At S2S Insurance we cover more than just marijuana dispensaries, and cannabis grow operations. S2S Insurance covers a multitude of facets in the cannabis industry, including cannabis testing labs. As cannabis use moves from the illicit market into the mainstream retail market, state legislatures are requiring higher standards for the cannabis that makes it to market. Each state varies on what the regulations and requirements are for testing and results, which is why it is important cannabis businesses owners review the regulations with an attorney.
The legal cannabis market is big business and cannabis business owners can potentially see big profits once their products clear the legal hurdles. While there is a great deal of pressure on the cannabis business owners such as the dispensaries and the growers, there is also a great deal of pressure on the testing labs. The cannabis testing labs in each state or pressed with having professional, reliable, consistent staff responsible for testing the various cannabis products for market. While cannabis labs are staffed with trusted professionals there is potential for a mistake. California for instance has strict testing requirements that take time to complete. If the labs make a mistake, file an issue on an incorrect report, or omit some form of critical information, the results could be devastating to the industry in that state. A mistake in the lab could cause production delays, could result in a recall, and possibly even a class action lawsuit. If a testing lab is the cause of any of this due to an error or omission, that lab may be liable for fines and damages.
One in five batches of marijuana has failed laboratory testing since new state safety requirements kicked in July 1, according to data from the California Bureau of Cannabis Control. Failures have been triggered by inaccurate labeling or contamination from pesticides, bacteria or processing chemicals.
Those testing requirements and results have left some retailers with severely limited inventory over the past few weeks, as cultivators and product manufacturers scramble to get compliant products to market.
The new testing requirements have also created backlogs at busy labs. The state has licensed just 31 testing labs, most located in Northern California, and many of them aren’t yet taking customers. As a result, Rinella said cannabis safety tests are taking between one and two weeks.
As previously stated, S2S Insurance can handle all of your cannabis business insurance needs whether you are a dispensary or a cannabis testing lab. If you own a cannabis testing lab it is crucial to insure against liability and professional liability. Put another way you should look for coverage against liablity incurred as a result of errors and omissions in performing professional services. The members of your staff are trained professionals and in some instances may be licensed, which means they are held to a higher standard. Due to the higher standards attributed to your staff if they were to commit an error, there may be potential for a professional liability claim. As always review your policy with one of the experienced agents at S2S Insurance and with an attorney as coverage limits do apply.