| Reno Gazette Journal
A Las Vegas-based marijuana testing lab is facing license revocation after state investigators determined it was hiding the presence of potentially dangerous contaminants and also inflating THC levels in marijuana it tested for at least five clients.
Cannex, now LettuceTest LLC, repeatedly doctored data to reflect higher levels of tetrahydrocannabinol, which gets people high and increases the value of pot, according to a 44-page complaint released by the Cannabis Compliance Board on Tuesday.
„Rather than protecting consumers through accurate and honest testing, Cannex implemented testing processes that were designed to protect the monetary assets of their clients without regard for consumer safety,” the complaint said.
The board conducted an investigation into the lab in November 2019 and suspended its operations the following month. The recent complaint alleges the following violations by Cannex:
- Routinely passing samples that had previously failed testing for pesticides, microtoxins, heavy metals and microbials, all regulated contaminants. Samples, which are supposed to be tested once, were sometimes tested up to five times before „passing.”
- Routinely inflating THC levels up to 5 percent higher than the actual THC levels. THC potency is known to drive higher retail prices.
- Failing to properly dispose of more than 12,000 samples.
- Failing to properly train lab employees, who were found to lack competency in not only conducting tests but analyzing data.
- Failing to provide proper security and record keeping at lab facility.
The complaint posted by the Board lists five main clients of the laboratory, all in Southern Nevada, who benefitted from Cannex’s violations: THC Nevada, Silver Sage Wellness, ACC Industries, Nevada Group Wellness (Prime Cannabis) and Integral Associates (Essence).
Labs generally test product for cultivators, or growers, who in turn are selling their product to retailers. Board officials could not immediately be reached to answer whether the clients could face violations moving forward.
Cannex resumed operations in February 2020, but it is unclear whether the lab is still operating. The lab is licensed to Ric Rushton; Robb Richardson and Scott Gragson, a multi-millionaire real estate executive who was recently sentenced to prison time after pleading guilty to a fatal DUI crash in 2019.
None of the owners could be immediately reached late Tuesday and the Cannabis Compliance Board said it does not comment on pending disciplinary matters.
Nevada state officials started investigating marijuana testing labs in late 2019 after an independent data analyst based in Washington presented them with evidence of a problem in Nevada’s marijuana market.
The issue, according to Jim MacRae, was that certain labs were hiding flaws in cannabis samples for their clients while also inflating levels of THC. Not only was it potentially hazardous to consumers, but damaging to the credibility of the state’s legalized market, he said.
Cannex had its license suspended initially in 2017 and in November 2019, several site inspectors conducted an inspection of the facility and found a number of unsettling discoveries, according to the state’s report.
When one of the inspectors inquired about a pattern of data suggesting that samples were often tested multiple times, the Cannex scientific director said the facility retested for accuracy. If a sample tested for microbial growth and it passed the test, it required no further testing, but if it failed they would retest it, the director said.
„(The director) likened the presence of microbial growth on cannabis to mold growth on a loaf of bread, stating that a loaf of bread may have mold on only one spot, but still be safe for consumption,” the complaint said.
While the director initially told colleagues she was concerned about the practice, the lead microbiologist told her „they must balance protecting consumers with protecting the business,” according to the complaint. The director said the same practice was used for testing for other contaminants.
Additionally, the lab was frequently giving misleading THC readings, with the THC potency increasing over time for their clients „as higher and higher results were continually perpetuated,” according to the complaint.
During the investigation, state officials tested a number of samples already tested by Cannex and retested the samples with another lab. Cannex’s THC results were higher more than 80 percent of the time. Clients regularly received reports of samples that exceeded levels of 30 percent THC, though following the investigation and a suspension of the operations shortly thereafter, levels dropped to the mid-20s.
The lab also was reporting the results of tests to the clients before reporting them to the state, which is supposed to receive results simultaneously. Also of concern, the facility’s primary potency analyst was a college graduate who lacked training in how to work instrumentation and also how to read data.
The Cannabis Compliance Board has recommended that Cannex’s license be revoked and it be fined in the amount of nearly $63,000 and the amount expended for the board’s time and effort on the investigation. The Board is additionally recommending the licensee not be able to apply for reinstatement of a license or certificate for nearly a decade after revocation.
The board also approved a number of other items Tuesday, including a settlement with a Reno marijuana cultivator, Herbal Care. The state imposed a seven-year industry ban on its owners, who will also pay a fine of $125,000, according to the Las Vegas Review-Journal.
Herbal Care had failed to tag and label more than 80 containers of marijuana and appeared to be diverting product illegally, according to an initial complaint state officials filed in July last year.
Jenny Kane covers arts and culture in Northern Nevada, as well as the dynamic relationship between the state and the growing Burning Man community. She also covers the state’s burgeoning cannabis industry (Check out her podcast, the Potcast, on iTunes.) Support her work in Reno by subscribing to RGJ.com right here.