With increasing acceptance of cannabis use for both recreational and medicinal purposes, the cannabis testing industry is poised for a breakthrough as it finds its foothold in analytical science

It’s no secret that the United States medical and recreational marijuana landscape has shifted dramatically over the last 24 months. With recent changes in both state law and public attitudes, the industry as a whole is on the rise. However, with its rapid growth, the industry has struggled to implement safeguards to protect new customers, dispensers, and growers. The cannabis testing industry has materialized to fill this void, performing services from analyzing potency and pesticides to testing for things like terpenes and solvents.

Be it for recreational or medical use, most states have legalized some form of marijuana. These same states have now begun to implement some level of testing standards to act as a safeguard for consumers. Marijuana and pesticides hit the Colorado Department of Agriculture’s radar in 2012 when a former employee of the Kine Mine, then a medical marijuana dispensary in Idaho Springs, complained to the state about not being given protective clothing to wear while spraying plants.

In fact, state regulators have known since 2012 that marijuana is grown with potentially dangerous pesticides. However, pressure from the industry and lack of guidance from federal authorities delayed their efforts to enact regulations. As a result, many state authorities ultimately settled on a less restrictive approach than originally envisioned.

Even with guidelines in place, there is still a lack of consistency in the industry’s quality controls. For example, a Colorado marijuana company is voluntarily re-calling its cannabis products for the tenth time in three months because its products contain potentially dangerous pesticides. According to Colorado Governor John Hickenlooper, “When a pesticide is applied to a crop in a manner that is inconsistent with the pesticide’s label, and the crop is contaminated by that pesticide, it constitutes a threat to the public safety”.

In addition, Denver-based EdiPure is recalling 7,770 packages of cannabis-infused edibles because they were made with contaminated marijuana the company purchased from independent cultivators, the Denver Department of Environmental Health reported. This is EdiPure’s second pesticide-related recall in five weeks!

Earlier this year a major blow to the industry hit publicly traded company CannLabs (CANL) after its accusations against Medical Marijuana Inc. (MJNA) were heavily contested in opposition of what a report said regarding Medical Marijuana’s hemp-based products containing “significant levels of toxic solvents.”

Until recently, there has not been a pure cannabis-testing play for stock market investors. Some investors have cited the recent move by Pazoo Inc. (PZOO) to enter the testing space through its Harris Lee Colorado, LLC subsidiary. However, the company still needs to obtain regulatory approval to complete its licensing requirements. Following this approval, the company will likely need additional time to establish itself in the marketplace.

DigiPath, Inc. (DIGP) however could be of interest to investors currently seeking a play in the cannabis-testing industry. As of its most recent quarterly filing, the company had over $1.2 million in cash on its balance sheet. Moreover, subsequent to the end of the quarter, DigiPath divested itself of its legacy microscopy business, and is now focused on its cannabis-testing operations and related marijuana media businesses. DigiPath Labs, Inc., its testing subsidiary, currently tests all forms of cannabis-based products using FDA-compliant laboratory equipment and processes to report product safety and efficacy. The company built its first testing lab in Las Vegas, Nevada, which it opened in May of 2015. DigiPath also has plans to open labs in other states in which cannabis use is legal.

DigiPath has established several cannabis partners in the Las Vegas area already and new cultivators are coming on board. Outside of the expansion as a leader in cannabis testing, DigiPath has also worked to address the other big issue that the industry faces: fragmented testing standards. In early October, DigiPath joined the Association of Commercial Cannabis Laboratories (the ACCL), which further demonstrates the company’s commitment to testing guidelines and quality assurance for marijuana consumers.

Unique to the ACCL are the additional requirements for members to conduct themselves professionally in an effort to increase the integrity of the cannabis testing industry. In addition, the group is working to advance the scientific understanding of cannabis to the general public in a continuing effort to push back the frontiers of ignorance surrounding cannabis. In accordance with ACCL recommendations, DigiPath has also sought out ISO 17025 accreditation, an internationally recognized standard for high quality testing.

 “[This] means that medical marijuana cultivators, producers and patients can be confident that required test results are compliant with state laws and that good laboratory practices are consistent with other industries.”

Todd Denkin, CEO of DigiPath Labs

 

 

 


 

 

 

 

Disclaimer

Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Important factors that could cause these differences include, but are not limited to, the demand for the company’s services, governmental regulation of the cannabis industry, and the company’s ability to execute its business plan. MIDAM Ventures, LLC, an affiliate of MAPH Enterprises, LLC, MarijuanaStocks.com and WolfofWeedStreet.com, was paid an advertising fee of $10,000 cash by Digipath Inc. (DIGP) for its services, including visual sponsorship and promotion by MarijuanaStocks.com | WolfofWeedStreet.com and for visual placement of Digipath Inc. (DIGP) within written materials.  For making specific investment decisions, readers should seek their own advice.

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