Photo: David Zalubowski, AP
DENVER (AP) – New compulsory marijuana pesticide testing in Colorado financially raises thousands of dollars in cost to local cultivators.
The additional cost is the last financial blow against the cultivators of the state, which are already struggling with falling wholesale prices and an oversupply of products.
Colorado Marijuana Enforcement Division requires pesticide tests for marijuana flower and trim, but no concentrates. The new rules came into force on 1 August.
Other states with recreational marijuana programs such as Oregon and California also require that cultivators submit their cannabis for pesticide testing.
In Colorado, Additional Costs Are $ 100 to $ 120
Tim Cullen, CEO of Denver-based Colorado Harvest Company, which manufactures and sells marijuana for medicine and leisure, said the trial cost him about $ 2,500 a week and growth.
"It's not like you can calculate more for the same product," said Cullen, who runs two waxes. "They only pay more (to produce the product)."
The new rules, however, have been a blessing for state-run cannabis testing laboratories, which are swamped with new deals – though some corporate owners and industry groups say the tests are not doing enough to protect consumers from unwanted chemicals in their marijuana, and even more needs to be done.
Mandatory pesticide test in Colorado requires medical and recreational cannabis to be tested:
– abamectin (avermectin B1 & B2)
– Spinosad A & D
ANOTHER FINANCIAL OBSTACLE
Cullen is in the middle of the validation process, which requires him to submit samples for testing for six weeks. If he passes the validation stage, then his operation must submit a batch for testing every 30 days.
He breeds about 25 strains per cultivation site, and each strain must be tested at a price of $ 100 per strain per week. Because he runs two waxes, that's $ 5,000 a week for his business, or $ 30,000 for the year, given the six weeks of mandatory testing, Cullen noted.
"It's another cut under a thousand that makes this business impossible to run," Cullen observes
Until the federal tax structure is changed to allow cannabis companies to deduct the same expenses from the mainstream industries, these additional financial burdens to be crippling, according to Cullen.
Have the state government perform all these new tests every year that come from the profit margin of the business without giving a relief on the side of the federal tax, which exploits the entire profit.
The state is also expected to introduce more mandatory tests in the future, including tests for heavy metals.
That does not mean that Cullen is against the mandatory pesticide test.
"There are additional costs that the company does not have generating additional revenue, "he says," but it's also imperative that cannabis be tested for pesticide use. "
The additional cost will likely cause Cullen to develop fewer burdens to reduce spending.
"We" They only build the best, heaviest producing varieties in the house and then add wholesale, which is probably a blessing for the wholesale market because there is so much wholesale on the market, "said Cullen.
Many breeders are supposedly at rock-bottom prices. Cullen's purchase wholesale blooms for $ 600- $ 800 a pound on average and sometimes for less.
By comparison, the one-year cannabis flower wholesale prices in Colorado a year ago were $ 1,800 to $ 2,200, according to the cultivation snapshot of Marijuana Business Daily. 19659018] Cullen estimates the production costs of indoor cannabis as efficiently as possible, at about $ 500- $ 550 per pound, with a skeletal crew and no hiccups. This means that the margins for cannabis producers are very low.
After a breeder has paid the light bill and the landlord, he noted: "There is simply nothing left."
This additional financial burden could eliminate part of the competition. 19659018] "Some people probably will not make it," Cullen said.
A BOX FOR LABS
An industry that meets this additional requirement: government-licensed cannabis testing laboratories. There are five licensed laboratories in Colorado.
Since the government-mandated pesticide test for cannabis, Denver-based Nordic Analytical Laboratories owner Kimia Mahmoudi has been working longer, buying new equipment and hiring more staff.
She's been trying to keep her promise to customers that she'll get results in two to three days.
She has purchased another liquid chromatographic mass spectrometry tester that costs between $ 300,000 and $ 500,000.
She had a technician in herself pesticide test lab, but she has set another three
"I know that the cost to breeders is very high and they are not happy about it," said Mahmoodi. "But it also costs us a lot of money to run the tests."
Your lab charges $ 120 per test for a 2 gram sample and offers a volume discount of $ 100 per test for higher volumes.
Mahmoodi said she did not have to reject cannabis so much because of unacceptable pesticide concentrations.
"People follow the rules and regulations," she said. "We do not have that many mistakes.
" Consumers are happy to see that the product they use is free of pesticides.
Finding out what's grown in cannabis is a big concern for at least one industry group
A campaign titled # Whatsinmyweed – consisting of entrepreneurs and industry groups, among others – claims that the list of 13 banned state pesticides is far too limited to determine if there are any chemicals in cannabis
"This is a really, really small step that is not even enough to provide meaningful health and safety protection to consumers said Ben Gelt, chairman of the Cannabis Certification Council.
Kirk Scramstad, Operations Manager for Organic Alternatives – a Fort Collins, Colorado, medical and adult-use retail store that also has an cultivation and manufacturing license – said the mandatory tests have increased the cost of his business, but not enough e an effect.
"Is this a step in the right direction? I think so," he said, "but is that a big step? I do not think so."
Information from: Marijuana Business Daily, http: // //www.mjbizdaily.com