Marijuana Business Factbook 2019

253 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. Cannabis Testing Labs and Ancillary Firms | Chapter 6 MJBIZDAILY.COM CHART 6.02: Number of Testing Labs In A Sampling Of Adult-Use Markets Note: Licensing data for California, Colorado and Oregon current as of April 2019. Nevada licensing data current as of February 2019. Source: California.gov, Colorado Department of Revenue, Oregon Liquor Control Commission, Nevada Department of Taxation © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Number Of Testing Labs In A Sampling Of Adult-Use Markets 15 11 94 26 51 64 10 28 51 9 6 12 Nevada 11 Colorado 11 Oregon 22 California 49 Number Of Testing Labs Per License By License Type & State Nevada California Colorado Oregon Number Of Testing Labs By State Cultivation Retail Infused Testing labs are the smallest plant-touching segment of the industry. The limited number of businesses paired with high demand in most markets leads to testing labs often being the source of supply bottlenecks when a new market comes online or when major changes in testing requirements occur. Ohio’s medical marijuana marketplace was put on hold in late 2018 because labs were not yet up and running ― a delay that resulted in businesses having to continue to take on costs (such as lease or mortgage payments) without generating revenue. The number of labs in each state is determined by market forces and entrepreneur interest rather than any state mandate. California’s massive marijuana economy is home to 49 testing labs, more than twice the number in any other state, but this averages out to only one testing lab per 120 potential lab users, including cultivators, retailers and infused product manufacturers. By comparison, Colorado’s relatively mature market has only 11 testing labs ― one per 141 potential lab users ― while Nevada’s 11 testing labs average out to one per 27 potential lab users. It’s easy to see how quickly a testing lab could become overloaded if a significant portion of cultivators were to send product to a lab for testing at once ― during October’s outdoor harvest, for example ― and how this bottleneck could impact other businesses down the supply chain.