In No. 16 of the Cannabis Commerce + Chemistry Podcast, host Curt Robbins from Higher Learning LV and co-hosts Dena Putnam from Leafwize Naturals in Orange County, California and John Bailey from the Mindset Genesis in Las Vegas are joined by guest Sam Richard, CEO of OnPoint Labs in Phoenix, Arizona.
The group discusses an April 2020 peer-reviewed research study entitled "Costs of Cannabis Testing Compliance: Assessing Mandatory Testing in the California Cannabis Market" that was published in the journal PLOS ONE.
Richard, Bailey, Putnam, and Robbins discuss the details of the American marijuana testing space and how federal restrictions and Schedule I have resulted in a dearth of research and other roadblocks to the growth of the legal cannabis industry and assurances of safety for patients and consumers. They discuss how reform must occur if the legal cannabis industry hopes to compete with the underground ("legacy") market.
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This weekly 30-minute podcast is targeted at cannabis and hemp industry professionals and is strategically free of profanity and crude dialog. This audio session was edited for length and clarity.
To better understand cannabis compliance testing in the United States and the costs associated with it, listen now at Higher Learning LV, on Apple Podcasts or Spotify, and most other major podcasting platforms (including Amazon Music, Anchor, Google Podcasts, iHeart Radio, Pandora, and Stitcher).
Deep Dive: Cannabis Testing Compliance Costs
An April 2020 research study entitled "Costs of Cannabis Testing Compliance: Assessing Mandatory Testing in the California Cannabis Market" that was published in the journal PLOS ONE investigated the costs incurred by a cannabis cultivation or processing or manufacturing company to comply with mandatory cannabis testing laws. The research leveraged primary data from California, "the country’s largest and oldest legal cannabis market," which it compared to that of other states in which medical or adult-use cannabis laws have been passed.
"We use state government data, data collected from testing laboratories, and data collected from lab equipment suppliers" to run a set of simulations to estimate the cost per pound of compliance with California's testing regulations, reported the study's authors.
U.S. Cannabis Markets Evolving Rapidly
"As of mid-2019, 32 of 50 states had some form of legal medicinal cannabis system in place," reported the study. It explained that, since 2012—when Colorado and Washington State implemented adult-use ("recreational") cannabis laws—"11 of those states have legalized and regulated adult-use cannabis."
"We use state data, that collected from testing laboratories, and that from lab equipment suppliers" to estimate the cost per pound of compliance with testing regulations.
The researchers explained how California was the first U.S. state to "decriminalize the sale of medicinal cannabis with the 1996 passage of the Compassionate Use Act (Proposition 215)." Seven years later, the Golden State passed Senate Bill 420 which "set out more specific rules for the operation of medicinal cannabis collectives and cooperatives."
The study noted that this legislation did little to regulate the "cultivation, manufacturing, and sale of cannabis in California," something that resulted from "a wide variety of local ordinances, with little intervention from the state government."
2016 California Adult-use Legalization
The study noted that California ushered in adult-use cannabis legalization in November of 2016 with passage of the ballot initiative Proposition 64, also known as the Adult Use of Marijuana Act (AUMA) that was approved by 56 percent of voters.
"Subsequently, the Medicinal and Adult-Use Cannabis Regulation and Safety Act of 2017 (MAUCRSA) created a unified framework for the state licensing of cannabis businesses and the taxation and regulation of adult-use and medicinal cannabis," reported the study's authors.
Mandatory Testing of Legal Cannabis
The study noted that cannabis safety regulations, including those that require testing for contaminants or other potential health hazards to consumers, "generally add costs to production" and that one of the largests costs is "mandatory testing of all legal cannabis." In the state of California, which was the case study focus for this study, such testing involves looking for more than 100 potential contaminants, "including pesticides and heavy metals."
The study's authors claimed that theirs was the first research to "comprehensively examine the economic challenges of cannabis testing and estimate the cost of testing compliance per pound of cannabis marketed in a legal and licensed cannabis market."
The study claimed it was the first to "comprehensively examine the economic challenges of cannabis testing and estimate the cost of testing compliance per pound of cannabis."
The study reviewed and compared the "allowable tolerance levels for contaminants in cannabis" to other crops in California. In addition, it reviewed rejection rates in the state since mandatory testing began in 2018 under MAUCRSA. "We compare these with rejection rates in other U.S. states where medical and recreational use of cannabis are permitted," reported the researchers.
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