CannLabs, Inc. provides cannabis testing laboratory services for licensed cannabis producers and distributors in the United States.
Services
The company licenses technology to CannLabs, Inc., a Colorado ‘S’ corporation to provide various services for the cannabis industry, including potency, residual solvent, and microbiological testing; consulting services; and research. The company provides clients with access to education and innovation through cannabis consulting and cannabis research.
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CannLabs, Inc. provides cannabis testing laboratory services for licensed cannabis producers and distributors in the United States.
Services
The company licenses technology to CannLabs, Inc., a Colorado ‘S’ corporation to provide various services for the cannabis industry, including potency, residual solvent, and microbiological testing; consulting services; and research. The company provides clients with access to education and innovation through cannabis consulting and cannabis research.
Laboratory Testing
The types of tests that could be performed are as follows:
Potency Testing: This type of test provides clients with the results of 10 different cannabinoids. The number of cannabinoids that is offered is limited only by the availability of Certified Reference Materials due to Drug Enforcement Administration restrictions on cannabinoids. Testing is conducted on an Ultra-High Pressure Liquid Chromatograph (UPLC).
Residual Solvent Analysis: This test provides clients with information on solvents that might be remaining during the process of manufacturing concentrates. There are four solvents approved for use in the manufacture of cannabis concentrates in Colorado and the company’s processes would identify approximately 15 different solvents that are known to be used or have been used in the manufacture of cannabis concentrates. Testing is conducted on a Gas Chromatograph with Flame Ionization Detector.
Microbiological Testing: Provides clients with the details of the bacterial, fungal, and mold contaminants that might be present in all cannabis and cannabis products, as well as other contaminants, such as black mold and listeria. Testing is conducted one of two ways – either Quantitative Polymerase Chain Reaction or traditional plating.
Pesticide Testing: Pesticide screens are semi-quantitative to approximately 58 different pesticides, with the ability to identify approximately 400. There are no pesticides approved for use in cannabis cultivation due to pesticides being regulated by the Environmental Protection Agency. Testing is done on an UPLC with tandem mass spectrometers (MS).
Heavy Metals Testing: Quantitative heavy metals test to identify the presence of lead, cadmium, mercury, and arsenic. Testing is conducted through Inductively Coupled Plasma with MS (ICP-MS).
Nutrient Analysis: This test helps clients improve their cultivation process and helps identify whether or not plants have been exposed to higher than needed levels of nutrients, such as magnesium and phosphorous that could have outcomes on the overall quality of the product. This test is also conducted on the ICP-MS.
Terpenes Analysis: Terpenes provide critical information to patients who have found terpenes essential to their treatments. Along with their medicinal properties, they also play the predominant role in the scent and taste of cannabis. Terpenes could amplify the beneficial effects of cannabis while playing a role as a buffer to THC’s psychoactive effects. A terpene profile could identify a cannabis strain’s benefits that could help consumers make educated choices both medically and recreationally.
Shelf-Life/Stability Studies: The company has a Certified Food Scientist (CFS) who is able to establish protocols for edible infused products and other products to determine the shelf-life and aid in expiration dating. The CFS is also able to go on-site to manufacturing production facilities and aid in determining the strengths and weaknesses of their production lines and assist in process improvements.
Research Projects: Consulting opportunities could lead to various research projects. This is aided with close relationship of Carbon & Cook (C&C) and the CannLabs sales team reaching out to find the research projects and the science team carrying out the projects.
Gene Expression: This is a test used to determine the production of cannabinoid synthases that occur in the plant and determine the overall production of various cannabinoids. The company would be able to add different cannabinoid synthases as they are discovered and would also be able to add synthases for terpene production as well.
Genotyping/Phenotyping: This is a test that could be used to determine the sex of the plant, as well as the specific strain of the plant. To get this test fully operational, significant instrument purchases would be need to be made. This test is 6-12 months away from being available.
Consulting
C&C would focus its business development efforts on prospective investors and cannabis businesses in new states, companies with revenues exceeding $5 million, companies who have a national footprint, legislators and regulators developing policy, and other businesses in the service sector, including attorneys and accountants, government affairs specialists, management companies, equipment providers, and technology companies.
This is a national and international service offering to regulators, businesses (new/existing entrants), growers, dispensaries, manufacturers of infused products (MIPs), ancillary services, etc. The company focuses on various areas:
Government Affairs: Privileged licensing, regulatory issues, policy development and legislation analysis.
Financial Services: Investor oversight, due diligence pre-/post- acquisition, and financial modeling.
Business Operations: Market development and assessment, technology integration, and data analytics.
Quality Assurance: Cultivation, formulation of strains, manufacturing processes, and product development.
Target markets
Each business unit has target audiences within their respective markets:
Laboratory Services: Growers, dispensaries and MIPs in states where there are mandate-testing laws, such as Colorado, Connecticut and Nevada.
C&C: Cannabis and hemp business operators; start-ups and prospective licensees; ancillary companies in the space; state governments and regulatory agencies; investors and funds; and other professional service providers.
StrainData: A pre-requisite of the ‘wall-garden’ approach is that the company is primarily interested in driving awareness within states where the company has a state certified laboratory. The nature of StrainData’s content skews the audience toward a more educated, affluent community, open to both recreational and medicinal applications for cannabis.
Customers
Each business unit has the following established customers:
Laboratory Services: The company has approximately 120 regular testing clients in Colorado and tests for approximately 54% of the market.
C&C: National pipeline, including Florida, Maryland, and New York.
StrainData: Consumer base is dependent on availability of new testing data from the company.
Research
The company’s expertise in the science of cannabis allows for advanced research into cannabis products. The company has various PhDs on its Science and Advisory Board with advanced degrees and extensive cannabis testing experience. The company also has experience with the manufacturing processes. This allows the company to help its partners develop products.
Intellectual Property
The company has applied for a patent covering its StrainData parametric search system. The company has also applied for trademarks for ‘CannLabs, Inc.’ and ‘StrainData’. Additionally, it has purchased a trademark for CannaLabs, Inc.
Research and Development
During 2014, the company’s research and development expenses were $71,578.
Competition
StrainData: The company’s primary competitors include Weedmaps, Leafly, StickyGuide, and THCfinder. Its secondary competitor is MassRoots.
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