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Calif. lab execs allege rampant potency fraud

By Alex Halperin
Aug 4, 2022
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Source: NYPL

California cannabis retailers say only two things move product: high potency and low prices.

With prices finding new lows and the state market in crisis, retailers are hungry for products with ever higher THC levels. This dynamic has led to a “plague” of brands “shopping” for a desired potency level and unscrupulous labs happy to oblige, according to a group of self-identified honest operators.

Feeling ignored by regulators, last week executives from Infinite Chemical Analysis Labs and Anresco Laboratories aired their complaints in a article published in Cannabis Industry Journal. Potency inflation, they say, threatens their business, overcharges consumers — “higher numbers = higher prices” — and risks allowing more unsafe products on the market. The authors blame state regulator the Department of Cannabis Control (DCC), which they say has taken insufficient and wrongheaded steps to curb the problem.

“Three years ago you had to be 20% —- 25%,” co-author Josh Swider, Infinite’s co-founder and CEO, told WeedWeek. “Now it’s up to 30%. Dispensaries won’t buy it if it’s under 30%.” Every day, he said, companies reach out offering their business on condition of hitting potency targets. “There’s no point in naming names,” he said. Big companies do it and smaller companies are worse. 

  • In a random test, I took a look at the flower listed today at Flower Company. About two-thirds tested above 30%.
  • Infinite Lab Director Erik Paulson, who co-wrote the CIJ article, said the article arose out of confusion. He watched potency numbers soar in stores without seeing a corresponding climb in Infinite’s data, even as the lab continually re-evaluated its methods.

An experiment

More than a year ago, the CIJ article says a group of irate labs, including the authors’, bought 150 flower samples of shelves and found that 87.4% contained at least 10% less THC than stated on the label. Almost 30% of the samples came in more than 25% below the label. “The primary reason why potency inflation has become so prevalent is that there have been no negative repercussions for those that are cheating,” the article states.

  • The authors say they provided DCC with data on the 150 samples which showed rampant potency inflation and it didn’t result in a single recall. They say the DCC did not even recall those products shown to contain category 1 pesticides, which the state bans in any concentration on cannabis.
  • While few cannabis professionals consider potency inflation itself to be a safety hazard, the authors say the data shows labs willing to bump THC levels are more likely to overlook restricted or banned chemicals.

While potency inflation may be especially common here, it’s not just a California problem:

A brand’s view

A scientist at a company with several brands, who does not have permission to speak to reporters, acknowledged the practice is widespread as well. He said he’d been asked, “How high do you want it?”

“It creates a false sense of what is actually in the packaging and what’s achievable,” he said. “Is 40% THC [flower] possible? Yeah it’s probably possible but that creates demand for every brand to be 35% and that’s not the way it works.”

  • “Everyone is getting so THC focused removes a lot of the variety and specialness, because everyone is just trying to get these fake THC numbers,” he said.

DCC Response

The DCC is aware of the problem. In July it fulfilled a statutory obligation by proposing standardized testing procedures. The fed up lab execs say it won’t help. (UPDATE 8/8/22: Statement from DCC director Nicole Elliott added below.

In an eight page response to the request for public comments and published here for the first time, Scott Willard, CEO of Monterrey-based Coverton Labs wrote that the proposal “fails to sufficiently account for purposeful manipulation of data and use of improper deviations.”

  • The cheating, Willard and his allies say, owes not to the lack of standardized testing methods but willfullly fraudulent activity such as being very selective about the sample that gets tested and what bits within it (i.e. kief instead of stem) get tested.
  • DCC said additional unnamed projects are underway that build on its efforts to combat potency inflation.

The Cannabis Industry Journal article’s recommendations include:

  • Routine surveillance sampling and testing of products bought in stores.
  • Recalls for “extreme” potency inflation.
  • In-person, unannounced audits of labs, perhaps focusing on those reporting statistically higher THC results.
  • The article even raises the idea of potency taxes.

Cindy Orser, Chief Science Officer at San Diego-based CLIP Labs suggested more consumer education could also help. Consumers are “really getting ripped off,” Orser said. Even when there is excessive THC, it’s “just going up in smoke. It’s not benefitting you.”

Statement from DCC director Nicole Elliott:

This practice of purposely altering lab results is the result of unscrupulous labs that are intentionally undermining the regulatory space, scamming consumers and threatening public health. There is no reasonable excuse for this type of behavior, for seeking to justify it or for financially supporting it in California’s legal market.  

The DCC has moved quickly in its first year of existence to undertake enormous regulatory responsibilities previously housed across three distinct state departments. We are proud of the strides we have made to help support the cannabis industry and continue to work on the many unique and complex issues within our control. One thing we know – significant changes can take time and require collaboration. We work in earnest every day to make progress towards these changes and improvements that will better support our legal market and drive accountability amongst our licenses.  

One example of this work is reflected in the Department’s proposed SB 544 regulations. The intent of SB 544 is to tackle the issue of potency inflation and inaccurate testing of contaminants by establish testing standards where none existed. The proposed standardized cannabinoid – potency – test method creates a standard for laboratories to follow that will reduce variation of results from laboratories using alternate methods. 

This is one example, and there will be more we will share, as there is work underway to build on these efforts. In the meantime, we encourage stakeholders to focus their energy on productive collaboration as we continue our work to expand compliance with our overall regulatory framework.