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Cannabinoid Testing Labs

The cannabis and analytical cannabinoid testing industry plays a pivotal role in companies’ ability to bring products to market. In many cases, raw material and end-product testing are requested to obtain certification that a product is safe and effective. Testing labs can also determine terpene ratios, heavy metal contamination, and potency of cannabis and hemp strains, allowing companies to make informed decisions regarding their breeding and growing programs. These laboratories invest significant resources in the creation of in-house assays for purity, pesticides, pathogens, and a host of other tests. Testing labs can recoup costs associated with novel assay development through the Research and Development (R&D) Tax Credit.

The R&D Tax Credit is an activities-based credit. Employee wages, raw materials and supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.

Example activities that qualify:

  • Introducing robotics or automation to existing protocols
  • Identifying new cannabinoids, heavy metals, or pesticides that must be tested for
  • Testing scale-up processes
  • Creating novel software or customer-friendly interfaces for result reporting
  • Implementing process improvements to increase testing efficiencies
  • Evaluating alternative protocols for the detection of toxins or contaminants

Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?

  • Analytical Chemists
  • Biochemists
  • C-Suite
  • Chemical Engineers
  • Lab Technicians
  • Microbiologists
  • Research Scientists
  • Software Developers

Use our Hemp Tax Calculator to estimate your potential benefit, and partner with HempTax to claim your benefits with no up-front costs. Contact one of our experts today.

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How much could I get back in R&D tax credits?

Great question! Try out our R&D Tax Credit Calculator to see the value of your R&D tax credit reward.
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