Strategic Considerations

The first phase of any laboratory startup we participate in consists of goal discovery. We like to know who you are, what your goals are and how best we can help you achieve them. This document is a series of questions that we will ask you over our first phone consult. Overall, it will help be design the best Cannabis laboratory we can for you to meet your goals.

Cannabis testing is becoming more and more standardized in terms of methods and tests performed but the instrumentation, personnel and individual business goals are still very different industry wide. More and more, the successful testing labs are the ones who can effectively guarantee high quality tests, and deliver the test results at the most competitive price and speediest turnaround. All this while presenting a friendly and attractive, yet business-like and authoritative customer-facing image.

Strategic Considerations

  • What will your competitive advantages be?
  • What relationships or potential partnerships should you consider? Growers, dispensaries, collection/delivery services, extraction labs, subcontract labs…
  • Where should you locate my lab?
  • What kind of volume are you looking at?
  • Are there existing competitors? How are they doing? What can you learn from them?
  • What is the regulatory landscape and how is it likely to change? CA.

Marketing Plan

  • Research
  • Initial and Ongoing Message Spreading
  • Problem Dissemination
  • LIMS?
  • Customer Portals? Or third-party data vendors?

Operational Plan

  • Testing techniques and costs
  • Instruments & equipment
  • Stocks, standards and reagents
  • Submission process
  • Testing processes
  • Reporting processes
  • Quality control
  • Customer service
  • Legal Requirements
  • Licensing and bonding
  • Permits
  • Health, workplace, or environmental regulations
  • State, local and any applicable federal regulations specifically regarding cannabis
  • Zoning or building code requirements
  • Insurance coverage
  • Trademarks, copyrights, or patents, branding
  • Staffing
  • Number of employees
  • Type of labor – Skilled/unskilled/professional? Contracted? Full-time?
  • Where and how will you find the right employees?
  • Pay structure
  • Training methods and requirements
  • Employee roles
  • Written Job Descriptions
  • Written SOPs
  • Inventory
  • Operating levels
  • Stocks, standards and reagents suppliers
  • Software application (LIMS, customer portals)
  • AR – Net, aging tracking, collection policies
  • AP – Recurring, one-time, aging, discounts
  • Billing service or software?
  • Data Management – What software applications will you use?
  • Auditing
  • ISO-17025

Management and Organizational Structure

  • Board members?
    Business organization?
  • Employee breakdown vs sample volume
  • Sales Teams?
  • Collections?
  • Marketing/Branding?

Startup Expenses and Required Capital

  • Business Model (refurbished instrumentation vs. Brand new)
  • Test type rollout (1 test first to generate revenue or open doors fully validated for all test types)
  • Revenue vs Monthly Expenses
  • Typical Payroll
  • Expertise needed


Cannabis testing labs don’t enjoy the huge profit margins (around 30-40%) that growers, sellers and extraction labs do, but it’s still significant. Identifying your priorities can help to either maximize revenue from day one or to achieve growth as soon as possible.