As we end the first quarter of 2019, several trends show continued challenges ahead for licensed cannabis testing labs as well as delivery and distribution businesses.
To wrap up our series of posts this month about what’s new in cannabis cultivation, manufacturing, and retail/dispensing, let’s take a closer look at what’s new in cannabis testing, delivery, and distribution and how things are shaping up for the rest of 2019.
What’s New in Cannabis Testing?
The “world” of cannabis testing is still far from perfect. States have put laws in place that require lab testing of cannabis products before they can be made available for purchase, but as I’ve discussed in detail before on the Cannabiz Media blog, the actual process of cannabis testing isn’t regulated and is often flawed.
Testing Standards are Missing
That means there are no standard testing procedures that labs are required to follow and no reliable quality control. Two labs could deliver different test results on the same crops and products, which leads many cultivators to choose the labs that deliver the best results in terms of THC potency and other metrics that suit their agendas.
Cannabis testing is a scientific process, yet there are no checks and balances and no standard operating procedures to ensure tests are repeatable and reliable.
Furthermore, labs in most states aren’t evaluated for their consistency or adherence to any kinds of cannabis testing standards. As a result, consumers and patients have little or no ability to confidently evaluate products based on quality.
As a result, more people in the cannabis industry are calling for standard operating procedures for cannabis testing to solve the problem.
Lab Testing is Expensive
Another problem related to testing is the expense. Not only is it expensive for cultivators to have their cannabis tested, it’s also expensive for labs to get the necessary equipment.
Some view this problem as a flawed business model since cannabis testing labs don’t have the same access to capital, talent, and government support that testing labs in other industries do.
To solve the problem, some companies are developing innovative new technology that can make cannabis testing less expensive and faster for both growers and labs. FluroTech Ltd. is just one company launching a new testing device that is being marketed as a solution to the problem.
Only time will tell if regulators develop new testing standards and if new testing equipment helps to make the safety of cannabis products more reliable.
What’s New in Cannabis Delivery and Distribution?
As I’ve covered on the Cannabiz Media blog, cannabis delivery and distribution is expanding, and California’s recent decision to allow cannabis delivery to patients in cities and municipalities that have banned marijuana sales was a significant step forward to ensuring people have access to the medicine they need.
Cannabis Delivery Brands are Expanding
More states are approving cannabis delivery, and as a result, the number of delivery and distributor licenses continues to grow. Eaze has been delivering cannabis products across California through its online marketplace and app for some time, so when Oregon made medical cannabis delivery available statewide in December 2018, it seemed like a natural expansion opportunity for the company and brand.
This month, Eaze announced that it partnered with Oregon-based dispensary Kaleafa to provide cannabis delivery in Portland, Oregon. Now, the race is on to see which brand will become the licensed cannabis delivery leader in Oregon and beyond.
States are Cracking Down on Illegal Cannabis Delivery but Distribution Barriers Still Exist
While legal cannabis delivery is expanding, states still have to deal with the widespread illegal delivery and distribution of cannabis. For example, in February of this year, California’s Department of Consumer Affairs’ Division of Investigation’s Cannabis Enforcement Unit seized more than $250,000 of cannabis and cannabis products when it shut down an illegal delivery service in Fair Oaks.
This is just one example of a state cracking down on illegal cannabis delivery to fight the black market, restrict sales, delivery, and distribution to licensed providers only, and keep revenue flowing to the states.
However, while states work to stop illegal cannabis delivery and distribution, law enforcement sometimes creates barriers for legal, licensed cannabis businesses.
That’s what happened in September when the owners of a licensed California delivery company were stopped by the California Highway Patrol and arrested despite having their valid license and invoices on hand during their deliveries. Approximately $257,000 was seized by the police during the arrest and given to the Department of Homeland Security. After six hours, the pair were released with no charges filed.
Clearly, there is still a gap between state laws and law enforcement in California. The same is likely true in other states as well. Hopefully, the number of incidents like this will decrease in the near future as cannabis markets continue to mature across the country.
Key Takeaways about Cannabis Testing, Delivery and Distribution
While testing, delivery, and distribution of cannabis and cannabis products are growing rapidly, there are still hurdles to cross and problems to solve. It will be interesting to see how states respond during the rest of 2019 in terms of taking steps to ensure consumers have access to high quality, safe products that they can legally and easily purchase when and where they need them.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.