Set HomePage - Favorites
HOT: Investing News
<-- AD960X90 -->0.0
Location: Home > MARKETS >

2017~ When market price is too low

2017-06-11 18:03 [MARKETS] Source:Netword
Guide:In any industry, quality costs money, and ingredient testing is no different.

We've all seen a restaurant menu that had a few items listed as "market price." Usually it’s the fish or lobster, and usually the "market price" is about the same as the restaurant next door, which is why it’s called "market price." Let’s say that a lobster dinner at an "OK" restaurant goes for $29/lb., at a "nice restaurant" for $45/lb. and $60/lb at a "fine" restaurant. The difference may be noticed in ingredient quality and freshness, service, presentation and overall restaurant experience, as well as in your bank balance.

Now say there was a restaurant that marketed itself as a "nice" restaurant and offered its lobster at the low, low price of $9.99. Would you eat it? Would you worry about why is it so cheap? I'd wonder if maybe it was frozen, or poor quality, or possibly not actually lobster. I know what choice I would make; I would not risk eating the "too good to be true" priced lobster.

There is a general "market price" in lab testing too. While there are many ways to test the caffeine in green tea, the majority of them are similar enough that the prices across the range of labs are pretty close. One variable that the big labs get to enjoy is sample volume. They just get more samples than everyone else, so statistically they will get more samples of the same material. They are known to "batch" samples to save on run costs. This offers a lower price but also generally a slower turnaround time as they wait for other green tea samples to arrive. Even then, the price difference is not too far from "market price."

Then there are "the other labs," which don’t run reference standards or calibration curves or follow GMP standards or ISO standards, or maybe they don’t even run the test, so the only cost they incur is the ribbon in the type-writer next to the HPLC that hasn’t been IQed (installation qualification), OQed (operational qualification) or PQed (performance qualification) for years. True story, this happens. It also explains the cheap price.

Why am I talking about this now? I just received an inquiry from an industry friend who asked, "Why is Alkemist Labs' CBD analysis $350? Other labs now are $60." To that I quickly replied, "I'd love you to spend some time at my lab and see for yourself." Quality costs big money. Most cannabis labs don't pay overhead for an ISO 17025-level quality system for cGMP compliance. In fact, we just don't know what most cannabis labs are doing because much of the data is hidden behind the words "proprietary and confidential." I can assure you that it is not possible to even turn on an HPLC with competent staff and a solid quality system for under $100, and all the other reputable labs would probably agree. So how is legitimate testing that will stand up to scrutiny being done for $60?

Just the other day, NPR reported a terrible tour bus crash that killed several people and injured many. It turns out, after a short investigation, that the company has been sued and fined several times for non-compliance with safety laws in years past.

The underlying point is that discount tour buses cut costs on compliance and maintenance, and sometimes that ends very, very badly. Similarly, the cheapest lobster dinner may not be a good time to court that special someone, or even just avoid paralytic shellfish poisoning. And discount labs must be questioned and audited before they are then trusted. Quality costs money, so unless they can explain to you, specifically, how they do it at that price, heed the words: If it’s too good to be true, it’s probably false.

Financial library, track portfolio, fidelity 401k, global economy, real estate


<-- AD690X200 -->
<-- AD250X250 -->
<-- AD250X250 -->
<-- AD960X78 -->