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New Cannabis Testing Regulations Requiring Specific Insurance Coverages

As cannabis use moves from the illicit market into the mainstream retail market, state legislatures are requiring higher standards for the cannabis that make it to market. 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.

Each state varies on what the regulations and requirements are for testing and results. 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.

According to data from the California Bureau of Cannabis Control, "one in five batches of marijuana has failed laboratory testing since new state safety requirements kicked in. 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."

If you own or operate a cannabis testing lab, it is crucial to have the right insurance in place. Due to these new, higher standards, if an employee were to commit an error, there may be potential for a costly professional liability claim. S2S Insurance Specialists is a leading provider of Product Liability Insurance for Cannabis Testing Labs. To learn more about how we can protect your testing facility, schedule a free 15-minute consultation by clicking here.


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