HomeMy WebLinkAbout10/19/2016 - STAFF REPORTS - 1.K. FPALM SA
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CITY COUNCIL STAFF REPORT
DATE: OCTOBER 19, 2106 CONSENT CALENDAR
SUBJECT: APPROVE AMENDMENT NO. 1 TO THE AGREEMENT WITH SC
LABORATORIES FOR MEDICAL CANNABIS TESTING SERVICES
FROM: David H. Ready, City Manager
BY: Chief of Staff/City Clerk
SUMMARY
The City Council will consider approving an amendment to an agreement with SC
Laboratories, Inc. to provide medical cannabis testing services.
RECOMMENDATION:
1. Approve Amendment No. 1 to Agreement No. A6725 with SC Laboratories, Inc.
for Medical Cannabis Testing Services, amending certain terms and extending
the agreement to December 31, 2017.
2. Authorize the City Manager to execute the Amendment to the Agreement.
STAFF ANALYSIS:
In 2015, the City requested proposals from medical cannabis testing labs for medical
cannabis testing as allowed, pursuant to Palm Springs Municipal Code Chapter 5.35.
City Staff selected SC Laboratories, Inc. and entered into a limited contract for a pilot
project to test medical cannabis at the City's permitted medical cannabis collectives and
cooperatives.
The results of the cannabis testing are posted on the City's website at
http://www.palmspringsca.gov/city-services/cannabis-cooperative-or-collective-testing.
The City Council Subcommittee (Councilmember Foat and Councilmember Kors)
recommends the approval of an agreement to continue with cannabis testing as an
important consumer safety and information service.
Recently enacted State Law will require all permitted medical cannabis be tested by a
State permitted testing laboratory. However, it appears the State will not be prepared
1\\to
ITEM NO. \4�iL
City Council Staff Report
October 19, 2016 — Page 2
Medical Cannabis Testing
enact testing provisions until 2018. Amendment No. 1 to the Agreement, extends the
Agreement to December 31, 2017.
The contract provides for testing frequency of approximately every two weeks, for a
collection of random samples per collective, usually around six samples. Flowers are
tested for potency, microbiological and pesticides. Infused products (edibles) are tested
for potency and microbiological. Concentrates are tested for potency and residual
solvents.
The City receives the test results in approximately 72-hours. City Staff reviews the
testing results, discusses any potential issues with the contract lab and the individual
collective, releases the results to the individual collectives and posts the results on the
City's website.
Medical cannabis testing provides consumers with important information about the
quality of their medicine. The City does not contract for pass/fail testing, nor does the
City employ research scientists and chemists that could research and opine on potency,
microbiological, pesticides and solvents. While there are differences in opinion about
what cannabis-testing standards should look like, the City recommends all medical
cannabis consumers perform their own research as to what is the appropriate potency
level, the types of microbiological factors, along with any pesticide and solvents that
may be present.
Due to the lack of both Federal and California industry-wide testing standards and
oversight of testing laboratories, collectives may have performed other laboratory
testing of their medical cannabis which may provide different results. Without set
standards for the industry as a whole, testing laboratories use different procedures,
equipment and methodologies.
Additionally, the testing results provided are only germane for the menu items available
on the specific testing date. The collective may have pulled the specific product or
depleted inventory and a different strain is now shelved. As such, the latest test date
will provide more current information on a specific menu item.
FISCAL IMPACT:
The costs of testing for individual products are determined by the type of product and
the requested tests. Assuming the average cost of $100, with 6 samples at each
collective, every two weeks, the estimated cost is $80,000 to $100,000 per year.
Sufficient funds are budgeted in account number 001-3010-43938 Medical Cannabis.
Palm Springs Municipal Code Section 5.35.710(c) requires each medical cannabis
collective and cooperative to submit a sufficient quantity of medical cannabis and
cannabis-infused products to a City retained cannabis testing facility to enable
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City Council Staff Report
October 19, 2016 -- Page 3
Medical Cannabis Testing
laboratory or chemical testing. The cost of the sample is borne by the individual
collectives.
ES THOMPSON DAVID H. READY
Chief of Staff/City Clerk City Manager
Attachments:
Proposed Amendment No. 1
Agreement with SC Labs
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AMENDMENT NO. 1 TO THE CONSULTING SERVICES AGREEMENT
City of Palm Springs and SC Laboratories
This Amendment No. 1 to the Cannabis Testing Consulting Agreement
("Amendment") is made and entered into this 1st day of December, 2016, by and
between the City of Palm Springs, California, a California Charter City ("CITY") and SC
Laboratories, a California Corporation ("CONSULTANT").
RECITALS
A. CITY and CONSULTANT have entered into a Consulting Services
Agreement for Medical Cannabis Collective/Cooperative testing services ("Agreement').
B. CITY and CONSULTANT are agreeable to modifying certain terms and
conditions to the Agreement.
AGREEMENT
In consideration of the promises and covenants contained in this Amendment
and other good and valuable consideration, the CITY and the CONSULTANT agree:
SECTION 1. Section 3.1 of the Agreement (titled "Compensation of Consultant'),
is amended to read:
3.1 Compensation of Consultant. Consultant shall be compensated and
reimbursed for the services rendered under this Agreement in accordance with the
schedule of fees set forth in Exhibit "A".
SECTION 2. Section 4.4 of the Agreement (titled "Term"), is amended to read:
4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this
Agreement, this Agreement shall continue in full force and effect until December 31,
2017, unless extended by mutual written agreement of the parties.
SECTION 3. Section 11.10 of the Agreement (titled "Conflict of Interest'), is
amended to read:
11.10 Conflict of Interest. Consultant acknowledges that no officer or employee
of the City has or shall have any direct or indirect financial interest in this Agreement,
nor shall Consultant enter into any Agreement of any kind with any such officer or
employee during the term of this Agreement and for one year thereafter. Consultant
warrants that Consultant has not paid or given, and will not pay or given, any third party
any money or other consideration in exchange for obtaining this Agreement.
SECTION 4. Section 11.12 is added to the Agreement to read:
11.12 Non-Discrimination Certification.
a) Consultant certifies and represents that, during the performance of the
Agreement, the Consultant and any other parties with whom it may
Cannabis Testing Agmt. Amend. No. 1
Page 1 of 6
contract shall adhere to the City's non-discrimination and equal
benefits as provided in the Section to assure that applicants and
employees are treated equally and are not discriminated against
because of their actual or perceived race, color, religion, ancestry,
national origin, disability, medical condition, marital status, domestic
partner status, sex, gender, gender identity, gender expression,
national origin, ancestry, or sexual orientation. Consultant further
certifies that it will not maintain any segregated facilities.
b) Consultant shall, in all solicitations or advertisements for applicants for
employment placed by or on behalf of this Agreement, state that it is
an "equal opportunity employer" or that all qualified applicants will
receive consideration for employment without regard to their actual or
perceived race, color, religion, ancestry, national origin, disability,
medical condition, marital status, domestic partner status, sex, gender,
gender identity, gender expression, or sexual orientation.
c) Consultant shall certify that it has not, in the performance of this
Agreement, discriminated against applicants or employees because of
their actual or perceived race, color, religion, ancestry, national origin,
disability, medical condition, marital status, domestic partner status,
sex, gender, gender identity, gender expression, or sexual orientation.
d) If requested to do so by the Contract Officer, Consultant shall provide
the City with access to copies of all of its records pertaining or relating
to its employment practices, except to the extent such records or
portions of such records are confidential or privileged under state or
federal law.
e) Consultant agrees to recruit Coachella Valley residents initially and to
give them preference, if all other factors are equal, for any new
positions which result from the performance of this Agreement and
which are performed within the city. The Contract Officer may agree to
modify requirement where it is in conflict with federal or state laws or
regulations.
f) Nothing contained in this Agreement shall be construed in any manner
so as to require or permit any act which is prohibited by law.
SECTION 5. Scope of Services Exhibit A to the agreement, is hereby replaced
with amended Scope of Services Exhibit A attached to this Amendment and
incorporated herein.
SECTION 6. CITY and CONSULTANT agree that the terms of the Agreement,
shall remain unchanged and in full force and effect, except as specifically provided in
this Amendment.
[SIGNATURES ON THE FOLLOWING PAGE]
Cannabis Testing Agmt. Amend. No. 1 05
Page 2 of 6
In witness whereof, CITY and CONSULTANT have executed and entered into
this Amendment as of the date first written above.
CITY OF PALM SPRINGS, SC LABORATORIES INC.
a California Charter City a California Corporation
David H. Ready, City Manager Jeffrey Gray, CEO
ATTEST:
James Thompson, City Clerk Joshua Wurzer, President
APPROVED AS TO FORM:
Douglas C. Holland City Attorney
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Cannabis Testing Agmt. Amend. No. 1
Page 3 of 6 06
EXHIBIT "A"
CONSULTANT'S
SCOPE OF TESTING SERVICES/WORK
Including,
Schedule of Fees
And
Schedule of Performance
Cannabis Testing Agmt. Amend. No. 1 07
Page 4 of 6
SCOPE OF SERVICES
Consultant shall perform medical cannabis testing services, per the attached proposal.
The proposal provides for al a carte pricing objectives.
The City currently has six permitted medical cannabis collectives. The initial testing
frequency and number of samples requested by the City is as follows, and may be
modified by the City in writing.
Pick-up, testing, reporting, and label generation at four permitted collectives (adding
additional collectives as they may be permitted by the City):
Testing:
Flowers: Infused Products (edibles): Concentrates:
Potency $ 36.85 Potency $ 36.85 Potency $ 36.85
Microbiological $45.14 Microbiological $45.14 Residual Solvent $21.10
Pesticide $66.85
TOTAL: $148.84 TOTAL: $ 81.99 TOTAL $ 57.95
Courier service charge of flat rate $30.00 for each pick-up, and includes as many
samples as requested.
Frequency of Testing:
Every two weeks.
Number of Samples:
The total number of samples for six dispensaries will be 50 to 60 samples per
month, and may increase if the City permits additional collectives. The City's Contract
Officer will determine the number of samples per MCCC and provide written notice to
Consultant.
Consultant shall determine the order for which samples to collect, implementing a
rotation so that all products are eventually tested.
Consultant shall perform a cursory visual inspection of each collective at the time of
sample pick-up for compliance with the Sanitary Regulations in Chapter 5.35 of the
Palm Springs Municipal Code. Consultant shall notify the City of any potential violations
or of un-sanitary conditions at any permitted collective.
Consultant shall attend meetings with City Staff and/or Collective Representatives of
mission, objectives, and updates of the testing programs.
Cannabis Testing Agmt. Amend. No. 1 08
Page 5 of 6
Consultants proposal is amended and updated to reflect the following enhancements in
testing equipment and procedures.
Potency
The cannabinoid analysis has been expanded from 5 basic cannabinoids to 13
cannabinoids. These data points establish levels for primary compounds that represent
substantial differences in effect and have major health implications for clients.
The original price was $26.84. The new price is $36.84.
Pesticide Analysis
Knowing what we know about the forth-coming regulatory climate in the California
cannabis market, we decided to make a large investment in two brand new SCIEX 3500
triple quadruple mass spectrometers. The greater sensitivity and expanded list of
compounds afforded by this new instrumentation will aid us in preparing and
empowering our clients to meet and exceed the regulations placed on their businesses
by the state of California by this time next year.
There are three aspects to this upgrade. The first is that the sensitivity of our assay is
going to be increased significantly. We're talking about a shift from detecting parts per
million to parts per billion for the majority of these compounds. The second change we
are implementing is the addition of 46 new compounds to our original 12. We now have
a total of 58 pesticides on our list. We have designed this list based on regulations in
place in Washington and Oregon. The third change is that we are now going to be able
to quantify pesticide detections. If something is detected, we are now able to put a
number on that detection.
The original price was $26.84. The additional price is $66.84.
Microbiological Screening
We have added a confirmation step for the pathogen testing using Qper analysis. This
technology identifies specific species of pathogenic bacteria by isolating and identifying
by DNA.
The original price was $36.14. The new price is $45.14.
Cannabis Testing Agmt. Amend. No. 1 09
Page 6 of 6
CONSULTING SERVICES AGREEMENT
SC Laboratories Inc.
Medical Cannabis Testing Services
THIS AGREEMENT FOR CONSULTING SERVICES ("Agreement") is made and
entered into on July 1, 2015, by and between the City of Palm Springs, a California charter city
and municipal corporation ("City"), and SC Laboratories, a California Corporation
("Consultant"). City and Consultant are individually referred to as "Party" and are collectively
referred to as the "Parties".
