Legal cannabis prices in Massachusetts are expected to drop, as a long-standing bottleneck in testing has been swept away by a boom in cannabis testing labs opening for business.
“We’re finally seeing supply start to catch up with demand. I’ve seen [a] decrease in prices,” said Brandon Pollock, CEO of dispensary chain Theory Wellness. “I think that’s happening right now in real time.”
Like many states, Massachusetts law requires all cannabis flower and products be tested by a licensed lab before it can legally be sold.
The Bay State has seven active facilities, but the number of licensed labs will continue to climb based on current applications and pending approvals, according to Shawn Collins, executive director of the Massachusetts Cannabis Control Commission. According to Collins, another company has a final license, five more provisional licenses and another has provisional approval. Six more companies have pending applications.
As more testing labs open for business, testing turnarounds dropped from as long as a month to just under a week.
The testing process starts when a crop of cannabis is ready to be harvested. A small portion of it is set aside for the testing lab. Any cannabis that is processed into another product, such as infused beverages or oil concentrate goes back to the lab before it can be sold.
The lab makes sure there are no harmful substances, such as mold, heavy metals, or pesticides, and also calculates the concentration of THC and other cannabinoids to be listed on the product label.
For the majority of the short span in which cannabis has been legal in the state, there were only two different testing labs for cultivators and manufacturers to send their product.
“It’s been kind of a crap shoot as to how long before the product gets back. Testing is just one step in the process. We’re not going to do labels and pack stuff up until it’s tested,” said Canna Provisions COO Erik Williams. “We could get it back in five days, or you may not get it back until it’s been a month.”
In that time, the product can degrade.
“Not only then is cannabis drying out, your potency is degrading, and you’re changing the consistency of the medication that people really need. so the consumer at the end is a guinea pig. it can grow mold or other microbiological contaminants,” said Nicholas Masso, CEO of Indo Laboratories.
Indo became one of the first labs to apply for a license to test recreational cannabis, in October 2019. It took 13 months to obtain their state license.
One of the factors that delayed the expansion of testing labs, was a regulatory shift in who had jurisdiction over the lab licensing.
The original law that legalized medical marijuana in the state in 2012 stipulated that the Department of Public Health would oversee licensing of testing labs. Later, with recreational cannabis that authority was given to the Cannabis Control Commission.
“The requirements and regulatory language around state lab testing requirements had been fragmented and difficult to piece together prior to 2020, which caused deficiencies and internal struggles within new lab testing companies breaking ground for the first time,” said Brendon Hurley, digital systems manager for Brightleaf.
Meanwhile, the state continued to hand out licenses for cultivators, manufacturers and retailers which created a log jam in the few existing testing labs.
Aside from licensing headaches, Masso also said that staffing a cannabis lab can be difficult.
“For us the one thing we underestimated the most, is how difficult it would be to find good, qualified scientists to come to the cannabis industry,” he said. “For us, it took awhile to hone in on the right people.”
“Going backward even a year ago, there was a severe backlog in the testing labs. At one point, we were experiencing four-to-five-week turnaround times. Now on average it’s about four business days,” said Pollock of Theory Wellness.
Without the testing backlog, labs have had a greater ability to work with cannabis producers in the event of failed tests.
“When you’re so busy and you’re just overwhelmed with business its hard to address random customer concerns and complaints,” said Pollock.
“Seven entities have commenced their operations. For a number of years it was two to three,” said Collins, during the Oct. 14 CCC meeting. “Seeing the growth in the last six months or so, does indicate a good opportunity within the industry.”