Cannabis testing labs in California face a plethora of regulations. Those go down to the minutiae of requiring that every single line of a shipping manifest be signed off by a compliance officer, says Scott Willard, CEO of Coverton Labs, which is in the process of opening a lab in Monterey’s Ryan Ranch. The company must keep the record of that transaction forever. “We have to hire people just to keep paperwork in order,” Willard says. The hiring process is also heavily regulated, he adds: “Honestly, the FBI doesn’t have to screen people as much as we have to.”
Coverton’s journey to opening a lab in Monterey began about two years ago, after Willard, a resident of Corral de Tierra, met local growers who lamented there were not enough agricultural testing labs in the county. Soil and plant samples had to be sent to labs far away, delaying needed results.
Willard saw a business opportunity in helping both growers of traditional produce as well as cannabis. After finding space in the Ryan Ranch business park in mid-2019, Coverton Labs discovered that on top of tough state regulations, it faced Monterey’s outdated cannabis ordinance that banned any cannabis-related businesses.
In November 2019, Coverton’s application for a permit from the city of Monterey was denied and the business was declared a “public nuisance” by the Monterey planning director – despite the lab being uninvolved in growing, distributing or selling cannabis.
Coverton appealed to the Monterey Planning Commission which ruled in his favor. City Manager Hans Uslar appealed that decision to the City Council, which voted 4-1 in January to permit the lab – and also to revise the city’s cannabis ordinance. (Councilmember Ed Smith cast the lone no vote.)
That ordinance finally came back for approval on Dec. 1, when city council voted 4-1 to create an industrial use classification for agricultural testing labs – including cannabis – to allow places like Coverton Labs to operate in industrial zones.
As to broader cannabis rules in Monterey, the discussion begins in mid-January with an interactive webpage and two town hall meetings the week of Jan. 25.
Despite the council’s approval, Coverton hasn’t opened yet, pending approval from the California Bureau of Cannabis Control. And the company’s attention was diverted, with a Costa Mesa location processing Covid-19 test samples since the start of the pandemic. (They hired additional staff, and had to purchase additional equipment from Austria to handle the volume, Willard says.)
Willard calls the regulatory environment for cannabis a “double-edged sword.” While it creates challenges for companies like Coverton, there are positives: “You kind of have to go through the fire,” he says. “It keeps the unscrupulous people out.”
The Monterey lab has scheduled a mock inspection before the holidays in preparation for state BCC inspectors. If it passes inspection, the lab could be open in early 2021.