RECITALS
A. City requires the services of a qualified Medical Cannabis Testing consultant to
assist in the enforcement of the City's Medical Cannabis Collective/Cooperative (MCCC)
ordinances and regulations, ("Project").
B. Consultant has submitted to City a proposal to provide Medical Cannabis Testing
services, to City under the terms of this Agreement.
C. Based on its experience, education, training, and reputation, Consultant is
qualified and desires to provide the necessary services to City for the Project.
D. City desires to retain the services of Consultant for the Project.
In consideration of these promises and mutual agreements, City and Consultant agree as
follows:
AGREEMENT
1. CONSULTANT SERVICES
1.1 Scope of Services. In compliance with all terms and conditions of this
Agreement, Consultant shall provide MCCC ordinance compliance and monitoring services to
City as described in the Scope of Services/Work attached to this Agreement as Exhibit "A" and
incorporated by reference (the "services" or "work"). Exhibit "A" includes the agreed upon
schedule of testing performance and the schedule of fees. Consultant warrants that all testing
services and work shall be performed in a competent, professional, and satisfactory manner
consistent with prevailing industry standards. In the event of any inconsistency between the
terns contained in the Scope of Services/Work and the terms set forth in this Agreement, the
terms set forth in this Agreement shall govern.
1.2 Compliance with Law. Consultant testing services rendered under this
Agreement shall comply with all applicable state and local laws, statutes, and ordinances and all
lawful orders, rules, and regulations of the State of California and City.
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Services Agreement Page 1
1.3 Licenses and_Permits. Consultant shall obtain at its sole cost and expense such
licenses, permits, and approvals as may be required by law for the performance of the testing
services required by this Agreement.
1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that
it has carefully considered how the work should be performed and fully-understands the
facilities, difficulties, and restrictions attending performance of the work under this Agreement.
1.5 Contract Officer. The Contract Officer shall be the City Manager or his/her
designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer
fully informed of the progress of the performance of the services. Consultant shall refer any
decisions that must be made by City to the Contract Officer. Unless otherwise specified, any
approval of City shall mean the approval of the Contract Officer.
2. TIME FOR COMPLETION
The time for completion of the testing services to be performed by Consultant is an
essential condition of this Agreement. Consultant shall prosecute regularly and diligently the
work of this Agreement according to the agreed upon schedule of performance set forth in
Exhibit"A." Consultant shall not be accountable for delays in the progress of its work caused by
any condition beyond its control and without the fault or negligence of Consultant. Delays shall
not entitle Consultant to any additional compensation regardless of the party responsible for the
delay.
3. COMPENSATION OF CONSULTANT
3.1 Compensation of Consultant. Consultant shall be compensated and reimbursed
for the services rendered under this Agreement in accordance with the schedule of fees set forth
in Exhibit"A". The total amount of Compensation shall not exceed $25,000.
3.2 Method of Payment. In any month in which Consultant wishes to receive
payment, Consultant shall submit to Contract Officer an invoice for services rendered prior to the
date of the invoice, no later than the first working day of such month, in the form approved by
City's finance director. Payments shall be based on the hourly rates set forth in Exhibit "A" for
authorized services performed. City shall pay Consultant for all expenses stated in the invoice
that are approved by Contract Officer and consistent with this Agreement, within thirty (30) days
of receipt of Consultant's invoice.
3.3 Changes. In the event any change or changes in the Scope of Services/Work is
requested by City, Parties shall execute a written amendment to this Agreement, specifying all
proposed amendments, including, but not limited to, any additional fees. The City Manager is
authorized on behalf of the City to approve and execute any amendment, so long as the costs are
specifically provided within the City Council's budget in which such services are provided. An
amendment may be entered into:
A. To provide for revisions or modifications to documents, work product, or
work, when required by the enactment or revision of any subsequent law; or t S
Palm Springs and SC Laboratories 1 S
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B. To provide for additional services not included in this Agreement or not
customarily furnished in accordance with generally accepted practice in Consultant's profession.
3.4 Appropriations. This Agreement is subject to, and contingent upon, funds being
appropriated by the City Council of City for each fiscal year. If such appropriations are not
made, this Agreement shall automatically terminate without penalty to City.
4. PERFORMANCE SCHEDULE
4.1 Time of Essence. Time is of the essence in the performance of this Agreement.
4.2 Schedule of Performance. All services rendered under this Agreement shall be
performed under the agreed upon schedule of performance set forth in Exhibit "A." Any time
period extension must be approved in writing by the Contract Officer.
4.3 Force Maieure. The time for performance of services to be rendered under this
Agreement may be extended because of any delays due to unforeseeable causes beyond the
control and without the fault or negligence of Consultant, if Consultant notifies the Contract
Officer within ten (10) days of the commencement of such condition. Unforeseeable causes
include, but are not limited to, acts of God or of a public enemy, acts of the government, fires,
earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, and
unusually severe weather. After Consultant notification, the Contract Officer shall investigate
the facts and the extent of any necessary delay, and extend the time for performing the services
for the period of the enforced delay when and if, in the Contract Officer's judgment, such delay
is justified. The Contract Officer's determination shall be final and conclusive upon the parties
to this Agreement.
4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this
Agreement, this Agreement shall continue in full force and effect until the earlier of(a) the total
amount of services provided under this Agreement reaches the Compensation cap of$25,000 as
provided in Section 3.1 above, or (b) for a period of one (1) year, commencing on July 1, 2015,
and ending on June 30, 2016, unless extended by mutual written agreement of the parties.
4.5 Termination Prior to Expiration of Term. Contract Officer may terminate this
Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant.
Where termination is due to the fault of Consultant and constitutes an immediate danger to
health, safety, and general welfare, the period of notice shall be such shorter time as may be
determined by the City. Upon receipt of the notice of termination, Consultant shall immediately
cease all services except such as may be specifically approved by the Contract Officer.
Consultant shall be entitled to compensation for all services rendered prior to receipt of the
notice of termination and for any services authorized by the Contract Officer after such notice.
Consultant may terminate this Agreement, with or without cause, upon thirty (30) days written
notice to Contract Officer.
5. COORDINATION OF WORK
5.1 Representative of Consultant. The following principal of Consultant is
designated as being the principal and representative of Consultant authorized to act and make all
Palm Springs and SC Laboratories 12
Services Agreement Page 3
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decisions in its behalf with respect to the specified services and work: Jeffrey Gray, CEO. It is
expressly understood that the experience, knowledge, education, capability, and reputation of the
foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore,
the foregoing principal shall be responsible during the term of this Agreement for directing all
activities of Consultant and devoting sufficient time to personally supervise the services under
this Agreement. The foregoing principal may not be changed by Consultant without prior
written approval of the Contract Officer.
5.2 Prohibition Against Subcontracting or Assignment. The experience,
knowledge, education, capability, and reputation of Consultant, its principals and employees,
were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall
not contract with any other individual or entity to perform any services required under this
Agreement without the City's express written approval. In addition, neither this Agreement nor
any interest may be assigned or transferred, voluntarily or by operation of law, without the prior
written approval of City.
5.3 Independent Contractor. Neither City nor any of its employees shall have any
control over the manner, mode, or means by which Consultant, its agents or employees, perform
the services required, except as otherwise specified. Consultant shall perform all required
services as an independent contractor of City and shall not be an employee of City and shall
remain at all times as to City a wholly independent contractor with only such obligations as are
consistent with that role; however, City shall have the right to review Consultant's work product,
result, and advice. Consultant shall not at any time or in any manner represent that it or any of
its agents or employees are agents or employees of City.
5.4 Personnel. Consultant agrees to assign the following individuals to perform the
services in this Agreement. Consultant shall not alter the assignment of the following personnel
without the prior written approval of the Contract Officer. Acting through the Contract Officer,
the City shall have the unrestricted right to order the removal of any personnel assigned by
Consultant by providing written notice to Consultant.
Name: Title:
Jeffrey Gray CEO
Joshua Wurzer President
6. INSURANCE
Consultant shall procure and maintain, at its sole cost and expense, policies of insurance
as set forth in the attached Exhibit "B", incorporated herein by reference.
7. INDEMNIFICATION.
7.1 Indemnification. To the fullest extent permitted by law, Consultant shall defend (at
Consultant's sole cost and expense), indemnify, protect, and hold harmless City, its elected
officials, officers, employees, agents, and volunteers (collectively the "Indemnified Parties"), t
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from and against any and all liabilities, actions, suits, claims, demands, losses, costs,judgments,
arbitration awards, settlements, damages, demands, orders, penalties, and expenses including
legal costs and attorney fees (collectively "Claims"), including but not limited to Claims arising
from injuries to or death of persons (Consultant's employees included), for damage to property,
including property owned by City, from any violation of any federal, state, or local law or
ordinance, and from errors and omissions committed by Consultant, its officers, employees,
representatives, and agents, that arise out of or relate to Consultant's performance under this
Agreement. This indemnification clause excludes Claims arising from the sole negligence or
willful misconduct of the City, its elected officials, officers, employees, agents, and volunteers.
Under no circumstances shall the insurance requirements and limits set forth in this Agreement
be construed to limit Consultant's indemnification obligation or other liability under this
Agreement. Consultant's indemnification obligation shall survive the expiration or earlier
termination of this Agreement until all actions against the Indemnified Parties for such matters
indemnified are fully and finally barred by the applicable statute of limitations or, if an action is
timely filed, until such action is final. This provision is intended for the benefit of third party
Indemnified Parties not otherwise a party to this Agreement.
7.2 WARRANTY DISCLAIMER. CONSULTANT MAKES NO WARRANTY,
EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NONINFRINGEMENT WITH REGARD TO THE SAMPLES
SUBJECT TO THE SERVICES PROVIDED BY CONSULTANT HEREUNDER. CITY
MAY HAVE OTHER STATUTORY RIGHTS. HOWEVER, TO THE FULL EXTENT
PERMITTED BY LAW, ANY STATUTORILY REQUIRED WARRANTIES SHALL BE
LIMITED AS PROVIDED HEREIN. CONSULTANT SHALL NOT BE LIABLE FOR ANY
USE OF PRODUCT OR SAMPLES SUBJECT TO THE SERVICES PROVIDED BY
CONSULTANT HEREUNDER INCLUDING, WITHOUT LIMITATION, FOR ANY
PURPORTED MEDICAL OR HEALTH RELATED USE, SERVICE FAILURES AND
OTHER PROBLEMS INHERENT IN USE OF THE PRODUCT SUBJECT TO TESTING
HEREUNDER OR OTHER EFFECTS FROM USE OF SUCH PRODUCTS OR SAMPLES
OUTSIDE THE REASONABLE CONTROL OF CONSULTANT.
7.3 Waiver of Consequential Damages. NEITHER PARTY SHALL BE LIABLE
FOR ANY LOSS OF USE, LOST OR INACCURATE DATA, FAILURE OF SECURITY
MECHANISMS, INTERRUPTION OF BUSINESS, COSTS OF DELAY OR ANY
INDIRECT, SPECIAL, INCIDENTAL, RELIANCE OR CONSEQUENTIAL DAMAGES OF
ANY KIND (INCLUDING LOST PROFITS), REGARDLESS OF THE FORM OF ACTION,
WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY
OR OTHERWISE, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES IN
ADVANCE.
7.4 Liability Cap. OTHER THAN CONSULTANT'S OBLIGATIONS UNDER
SECTION 7.1 (INDEMNIFICATION) EACH PARTY'S ENTIRE LIABILITY AND
OBLIGATION TO THE OTHER PARTY SHALL NOT EXCEED THE AMOUNT
ACTUALLY PAID BY CITY TO CONSULTANT UNDER THIS AGREEMENT DURING
THE TWELVE (12) MONTHS PRIOR TO THE DATE ON WHICH THE CLAIM AROSE. q
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S. RECORDS AND REPORTS
8.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer
reports concerning the performance of the services required by this Agreement, or as the
Contract Officer shall require.
8.2 Records. Consultant shall keep complete, accurate, and detailed accounts of all
time, costs, expenses, and expenditures pertaining in any way to this Agreement. Consultant
shall keep such books and records as shall be necessary to properly perform the services required
by this Agreement and enable the Contract Officer to evaluate the performance of such services.
The Contract Officer shall have full and free access to such books and records at all reasonable
times, including the right to inspect, copy, audit, and make records and transcripts from such
records.
