Potency Testing: In-House or External Lab?

August 12, 2020

R&D potency testing is a valuable and often necessary analytical tool for measuring cannabinoid content of cannabis products. At a cost of ranging from $55 to $75 per test for external labs, R&D potency testing can represent a significant line item in cultivation and product development budgets.

When does it make sense to consider in-house testing?

The gold standard for potency testing is HPLC UV-vis, a staple procedure that most external laboratories can provide. While new low-cost light-based methods have recently been developed and can offer valuable information, high measurement uncertainties make them better suited for upstream analyses. There are a number of factors that go into the decision of whether or not to open an in-house lab and they are unique to your situation.

At low volumes, external testing labs offer an appealing alternative to in-house HPLC testing. The trade-off, however, is that external testing labs will tend to prioritize larger customers and compliance samples where the bulk of their revenues and profits lay. This can often mean that turn around times for lower volume R&D testing are longer than desirable and if turnaround time is a priority an in-house lab may still make sense.

Benefits of In-House Testing:

  • Lower per-unit costs at scale
  • Faster turnaround times
  • Reduce reliance on external testing labs
  • Refine methods to specific products

Cons of In-House Testing:

  • Higher relative per-unit costs at low volumes
  • Maintenance and upkeep of equipment
  • Need for a trained user on staff or on contract

Building an in-house lab used to be a considerable undertaking, requiring ~$250K investment in equipment and build-out, a highly trained analytical chemist ($80-$120K per year) and ongoing consumables costs of $1,500 to $6,000 a month depending on volume. Deployment of the solution was often on the order of 2 to 8 months.

Recent advancements in HPLC services have brought down the costs of starting an in-house potency lab considerably. An in-house lab can now be set up with a $30K investment and run by a novice user ($40-70K per year) with consumables subscription of $25-$50 per test depending on volume. These services can now be deployed in as little as two days and come with equipment maintenance included.

What makes sense for you?

The decision whether to start an in-house testing lab or use an external lab depends on your unique situation and priorities. In-house testing labs offer the benefits of faster turnaround times, lower costs at high unit volumes and other benefits of having the test equipment on site.

If you are interested in learning more reach out to us and we will be happy to help you make the right decision for your business!

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