementation that drags on over months or even years, costing untenable amounts of time, money and staff allocation. To effectively select a suitable solution, choose a system that is:
- Proven: The stakes are too high to risk being a guinea pig for some new product that purports to be The Next Big Thing — no matter what kind of special deals they offer.
- Comprehensive: Your services are diverse and your data management needs range from inventory control to instrument management to data analysis and reporting. Make sure it has all the features and functions you need — or might need in the future.
- Flexible: You’re already in a dynamic, changing industry. You also may be looking into diversifying. The last thing you need is a hard-coded, dedicated one-trick pony system that cannot adapt with you to marketplace demands without costly developer services to modify back-end code. The LIMS should be highly USER-configurable.
- Able to Integrate and Automate: If you’re looking for efficiency and error-free operations, it’s essential to be able to transfer information directly from instruments and populate reports or COAs without the potential for typos or misread spreadsheets. And reports are ready as soon as results are, so turnaround time (TAT) is the absolute best it can be.
- Cost-Effective: It’s true you get what you pay for… except sometimes it’s not. Beware the exorbitantly expensive, but also the too-good-to-be-true low-cost or free. Somewhere in the middle lies the sensibly-priced solution that delivers true value accompanied by great quality, expert, friendly support you can rely on.
- Quick and Easy to Deploy: A good system is already set up to operate in your lab. The only things that should need implementation services are training (technically that’s not really implementation — but trust me, it’s essential!), helping you configure screens and reports to exactly suit your preferences (your logo on reports, capture the data you track with no unnecessary fields or steps, etc.), setup (users, access profiles, etc.) This is often part of training so that you can handle it yourself), and interfaces to instruments and other systems. All in all, this should be able to be accomplished in a matter of weeks, not months or years.
Put the Plan Into Action
Systems that meet the criteria above are extremely thin on the ground. Those that are capable of both diversification and COVID testing management are almost non-existent. One notable exception, however, is CannaQA, from LabLynx, Inc. It is an industry solution version of their ELab LIMS, a well-established, comprehensive, flexible system that is used across industries globally. Importantly, LabLynx also offers COVIDLiMS, another version of ELab, aimed specifically at COVID testing (but, like all ELab versions, flexible enough to handle any kinds of testing).
For additional information on those systems, contact LabLynx at sales@lablynx.com, 866-LABLYNX (522-5969), or LabLynx.com.
For many labs, the COVID pandemic presents additional challenges in an already tricky market. For labs who intend to survive and flourish, it also presents opportunity and motivation to equip for longevity and success.
