LIMS or Lose: What Booming Cannabis Sales and Tighter Regulations Mean for Laboratories

Posted on March 1, 2021 By LabLynx Blog

Despite the global pandemic, America’s cannabis industry saw record-breaking sales in 2020. Even more opportunities are on the horizon for laboratories that offer accurate, consistent and credible test results while delivering fast turn-around times. But mainstream acceptance also means more attention from regulators. The only way labs can grow their cannabis testing services while ensuring compliance is with the capabilities provided by a laboratory information management system (LIMS).

Cannabis Industry in 2021: Sales Up and Cracking Down

LIMS or Lose: What Booming Cannabis Sales and Tighter Regulations Mean for Laboratories

Sales of medicinal and adult-use cannabis nearly doubled over the previous year to reach somewhere between $18 billion and $21.6 billion. The lack of entertainment options during the pandemic contributed to the growth, but it is not the whole story. In states with established adult-use cannabis industries, growing sales reflect a multi-year trend. Fundamentals-based growth rather than a pandemic-driven spike is good news for the industry. Sales will continue to rise in established states. Boosting revenues further, newly-opening markets in Arizona, Montana, New Jersey and South Dakota are further integrating cannabis into the mainstream economy.

Even though the public no longer associates cannabis with “Reefer Madness”, public perception still matters. The industry’s growth could stall if consumers cannot trust that the products they buy are safe and work as advertised. Even worse, state officials could impose stricter regulations that could cripple young companies (and the labs that serve them).

Laboratories play a crucial role in the cannabis industry’s future. Testing is the only way cannabis growers, producers and sellers can prove that their products are safe and effective. Unfortunately, some labs aren’t serving the industry well. One-method-fits-all approaches won’t deliver accurate results. Without the expertise to correctly adapt methods for each product, some labs deliver inaccurate and inconsistent results.

Even worse are the outlaw labs that care more about the bottom line than professional integrity or public safety. These labs promise to deliver the results their customers want no matter what the actual tests say. Bogus potency ratings are bad enough, but allowing contaminated cannabis onto the market could cost lives.

Although state regulators have been slow on the uptake, they are beginning to recognize the need for stricter oversight of cannabis test labs. Over the past year, test labs have been the target of enforcement actions in several states:

LIMS or Lose: What Booming Cannabis Sales and Tighter Regulations Mean for Laboratories

EcoTest Labs was delicensed by the Oregon Liquor Control Commission and decertified by the Oregon Environmental Laboratory Accreditation Program for allegedly failing to follow correct testing procedures and standards. These actions came too late to prevent contaminated extracts and flowers from reaching the market. A very public and expensive product recall followed.

In Nevada, regulators launched an investigation of all cannabis testing labs in response to fake and inaccurate testing. Certified Ag Labs had its license suspended and was fined $70,000 for issuing “inaccurate and misleading” potency test results and other labs have come under scrutiny.

The cannabis industry’s growth offers test labs many new business opportunities. But the anticipation must be tempered by the reality that the cannabis business is different. Many politicians, regulators and law enforcement officers remain deeply skeptical of the business. In addition, public perception is still forming and could turn against an industry selling misleading and unsafe products.

Labs Must Position Themselves for Success

LIMS or Lose: What Booming Cannabis Sales and Tighter Regulations Mean for Laboratories

Laboratories that want to serve the growing cannabis industry must carefully assess whether they are ready for the new business. Do you have the capacity and throughput to handle the volume of tests? Can you deliver consistent, accurate results when testing standards vary from state to state? And can you deliver rapid turn-around times to stay competitive?

Just as importantly, laboratories should evaluate whether their internal processes can meet state certification requirements such as seed-to-sale tracking and sample chain of custody. Methods must be tailored to the nuanced demands of cannabis product testing. Achieving the necessary quality levels will be difficult if your lab still relies on spreadsheets, much less on paper forms, to record and track test data.

CannaQA Prepares Labs for Booming Testing Demand

LIMS or Lose: What Booming Cannabis Sales and Tighter Regulations Mean for Laboratories

LabLynx, Inc created CannaQA to serve the data management needs of cannabis testing laboratories. The total solution includes cannabis-testing informatics applications and hardware that laboratories can adapt to a lab’s unique combination of business processes, testing services and regulatory environments.

The CannaQA LIMS, for example, is more than a database for storing test results. CannaQA LIMS includes certificates of analysis, specification management, test management and other tools specific to cannabis testing, that you can also tailor to the way your unique lab works. This cloud-based system offers secure access for remote workers and can integrate with web portals for client communications.

Using CannaQA to manage your cannabis test data optimizes your laboratory’s operations in several ways:

Lab Performance: Your staff spends less time data-wrangling when CannaQA tracks samples from point-of-collection through accessioning, testing and storage. As a result, your lab will achieve faster turn-around times and higher throughput.
Adaptability and Scalability: CannaQA comes pre-populated with methods and workflows specific to cannabis testing, but does not lock laboratories into one way of doing things. Labs adapt the system to their testing processes. Besides making their results more accurate, this adaptability lets labs scale and extend their services for a wider range of customers.
Reliability: CannaQA’s automation and integration features reduce the error rates in laboratories’ testing processes. By integrating instruments with the CannaQA LIMS, for example, systems can automatically ensure samples are getting the right test, and the results are accurate with typos eliminated and calculations performed correctly every time.
Certifications: Being able to document practices and procedures is an essential element of laboratory certifications. Proving you can deliver consistent results is difficult when your lab relies on manual forms or spreadsheets. Automating data management with CannaQA makes certification much easier to receive and maintain.

CannaQA can help your lab consistently deliver the very highest levels of performance. And as your business grows, CannaQA adapts to new cannabis testing services. For more information and to learn what CannaQA can do for your lab, visit CannaQA.com or contact LabLynx at sales@lablynx.com or 866-LABLYNX (522-5969).