8.3 Ownership of Documents. All drawings, specifications, reports, records,
documents, and other materials prepared by Consultant in the performance of this Agreement
shall be the property of City. Consultant shall deliver all above-referenced documents to City
upon request of the Contract Officer or upon the termination of this Agreement. Consultant shall
have no claim for further employment or additional compensation as a result of the exercise by
City of its full rights or ownership of the documents and materials. Consultant may retain copies
of such documents for Consultant's own use. Consultant shall have an unrestricted right to use
the concepts embodied in such documents.
8.4 Release of Documents. All drawings, specifications, reports, records,
documents, and other materials prepared by Consultant in the performance of services under this
Agreement shall not be released publicly without the prior written approval of the Contract
Officer.
8.5 Cost Records. Consultant shall maintain all books, documents, papers, employee
time sheets, accounting records, and other evidence pertaining to costs incurred while performing
under this Agreement. Consultant shall make such materials available at its offices at all
reasonable times during the term of this Agreement and for three (3) years from the date of final
payment for inspection by City and copies shall be promptly furnished to City upon request.
8.6 Secure Transactions. Consultant has implemented and will maintain security
systems for the transmission and possession of the City's information and documentation, in hard
or electronic format, consistent with appropriate and reasonable industry standards for the
transmission and possession of such information, including without limitation transmission of
such information or documentation over the Internet or stored on systems maintained by
Consultant.
8.7 Non-Disclosure. Consultant acknowledges that in the performance of services
under this Contract, Consultant may have access to nonpublic and/or confidential information
pertaining to the City and its operations. Consultant agrees to maintain the confidentially of such
information, and will: (i) use the confidential information solely for the purposes set forth in this
Contract; (ii) take suitable precautions and measure to maintain the confidentiality of the
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confidential information of the City; and (iii) not disclose or otherwise furnish the confidential
information to any third party.
9. ENFORCEMENT OF AGREEMENT
9.1 California Law. This Agreement shall be construed and interpreted both as to
validity and to performance of the parties in accordance with the laws of the State of California.
Legal actions concerning any dispute, claim, or matter arising out of or in relation to this
Agreement shall be instituted in the Superior Court of the County of Riverside, State of
California, or any other appropriate court in such county, and Consultant covenants and agrees to
submit to the personal jurisdiction of such court in the event of such action.
9.2 Interpretation. This Agreement shall be construed as a whole according to its
fair language and common meaning to achieve the objectives and purposes of the Parties. The
terms of this Agreement are contractual and the result of negotiation between the Parties.
Accordingly, any rule of construction of contracts (including, without limitation, California Civil
Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be
employed in the interpretation of this Agreement. The caption headings of the various sections
and paragraphs of this Agreement are for convenience and identification purposes only and shall
not be deemed to limit, expand, or define the contents of the respective sections or paragraphs.
9.3 Waiver. No delay or omission in the exercise of any right or remedy of a non-
defaulting party on any default shall impair such right or remedy or be construed as a waiver.
No consent or approval of City shall be deemed to waive or render unnecessary City's consent to
or approval of any subsequent act of Consultant. Any waiver by either party of any default must
be in writing. No such waiver shall be a waiver of any other default concerning the same or any
other provision of this Agreement.
9.4 Rights and Remedies are Cumulative. Except with respect to rights and
remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the
parties are cumulative. The exercise by either party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other party.
9.5 Legal Action. In addition to any other rights or remedies, either parry may take
legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for
any default, to compel specific performance of this Agreement, to obtain injunctive relief, a
declaratory judgment, or any other remedy consistent with the purposes of this Agreement.
10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
10.1 Non-Liability of City Officers and Employees. No officer or employee of City
shall be personally liable to the Consultant, or any successor-in-interest, in the event of any
default or breach by City or for any amount which may become due to the Consultant or its
successor, or for breach of any obligation of the terms of this Agreement.
10.2 Conflict of Interest. No officer or employee of the City shall have any direct or
indirect financial interest in this Agreement nor shall any such officer or employee participate in 1
Palm Springs and SC Laboratories 1 6
Services Agreement Page 7
i
any decision relating to the Agreement which effects their financial interest or the financial
interest of any corporation, partnership, or association in which he/she is, directly or indirectly,
interested in violation of any state statute or regulation. Consultant warrants that Consultant has
not paid or given, and will not pay or give, any third party any money or other consideration in
exchange for obtaining this Agreement.
10.3 Covenant Azainst Discrimination. Consultant covenants that, by and for itself,
its heirs, executors, assigns, and all persons claiming under or through them, that there shall be
no discrimination or segregation in the performance of or in connection with this Agreement
regarding any person or group of persons on account of race, color, creed, religion, sex, marital
status, disability, sexual orientation, national origin, or ancestry.
11. MISCELLANEOUS PROVISIONS
11.1 Notice. Any notice, demand, request, consent, approval, or communication that
either party desires, or is required to give to the other party or any other person shall be in
writing and either served personally or sent by pre-paid, first-class mail to the address set forth
below. Notice shall be deemed communicated seventy-two (72) hours from the time of mailing
if mailed as provided in this Section. Either party may change its address by notifying the other
party of the change of address in writing.
To City: City of Palm Springs
Attention: City Manager/ City Clerk
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
To Consultant: SC Laboratories, Inc.
Attention: Jeffrey Gray, CEO
100 Pioneer Street, Ste. E
Santa Cruz., CA 95060
11.2 Integrated Agreement. This Agreement contains all of the agreements of the
parties and supersedes all other written agreements.
11.3 Amendment. No amendments or other modifications of this Agreement shall be
binding unless through written agreement by all Parties.
11.4 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to he effective and valid under applicable law. In the event that
any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this
Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of
competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining
phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted
to carry out the intent of the parties.
11.5 Successors in Interest. This Agreement shall be binding upon and inure to the
Palm Springs and SC Laboratories 17
Services Agreement Page 8
benefit of the Parties' successors and assignees.
11.6 Third Party Beneficiary. Except as may be expressly provided for in this
Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement
be construed as conferring, any rights, including, without limitation, any rights as a third-party
beneficiary or otherwise, upon any entity or person not a party to this Agreement.
11.7 Recitals. The above-referenced Recitals are hereby incorporated into the
Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees
that such Party is bound, for purposes of this Agreement, by the same.
11.8 Authority. The persons executing this Agreement on behalf of the Parties
warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by
so executing this Agreement the Parties are formally bound to the provisions of this Agreement.
11.9 Collective Membership. City acknowledges that certain designated employees,
officers, or agents of the Consultant will be required to become members of medical cannabis
collectives in the City of Palm Springs, in order to be in lawful possession of medical cannabis
pursuant to California law. Consultant will provide and maintain a current list of such
employees, officers, or agents, and the collectives for which such persons are members of to the
City Manager.
11.10 Conflict of Interest. Employees, officers, and agents of Consultant shall not
accept gifts, honoraria, travel and loans from any permitted medical cannabis collective in the
City of Palm Springs.
11.11 Non-Exclusive Agreement. Consultant acknowledges and agrees that this
Agreement to provide medical cannabis testing services as set forth herein is non-exclusive. City
at its sole discretion may contract with other medical cannabis testing providers, as it deems
necessary and appropriate.
[SIGNATURES ON FOLLOWING PAGE]
\11
Palm Springs and SC Laboratories 18
Services Agreement Page 9
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates
stated below.
"CITY"
City of Palm Springs
a Charter City and Municipal Corporation
Date: By. /
David H. Ready,
City Manager WROVED BY CRY MAI GER
W-c Y25,Grr, q�725
APPROVED AS TO FORM: ATTEST
By: 44 BY:� -
Dougl s C. Holland, es Thompson,
City ttorney ity Clerk
"CONSULTANT"
SC Laboratories Inc.
a California Corporal n
Date: no ZIJ I S By:
Jeffr yJ; CEO
By: f c Y -
o `ua Wurzer, President
Palm Springs and SC Laboratories 19
Services Agreement Page 10
EXHIBIT "A"
CONSULTANT'S
SCOPE OF TESTING SERVICES/WORK
Including,
Schedule of Fees
And
Schedule of Performance
Palm Springs and SC Laboratories 20
Services Agreement Page 11
SCOPE OF SERVICES
Consultant shall perform medical cannabis testing services, per the attached proposal.
The proposal provides for al a carte pricing objectives.
The City currently has four permitted medical cannabis collectives. The initial testing
frequency and number of samples requested by the City is as follows, and may be
modified by the City in writing.
Pick-up, testing, reporting, and label generation at four permitted collectives (adding
additional collectives as they may be permitted by the City):
Testing:
Flowers: Infused ProductsAedibles : Concentrates:
Potency $ 26.85 Potency $ 26.85 Potency $ 26.85
Microbiological $ 36.14 Microbiological $ 36.14 Residual Solvent $ 21.10
Pesticide $ 26.85
TOTAL: $ 89.84 TOTAL: $ 62.99 TOTAL $47.95
Courier service charge of flat rate $30.00 for each pick-up, and includes as many
samples as requested.
Frequency of Testing:
Every two weeks.
Number of Samples:
The total number of samples for four dispensaries will be 30 to 40 samples, and
may increase if the City permits additional collectives. The City's Contract Officer will
determine the number of samples per MCCC and provide written notice to Consultant.
Consultant shall determine the order for which samples to collect, implementing a
rotation so that all products are eventually tested.
Consultant shall perform a cursory visual inspection of each collective at the time of
sample pick-up for compliance with the Sanitary Regulations in Chapter 5.35 of the
Palm Springs Municipal Code. Consultant shall notify the City of any potential violations
or of un-sanitary conditions at any permitted collective.
Consultant shall attend meetings with City Staff and/or Collective Representatives of
mission, objectives, and updates of the testing programs.
Palm Springs and SC Laboratories 21
Services Agreement Page 12
Medical Cannabis Testing Services Proposal
November 6, 2014
SC Laboratories, Inc.
ioo Pioneer Street Suite E
Santa Cruz, CA 95o6o
Phone: (831) 475-i844
www.sclabs.com
22
Table of Contents
I. Background, Firm and Staff Qualifications.............................................2
Mission
Corporate Profile
Services
A Technology Company
Courier Network
Key Staff Members
Capabilities and Experience With Projects of This Scope
Business References
II. Testing Methodology and Services.............................................................11
Cannabinoid Assay(Potency Testing)
Microbiological Screening
Pesticide Analysis
Residual Solvent Testing
Sampling Services and Disposing of Samples
III. Testing Frequency............................................................................................ 17
Cannabinoid Assay-
Microbiological Testing
Pesticide Testing
Residual Solvent Testing
IV. Costing................................................................................................................. 20
Testing Protocol Option 1 - Full Testing
Testing Protocol Option 2 — Periodic Inventory Audits
V. Sample Reports.................................................................................................23
_ VI. References.......................................................................................................... 26
VII. Letters of Recommendation........................................................................ 28
23
Background, Firm and Staff
Qualifications A
SC Laboratories Inc. (SCL) is the recognized leader in 9
quality assurance and safety testing for the Medical _
Cannabis industry. In a little over 4 years of operation
and with more than ioo,000 samples tested, SCL has
grown into an expanding network of laboratories
providing quality and safety tests to the California s - •
Medical Cannabis market. Our mission is to provide
Cannabis patients, prodders, and government agencies ..-. .
with accurate and reliable analyses performed to the
highest standards. SCL is committed to our belief that the '
greatest contribution we can give to the Cannabis
efficiency,and re
movement is to promote consumer confidence and liability. Our
: Certified Seal Ls a syrnbol of
education by establishing higher standards of safety and
our ongoing commitment to
quality in herbal Cannabis and Cannabis-based products. quality and dedication to the
SCL has been the largest provider of laboratory services
to the California Cannabis market for the last four years.
Our commitment has been to establishing and nurturing
long term relationships with clients, educating patients, and making the science of
cannabis accessible. SCL services the entire state of California and has had the
opportunity over the last several years to establish long term testing relationships with
each and every-one of the four currently licensed dispensaries in Palm Springs. We view
those long term relationships as representative of a shared commitment to being the
provider of the highest quality products and to the health of their patients.
Mission
It is SC Laboratories' mission to be a quality provider to the cannabis industry of reliable
and accurate third party testing and verification. It is our vision to be recognized as an
industry performance leader, surpassing our competitors in quality, innovation,value,
service, and excellence in applied scientific methods and processes. The company
maintains a focus on socially responsible practices.We believe we have a responsibility
to play-a pivotal role in unlocking the potential within our industry to improve the end
value to patients and consumers through education.
