Florida marijuana testing labs under fire as industry tackles potency problem

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Image of a gloved hand holding a test tube containing cannabis

Florida regulators recently cracked down on several licensed medical marijuana testing labs, tightening the screws on a part of the cannabis industry that is increasingly coming under fire across the country.

The issues of inflated THC potency results and lab shopping are hot topics in the cannabis industry right now.

The situation is multifaceted, including:

  • A growing public mistrust of marijuana testing-lab results.
  • A pervasive trend among marijuana businesses to shop for labs that will give them favorable test results.
  • Testing labs that say they are struggling to retain market share and losing money as unethical counterparts gain new clients by inflating THC potency numbers. 

It’s even causing a race to the bottom in which labs are offering lower and lower prices for testing in order to compete.

The obsession around potency and the subsequent related problems have led to an increasing call for regulators to create more state-run testing labs that audit testing-lab results.

In August, the Florida Office of Medical Marijuana Use (OMMU) fined two MMJ testing labs $20,000 each for allegedly using methods that were not compliant with state regulations.

ACS Laboratory, based in Sun City Center, and Green Scientific Labs (GSL), headquartered in Davie, were both fined.

This after Florida regulators slapped ACS and another laboratory, Tampa-based Method Testing Labs, with thousands of dollars in fines for allegedly reporting false or inaccurate information on their certificates of analysis.

Such actions prompted the OMMU to send out a letter on Aug. 31 saying testing labs “must only use approved methods when testing products.”

ACS and GSL were not approved for polymerase chain reaction (PCR) tests to check for yeast and mold, which is what they were found to be using.

“(Labs) not in compliance with these rules risk disciplinary action, including fines and/or license suspension,” state officials wrote. “… any test results obtained using an unapproved method may be deemed invalid.”

Representatives of both labs said the fines stemmed from a “clerical error.”

“The clerical error on the accreditation certification has been promptly corrected and GSL will continue to work with the OMMU to provide OMMU with all requested documentation to resolve this issue,” Rafael Bombonato, chief compliance officer and interim CEO for Green Scientific, wrote in a letter apologizing to Florida’s medical marijuana patients and the lab’s clients.

Michael Richmond, chair at GSL, said the company has not paid the $20,000 fine yet but is working with the state to try to address the error.

‘Difficult time’

In a market such as Florida where THC is king, Richmond said he’s losing business to other labs because Green Scientific’s THC testing results aren’t as high, at times 5% or 10% lower.

“We’ve lost clients because they’re like, ‘Hey, I can get a higher number over at this lab,'” he said.

“It sucks because … cannabis is so important to so many people, but it carries a negative stigma already, and to have these types of things going on.”

Building a quality lab staffed with experienced professionals “doesn’t mean that you’re going to be successful,” Richmond added. “And it’s been really, really challenging.”

One of the causes of the unscrupulous behavior among cannabis testing labs, he believes, is that too many have been licensed, which incentivizes some to cut corners in order to gain business.

“It seems like the entire industry in Florida, from the lab standpoint, is turning on each other,” Richmond said.

“They got to get their piece of the pie.”

At the same time, Florida is working through the process of adding 19 vertically integrated cannabis licenses, and the testing labs will be jockeying for that new business.

“It’s just becoming much more cutthroat,” Richmond said.

State-run audits

A possible solution would be for the state to create an audit trail that checks testing results.

Keith Browning, CEO of Method Testing Labs, said his company has been pushing for such a move.

“It’s the right thing to do,” Browning said. “That will change this industry.”

Browning admitted Method Testing made a mistake that led to the fine for the certificate-of-analysis violation.

“We should have done it the right way,” he said. “That’s our fault.”

In an emailed statement to MJBizDaily, Browning’s company said that “Method takes regulatory violations very seriously and has updated the certificate of analysis to bring it back into compliance with the requirements from the state of Florida.”

As far as the competition for market share, Browning said that, more so than price, his customers want quick turnaround times.

Many of his clients have in-house labs, so they know what to expect from the test results. They just want him to make sure the supply chain moves quickly.

“It’s a pure cash-flow discussion for them,” he said. “You’re talking about millions of dollars if you can shave off two days.”

Focus on test results

According to Roger Brown, president of ACS Laboratory, the fines his lab received were the result of “simple clerical errors that should have been caught.”

ACS corrected the error, he said.

“We fixed it, we submitted the documentation, and everything will go away,” Brown said. “But unfortunately, we have to pay the fine.”

Brown said he’d much rather see the state go after labs that are giving out fake test results.

“The most important thing is to make sure the product is safe for human consumption,” he added.

Brown said ACS tests about 50% of all cannabis in Florida. The lab tests medical marijuana both in Florida and hemp nationwide.

Tallahassee-based multistate operator Trulieve Cannabis makes up about 30% of ACS’ business, according to Brown. He said Trulieve doesn’t focus on THC potency results.

Brown has been outspoken about the issue of false test results and lab shopping.

He said he lost clients to a lab that, for example, will give a 30% THC result on a product that’s really only 20% THC.

“I have lost business with clients where they said, ‘I’m going to go with a laboratory that gets me to the highest-level THC,'” Brown said.

Potency inflation and lab shopping is also rampant in the hemp space, he added.

Brown would like to see more emphasis on terpene levels to help differentiate products and educate consumers to shift the focus from THC.

He’d also like to see the state audit test results and for the labs to form a consensus around products.

A typical margin of error for THC testing is 5%, Brown said.

“But if they’re plus or minus 50%, somebody’s whacked out.”

Bart Schaneman can be reached at bart.schaneman@mjbizdaily.com.