Message from Executive Director, Dr. Robert Martin
Welcome to the Association of Commercial Cannabis Laboratory website! We are a group of independent lab operators that have come together to address the lack of standards and practices in the medical and recreational marijuana industry evolving in North America today. Our ACCL members are dedicated to achieving the highest standards for quality assurance testing protocols. All of our members must adhere to strict guidelines for scientific acumen and legal responsibility.
Profitability in the Cannabis Laboratory Industry
Robert W. Martin, Ph. D.
Association of Commercial Cannabis Laboratories, Inc.
OAKLAND, May 2016: There exists a great misconception about Cannabis testing laboratories in North America. That misconception rests in the common belief that laboratories working on Cannabis products are wildly profitable. Nothing could be farther from reality. Most ACCL labs began with personal monies or private investors, both sources providing courageous support at a time when there was no QA available in an industry in need. The expensive and delicate analytical equipment to operate and maintain, the professional competitive salaries we must offer, and the cost of supplies and standards that increase with sample number makes profitability a fleeting concept to most laboratory operators. Many of our instruments cost over $100K and some as much as $500K. The cost of operating a laboratory doesn’t stop there. Insurance, equipment standardizations and upgrades, ISO certification protocols all add to the expenses of a laboratory and are ongoing. Further, laboratory operations require highly trained professionals from chemistry, microbiological and biochemistry backgrounds holding advanced collegiate degrees that are expensive to recruit and sustain. In fact, salaries are the single costliest ongoing expense within a laboratory.
Cannabis laboratory operators must navigate all these financial challenges without any banking support, as banks are forbidden in assisting our industry in any way, form, or fashion. Simple protocols like checking and lines of credit do not exist for laboratory owner/operators. As a result, laboratories are forced to handle large amounts of cash. In our electronic world a cash business is both cumbersome for accounts payable and dangerous for personal safety. Landlords are no better as rents are often inflated for blatant profiteering of our emerging industry. Many landlords charge 5-10 times the normal rent for a Cannabis industry related tenant.
Unfortunately, the undue financial stress of laboratory operation doesn’t end there. Several municipalities are preparing to adjust new fee schedules to begin draining tax dollars from laboratories at a record pace. City, county, and state organizations are all planning to create new tax schedules for the Cannabis laboratories. The industry simply cannot support large tax burdens from multiple municipalities. Our margin of profitability is just too thin and fragile to sustain these economic hardships.
The ACCL calls for logic and reason to prevail of our evolving industry by reducing our tax requirements in order to operate these much needed quality assurance companies. Our laboratories have lived through many years of these hardships and hope that our voice will be heard and recognized as professional and responsible now and in the years to come. Allow laboratories to apply for special permits that allow compliance at affordable and reasonable tax rates. The ultimate safety of patients depends on it.