24
Corporate Profile
Company Name: SC Laboratories INC (A California Corporation)
CEO Jeffrey Gray
President Joshua Wurzer
,
j Company Type S-Corp
Laboratory sites
Corporate Office ioo Pioneer St, Ste. E Santa Cruz, CA 95o6o
Southern California 1822 E Carnegie Ave Santa Ana, CA 95xxx
f
l Date Founded 10/01/2010
Shareholders Jeffrey Gray
Joshua Wurzer
Ian Rice
( Alec Dixon
t Fiscal Year From January t to December 31'of the same year
Main Business Activities Laboratory analysis of Cannabis products
Number of employees 32
L
3 Services
i SCL offers a comprehensive battery of tests for cannabinoid levels (potency),terpene
{ levels, chemical residue analyses for pesticides in cannabis and residual solvents in
cannabis products and concentrates, microbiological contamination, and genetic testing
{f in Medical Marijuana. SCL is introducing several soil and tissue analysis over the
i coming months to assist producers in optimizing plant growth while reducing inputs.
f
f� SCL offers the following core services to our clients:
Cannabinoid profiling assay utilizing High Performance Liquid Chromatography
(HPLC) to determine the concentrations and potency of the relavent active
cannabinoids in medical marijuana flowers, concentrates, and edible products.
f '
L_
25
f
i
• A full range of validated microbiological testing using 3M Petrifilm and Real-
Time Polymerase Chain-Reaction (gPCR) technology to detect, identify, and
quantify yeasts, molds, and bacteria that can be harmful to consumers or degrade
product quality. These include harmful Aspergillus species, Botrytis, E. coli,
Coliforms, Enterobacteriaceae such as Salmonella and Shigella, afflatoxins, etc.
• Chemical residue analyses is performed in full compliance with relavent EPA,
USP, and state agricultural guidelines using a combination of Gas
Chromatography- Mass Spectrometry(GC-MS), Liquid Chromatography- Mass
Spectrometry(LC-MS) and HPLC.
• Both standard and custom genetic tests to fit clients' needs. SCL offers custom
genotyping, gene mutation identification, and gene quantification analysis as well
as targeted gene expression identification.
• SCL offers an industry specific quality and safety certification and regulation
service to allow medical marijuana producers and cultivators to validate their
processes. The program was designed to the highest standards and many of it's
protocols were adopted,through our consultation, by government and regulatory
bodies including the State of Washington for their I-502 regulations,by the
American Herbal Products Association for their Cannabis guidelines, and by the
American Herbal Pharmacopeia for its'Cannabis Monograph.
• Terpene profiling assay using Gas Chromatography(GC) to quantify compounds
that provide Cannabis with its'varied aromas and differentiate the biological
effects of different varieties.
• SCL provides consulting services drawing from the management staffs 30+years
of experience in cultivation management, process development, and contract
research..
0 SC Laboratories is fully equipped to do all testing in-house.
A Technology Company
SCL has built considerable IT infrastructure to support core lab services and deliver data
in an unlimited number of applications. Built around a sophisticated and proprietary,
cloud-based, Laboratory Information Management System (LIMS), SC Labs' IT network
connects and delivers testing data to clients in real time providing options including
automated email, SCL's website and a highly documented API. Developed in house by a
team of SC Labs programmers, the IT system is constantly evolving and highly
customizable.
As a first step in the testing process, lab samples are received by the lab, a chain of
custody is established, and a sample ID # is generated using the SCL LIMS. This chain
of custody remains unbroken until that sample is processed to completion and
ultimately released to a licensed waste disposal company and the entire process is
tracked and managed using the SCL LIMS. Built as a centralized cloud based system,
our LIMS serves as the central database for all labs in our system. Centralization of data
management provides anytime access and unlimited options for delivery of data sets.All
lab results are delivered to clients via a secured SClabs.com website account. Further,
SCL's IT system is currently programmed to delivers results, and related data, directly to
clients, to 3rd party platforms (at the discretion of clients), or to a government agency.
Courier Network
SCL services the entire state of California using a network of SC Labs couriers. Each
courier is an employee and trained representative of the lab and performs with the
highest level of professionalism and respect for the client and the company mission.The
courier is the public face of the laboratory and the first step in the lab's responsibility for
1
chain of custody of the sample. All couriers maintain complete documentation during
the performance of their duties and all samples are delivered directly to the lab. All
proper processing and handling procedures are followed in the secure delivery of
samples to the lab.
Key Staff Members
SCL prides itself on the diversity of its'staff. From our management to our technical
personnel, SC Labs has drawn its talent from both Cannabis industry professionals and
seasoned Chemists and Biologists alike.A short description of key staff members follows
with complete CV's attached as an addendum.
F
Jeffrey Gray, CEO
Jeff is one of the founders of SC Laboratories. Jeff is responsible for the general
management oversight of SCL, investor relations, overseeing all financial aspects of the
business, identifying strategic partners, and managing legal and regulatory compliance.
In addition to more than 15 years consulting experience in the Cannabis industry,Jeff
holds a degree in Business Management from the University of California, Santa Cruz.
' Jeff brings a strong background in government regulation and regulatory compliance,
having served as a claims representative and public speaker for a large governmental
social service agency for 8 years and on the Board of Directors for The Homeless Garden
Project for a period of 5 years.
Josh Wurzer, President
Josh is also a founder of SC Laboratories with a background in analytical and synthetic
chemistry. He has worked in the pharmaceutical and electronic materials industries for
several years before becoming the laboratory director for the first Cannabis testing lab
in the United States. From there, Josh went on to found SC Labs. Josh is the author for
several patent applications in Cannabis and cannabinoid medicine and has been
published numerous times. He holds a BS degree in Chemistry from the University of
Wisconsin Green Bay.
Andrew Pham, Senior Scientist, Quality Control Manager
Andrew specialized in Cannabinoid science as a postgraduate at Boston University
where he earned a Masters degree in Medical Science. He also holds a Bachelor of
Y Science in Chemical Biology from UC Berkeley. Andrew oversees and manages quality
control between SCL facilities as well as being a strong driver of method development
_ . for new assays.
Victoria Kha, Laboratory Supervisor, Southern California
Vicky manages daily operations at the Southern California facility. She holds a
_ Bachelor's degree from the University of California, San Diego in Physiology and
Neuroscience. Her interests include the long-term effects of cannabinoid receptor
r stimulation on the central nervous system.
Jacyln Mauser, Laboratory Supervisor, Northern California, Microbiologist
Jacky oversees daily operations in the Northern California facility. Her background
involves extensive experience with microbiological testing and genetic research with
soybean, maize, and other commercial crops at DuPont and Diana Plant Sciences. Jacky
extensive work with plant as well as food testing makes her uniquely suited to oversee
SC Labs specialized edible testing.
Aaron Nichols, Associate Scientist
Aaron holds a Bachelor's and Master's degree in Bioengineering from the University of
California, Riverside, graduating on the Dean's Honor List as well as an Amgen
scholar. He is a published author on two scientific papers, one in the journal
Biopolymers and the other in the UCR Undergraduate Research Journal.
Abbey Chrystal, Associate Scientist
Abbey oversees SCL's wine testing program as well as assisting in method development
and process improvement with the Cannabis testing program.Abbey has extensive
experience in the wine industry with an emphasis on geo-chemistry and climate change.
She holds a Masters degree in Geology from Ohio State University and Bachelor's degree
in Environmental Science from the University of North Carolina Wilmington.
Michael Pham, Senior Technician
Michael is a cum laude graduate from University of California, Riverside with a
Bachelor's degree in Biochemistry. He has extensive laboratory experience through his
time as an undergraduate researcher at UC Riverside, studying a variety of molecular
biology and chemistry techniques.
Mac Whitman, Senior Technician
Mac holds dual Bachelor's degrees in both Chemistry and Earth Science from the
' University of California, Santa Cruz. He has extensive experience in environmental
testing methodologies due to his time as a field technician for the Northern California
Resource Center.
Kareem Kassem, Laboratory Technician
Kareem holds two associates degrees in Biological Sciences as well as Liberal Arts. His
; , 29
research interests are mainly in botany and plant sciences, and he has extensive
experience in horticulture techniques.
Kyle Boyar, Laboratory Technician
Kyle is a graduate of the University of California Santa Cruz with a B.S.in Neuroscience
and Behavior, and is interested in research on the endocannabinoid system. He is in
charge of science communication and outreach and is the primary author for the SC
Labs blog on our website.
Julia Schimmel, Senior Technician
Julia holds a Bachelor's of Science degree in Molecular Cellular Developmental Biology
from UC Santa Cruz. She has three years of experience in the cannabis-testing field.
Capabilities and Experience With Projects of This Scope
With over over too,000 unique Cannabis samples tested to date and having served over
1,800 individual clients, more than any other lab in the world, SCL is the most capable
option to help Palm Springs realize a safety-testing program. SCL is the largest Cannabis
testing lab in the world and its' economies of scale allow us to provide testing services
_ performed to the highest standards with service and pricing that is second to none. SCL
has a history of working with state and foreign governments to implement testing
programs. SCL currently services all of the licensed dispensary-collectives in Palm
Springs. These collectives have chosen SCL as the only lab that can reliably service the
Palm Springs area due to our extensive courier network and reliable service.
A primary concern for the city must be the lab's ability to perform sampling, transport
the samples, perform the testing, and report accurate results in a time frame that
doesn't hinder the collectives/cooperatives ability to operate and provide medicine to
patients. SCL is the only laboratory in California that has proven its' ability to service
Palm Springs testing needs.
SCL has a history of working closely with state governments including the states of
` Washington and Kentucky, trade groups including the American Herbal Pharmacopeia
and the American Herbal Products Association, university research institutions like the
University-of Louisville School of Medicine and the University of Houston, as well as the
government of Canada as consultants on testing and Cannabinoid formulation.
z,��� 30
Business References
Gary Cherlin
Desert Organic Solutions
760.567.4081
SEE ATTACHED LETTER OF RECOMMENDATION
Gary Cherlin has first hand experience as a client of SC Labs'testing services. Desert
Organic Solutions has been testing with us for over two years.
Jim Camper
Organic Solutions of the Desert
76o.832.7813
SEE ATTACHED LETTER OF RECOMMENDATION
Jim Camper has experience with SCL as a client through our testing services. Organic
Solutions of the Desert has been a client of SCL's for over two years.
Roy Upton
Executive Director,American Herbal Pharmacopeia
831.462.6317
SCL helped Mr. Upton and the AHP identifij pertinent contentfor the AHP Monograph
on Cannabis, then helped consult on that con tent generation. To date, the AHP
Monograph is considered the standard in safety testing guidance to the Cannabis
industry. The AHP is recognized as a foremost authority in the standardization of
herbal medicines and supplements.
Mike Rotkin
Former Mayor of Santa Cruz
831.345.8469
SEE ATTACHED LETTER OF RECOMMENDATION
SCL has enjoyed the support of Mayor Rotkin who has seen the positive impact SC
Labs has had on the Cannabis industry first hand.
31
Allen Hopper
Criminal Justice and Drug Policy Director,ACLU of California
415.450.5336
SEE ATTACHED LETTER OF RECOMMENDATION
Allen Hopper has seethe positive impact SC Labs has had on the Cannabis industry in
California through his clients and our reputation in the Cannabis industry as
conscientious scientists and activists.
Valerie Corral
Director, Wo-men's Alliance for Medical Marijuana
831-425.0580
SEE ATTACHED LETTER OF RECOMMENDATION
SCL has provided free testing to WAMMfrom our inception nearly four years ago.
WAMM was the first recognized Cannabis Collective in the nation and still provides
free and low cost medicinee to patients in need. WAMM's primary mission as a true
non-profit collective is to serve the poor and terminally ill.
Josh Hartsell
Laboratory Director, CannaVest Inc.
949-491.4328
SEE ATTACHED LETTER OF RECOMMENDATION
Joshua and his company have been a client of ours for nearly one year. CannaVest is a
large scale producer of pharmaceutically oriented cannabinoid medicines.Joshua was
the owner of delta 9 technologies, a competing Cannabis laboratory, before accepting
the position as lab director at CannaVest.
