Cannabis testing labs in Colorado are seeing a stream of new profits while local cultivators are struggling to absorb the costs of state-mandated pesticide testing on all cannabis flower products, according to a Marijuana Business Daily report.

The new rules, which took effect August 1, do not require additional pesticide testing for cannabis extracts and other concentrates.

Because each strain must be individually tested, however, some industry insiders fear that the rules could lower the diversity of products on the marketplace as growers reduce the number of unique strains they produce.

Tim Cullen, CEO of the Denver-based Colorado Harvest Company, told Marijuana Business Daily that the new lab tests cost him about $2,500 per week for each grow facility. The added costs, Cullen said, are financially squeezing local cultivators, who already must deal with high rates of taxation and a lack of typical business tax deductions.

“You can’t have the state government imposing all these new tests every year that come out of the profit margin of the business without giving some relief on the federal tax side that takes all of the profit out.” — Tim Cullen, CEO of Colorado Harvest Company, in the report

Cullen, though he’s pained by the added costs, said he doesn’t disagree with the mandatory pesticide tests, however, and called them “absolutely necessary” to keep cannabis consumers safe.

Colorado’s testing labs, on the other hand, have seen a boom in business since the rules took effect on August 1. There are five licensed labs in the state.

Last week, two new pesticides were added to the list of accepted pesticide products in Colorado’s cannabis industry.

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