February 12, 2018

An Overview of Cannabis Testing Laboratories

One of the requirements of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) is that cannabis products must be tested by a licensed testing laboratory and must pass a number of required tests before being sold at retail. Sections 26100 through 26106 of the Business and Professions Code are the statutory sections relating to cannabis testing laboratories. Additionally, the Bureau of Cannabis Control (the Bureau) has issued emergency regulations pertaining to testing laboratories which can be found in Sections 5700 through 5739 of the California Code of Regulations.

Testing laboratories are licensed and regulated by the Bureau. They are considered a “Type 8” cannabis license at the state level. Unlike other types of cannabis activity, there is no “A” or “M” designation for testing laboratories–rather, a licensed cannabis testing lab can test products from both the adult use and medicinal supply chains. Additionally, a person who holds a state testing laboratory license cannot obtain any other types of cannabis licenses.  For example, a corporation holding numerous types of California licenses (including cultivation, manufacturing, distribution, and retailer licenses) is prohibited from also holding testing laboratory licenses so that testing laboratories do not have a financial interest in the outcome of test. Additionally, a licensed testing laboratory cannot employ anyone who is also employed by any other licensee that does not hold a state testing license. For instance, a part-time employee of a licensed manufacturer cannot work part-time at a testing laboratory, but a part-time employee of one testing laboratory can work at other testing laboratories.

An employee of the testing lab is required to travel to the premises of a licensed distributor in order to collect samples to be tested; thus, the drive between the laboratory and the distributor should not be too long, otherwise there are unnecessary costs as well as increased risk of damage to the sample.

Licensed testing laboratories must also eventually obtain ISO/IEC 17025 accreditation for testing. You’re probably wondering what “ISO/IEC 17025” means and why it’s so important. ISO stands for the International Organization for Standardization. ISO/IEC 17025, a standard created by the ISO, sets forth requirements for the competence of testing and calibration laboratories.

“ISO/IEC 17025:2017 specifies the general requirements for the competence, impartiality and consistent operation of laboratories. ISO/IEC 17025:2017 is applicable to all organizations performing laboratory activities, regardless of the number of personnel.”

Provisional Laboratory Testing Licenses may be issued to an applicant prior to receiving ISO/IEC 17025 accreditation provided that the applicant meets all other requirements for a testing license and submits an application to the Bureau of Cannabis Control along with an attestation that the applicant has or intends to seek ISO/IEC 17025 accreditation for all required testing methods. Provisional testing laboratory licenses are valid for 12 months, though they can be renewed for a short period under certain circumstances.

A Certificate of Analysis (COA) must be produced for each sample collected. Within one day of conducting the test the information will be entered into the track-and-trace system. The COA contains lots of information about the product including the test results. Eventually, all of the following items must be tested for: cannabinoids; heavy metals; microbial impurities; mycotoxins; residual pesticides; residual solvents and processing chemicals; moisture content and water activity; foreign material; terpenoids if claims about them are made; and homogeneity.  The Bureau has published a helpful testing chart summarizing the phased testing requirements, which is shown below.

Testing laboratory licensees must provide Standard Operating Procedures (SOPs) for sampling cannabis and cannabis products to the Bureau. There are some general sampling requirements set forth in the Bureau’s emergency regulations, one of which is the requirements to complete a chain of custody form and a sample field log for each sample collected. Laboratories must also develop and implement a Laboratory Quality Assurance (LQA) program in accordance with the Bureau’s regulations. This LQA must be be reviewed annually by the management employee. Additionally, there are educational requirements for laboratory staff set forth in the emergency regulations.

In addition to the $1,000 application fee applicable to all applications for an annual license, license fees for a cannabis testing lab range from $20,000 to $90,000, depending on the estimated “maximum dollar value of its planned operation in terms of the value of the product expected to be tested.” Title 16, California Code of Regulations, § 5014.

As mentioned at the beginning of this post, eventually all cannabis and cannabis products must be tested by a licensed testing laboratory before being sold at a retailer. There is a transitional period that lasts until July 1, 2018 during which time products that are not laboratory tested may be transported and sold if a label stating that the cannabis goods have not been tested as required under Business and Professions Code section 26070, subdivision (l) is affixed to each package containing the cannabis goods prior to sale by the retailer. (The exact language is, “This product has not been tested as required by the Medicinal and Adult-Use Cannabis Regulation and Safety Act.”)  Nevertheless, by July 1, all products sold by licensed retailers must be tested.

Across the state, there are comparatively few jurisdictions that allow cannabis testing laboratories, and of those that do allow laboratories in theory, not all have licensed testing labs operating in practice. A lack of state-licensed testing labs could lead to problems in the supply chain.  As of February 12, 2018 there are only twenty-three state-licensed testing labs in the whole of California, most of them located in the northern part of the state.  This is a fraction of the close to four hundred temporary licenses issued by the Bureau to both adult-use and medicinal distributors.  Clearly, there will be tremendous demand for reliable testing laboratories with efficient procedures, rapid throughput and quick turn-around. 

California is a global center  of technological innovation, and it is anticipated that future developments in the science of laboratory testing will take place in the Golden State. As accredited, state-of-the-art cannabis testing laboratories compete with each other to provide increasingly rapid, accurate, and reliable results, not only will the California cannabis industry benefit, but so will patients, consumers, and regulators.

This information is provided as a public service. It is not intended as legal advice. For more information about how to obtain a state cannabis testing laboratory license, please contact the Law Offices of Omar Figueroa at (707) 829-0215 or to set up a personalized, confidential legal consultation.

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