In conjunction with Rocco Petrilli – Chairman,
National Cannabis Risk Management Association and Alex Hearding –
Chief Risk Management Officer, National Cannabis Risk Prevention
Services.
To date, most of the claims and litigation around cannabis
products have been predicated largely on allegations of
contamination, mislabeling and testing failures that have resulted
in product recalls, consumer class actions and alleged state
regulatory violations or violations of consumer protection
statutes. Testing failures place additional financial burdens on
businesses because products that do not pass state testing
requirements either are not allowed to be sold to the public or the
product’s value is reduced because of the cost of remediation.
We expect that industry risk management advancements, along with
the adoption of uniform standards for cultivation, manufacturing
and testing, will help to drive down future liability for
contamination, label inaccuracies, testing failures and similar
claims. To be fully effective, these risk management activities
should be formal, complete and – most importantly – embraced by
cannabis companies at all levels of management.
Product Contamination
Contamination issues primarily involve pesticides (as well as
herbicides and fungicides), solvents, heavy metals and
microbiological contaminants. The cannabis industry has been
hampered by the fact that the Environmental Protection Agency (EPA)
does not regulate cannabis due to its Schedule 1 status, and
therefore has provided the industry with no helpful scientific
recommendations for pesticides and other agricultural chemicals.
There has been little research on the risks of heating and inhaling
pesticides used on agricultural products. States have therefore
been left to make their own recommendations on chemicals that
should be used or avoided. California and Colorado, in particular,
have played a leading role in the development of state-issued
cannabis pesticide recommendations. In lieu of federal
participation, the active engagement of additional states and the
adoption of formal risk management practices must play a more
prominent role in providing guidance to the cannabis industry.
Even products that are characterized as „organic” or „minimum risk” may trigger lab failures, including for
pesticides, solvents and heavy metals. This inadvertent
contamination may be due to pesticide or heavy metal residue in the
growing medium or nutrients used by the cultivator introduced
through cross-contamination or pesticide drift. Residual solvents
and cleaners used in other areas of a facility also may trigger
testing failures. Trace amounts of industrial or household
chemicals can linger in cultivation areas for months after use.
Microbiological contaminants represent a primary area of
uncertainty that impacts cannabis product liability. Many
states’ cannabis contaminant testing requirements are derived
from food testing rules that specifically look for common food
contaminants such as E. coli and salmonella. Although those
contaminants are a significant threat in the production of
marijuana edibles, the risk of common foodborne pathogens is lower
in the cannabis plant and in cannabis extracts. Lesser known
microbiological contaminants also may pose a danger to consumers.
Various species of fungus can cause illness from mycotoxins, which
can result in severe injury or even death when consumed. Lack of
research has hampered the industry and its regulators from
identifying and categorizing dangerous species of mold, mildew and
other fungi. As we learn more about what mycotoxins may be found in
and around the product and their specific health hazards, uniform
testing standards should be improved and adopted to protect public
health.
The Cannabis Testing Laboratory Trust Gap
The importance of uniform testing standards has been made more
apparent by recent reports of negligence and even fraud committed
by cannabis testing laboratories in multiple states. Although labs
in most states essentially work on the „honor system,”
there is a significant trust gap due to the questionable business
practices of a subset of licensed laboratories. In fact, lab
failures have been an open secret within the cannabis industry for
some time.
Lab Shopping
Cannabis testing laboratories are private for-profit
businesses that rely on cultivators and distributors using their
services. Reports of „lab shopping” and undisclosed quid
pro quo deals between cannabis businesses and testing laboratories
have become more frequent. It was reported in January 2021, for
example, that Nevada laboratory Cannex was suspended for allegedly
inflating THC potency results for favored clients, and repeatedly
retesting samples for contamination until a passing result is
obtained. Other reports have accused marijuana businesses and labs
of adulterating product with spray-on cannabis oil that gives the
impression of a higher THC content, a practice known as „kiefing.” Some laboratories have lost their licenses
based on violations of this nature.
Cherry-Picking
Some states allow the cultivator or distributor to self-select
the sample to be tested, which may lead to biased „cherry-picking” and manipulated lab results. Some
samples, for example, may be separated and carefully dried
independently from the bulk harvested material to reduce the
potential for findings of microbial contamination or moisture.
Cherry-picking of samples also may lead to deficiencies in the
testing for adequate homogeneity of cannabis-infused products.
Batch-to-batch variability may be caused by factors such as
changing growing conditions, the manufacturing environment or even
use of different packaging.
Costs
A 2020 study from the University of California, Davis finds
that safety tests cost growers about 10 percent of the average
wholesale price of legal cannabis, with the biggest share of this
expense due to test failures. California’s lab testing
requirements are the most stringent among state regulations,
mandating testing for more than 100 contaminants, including 66
pesticides with tolerance levels as low as any agricultural
product. The cost of testing in California averages around $500 per
product tested.
Varying Methods and Equipment
Not only do states have varying standards for regulated
testing laboratories, but the testing methods and validation
procedures used by labs within the same state may vary widely.
Although there can be a wide divergence in the quality of the
equipment used by laboratories, instrumentation typically includes
gas chromatography (GC) and high-performance liquid chromatography
(HPLC) systems coupled with various modes of detection such as mass
spectrometry and diode-array detection. HPLC often is used to
measure cannabinoid concentration, and if done correctly, allows
chemists to separate and measure the concentration of THC, CBD,
terpenes, flavonoids and other cannabinoids. Labs also may isolate
pesticides using this method and then assess their concentrations
using mass spectrometry.
