Sonoma Lab Works, a cannabis testing lab based in Santa Rosa, California, has shut down, according to the Green Market Report.
The lab employed roughly 25 workers, who were reportedly informed of their redundancy without warning.
“We are completely shut down,” one anonymous employee told the Green Market Report. “We came into work yesterday, and one of the managers of the company came over and pulled everyone in, and said, ‘Hey, unfortunately, this is the end of the line for us. We’re shutting operations down.’”
“It’s been definitely a whirlwind for the last 24 hours, to be just told so abruptly like that,” the employee said. “It’s a hard pill to swallow.”
Analytical Cannabis has reached out to Sonoma Lab Works for comment.
Low revenue and lab shopping
While no reason was apparently given for the lab’s closing, one employee told the Green Market Report it was likely due to the tougher economic conditions the cannabis testing sector has recently experienced.
“It’s clearly due to the struggles we’ve faced in the cannabis testing space. Prices going down, and just not making enough revenue to keep the doors open, is my understanding from what was shared,” the employee said.
“We’ve had too many labs in the space, and just like all areas of the supply chain, the operators have been too competitive against one another.”
Another California cannabis lab, CannaSafe, closed its doors earlier this year. Speaking to Analytical Cannabis at the time, CannaSafe’s chief science officer, Ini Afia, explained that the issue of lab shopping was the ultimate end for CannaSafe.
“The issue of lab shopping and ownership decision not to play in that arena ultimately led to the closure,” he said.
Lab shopping is the somewhat unscrupulous practice of “shopping” a cannabis product around different labs until one provides the cannabis manufacturer with the test results it’s after.
“There hasn’t been substantive action from the DCC [California’s Department of Cannabis Control] even when direct evidence of unscrupulous lab practices were submitted as complaints to the agency,” Afia continued.
“When people are able to test compliance samples at multiple labs and pick the most favorable result for sale, then it makes it very difficult for labs with integrity to get on the playing field,” he added.