Taylor Blake
Co-Producer of the Emerald Cup
831.332.7317
SEE ATTACHED LETTER OF RFCOMMENDATION
3Z
Taylor is the Co-Producer of the Emerald Cup, the longest running Cannabis festival in
the United States. The Emerald Cup has tested with SC Labs since our inception, nearly
four years ago.
Testing Methodology and Sen ices
SC Laboratories offers five comprehensive testing methods for cannabis and cannabis
products. These include potency testing, pesticide screening, residual solvent testing,
terpene testing, and microbiological testing. The turnaround for each of these tests
ranges between 2-5 days, depending on the sample type and testing methodology. We
are able to test every-cannabis product on the market, including flowers, hash, wax,
tinctures, salves, topicals, brownies, cookies, and much more.
Cannabinoid Assay (Potency Testing)
The cannabinoids are the chemical compounds responsible for the medicinal effects in
cannabis [1]. SC Laboratories uses High Performance Liquid Chromatography(HPLC)
to quantify five primary cannabinoids: tetrahydrocannabinolic acid(THCA), A9-
tetrahydrocannabiol (THC), cannabinol (CBN), cannabidiol (CBD), and cannabidiolic
acid (CBDA). Each molecule can be found both naturally occurring in the cannabis
flower as well as extracted into a concentrated form, and each has different
pharmacological properties [2]. Measuring all five cannabinoids allows us to quantify
the active ingredients in any type of sample, allowing for standardized dosage
recommendations for nearly any cannabis product.
The potency testing process consists of extracting cannabinoids into an organic solvent
spiked with a known concentration of internal standard. The sample is further diluted
down to the appropriate concentration for the diode array detectors on the HPLC. The
HPLC separates all the components in the sample from each other so each can be
measured once they reach the detector. We use HPLC rather than Gas Chromatography
(GC)because GC processes samples with heat, which will destroy the temperature
sensitive acidic cannabinoids and lead to inaccurate results [3]. Our method is
validated according to ICH guidelines [see Section 5.2 - Validation data].
We are proud to offer a 72 hour guaranteed turnaround time for all potency samples at a
competitive volume-based rate. We have tested every kind of cannabis product on the
market, from concentrates to edibles to tinctures to topicals. Our customer service-
33
minded testing services have driven us to become the largest cannabis testing laboratory
in the country, analyzing nearly loo,000 unique samples since opening in 2010 [4].
The importance of potency testing goes beyond establishing a standard of quality, as it is
also crucial to public health and safety. In Colorado where recreational cannabis is legal
and largely unregulated, a man ate an edible six times the recommended amount, and in
his altered mental state jumped off a balcony [5]. Denver hospitals have also seen a rise
in emergency room cases where children were accidentally ingesting cannabis-infused
edibles [6]. Both of these problems could have been prevented with proper testing,
labeling, and education, all of which are crucial aspects of the testing services SC
Laboratories provides.
SC Laboratories strongly recommends potency testing for every type of sample sold in medical dispensaries.
Comparison of Gas Chromatography and High Performance Liquid Chromatography
ChromatographyGas Chromatography
A low pressure stream of gas helps A high pressure stream of solvent
move the compounds to the detector helps move the compounds to the
detector
The system is heated during analysis The system can be maintained at a
low temperature during analysis
Detects total available THC,CBD, Detects THC,THCA,CBD,CBDA
and other,non acid,`activated' and other acid and non acid
cannabinoids cannabinoids
Cannot detect cannabinoid acids Can detect cannabinoid acids
Microbiological Screening
SC Laboratories offers a full range of reliable microbiological testing and data
interpretation using 3M petrifilm and standard plate count methods. The same
conditions that are ideal for the cultivation of medical cannabis can also be ideal for the
germination of bacteria and fungi which is found in the soil, air and water. We must
remember that yeast and molds can grow in decaying vegetation and the residual
moisture will encourage bacterial growth. If your cannabis and all infused products are
not properly tested,the medicine you are consuming can be contaminated with a variety
of harmful pathogens. For many patients, ingesting contaminated medicine can lead to
serious illness and health complications,especially for those who are immuno-
compromised. These patients are very susceptible to infections and cannabis that is not
39
properly tested to be free of fungi and bacteria pose a huge risk and increase the
probability of opportunistic infections.
Using 3M petrifilm and agar plate counts, we can identify, detect, and quantify total
plate counts of Yeast&Molds, Aspergillus, Coliforms, Enterobacteriaceae,Aerobic
bacteria, E.coli, Salmonella and Staphylococcus aureus, which have all been found to be
potential contaminants of cannabis. 3M Petrifilm plates are ISO-9002-certified for
design and manufacturing and included in the official methods of analysis of the
Association of Official Analytical Chemists (AOAC) International. They are also a
recognized method by the American Public Health Association, the USDA Agricultural
Marketing, Food Safety& Inspection Service and the US Food & Drug Administration(i).
The safe limits SC Laboratories has defined are based on the US and International
standards for the food, herbal and tobacco industries(2).
Microbial limit tests provide for the estimation of the number of viable microorganisms
present in all cannabis samples types such as flowers, concentrates, edibles, tinctures
and topical creams. We determine a total Yeast and Mold count,Aerobic bacterial count,
Coliform count, Enterobacteriaceae count, E.coli count and Staphylococcus aureus
count using 3M Petrifilm.
Yeast and Molds are ubiquitous fungi in our environment with over 400,00o types of
molds and 1500 types of yeast. They are opportunistic organisms that can live, grow
and reproduce on their hosts. The difference between yeast and molds are that molds
form spores and yeast do not. Spores can withstand extreme conditions and can
germinate when conditions are favorable and can cause allergenic affects in humans.
Also under ideal conditions, some fungi can produce toxic metabolites know as
mycotoxins. Aerobic bacteria survive and grow in an oxygen rich environment and give
us an idea of total bacterial contamination present in the environment leading to
confirmations of sanitation. Coliforms and Enterobacteriaceae are indicator organisms
which gives us an idea of quality and overall hygiene. For example, they can indicate an
environment where conditions are favorable to contain pathogens such as E.coli which
are fecal-associated bacteria and can cause human illness. Lastly, Staphylococcus
aureus is found everywhere in the soil,water and air and has the ability to produce an
enterotoxin which causes food borne illnesses.
Sample preparation is done in a designated clean room and with the appropriate sterile
diluents (ISO-5541-1), the sample suspension is placed onto the center of the bottom
film and a 3M spreader distributes the inoculum evenly across the film. Petrifilms have
a ready-made culture medium that contains a cold-water soluble gelling agent, nutrients,
- 35
indicator dye, and a built-in grid to provide contrast and help facilitate counting colony
forming units(CFUs)(r). After incubation under the designated temperature and time
(AOAC Method), interpretation in CFUs is recorded and reported using a LIMS
database.
Detection of aflatoxin producing Aspergillus and Salmonella/Shigella are performed
using the differentiation agar method. Our Aspergillus differentiation medium
identifies 3 species of the mold Aspergillus (sp. Flavus,parasiticus,niger)which can
infect immuno-compromised humans and cause allergic, aflatoxin and pathogenic
infections such as the diseases Aspergillosis. The Salmonella/Shigella selective medium
' identifies the largest food borne illness causing pathogen. After the appropriate sterile
preparation, the diluent is transferred to a petri dish containing the selective agar
medium and then incubated under the recommended conditions. The number of CFUs
is determined based on the serial dilution performed and the count is reported and
recorded.
With basic Aspergillus plating techniques we are able to only determine the microbial
4 level as a CFU count, but are unable to determine the amount of harmful mycotoxins
that these fungi produce. This is why we offer an Aflatoxin/Ochratoxin screen which
l has the ability to separate and quantify four aflatoxin (Bl, B2, Gi and G2) synthesized by
Aspergillus. Using an HPLC, aflatoxins are separated using reverse phase
chromatography and detected by UV. This gives great insight into whether or not the
' Aspergillus present in the sample is at extremely dangerous and carcinogenic levels.
f We guarantee a five day turn around for our multiple test microbiological screen
1 .
available for all cannabis sample types. No other cannabis testing laboratory-in the US
offers as many microbiological tests as part of there microbiological screen. Even forty-
nine of the top fifty food companies in the US use 3M Petrifilm in there sampling
procedures(1). Also, due to the lack of regulation on edible products within the industry,
SC Laboratories in house has the ability to screen for three of the largest food borne
pathogens. At SC Laboratories we see edibles all the time that have not been properly
packaged and stored. Because of this, we see a tremendous amount of microbiological
contaminated edibles everywhere from cakes to glycerin tinctures to frozen popsicles to
raw food infusions and to liquid sugar-based drinks. When it comes to food safety,we
should advise all edible makers to test their product before it hits the dispensaries shelf
1 and also inquire consulting advice on how to properly package and store the edible to
increase its shelf life. All of this can prevent people from getting sick and can in turn
increase the legitimacy of the cannabis industry.
!!t
f
a 3s
i .
Since hundreds of bacteria and fungi are associated with
the cultivation of cannabis, microbiological hazards
absolutely-need to be addressed. Microorganisms can be Safe Cannabis
indicative of spoilage,levels of sanitation and the
potential for human pathogenesis. Demand safe
medicine.
Pesticide Analysis
SC Laboratories offers a standard pesticide screen for twelve of "
the most commonly seen pesticides, fungicides, and plant *dfoo producL
�iannabls is used to treat
growth regulators (PGRs) in the cannabis industry. The
��condttlons for
pesticide test is offered as part of our comprehensive safety test
patients who are gravely ill,it;#i
(CST) package, which comes with a potency, pesticide, and 9 produced in a manner
microbiolgical test. closer to growing
strawberries than to
Our standard pesticide screen looks for 10 of the most producing
commonly used pesticides in the industry, including Pesticide use and
fungal and
acequinocyl, imidacloprid, pyrethrium, spinosad, spiromesifen, bacterial contamination
spirotetramat, abacmectin, bifenazate, and fenoxycar6. It also serious considerations to a
screens for the fungicide myclobutanif and two plant growth patients!health.
regulators, daminozide and paclobutrazol. The FDA has not The same conditions that are==;
established a safe level of consumption for any of the Idealforthe
aformentioned compounds [7], and many can be harmful evencannabis can also be Ideal for
at minimal exposure levels. Animal studies have shown the germination of bacteria,
exposure to plant growth regulators can lead to kidney failure mildew and
and reproductive damage [8].
The FDA has not determined
SC Laboratories strongly recommends that pesticide testing is
fungicide
on cannabis.
used on all flowers, leaves, concentrates, and edibles. however,
cultivotorssUll use Illegal or =q;
Residual Solvent Testing banned vesticides.
The rise in popularity of high-potency concentrates has arisen
concerns among the industry regarding standards of safety and quality for concentrate products
and manufacturing practices.
The most popular concentrates today by far are butane extracts, more commonly referred to as
"wax", "shatter", "dabs", etc. While a typical flower ranges between 10-20%THC, a butane
concentrate can range between 80-90% THC This allows patients to medicate at higher doses,
which can be extremely important for patients who have high tolerance or need to consume
37
cannabinoids in excess for the condition they are treating. However, the majority of these
concentrates will have residual hydrocarbons in the final product due to the differences in
manufacturing practices. Even though many claim to use only butane in their extractions,
industrial butane can be littered with a variety of contaminants such as propane, pentane, hexane,
and mercaptan [9]. leaving the patients vulnerable to unknowningly consuming hydrocarbons.
The United States Pharmacopia(USP) has set exposure limits for residual solvents in
pharmaceutical products ranging from 2 to 5000 parts per million (ppm) depending on their
classification as Class I, 11, or III solvents [101. Meanwhile, the state of Washington has
mandated a total residual solvent limit of 500 ppm [11], while Colorado is pushing for a 50 ppm
limit [12]. No matter what guidelines are established, SC Laboratories is properly equipped to
measure 18 of the most commonly found residual solvents in the medical cannabis industry.
SC Laboratories uses headspace extraction with gas chromatography (HS-GC) to accurately
quantify levels of residual solvents commonly used in the manufacturing of medical cannabis
concentrates. The testing process consists of placing a cannabis concentrate sample into a
headspace vial. The headspace extractor will gently heat the concentrate, allowing the low-
boiling point residual solvents to vaporize into the air above the sample, also known as the
headspace. An injection of that headspace is taken and run through the gas chromatograph to
separate its components before it hits a flame ionization detector, a very sensitive detector
specially designed to measure the strength of combustion of hydrocarbons such as butane. This
detector is so sensitive to hydrocarbons that it allows us to quantify them down to the 10 parts
per million level [13].
