NH enviro firm’s founder readies Maine cannabis lab site

After Maine legalized recreational marijuana in 2016, Guy Sylvester, founder of an environmental testing laboratory in Portsmouth, embarked on a cannabis testing facility. (Photo by Michael McCord)

The times they are certainly changing. It is now legal to buy marijuana in 16 states and the District of Columbia, with New York the latest to join the list, and and there are only five states where it remains fully illegal.

New Hampshire, which has decriminalized marijuana possession and allows for medicinal sales, is surrounded by three states (Maine, Vermont and Massachusetts) where state-licensed stores sell cannabis and cannabis products for adult recreational use.

Testing laboratories are a critical component in the supply chain from producer to consumer, and Guy Sylvester — founder of Absolute Resource Associates, a Portsmouth environmental testing laboratory — saw an entrepreneurial opportunity. He decided to branch out and has opened CATLAB, a cannabis testing facility in Eliot, Maine.

CATLAB’s winding path began in 2016 after Maine voters narrowly approved a ballot initiative allowing for recreational use, state-sanctioned retail sale and taxation of marijuana. The state’s legislature added its own alterations and work began on setting up the infrastructure through a newly created Office of Marijuana Policy. Under the rules, before being sold on the adult-use market, marijuana and marijuana products must be professionally tested to ensure they don’t exceed the maximum level of allowable contaminants or potency, and to verify accuracy in product labeling.

Sylvester saw what was happening across the border and was asked, beginning in 2018, whether he might be interested in cannabis testing. He was, but couldn’t do anything because Maine required that labs be located in the state.

The timing was fortunate because after two decades, Absolute Resource Associates (ARA) had already established itself as one of the top environmental testing labs in the state. (Last year it became the first to be accredited by the state to test for PFAS in drinking water — working with residential, commercial and government clients.)

“I was looking for what’s next,” said Sylvester, who has been an entrepreneur and senior executive in multiple testing companies since the 1980s.

Testing requirement

Sylvester said he spent most of the past 18 months researching the market, learning about the myriad regulatory mandates, finding a suitable building space, obtaining permits and licenses, purchasing equipment and hiring staff for his new business — and did it all amid the Covid-19 pandemic. He named the new business CATLAB (Cannabis Analytical Testing Laboratory) and is now awaiting imminent final approval from the Maine CDC and OMP to become one of the three testing labs in Maine for adult recreational use. Sylvester said his lab began medicinal marijuana testing in February.

Every state has its own testing requirements to test for product potency and to verify containment-free cannabis. The regulatory schemes in states are constantly in flux.

California tops the requirement demand chart as labs there test for more than 96 different pesticides. Currently, Maine only requires testing of 0.5 grams of sample product for potency and micro biologicals, but Sylvester said the state is working on draft language to expand testing protocols to include metals, solvents and as many as 40 pesticides by the end of 2021.

Since adult recreational use stores opened in October, Maine has overseen almost $10 million in sales through the end of February, according to the Maine OMP. In February alone, there was $2,548,341 in sales from 35,341 transactions that resulted in $254,846 in state tax revenues. As of March 15, there were more than 80 stores open in every part of the state.

CATLAB will join a growing cannabis testing industry. Morgan Fox, a spokesman with the Washington, D.C.-based National Cannabis Industry Association, estimates there are thousands of testing labs in the country. “These are critically important for consumer confidence and government oversight,” he said.

‘Clean, safe product’

The spread of legalized marijuana at the state level in the past decade has happened even though marijuana is still illegal at the federal level and classified as a Schedule 1 drug (addictive, not cleared for medical benefit). But that designation may change in the current congressional session.

U.S. Senate Majority Leader Chuck Schumer, D-N.Y., is among congressional democrats pushing national marijuana decriminalization legislation after a landmark House bill passed in December.

“It’s really about helping the cannabis industry provide a clean, safe product for the consumer,” said Jane Stratton, CATLAB’s customer relations officer. “Our clients are the growers and producers, and if they can tell their customers that their products have been tested for safety and potency by a state-certified laboratory, that goes a long way in establishing consumer confidence in this growing industry.”

Sylvester, who has an educational background in biology and chemistry, is no stranger to catching the right industry wave.

In the 1990s, he was president of Groundwater Environmental Testing Laboratory, which had five locations nationally and topped more than $20 million in revenues. In 2000, he downsized after he and his wife, Susan, purchased a small testing lab in Portsmouth with six employees and $600,000 in revenues. Today, ARA has 30 employees and more than $3 million in revenues.

CATLAB is starting out with six employees who all have strong backgrounds in chemistry, laboratory testing and compliance. Sylvester expects the lab to grow as the demands from producers of cannabis products (buds, gummies, oils, edibles, etc.) grow as cities and towns in Maine allow more distributors to open stores.

Sylvester said CATLAB will set a highquality standard and differentiate itself with fast result turnaround times — five days rather than weeks, in a cannabis industry where getting product to market is critical for success.

“Farms are at the mercy of the labs,” he said. “They have a harvest cycle and need to get their test results turned around as quickly as possible.”