In a study published on April 23, Pablo Valdes-Donoso, Daniel A. Sumner and Robin Goldstein, all researchers with the public Californian university, found that testing costs accounts for approximately 10 percent of the reported average wholesale price for cannabis in the state.
The study’s authors, who published their findings on PLOS ONE, an open-access science journal, collected data from in-state testing labs as well as testing equipment manufacturers to calculate the average cost for various tests required for a product to be compliant. They found that testing costs varied greatly depending on the type of test, with a moisture balance test representing the lowest cost (approximately $1.25 per test) and a liquid chromatography-mass spectrometry (LCMS) test representing the highest cost (approximately $8.82 per test).
The study also highlighted the impact on batch size and failure rates on testing costs. For example, “given a 0 [percent] rejection rate, the cost of testing per pound of cannabis marketed from a one-pound batch is about 27 times higher than the cost of a 48-pound batch,” the researchers found. “[On] the other hand, given an 8 [percent] rejection rate, the cost of testing per pound of cannabis marketed from a one-pound batch size is only seven times higher than the cost from a 48-pound batch size.” (California allows for batch sizes of up to 50 pounds.)
The authors looked at how food products would fare if held to the same contaminant thresholds as cannabis. While more than 60 percent of food products have detectable (but allowable) levels of pesticides, only less than 1 percent actually fail to meet EPA standards. However, more than 13% of food products would fail compliance testing using criteria for inhalable cannabis products.
“Testing itself is costly,” said study author Dan Sumner, a professor of agricultural economics at UC Davis in a statement. “But growers have to destroy the product that doesn’t pass the test and that is where the biggest losses occur.”
The authors found that higher testing costs ultimately led to higher consumer prices, adding that “safety regulations and testing may improve the perceived safety and quality of cannabis in the licensed segment.” That said, “for price-sensitive consumers, the alternative is an illegal market. That means they consume a product with no testing at all.”
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