We offer a 72 hour turnaround for our residual solvent test, which is among the best in the
industry. With a small half-gram sample we are able to provide quality control for multiple
pound batches of alkane-extracted concentrates. We strongly urge all distributors of butane
concentrates to undergo residual solvent testing in order to establish a baseline for clean
medicine.
SC Laboratories strongly recommends residual solvent testing on all butane-extracted
concentrates. We also suggest it is run on alcohol-based evaporated extracts as well to establish
residual levels of alcohol.
Sampling Services and Disposing of Samples
SC Laboratories offers a professional courier service to ensure safe and documented
transfer of samples. The sampling procedure involves taking a representative sample
from a batch or crop of cannabis product and sealing it into one of our laboratory vials.
�;�� 38
The samples are handed to the courier and a chain of
custody form is filled out and signed at the site of
r
transfer. The courier will then drive the samples back
into the laboratory-and enter them into our lab
inventory management system (LIMS),where each i "'
sample is assigned a unique ID. Samples are
destroyed in the testing process due to the breakdown of the sample into chemical waste,
rendering it unusable and unsafe for consumption or handling. The chemical waste is
consolidated and picked up by a licensed hazardous waste disposal company.
Testing Frequency
Cannabinoid Assay (Potency Test)
Basic dosage information is absolutely essential to ensure the safety and efficacy of the
medicine. Every cannabis based product in the dispensary is a medicine and every
medicine needs dosage information. For herbal cannabis that is produced in
exceptionally large quantities, each batch is defined by SC Labs as a specific cultivar
(strain) grown in a single crop (up to five pounds finished cannabis). For every
additional five pounds of herbal cannabis, there should be a cannabinoid assay
performed. The fire-pound rule has become somewhat of an unofficial standard for
herbal Cannabis batch sizes since its adoption by the State of Washington and the State
of Colorado.
For infused products and extracts, each batch will be defined by the production method
used. Generally, one batch is defined as the output of a single production run where
there is a reasonable expectation of homogeneity within that batch. Each batch should
generate one cannabinoid test. For example, if an infused cookie were to be prodded for
patients, there would need to be a cannabinoid assay performed every time the starting
dough was mixed. If the producer mixes enough dough for 3,000 cookies and bakes
39
each of those cookies in an identical manner, then there would need to be one test for
every 3,000 cookies produced.
For edible products, dosage information is absolutely essential. For most of these
products, it is impossible to gauge the strength and determine the potential effect of the
medicine by simply looking at the product. In order to be administered safely,there
needs to be dosage information clearly provided on such products.
Extracts should be tested in a similar way. If an extract manufacturer has a piece of
equipment that can produce 1,000 grams of concentrated Cannabis for every extraction
run there should be one test done for every 1,000 grams from that extraction. If another
producer is only able to make 250 grams from a single extraction,they will require a test
for every 250 grams.
Cost/ Potency test: $24•85
Microbiological Testing
Microbiological testing of Cannabis products is perhaps the most important class of
safety assays for many types of products and patients. Most jurisdictions, including
Canada, are also requiring some component of microbiological testing for all batches of
Cannabis and Cannabis products. Since so many patients who find relief in Cannabis
are immune-compromised by their condition (ex: AIDS, HIV, Cancer, etc). and since
much of the Cannabis is consumed via inhalation rather than ingestion, microbiological
testing is essential to creating a safe Cannabis medicine. Many microbiological
contaminants have the potential to proliferate in the respiratory system of immune-
compromised patients that may be benign if eaten or if consumed by an otherwise
healthy individual. This is the reasoning given for clinics refusing to provide transplants
for Medical Cannabis patients.
Since many Cannabis products have a food component to them,there will be special
considerations that apply in regards to standard food safety testing. SC Labs
recommends a reasonably comprehensive safety testing regime for its Cannabis clients.
We feel strongly about the importance of each assay we recommend. Pricing on a
volume-based sliding scale allows our clients to perform a wider range of assays at price
27 1 40
points that are lower than our competitors'less comprehensive offerings. Edible
Cannabis products should also be screened for microbiological pathogens such as E. coli
i
and Salmonella that are of specific concern for food producers.
Cost/ Microbiological Test: $36.14
Pesticide Testing
Since there are literally hundreds of potential insecticide, herbicide,fungicide, and plant
growth regulators on the market, to test for them all using internationally accepted
methods could cost literally tens of thousand of dollars per sample. This, of course,
would be cost prohibitive. So the options that remain would be to use a less robust
i
testing method,test for less substances, or do not do pesticide testing at all or only test
random spot checks of producer's output.
Cannabis producers struggle with a specific set of pests and therefore use a narrow
spectrum of available pesticides to treat infestations.This allows for a cheaper assay that
targets a handful of pesticide, fungicide, and plant growth regulators that are actually
! . used on Cannabis. SC Labs has used our extensive industry knowledge and consulted
with the largest hydroponics retailers in the country to develop an assay which tests just
for these compounds that producers are actually using. Our cost is extremely
competitive and we can offer a much more sensitive assay at a lower cost than
competitors who offer a broad spectrum test that would not hold up in to regulatory
scrutiny and often leave out the actual compounds that producers are using on their
plants.
Cost/Pesticide Test: $24.85
i
Residual Solvent Testing
i
Residual solvent testing is only necessary for concentrated Cannabis extracts. Many of
these products are produced using solvents to extract the essential oils of the cannabis
plant.These products produce a highly purified product that can be safer,with less tar
Er SC S. nr'J22 .�P3 2!i'2 lq 41
t
i
and other particulates, provided in an easier to dose form than herbal cannabis. They
can also be produced in a manner which safely removes the solvents used in the
production process. However, it is necessary to perform a Residual Solvent Test to verify
that the solvents have been reduced to benign levels. Colorado and Washington as well
as the American Herbal Pharmacopeia have set standards for testing and residual
solvent levels that are more stringent than those used for pharmaceuticals, herbal
products, and food products.While these standards are
stringent, most producers of Cannabis concentrates have
no problem meeting them. The State of Washington's 1 „,r ,rni h o:iar
Liquor Control Board has set standards for the allowable 7 a000 n.:dical
limits at o for Class 1 and Class 2 solvents (as) and 5O0 " 'i a""
ppm for Class 3 solvents.These standards are consistent �`` " `` "'
po'inrl, ofi cai�abi>
with those set by the United States Pharmacopeia.
any,-3' ,
Cost / Residual Solvent Test: $19.10
Costing
Cost Per Unit of Work
Infused
Flowers Products(Edibles) Concentrates
Potency $26.85 Potency $26.85 Potency $26.85
Residual
Microbiological $36.14 Microbiological $36.14 Solvent $21.10
Pesticide $26.85
-. Tu• Total
Total Flowers $89.84 Total Infused Products $62.99 concentrates $47.95
Does not include courier costs
42
i ,
Testing Protocol Option 1 — Ongoing Quality Control For All Products
I ' In order to empower the patients with all the information necessary to have full faith in their
providers, it is SC Labs recommendation, as well as the position of most jurisdictions that
require safety testing as part of their regulatory regime, that a full spectrum of testing be done on
each batch of raw cannabis, cannabis extracts or infused cannabis products. Due to the sheer
variety of sources for cannabis batches, it is strongly urged that full spectrum testing is employed
to establish a consistent source of medicine.
Testing every batch requires constant sampling and courier service in order to maintain inventory
! levels and mitigate the burden placed on the dispensary. SC Labs recommends servicing all four
i
(4) licensed dispensaries on a regular schedule three (3) days a week. The costs are included in
' the table below. An expected outcome of restricting the dispensaries that serve the Palm Springs
1 market to four(4), is an exponential increase in the volume of medicine tested and the cost per
month for each dispensary. The specific set of tests necessary for each sample type is described
` in the table above.
t Avg. Monthly Testing Cost Per Dispensary
Cost/Unit
Avg.#of Samples of Work Total Cost/Type
Flowers 71 $90 $6,379
Infused 69 $63 $4,315
l Concentrates 24 $48 $1,151
[ Monthly Cost/Dispensary $11,844
1 Monthly Courier cost per Dispensary $810
3 days/week dedicated courier service divided among 4 dispensaries
Estimates of volume based on current dispensary inventory
43
r�
Testing Protocol Option 2 — Periodic Inventory Audits
The growth potential of SCL is contingent on the continued expansion of revenue streams and brand
recognition.The most effective way of accomplishing both is to expand into new geographic markets.The
following 2 conditions have been identified as determining factors in selecting initial target markets: state
mandated testing and a comprehensive regulatory structure.These factors are present in the following 5
states —Nevada,Oregon,Washington and Colorado. Each of these states has recently adopted statewide
legislation to legalize and regulate safe access to cannabis in a much more comprehensive fashion than
early entrants such as California.
Greater revenue potential
Unlike the California market,in mandated testing markets each and every batch of Cannabis grown must
be tested before it can be distributed in the supply chain.SC Labs is one of few labs in the industry
currently that has the experience and scale to capture large market share while maintaining a high level of
senzce.A 20%market share in a retail space like Colorado can represent as much as$2 million annually
in revenue.
Periodic audits on a percentage of each dispensary's inventory offers a less intrusive and lower
cost option. While not as comprehensive an option, auditing can be enough of a measure to
provide patients with the confidence that there is some oversight and promote self policing by
the licensed dispensaries. All of whom already use SC Labs testing services as a quality control
measure on their own merit. A suggested protocol would be for SC Labs to sample a random
selection of 30%of each dispensary's inventory twice each month. Random sampling supported
4
by batching and tracking requirements for each dispensary would allow for batch control and
recalls if necessary. The costs are laid out in the table below.
44
t
I
Avg Monthly Testing Cost Per Dispensary
Periodic Auditing of inventory
Avg k of Samples Cost/Test Total Cost/Type
Flowers 43 $90 $3,827
Infused 41 $63 $2,589
Concentrates 14 $48 $690
Monthly Cost/Dispensary $7,107
Monthyl Courier Cost per Dispensary $540.00
2 days/month dedicated courier service divided among 4 dispensaries
Sample Report
Sample reports are accessible through secure login at our website,SCL can also provide an API handoff of
information free of charge.The following are examples of sample reports.
