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Despite widespread acknowledgement from cannabis industry observers that commercial testing laboratories across the country routinely inflate THC potency results, consequences are rare, according to a review of recent state regulatory actions.
Critics say this demonstrates that state regulators have been too slow to wrestle with dubious THC-potency results and other questionable data and behavior from state-licensed marijuana labs, allowing the problem to grow worse.
The pervasive lab-fraud problem in turn deals a serious blow to the $34 billion marijuana industry’s credibility – for cannabis consumers, lawmakers and law enforcement.
“It truly is a massive consumer fraud,” said James MacRae, a Washington-based data analyst who identified “rampant cheating” in that state’s marijuana testing data as early as 2016.
MacRae’s work led to increased scrutiny that culminated in Washington state regulators revoking one cannabis lab’s license in 2020.
But that’s among only a handful of examples of state regulators catching cheating labs in the act and meting out punishment.
“There needs to be enforcement about this and there needs to be consequences for being on the wrong side of it,” MacRae, owner of Seattle-based Straight Line Analytics, told MJBizDaily.
“State intervention,” he said, “is crucial.”
So far, he added, it’s also been “sorely lacking.”
Known problem
Complaints of “lab shopping” – a practice in which marijuana product manufacturers select private, licensed labs for state-mandated potency and safety testing – have dogged legal cannabis markets for years.
In October, Yasha Kahn, a vice president at MCR Labs, a state-licensed marijuana laboratory in Massachusetts, obtained and analyzed anonymized data from testing labs in Maryland, Massachusetts, Michigan and Oregon.
His analysis found that labs routinely inflated THC levels by as much as 25% or more.
Kahn also found signs that labs manipulated data to allow cannabis that should have failed for yeast and mold contamination to pass.
Kahn’s analysis was only the latest warning from a credentialed scientific observer or a licensed laboratory that questionable testing results could be easily flagged using simple diagnostic tools.
State regulators have at times taken serious action against labs alleged to have inflated THC results or manipulated data to allow tainted products to be sold.
Prominent examples include:
Las Vegas’ Cannex Nevada (aka Lettucetest and RSR Analytical Laboratories), which Nevada state regulators punished with a 10-year ban for potency inflation violations dating to 2019.
Washington-based Praxis Laboratories, shut down in 2020 by the state Liquor and Cannabis Board.
Sacramento, California-based Sequoia Analytical Labs, which surrendered its business license in 2018 after a state inspection found the laboratory’s director faked results for nearly four months.
Meanwhile, other allegedly suspect labs have managed to evade enforcement.
A prominent example is Michigan-based Viridis Laboratories, which responded to a state Cannabis Regulatory Agency recall with litigation that’s still ongoing.
More recently, states have launched or announced intentions to begin stepped-up enforcement.
But results have been negligible.
Slow going
In mid-September, California cannabis regulators issued a long-anticipated warning to state-licensed marijuana businesses.
Random tests of marijuana products pulled from retail shelves would soon begin, the Department of Cannabis Control (DCC) wrote in a message sent to all licensees on Sept. 15.
If the results for THC percentage and contamination returned from a state laboratory didn’t match the results certified by commercial marijuana laboratories and printed on the label, the products could be recalled and the offending lab punished.
Some cannabis laboratories welcomed the DCC’s move as a long-overdue attempt to wrestle with what’s become known as a widespread and, in some critics’ views, worsening problem: unreliable lab-testing results, including labs bending to market pressures and boosting clients’ THC potency to attract business.
But after more than three months, California officials have not identified any products pulled from store shelves.
Nor has any punishment been meted out to labs as a result of the DCC investigation.
Slow to act
In Oregon, random off-the-shelf testing won’t begin until 2024.
That’s in part because the Oregon Legislature only last summer approved the transfer of $2.2 million in marijuana licensee revenue to the state Department of Agriculture to pay for “reviewing private lab test results.”
In California, investigations are still “ongoing,” DCC spokesperson David Hafner told MJBizDaily.
Such probes are complicated, in part, because “the initial results of these investigations have moved the department to widen its scope,” Hafner added.
California’s regulated adult-use market opened in 2018, but it wasn’t until five years later that state regulators imposed a standardized cannabinoid-testing method for all labs to use.
Meanwhile, Massachusetts regulators sent a bulletin last month to all state testing laboratories instructing them to report THC percentage via a standardized formula.
“The Cannabis Control Commission continues to conduct routine inspections of all Marijuana Establishments, including Independent Testing Laboratories, to ensure compliance,” an agency spokesperson told MJBizDaily via email in response to questions.
“A plan of correction is required if deficiencies are identified,” the spokesperson added.
“Massachusetts’ cannabis testing landscape will continue to evolve as the regulated industry matures.”
To date, the agency has not reported penalizing marijuana laboratories for alleged or proven THC-potency inflation.
‘Different ideas’
In state regulators’ defense, lab shopping and potency manipulation was simply not a widely foreseen problem in the early days of marijuana legalization.
And government regulators will rarely move with the speed of private, for-profit actors.
“The encouraging or positive way to look at it is that this is one of those classic cases of ‘laboratories of democracy,’” said Jeff Rawson, founder of the Massachusetts-based Institute of Cannabis Science and a critic of lax enforcement of questionable lab data.
“Different states try different regulations and see what works best,” he added. “… From that perspective, I feel like shortcomings can present different ideas.”
But above all, “the states have to enforce their own rules,” said Roger Brown, the president and co-founder of Florida-based ACS Laboratory, which claims to be the largest CBD/hemp-testing lab in the eastern United States and is licensed by the U.S. Drug Enforcement Administration.
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