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Demystifying the NJ Cannabis Testing Labs Business Application Process

Prospective New Jersey cannabis testing labs undergo a significantly different process from other businesses when applying for the ability to operate.

The NJ Cannabis Regulatory Commission (CRC) created six official classes of cannabis business licenses in cultivation, manufacturing, wholesaling, distribution, delivery, and retail dispensaries. Cannabis testing labs are a de facto seventh class.

Last week the CRC opened the portal for prospective cultivation, manufacturing, and cannabis testing lab companies to apply for a license.

The need for more cannabis testing labs is dire in New Jersey. There is only one state lab checking the quality of medical cannabis for the 23 dispensary locations in the state. They have also been unable to stop moldy cannabis at times from entering the market It is likely undermanned and not trained in the nuances of cannabis.

The Cannabis Testing Lab Application Process

The most important part of the cannabis testing lab application is the compliance plan. It’s worth 50 of the 200 points needed to qualify. The plan must include what the company needs to remain compliant with laws and regulations.

The 20-page document should include Occupational Safety and Health Administration (OSHA) standards, sanitation procedures, hazardous materials storage, handling of in-charge components, and employee policies and best practices to meet standards. This document also outlines all the required safety equipment, Personal Protective Equipment (PPE) suits, handwash/eyewash stations, alarms, and fume hoods necessary for compliance.

New Jersey Regulations

The CRC greatly values the executives’ background and the business plan in the application. This takes 40 of the 200 points needed to qualify. Company executives need to have a strong background in laboratory settings within regulated industries. Applicants must also have a strong understanding of how a facility is run, the services they intend to provide, and a model for profit generation.

Another issue in the cannabis testing lab application process is securing ISO/IEC 17025 certification. These standards include risk assessment, corrective action plans, policies for complaints and disputes, and plans to maintain compliance with standards moving forward. It can take a lab six months to a year, depending on the size and scope of services they intend to offer to achieve accreditation.

An applicant should also know what laboratory equipment they need and how many employees they need. These are the largest factors in start-up and operating costs. Equipment should match the scale of operation. Train employees to operate equipment and follow complex lab procedures.

Prospective cannabis testing lab must demonstrate expertise in testing and calibration. The company must choose a third-party certifying body. The certifying body will prepare the company by implementing policies, practices, and records required to demonstrate compliance with ISO 17025 standards.

To implement a culture of quality, standardize Good Laboratory Practices (GLP) in company policies and procedures. Hold regular trainings for employees to keep them current on company policies, relevant regulations, and technical aspects of their work.

Setting up a Lab Properly

The Safety and Security plan and Secure Transport Standing Operating Procedures (SOP) are worth ten points each on the application. Also the requirements are nearly identical to those for the formal license classes.

The remaining license application materials are SOPs specific to a cannabis testing lab.

Cannabis testing labs do not need to submit a Community Impact or a Workforce Development plan. This is unlike the six official license classes. They are also not incentivized to allow a labor union to be formed in their workplace or construction site. The employees needed to run cannabis testing labs are highly skilled. Hiring incentives for individuals from communities impacted by the war on cannabis might limit the available labor pool. These facilities have specific ventilation, lighting, electrical wiring, and employee safety needs.

Cannabis testing labs shouldn’t create smell issues or engage in techniques that would require a safety plan and necessitate outreach.

Putting together a strong license application can be daunting, even for experienced operators. Companies often seek the help of consulting firms and lawyers to develop their business plans and complete their applications since they often have very specialized knowledge.

Article by Warren Harasz, Vice President of Regulatory Compliance at Cannaspire

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