45
Certificate of Analysis
Sample Name: Backyard Blasters(Fail RST)
- Tested for: SC Labs
Sample ID: 140625L011 Doses per Serving: N/A
Sample Type: Shatter Standard Dose: NIA
Date Tested: 06/27/2014 Expiration Date: 08126=14
Potency Test Results Terpene Test Results
Full spectrum cannabinoid profiling and analysis utilizing High Screening and profiling for 31 terpenes found in Cannabis utilizing
Performance Liquid Chromatography(HPLCCAD) Gas Chromatography-Flame Ionization Detection(GC-FIO)
Cannel Summary Standard Terpene Test Comprehensive Terpene Test
Total THC 69THC+TH0a 76°° 3 Carene 0 Camphene NIA
Total Potential A9THC 676 5 mg/g 57.65°° a Bisabclol 1641 4 (i Pinene N/A
a Humulane 5447 Ccimene N/A
Total COD CBD+CBDa 1.2°° a Phellandrene 0 Sabmane N/A
Total Potential COD 11 mg/9 1 10°e a Phan. 4169.3 Camphor N/A
a Terpinene 0 Isobcrne0l N/A
Total CBN Total CBN D 4 qo 0 Carlophyllene 33M Merri l NIA
Borneol 1454.6 a Connie N/A
Caryophytene Oxide 19128 Nerolldol N/A
Full Cennabinoid Profile Fenchol 51422 9-(+)-Pulegone N/A
Gatt iol D Eucalyptol NIA
Tetrahydrocannabinol AgTHO BPo
Limonol 47496 B pCymene N/A
Tetahytlrocannabmolic Acid THCa 6B 96 Linalool 54T/.2 (-)-Isapulegol NIA
Cannabldiol CBD 0.4% Myrcene 7414.4 (+)-Iaapulsgol NIA
Cannabidiolic Acid CBDa 08°• Terpmeol 2654.5 Geranyl Acetate NIA
Cannadnol CBN 04% Terpnolene 19163 Guabl NIA
Valencene NIA
Total Active Cannabinaids: 776°° Phytol NIA
- Pesticide Test Results
Residual Solvent Test Results
Detection and uantilica[ion o112 Screening for harmful solvents impurities and/or other added
q pesticides antl plant growth odorants or chemicals
regulators(Mrs)
Acequinocyl NIA Imidacloprid NIA Ethanol ND Pass Heptanes BDL Pass
Pyrefhnum N/A Spnosad NIA Hexames BDL Pass Isobatarse 11 ppm Pass
Spiromeslfen WA Spirmetramat NIA IsopropanoI ND Pass hlercaptan ND Pass
Methanol ND Pass Pentanes 26 ppm Pass
Abamectin NIA Bfenazate NIA Propane NO Pass nButane &NM pp. Fail
Dairifir de NIA Fenoxycarb N/A Butanes Fail 2,2-Dimethylbuteme N/A
Myclobutaml NIA Paclobutrazol WA 2-MethNpenfane N/A 3-Melhylpantane N/A
Cyclohexane+Benzene N/A lon,re.ne NIA
Neopeman NIA n Heptane N/A
Microbiological Test Results PAURVir terUfication N/A n Pentane N/A
Detection and quamiloahon of fetal yeast&mold contamination This sample has been tested by BC Labs
and/or harmful microorganisms t and the results are valid until
she expiration date shown
Total Aerobic NIA Total yeast WA 1 Plate Count and Mold
Entinotect. N/A COIHarme N/A r
osh er,President
E coil N/A Asperglllus N/A a.mo.am/nsian mm
46
Certificate of Analysis
Sample Name: Harlequin
Tested for: SC Labs
Sample ID: 140625L001 Doses per Serving: N/A
Sample Type: Flower Standard Dose: N/A
Date Tested: 06/26/2014 Expiration Date: 08/2512014
Potency Test Results Terpene Test Results
Full spectrum cannabwid profiling and analysis ualizirg High Screening and profiling for 31 arpenes found in Cannabis utilizing
- Performance Liquid Chromatography(HPLCDAD) Gas Chromatography-Flame Ionization Detection(GC-FID)
Clummi noid Summery Standard Terpme Tent Comprehensive Terpene Test
Total THC A9THCTHCa 1.65°. 3Caren. 1679 Camphene NA
Total Poenbal 69THC 14 B mglg 1.48°6 a Bisabolol 2W 1 9 Pmene N/A
a Humulene 257.5 Ccimene N/A
Total CBD CBDFC8Da B 46 a Phellandrene 1631 Sahinene N/A
- Total Potential CBD 70.2 in 702'b °Pmene 1478 Camphor N/A
a Terpmene 1395 Iscborneol N/A
- Total CBN Total CBN 0.. [3 Caryophyllene 3831 Menthol N/A
Borneol 2W aCedrene NIA
Full Cannabinoid Profile Caryophyllene Oxide 2666 Nerolidol NIA
_ Fenchol M29 R-(y-Pulegone NIA
Tetrahydrocannabinal A9THC 008•m Geraniol 1931 Eucalyetol NIA
Limonene 1555 P-Cymene NIA
Tetrahydrocannabinelic Acid THCa 1.6°-° LlneeN 498.6 (-)-Iscpulegot NIA
Cannabidiol CBD a'. Myrcene 186.5 (�)-Isepdegcl NIA
Cannabidiolic Acid CBDa 8°• Terpinml 243.2 Geranyl Acetate NIA
Cmnaanol CBN 0.. Terpmolene 574 Guabl NIA
Valencene NIA
Total Active Cennabinoida: 968°. Phytol NIA
.. Pesticide Test Results Residual Solvent Teat Results
Detection and uantAtcation of 12 Screening for harmful solvents.impurlies.and/or other added
q Pesticides and plant grevnM1 odorants or chemicals
lHJWalpra(u,Ia)
Ahamectin Passed Acequinocyl Passed Propane NIA Ethanal N/A
_ Methanol N/A Isopmperel NIA
Blfenzzate Passed Daminezide Passed Isabuteme N1A M.mwen NIA
Fenoxycarb Passed Imidacloprid Passed 22-Dimethylbutane N/A 2Methylpentane N/A
- Mydobutanil Passed Paclobutrazol Passed 3-Methylpentane NIA Cyclohmane a Benzene NIA
Pyrethrium Passed Spinosad Passed Isopentane NIA Neopentane NIA
Spirchimil n Passed Spinell mat Passed n Butane N/A n Hectare NIA
n Hexane N/A nPentane N/A
Microbiological Test Results Sample Certification
Detection and quanLlkaeon of fatal yeast&mold contamination This sample has been tested by SC Labs
and/or harmful microorganisms and the results are valid until
� the expiration date shown.
- Aspergillus 15 dulg Pass Coliforms <100cfu/g Pass �1
Ecoli ND Pass Enterobact <100clu/g Pass ❑ -
Total Aerobic NIA N/A Total Yeast 1OW cfulg Pass osM1 er.President
Plate Count and Mod somovrml ar vsam mm
47
References
1. E1Sohly, Mahmoud A. Marijuana and the Cannabinoids. New Jersey, Print.
2. Hazekamp, Arno. Cannabis; Extracting the Medicine. Ph.D Thesis (2007).
Leiden University, The Netherlands.
3. Agilent Technologies. Fundamentals of Gas Chromatography. Delaware,
2002. Online and Print.
4. SC Labs Public Database. __.. ,:__:. 2014. Online.
5. Nicholson, Kieran. "Man who plunged from Denver balcony ate 6x
recommended amount of pot cookie." Denver Post Apr. 2014.Online.
denver-balcony-ate-6
6. Ingold, John. "Children's Hospital sees surge in kids accidentally eating
marijuana." Denver Post May 2014. Online.
http // i
kids-accidentally eating-marijuana
7. Pesticides Q&A. Food and Drug Administration. Online.
kr Food/FoodborneIllnessContaminants/Pesticides/uc_m_11_
4958.htm
S. Yazar, S; Baydan E. "The subchronic toxic effects of plant growth promoters
in mice." 2008. Ankara University,Turkey.
9. Spright, JG. The Chemistry and Technology of Petroleum, 4th ed. Florida,
2007. Print.
10. United States Pharmaeopia 30. Chapter 467,Residual Solvents. Online.
�-- ' ' i "_1 eneralChanter
467Current.pdf
11. Washington State Legislature. WAC 314-55-104:Marijuana processor
license extraction requirements. 2012. Online.
default.asox?cite=314 55-1oa
12. Colorado Department of Revenue, Marijuana Enforcement Division. 1 CCR
212-2. Permanent rules related to the Colorado Retail Marijuana Code.
2013.
48
13. Broske AD, DiUbaldo D, Gere DR. Headspace analysis of organic volatile
impurities by USP <467> using the DB-624 and the HP-Fast GC Residual
Solvent Column. Agilent Technologies, 2002. Online.
i .i _ � _ C,l il.fl-' � .J- � `) •1�„� i1 �.iCi.(` . '� -i -'J� '� {�j7f'. riF
14. 3M Food Safety. 2014.
15. Microbial Quality of Medicinal Plant Materials. 2012. <a
href_"http://w,""v.intechoDen.com/books/latest-research-into-qualms-
co_n_troitmicrobial-quality of-medicinal-plant-materials"_title="Microbial Quality
of Medicinal_Plant Materials"_>Microb_ al_Qtiality of Medicinal Plant_Materials</a>_
49
Letters of Recommendation
50
i
i
Desert Organic Scilutions
Box 590391
North Palm Springs CA 9'—"59
I llgQ4
To Whom it May(:en I
I an,writing to nxommend the senior of the SC Labs-We have berm using SC Labs to(cst our
medicine for about a year now.They do an cacellent job,the test mulls are posted quickly their
staff is always p ncntal and helpful-
Sdnccrely,
_ Can•Cherlin
President
Desert Organic Solutions
51
11/05/2014
To David Ready, PS City Council
I am writing this letter as a letter of recommendations
for SC Labs, here at Organic Solutions of the Desert we have
been using their testing facilities for approx two years now and
_ have been very satisfied with their work. They are professional
and play a big part in making sure our medicine is tested and
safe for patients to use which the patients love. In the two
years we have worked with SC Labs I have to say we are
satisfied with their work and believe the city of Palm Springs
would also benefit from their services,
Jim Camper, President OSD
52
_ g
From the Desk of
Mike Rotkin
123 Liberty Street
Santa Cruz, CA 95060
James Thompson, Chief of Staff/City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Dear Mr. Thompson,
I am writing in support of the proposal to provide medical marijuana testing for the City
of Palm Springs that is being submitted by SC Laboratories, Inc. I am a five-time former
mayor of the City of Santa Cruz, where SC Laboratories, Inc. currently operates a
medical marijuana laboratory. I believe that the City of Santa Cruz was the first, or
certainly one of the first, cities in California to create a legal structure for dispensing
medical marijuana to patients.
I have visited SC Laboratory, Inc.'s facility, which exists in a mixed-use industrial zone
in our city that includes some nearby residential properties. I have discussed their
operation with both the operators of the facility, including Jeff Gray, their CEO, and with
City of Santa Cruz staff, with whom they work closely.
SC Laboratories, Inc. is an extremely professional organization. They have the technical
expertise and organizational structure necessary to inspire confidence in public officials
who are often new to the legal, regulatory, public safety, and public acceptance issues
that one must confront when responding to the situation that was created by the
passage of Proposition 215 and the response of state and federal officials to this rapidly
developing issue.
The technicians and sophisticated technology that they use to test marijuana samples
from legal growers and dispensaries inspire great confidence in the way in which they
carry on their work. Municipalities and counties can be assured that they work well with
local police, planning departments, and others to insure that they understand the critical
importance of working within the framework established by local authorities and that
they will follow though on their commitments in a highly professional manner. A great
deal of their work is highly technical, but their leadership and their employees know how
to talk to the public in accessible ways about a process that is essentially highly
scientific and one that requires a great deal of arcane technical knowledge.
The organization has established very positive relationship with local legal growers and
dispensaries so that the trust necessary to work in this, still, emerging regulatory
environment is clearly established and maintained. They have a very positive reputation 53
_ _- W
is
among local providers and the local government officials charged with regulating this
new industry.
Their testing, which focuses both on the health of the products they test with respect to
pesticides and other contaminants that can enter into the growing and production
_ process and the relative strength of various strains they are testing, is done in such a
way that both distributors and patients can be extremely confident about the quality of
what they are putting on the market. As a public official, you will want to know that your
residents are obtaining a product that is safe and one whose medical effects can be
understood by patients and their medical advisors.
The facility that they operate in Santa Cruz is attractive both on the outside and the
inside. It fits well into the neighborhood in which they are located and neither the police
nor planning department of our city have received a single complaint about their
operation. When you walk into the lab, you would not be able to distinguish what you
see from any of the many other R and D facilities in our city— except perhaps that their
reception area, with a tropical fish tank and colorful art work is more attractive than
most.
If you are looking for a medical marijuana laboratory that will be quickly accepted by
growers, providers, patients, and city officials, this is the group you will want to contract
with for the City of Palm Springs. I give SC Laboratories my highest recommendation
without reservations of any kind.
Thank you for your consideration in this matter,
Mike Rotkin
Former Mayor of Santa Cruz, California
54
To:City of Palm Springs Chief of Staff/City Clerk James Thompson
- Date:November 6,2014
RE:Selection of Medical Testing Lab for the City of Palm Springs
Dear Mr.Thompson,
I write to encourage the City of Palm Springs to select SC Labs as the City's official medical cannabis testing lab.
I am an attorney with over a decade of experience leading the California and National American Civil Liberties
Unions'(ACLU)work concerning marijuana law and policy reform,with a specific focus on medical marijuana
law and policy. I am currently the Director of Criminal Justice and Drug Policy for the ACLU of California. I write
however,in mypersonal capacity and the views expressed here are my_own,not.the ACLU's.
Through my work with the ACLU, I have developed deep expertise in this field and have communicated
extensively with medical marijuana patients,providers,attorneys,government officials and others throughout
California and the rest of the nation about medical marijuana-related law and policy. At the request of the
California Attorney General's office, I reviewed and critiqued that off ice's proposed medical marijuana
guidelines prior to their publication in 2008,1 also testified as an expert in October,2009 before the California
State Assembly Public Safety Committee during its historic hearings on the legalization of marijuana. A copy of
my bio is attached for further reference.
I have also resided in Santa Cruz,California at several times during the past ten years,and have considerable
knowledge of local participants in the City and County medical marijuana programs. I know that SC Labs has an
excellent reputation as the most trusted source for reliable and accurate testing of cannabis. SC Labs has been
in operation for four years and provides transparency and quality assurance testing.I am aware that SC Labs
has the infrastructure and experience necessary to support large contracts with government agencies and
government-approved medical marijuana providers.
