Marijuana testing labs report steady business as the COVID-19 outbreak rolls on, though concerns loom over the availability of protective equipment such as gloves and masks and other cleaning supplies.
It’s a topic the cannabis industry will keep a careful eye on because, if the coronavirus pandemic eventually causes hiccups in testing, that could slow the entire marijuana supply chain from seed to sale.
Cannabis testing labs report they are currently servicing clients at a normal rate.
To keep a constant workflow during the pandemic, some labs are staggering shifts so workers can practice social distancing, and testing facility owners point out their businesses are by nature clean environments.
For example, personal protective equipment (PPE) is typically worn by cannabis lab workers and isopropyl alcohol is used to sterilize lab equipment and surfaces. Both are currently difficult to find in the U.S.
Lori Glauser, chief operating officer Evio Labs, a multistate and international cannabis testing company with headquarters in Henderson, Nevada, said her company hasn’t run out of PPE yet.
“We are watching carefully, as things could change as more supplies may be directed to health care in coming weeks,” she added.
Improved efficiency
Nick Mosley, co-owner of cannabis testing lab Confidence Analytics, based in Redmond, Washington, was heartened when the state’s governor deemed cannabis an essential business.
“That’s a huge blessing to our industry and all of our employees,” he said.
His lab has instituted new practices for its workers, including staggered shifts and allowing some employees to work from home.
He hasn’t run low on PPE yet. PPE is a regular part of his business, so the lab is well-stocked.
“We’re fortunate that we work in a business that by its very nature is very clean and sanitary,” he said.
Mosley sees at least one positive from the crisis: This might lead to improvements in business management, including allowing his employees flexibility to work from home, which could lead to better employee retention.
The staggered shifts have also reduced his lab’s testing times and made it more efficient.
Demand on the rise
Evio’s labs in California and Oregon have felt an increase in demand as consumers stock up on cannabis.
“During the initial week of the virus, there was a lot of uncertainty so business was a little slow, but since then, it has picked up considerably,” Glauser said.
The members of her staff who can work from home are doing so, and others are working in staggered shifts.
Glauser has had some trouble ordering isopropyl alcohol because people have purchased it from stores at a higher rate due to coronavirus concerns.
She’s also worried that the pandemic might decrease access to legal products if retail stores are shuttered or the supply chain is otherwise broken.
“What concerns me is a lot of people consuming unregulated products like vape pens or flower,” she added.
Future challenges
According to Wes Burk, president of San Luis Obispo, California-based Emerald Scientific, which provides supplies to cannabis testing laboratories, most of his customers aren’t reporting much of a disruption to business.
While no dearth of access to flower and cannabis products exists, a shortage of Certified Reference Materials (CRMs) might develop. CRMs are the standard materials used to test the safety, potency and quality of cannabis products.
Getting these products tested and on shelves could prove challenging as manufacturers of CRMs might have to shutter their operations because of the coronavirus.
So far, only two labs out of roughly 200 that his company supplies have closed because of local mandates, Burk said.
“We have a number of new labs (as clients) that are in the process of doing lab build-outs and many of those are full steam ahead,” Burk added.
Access to capital might slow down laboratory business development in the future, as private equity could become hesitant to deploy financing, according to Burk.
But overall, he predicts that cannabis will join other industries such as alcohol and tobacco that historically have fared well during trying economic times.
Burk’s business is having its best month ever in terms of revenue, which he owes to the momentum of new people entering the industry as well as strong demand.
“I’m very optimistic,” he said. “I don’t see any reason it’s going to come to a screeching halt.”
Bart Schaneman can be reached at barts@mjbizdaily.com
For more of Marijuana Business Daily’s ongoing coverage of the coronavirus pandemic and its effects on the cannabis industry, click here.
