Mississippi’s Two Remaining Cannabis Testing Labs Combine to Cut Costs

Mississippi’s medical cannabis market is about to consolidate its entire compliance-testing sector into a single ownership structure. Steep Hill Mississippi, the state’s first and largest cannabis testing laboratory, announced on August 6, 2026 that it will combine with Alchemy Analytics under a newly formed Mississippi holding company, Southern Precision Analytics LLC, in a move the companies describe as necessary to keep both laboratories financially viable.

The two labs are the only testing facilities still operating in a program that once had seven announced or licensed. Under the combination, the companies will consolidate administrative and back-office functions while each laboratory keeps its own facility, team, instruments, methodologies and compliance standards. Allen Whitt, CEO of Steep Hill Mississippi, will serve as chief executive officer of the combined organization.

“This is the only practical path forward to ensure both labs remain financially feasible and that the cannabis industry in Mississippi continues operating without disruption,” Whitt said in the announcement. “Without this restructuring, neither lab would have the operational scale necessary to remain viable in this market.”

The companies said customers will see no required changes: clients keep their choice of location, submission processes and reporting structures stay the same, and both labs maintain compliance with Mississippi State Department of Health requirements and ISO/IEC 17025 accreditation.

“Our clients will keep the lab, the people, and the turnaround times they know,” said Hatem Mourad, MD, CEO of Alchemy Analytics. “Combining back-office operations lets us keep delivering accurate, objective testing across the state.”

Why Mississippi’s two remaining testing labs are merging

The announcement is explicit about what forced the combination: patient enrollment came in well below the projections the market was built on. Mississippi’s medical cannabis program originally projected approximately 100,000 patient cardholders by year three. The state currently has 69,476 active patient cardholders, and testing volumes have fallen well short of what the labs expected when the market launched.

The announcement says each lab’s fixed costs “have proven structurally challenging to support at current market volumes.” Each lab carries substantial fixed costs for instrumentation, ISO 17025 accreditation maintenance, regulatory compliance and skilled analyst staffing, costs the announcement says “have proven structurally challenging to support at current market volumes.” Removing duplicate administrative and back-office overhead is the lever the two companies are pulling; the lab operations themselves, where the accreditation and the client relationships live, stay separate.

Steep Hill Mississippi opened in 2023 as the state’s first commercial cannabis testing laboratory, based in Flowood. It operates as Chromatic, LLC and provides the full compliance testing panel the Mississippi State Department of Health requires, covering potency, pesticides, microbial contaminants, heavy metals, mycotoxins and residual solvents. Alchemy Analytics performs the same Department of Health compliance panel with a team whose analysts bring more than 60 years of combined experience, according to the company.

What the combination leaves in place

Southern Precision Analytics LLC becomes the holding company while each lab keeps its own facility, team and instruments, per the August 6, 2026 announcement. Mississippi requires final-form compliance testing before medical cannabis products can be sold to dispensaries, so every cultivator and processor in the state depends on at least one functioning licensed lab. The announcement commits to uninterrupted testing services for cultivators, processors and patients statewide, with each laboratory maintaining its own instruments, methodologies and compliance standards under the shared holding company.

Practically, the state retains two physical testing locations and two accredited operations, now with one back office. For operators, the submission processes and reporting structures they already use carry over unchanged, and both labs continue to hold ISO/IEC 17025 accreditation alongside their state licenses. The companies say consolidating administrative and back-office functions will “reduce costly overhead” while testing operations stay separate.