Based on my experience and knowledge of the industry and SC Labs, I recommend them without hesitation for
selection by the City of Palm Springs as the City's medical cannabis testing lab.
55
r
Sincerely,
Allen Hopper
Director,Criminal Justice and Drug Policy
ACLU of California
39 Drumm Street
San Francisco,CA 94111
415-450-5336
56
3-'
s
November 4,2014
Palm Springs City Council
- - 3200 East Tahquitz Canyon Way
Palm Springs,California 92262
Dear Honorable Mayor Pougnet&Honorable Council Members;
Allow me to introduce myself. I am Valerie Corral, the Director and co-founder of the
Wo'Men's Alliance for Medical Marijuana, WAMM established in Santa Cruz in 1993. WAMM
has been at the forefront of legislation and service to patients for more than two decades; paving
the way for patient access, developing quality medicines and establishing the highest standards
of service and healing in the field of medical cannabis. I write this letter to recommend SCLabs
and their unparalleled performance in the field of laboratory testing.
It is the intention of every business to succeed. The greatest proof of that success is
providing excellent service; service that is measured not only through client satisfaction, but that
which also inspires and promotes the client's potential for achievement. In every aspect SCLabs
surpasses expectation. Performing an essential role in elevating an otherwise potentially
unbridled industry.
The provision of medicine to seriously ill and dying people requires an uncompromising
guarantee of quality, safety and purity subject to the scrutiny of scientific application. Where
lesser standards may sometimes suffice, when it comes to administering medicine for patient use,
there can be no compromise.
From the onset our collaboration with SCLabs has been exemplary, consistently
professional, accurate, reliable and indispensable. Recognizing the relevance of tested medicine
has proven to be of significant impact in patient treatment planning. In designing a protocol for a
patient's specific needs the imperative is the reliability of the products we provide. To replicate a
successful modality lessens suffering and helps save lives. Only the most dependable medicine
of superior quality can afford the greatest outcome. Because the bottom line is always the health
of those we serve. I hope you will consider the proven reputation of SCLabs and their practice to
be at the vanguard. They have elevated the standards of their associates and their community, .
which ultimately benefits patients.
Respectfully yours,
L
is
Valerie Corral
57
CannaVest Laboratories
- - 3030 Bunker Hill St. Suite 107
San Diego,CA 92109
October 31'`,2014
To whom it may concern,
On behalf of CannaVest Laboratories, I am pleased to write this letter of recommendation for SC Laboratories.
They have consistently provided reliable data throughout the extent of our relationship. I am particularly
comfortable working with SC Labs based on the exceptional team they have put together. Andrew Pham
earned his masters degree under the guidance of Dr. Alex Makriyannis and has an outstanding academic
pedigree working with cannabinoids. Dr. Makriyannis is the head of CannaVest's scientific advisory board and
has spent several decades exploring the therapeutic potential of cannabinoids by applying chemical,
biochemical,and biophysical approaches to study the endocannabinoid signaling system.
- I have personally been in the cannabis testing industry for 3 years,as the President of Delta-9 Technologies and
the Director of Research and Development at CannaVest Corp.(ticker:CANV).Through my membership in the
Association of California Cannabis Laboratories I have had the opportunity to work with most of the cannabis
testing facilities in this sector. SC Labs has the proper equipment to meet the highest standards for potency
testing, terpene analysis, microbial testing,and residual solvent detection. Each sample sent to SC Labs is also
tested in the facilities at CannaVest Laboratories.Therefore,we are confident that the data we receive from SC
Labs is reliable and accurate. It is my humble opinion that SC Labs is the best choice for a cannabis testing
facility in California.
Sincerely,
} I !
Joshua Hartsel, Ph.D.
Director of Research and Development `5 8
A
r
November 46,2014
To Whom it May Concern,
I am the co-producer of the The Emerald Cup,which is a long running Cannabis harvest festival
dedicated to sustainable cultivation.The Emerald Cup is the longest running Cannabis festival in
the United States..and remains a one of a kind event because of its'dedication to sustainability.
We have worked with SC Labs since their inception specifically because of the quality and
reliability of their services and because the size and capacity of their lab allows them to provide
us with confidence that our tests will be provided accurately and on time.Since our event has
strict requirements for turnaround of results,we feel SC Labs is the only lab that we can rely on
based on our review of their competitors.
Through our relationship with SC Labs,testing has become an integral pad of our event.We
consider quality and safety testing to be necessary to our philosophy of safety and accountability
in the medical cannabis industry.
SC Labs have been a pleasure to work with and we gladly recommend them for your testing
program.
Thank you for your time,
Taylor Blake
- (831)332-7317
Taylors lake@TheEm eraldCup.corn
59
r
To Whom It May Concern,
The Association for Standardized Cannabis (ASC) Is comprised of several
storefront collectives, delivery services, cultivators, and cannabis businesses in the
South Bay and Santa Cruz area of California. Many of our members rely on SC Labs to
provide accurate testing and screening to ensure the safety and consistency of the
medicine and cannabis products they provide to their members. Testing services have
become a crucial tool in the effort to validate and legitimize medical cannabis. Our
organizations primary goal is to develop standardization and sensible regulations across
the industry and we are proud to have SC Labs as a member.
SC Labs has proven itself to be an organization the raises the bar high and
continues to be at the forefront of the legitimate cannabis movement. From the very
beginning they have aspired to maintain quality and rigorous standards as a entity and
have continued to grow not only their business but also their positive reputation when so
many cannabis labs have been discredited and scrutinized for unsound scientific
methodology or poor business practices.
SC Labs is well known for their continual effort and hands on approach to
educate the medical cannabis community on the effects of cannabinoids, terpenes, and
cutting edge research. They are renown for their timely response to client issues and
phenomenal customer service. It is no coincidence that many of the most successful
and progressive cannabis companies in the state count on SC Labs Whether it be to
provide accurate cannabinoid testing or terpene profiles to patients, ensure
concentrated cannabis products are safe and solvent free or aid edibles companies in
maintaining consistent dosing of products SC Labs continues to be a crucial partner to
many of us and leader at the forefront of this new industry.
Sincerely,
The Board of Directors of The Association for Standardized Cannabis
Bryce Berryessa (Hashman-Infused, Waxman Concentrates)
Collin Disheroon (Santa Cruz Mountain Naturals)
Kahlif Moutawakkil (Kind Peoples Collective)
Jarrad Pecoraro (Herbal Cruz)
60
EXHIBIT "B"
INSURANCE PROVISIONS
Including
Verification of Coverage,
Sufficiency of Insurers,
Errors and Omissions Coverage,
Minimum Scope of Insurance,
Deductibles and Self-Insured Retentions, and
Severability of Interests (Separation of Insureds)
Palm Springs and SC Laboratories 61
Services Agreement Page 14
INSURANCE
1. Procurement and Maintenance of Insurance. Consultant shall procure and
maintain public liability and property damage insurance against all claims for injuries against
persons or damages to property resulting from Consultant's performance under this Agreement.
Consultant shall procure and maintain all insurance at its sole cost and expense, in a form and
content satisfactory to the City, and submit concurrently with its execution of this Agreement.
Consultant shall also carry workers' compensation insurance in accordance with California
workers' compensation laws. Such insurance shall be kept in full force and effect during the
term of this Agreement, including any extensions. Such insurance shall not be cancelable
without thirty (30) days advance written notice to City of any proposed cancellation. Certificates
of insurance evidencing the foregoing and designating the City, its elected officials, officers,
employees, agents, and volunteers as additional named insureds by original endorsement shall be
delivered to and approved by City prior to commencement of services. The procuring of such
insurance and the delivery of policies, certificates, and endorsements evidencing the same shall
not be construed as a limitation of Consultant's obligation to indemnify City, its elected officials,
officers, agents, employees, and volunteers.
2. Minimum Scoae of Insurance. The minimum amount of insurance required
under this Agreement shall be as follows:
1. Comprehensive general liability and personal injury with limits of at least
one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two
million dollars ($2,000,000) general aggregate;
2. Automobile liability insurance with limits of at least one million dollars
($1,000,000.00) per occurrence;
3. Professional liability (errors and omissions) insurance with limits of at
least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000)
annual aggregate is:
required
Y is not required;
4. Workers' Compensation insurance in the statutory amount as required by
the State of California and Employer's Liability Insurance with limits of at least one million
dollars $1 million per occurrence. If Consultant has no employees, Consultant shall complete the
City's Request for Waiver of Workers' Compensation Insurance Requirement form.
3. Primary Insurance. For any claims related to this Agreement, Consultant's
insurance coverage shall be primary with respect to the City and its respective elected officials,
officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City
and its respective elected officials, officers, employees, agents, and volunteers shall be in excess
of Consultant's insurance and shall not contribute with it. For Workers' Compensation and
Employer's Liability Insurance only, the insurer shall waive all rights of subrogation and
Palm Springs and SC Laboratories 62
Services Agreement Page 15
contribution it may have against City, its elected officials, officers, employees, agents, and
volunteers.
4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required,
and if Consultant provides claims made professional liability insurance, Consultant shall also
agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to
cover claims made within three years of the completion of Consultant's services under this
Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in
the amount required by this Agreement for at least three years after completion of Consultant's
services under this Agreement. Consultant shall also be required to provide evidence to City of
the purchase of the required tail insurance or continuation of the professional liability policy.
5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided
by authorized insurers in good standing with the State of California. Coverage shall be provided
by insurers admitted in the State of California with an A.M. Best's Key Rating of B++, Class
VII, or better, unless otherwise acceptable to the City.
6. Verification of Coverage. Consultant shall furnish City with both certificates of
insurance and endorsements, including additional insured endorsements, effecting all of the
coverages required by this Agreement. The certificates and endorsements are to be signed by a
person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be
received and approved by the City before work commences. City reserves the right to require
Consultant's insurers to provide complete, certified copies of all required insurance policies at
any time. Additional insured endorsements are not required for Errors and Omissions and
Workers' Compensation policies.
Verification of Insurance coverage may be provided by: (1) an approved General and/or
Auto Liability Endorsement Form for the City of Palm Springs or (2) an acceptable Certificate of
Liability Insurance Coverage with an approved Additional Insured Endorsement with the
following endorsements stated on the certificate:
1. "The City of Palm Springs, its officials, employees, and agents are named as an
additional insured... " ("as respects City of Palm Springs Contract No. " or 'for any and all
work performed with the City"may be included in this statement).
2. "This insurance is primary and non-contributory over any insurance or self-
insurance the City may have..." ("as respects City of Palm Springs Contract Na" or 'for any
and all work performed with the City" may be included in this statement).
3. "Should any of the above described policies be canceled before the expiration
date thereof, the issuing company will mail 30 days written notice to the Certificate Holder
named." Language such as, "endeavor to" mail and "but failure to mail such notice shall impose
no obligation or liability of any kind upon the company, its agents or representative" is not
acceptable and must be crossed out.
Palm Springs and SC Laboratories 63
Services Agreement Page 16
4. Both the Workers' Compensation and Employers' Liability policies shall contain
the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees,
agents, and volunteers.
In addition to the endorsements listed above, the City of Palm Springs shall be named the
certificate holder on the policies.
All certificates of insurance and endorsements are to be received and approved by the City
before work commences. All certificates of insurance must be authorized by a person with
authority to bind coverage, whether that is the authorized agent(broker or insurance underwriter.
Failure to obtain the required documents prior to the commencement of work shall not waive the
Consultant's obligation to provide them.
7. Deductibles and Self-Insured Retentions. Any deductibles or self-insured
retentions must be declared to and approved by the City prior to commencing any work or
services under this Agreement. At the option of the City, either (1) the insurer shall reduce or
eliminate such deductibles or self-insured retentions with respect to the City, its elected officials,
officers, employees, agents, and volunteers; or (2) Consultant shall procure a bond guaranteeing
payment of losses and related investigations, claim administration, and defense expenses.
Certificates of Insurance must include evidence of the amount of any deductible or self-insured
retention under the policy. Consultant guarantees payment of all deductibles and self-insured
retentions.
8. Severability of Interests (Separation of Insureds). This insurance applies
separately to each insured against whom claim is made or suit is brought except with respect to
the limits of the insurer's liability.
Palm Springs and SC Laboratories 64
Services Agreement Page 17