Using Element LIMS to turn uncertainty into opportunity in the cannabis testing market.

Legalization of recreational cannabis has created a high growth segment in a historically slow growth analytical testing market. Testing laboratories must learn to adapt and operate efficiently in order to be successful in this new segment. A laboratory information management system that drives productivity and regulatory compliance is one key to achieving that success.

Riding the regulatory roller coaster.

With no federal guidance or mandates for cannabis testing, states are experimenting with their own approaches. The extremely fluid regulatory environment makes for challenging business conditions and data management. For example, Oregon and California have both experienced big disruptions in the supply chain as tight sampling requirements caused commercially untenable failure rates.

The industry is still in the toddler phase, or at the very most adolescence, and there is not universal agreement on the level of regulation required. Many in government agencies and the testing industry are already questioning the need to provide some of the more expensive and potentially unnecessary tests. For example, heavy metals is an area where there continues to be some debate regarding the level of testing that is useful. There are states that are pursuing a familiar stringent regulatory framework (e.g. California) while other states are using less restrictive approach (Washington).

A unique new role for the laboratory.

One other area that stands out as a particularly noteworthy difference, is the role of the laboratory in the whole testing ecosystem. In many states, the testing laboratory and not the end client, is essentially responsible for reporting compliance. This compliance role puts the laboratory in unfamiliar territory and requires new practices, procedures, and information management.

Eric Wendt, Chief Science Officer of Green Leaf laboratory of Portland, Oregon, which has implemented Element LIMS from Promium describes the situation. “The State has put the onus on the laboratory as the enforcement arm. We are required by the State to issue pass fail criteria to the State on behalf of our customers.” Consequently, the burden on the lab is much higher than in other sectors. In the case of Green Leaf, their approach to testing, process control, and information management have been critical factors in fulfilling this new role and achieving business objectives.

The right LIMS drives productivity and compliance.

Scientific Foundation

While regulatory standards follow a familiar path of two steps forward and one step back, cannabis science is lurching ahead. Fundamentally, much of the science is similar to what is done in full-service laboratories but test protocols and workflow specific to cannabis are being developed.

Greater regulatory scrutiny requires more focus on scientific results and less focus on superficial reporting. Applying the same discipline to cannabis testing that we apply to soil or water testing, requires a LIMS with robust functionality.

Operational Efficiency and Workflow Automation

In the face of unstable regulatory rules and the mad rush to get laboratories up and running, many organizations cobble together an information management system that is made up of a manual tasks and spreadsheets. This approach isn’t sustainable when volume increases and when regulatory and reporting requirements become more rigorous. The key to optimizing efficiency and addressing regulatory fluidity is to have a sound information management strategy.

Automating and streamlining sample login, bench sheet activity, quality control, method management, and report assembly, reduces or eliminates expensive and time consuming manual tasks. And a centralized database provides greater access to analytical and operational information. A system that simply helps you assemble superficial reports will not suffice. The scientific capabilities will be key to meeting customer and regulatory requirements.

Seed-to-Sale Integration

Cannabis tracking starts with the planting of the seeds and progresses all the way to the end consumer. Some states have mandated the use of seed-to-sale applications such as Franwell Metrc and BioTrack THC for tracking from grower to retail outlet. That tracking process can include a full certification for accreditation like in Oregon, or a simple registration submission like in Alaska. This reporting activity can place a huge burden on the lab unless the information management system automates the process. Integration between the seed-to-sale application, and the LIMS eliminates the overwhelming manual effort otherwise required.

Reporting Results

Presentation of testing results is more complicated as well. Laboratory clients are requiring reports in visually attractive formats rather than clinical looking scientific reports. Tabular reports that just show endless rows and columns of data are no longer adequate. Clients want something attractive to show their own customers including embedded photographs and information on potency levels. Reports provide the necessary technical information but also serve as a marketing tool for the grower as well.

In addition, meeting accreditation standards such as ISO 17025 and local standards requires a robust LIMS system. And there are new attributes to track such as sample weight and medical vs. recreational. Granular tracking and automated auditing are necessary to meet the strict guidelines.

Affordable and Flexible

In addition to technical requirements, the LIMS solution must offer pricing models that address the investment profile of the laboratories—that often means a subscription-based purchase for software. The cost of specific tests, driven down by strong competition and low spending levels of growers, creates some major challenges to profitability. In addition, newer laboratories have to juggle the capital expense of new equipment and operating expenses for building out the facility.

Having the choice to purchase the software outright, and install on premise provides the greatest level of control for the laboratory. On other hand, a SaaS subscription service (software-as-a-Service) for the LIMS reduces capital outlay and makes updates much easier to manage.

A Fully Functional LIMS

All of these factors point to a growing need for laboratories to implement a fully functional LIMS—with particular attention to sample management and reporting. That LIMS should include:

  • Comprehensive scientific capabilities
  • Workflow automation to provide efficiency
  • Strong analytical reporting and client reporting
  • Integration with seed-to-sale applications
  • Granular tracking and auditing
  • Deployment flexibility

The path forward.

Even as the Federal Government makes noises about trying to roll back the legalization for recreational cannabis, more and more states are moving ahead. It is hard to put the proverbial genie back in the bottle. The large sums of tax revenue and corporate profits generated by recreational cannabis—billions of dollars—provide significant incentive and persistence on the part of the pro-cannabis community.

At some point regulations will become more standardized within states and across the country. Laboratories that practice sound scientific analysis will ultimately dominate the industry. And with a tight cost structure, the laboratories that can most efficiently manage sample flow and report production with a strong laboratory information management system will be the most profitable.