Details of each laboratory’s procedures and validation
methods often are proprietary. This results in an environment where
it is difficult to validate the accuracy of cannabis test reports ?
a particular problem for multistate operators that expect
consistency with their branded products across multiple states.
Brand loyalty, of course, depends on product consistency and
safety. State regulators are evaluating broad testing standards
through organizations such as the Cannabis Regulators Association
(CANNRA) and with the assistance of outside third-party standards
organizations such as ASTM International, giving them a better
understanding of the problems.
The „Limit-of-Detection” Problem
Some states inadvertently created perverse incentives by
allowing a cannabis product to pass or fail through „limit-of-detection” testing. This standard essentially
provides that the sample for certain pesticides or other
contaminants will pass if the chemical is not detected within the
limit of detection of the equipment and methodology used – but
without setting a specific acceptable level of detection. This „detect/non-detect” standard penalizes laboratories with
cutting-edge equipment and methods, while rewarding less proficient
laboratories. A laboratory with modern equipment, experienced
technicians and effective methodologies will detect pesticides or
other contaminants at lower levels than a laboratory with older
equipment, less experienced employees or ineffective
methodologies.
From the cannabis operator’s perspective, however, when
faced with the choice between a more likely pass-rate for their
product – even with a higher potential for recall – many operators
will make the „easy” choice to get the product on the
shelf. This dynamic should be reversed through the adoption of
uniform standards that move away from limit-of-detection testing.
In the meantime, states should examine and identify reasonable
action levels for residual pesticides and solvents.
Label Inaccuracies Remain a Problem
In the meantime, various studies and surveys have verified
label inaccuracies across a spectrum of cannabis products,
particularly pertaining to „margin of error” cannabinoid
potency testing and reporting of contaminants. Some cannabis
products are certainly easier to analyze than others. More complex
products such as cannabis edibles are more likely to be
inaccurately labeled. For example, California’s Bureau of
Cannabis Control determined that nearly 20 percent of all products
tested failed laboratory analysis for potency and purity, with the
most common failure being inaccurate claims on the package label.
Over 30 percent of edibles and other manufactured products
failed.
Identifying the Solutions and the Barriers
Advancements with the adoption of uniform standards for
cultivation, manufacturing and testing should help to drive down
future liability for contamination and label claims, so long as the
standards are followed by cannabis operators. Several key practices
should be embraced by the cannabis testing industry, including full
accreditation, objective demonstration of proficiency, better
investment in state-of-the-art equipment and the adoption – and
enforcement – of ethical business practices. Past experience in
other market sectors such as health care, pharmaceutical and
automotive tell us that compliance is not widely embraced unless
certain disciplinary consequences are attached. Organizations such
as the Cannabis Compliance Commission of Nevada have been formed to
police compliance, and penalties are being imposed for
nonconformance to specific standards.
Accreditation
Given the concerns addressed above, it is a hopeful sign of
progress that of the 26 states that currently mandate cannabis
testing, 18 require some form of accreditation. This usually means
accreditation through the International Organization for
Standardization (ISO). The standard for testing laboratories is ISO
17025 („General requirements for the competence of testing and
calibration laboratories”), which sets minimum equipment,
process and quality assurance requirements, as well as proficiency
testing to ensure that testing methods are accurate. Some states
either do not require ISO accreditation or allow laboratories to „phase in” for accreditation over time. In addition, of
those cannabis testing laboratories that have some form of
accreditation, a majority are accredited for only a few of the
tests they perform. The industry should strive to require full
accreditation on all compliance testing methodologies.
Proficiency Testing
No state has yet developed and implemented a cannabis
proficiency testing program. Such a program could incorporate
random sampling and testing of retail products off store shelves,
with results compared to the testing laboratory’s Certificate
of Analysis for that product. Alternatively, proficiency testing
may be coordinated by an independent third party that sends an
unidentified sample to testing laboratories to verify whether the
laboratory has the expertise to accurately analyze the ingredients.
This system has been used for companies that test water, biofuels
and certain agricultural products.
Striking the Right Balance
It may be difficult to achieve widespread consensus on what
should be included in uniform testing standards due to disparate
stakeholder interests. Stringent standards are more expensive to
adopt. That may raise the barrier to entry for less-established
companies and potentially stifle industry growth. Less-rigorous
standards, however, can result in unscrupulous laboratories
undercutting responsible competitors through less-expensive and
unreliable methods that could harm public safety and perpetuate the
trust gap that already exists. Striking the right balance means
adopting standards that allow some degree of flexibility for a
still-emerging industry while keeping customers safe.
In the meantime, there are certain easy steps that have
immediate impact on the safety of cannabis products. Broad adoption
of Current Good Manufacturing Practice (cGMP) standards, for
example, should prevent most instances of microbiological and
particulate contamination in cannabis-infused products.
Federal Illegality Doesn’t Help
The challenge is further complicated by the ongoing federal
illegality of cannabis and the resulting fragmented state
commercial markets, which make a uniform national standard all but
impossible without reform at the federal level. The current
population of licensed laboratories is almost exclusively composed
of small state-specific startups that do not maintain federal DEA
licenses like their non-cannabis competitors. In addition to making
a uniform standard more achievable, reform at the federal level
should help pave the way for important new players, such as large
food safety laboratories and experienced manufacturing
professionals, to enter the space. This may facilitate improved
quality assurance with a corresponding reduction in product
recalls, label suits and consumer class actions.
Like cannabis banking reform, redressing the federal illegality
of cannabis products should be championed as a public safety
measure due to the positive impact it will have on the future
safety and integrity of the entire cannabis product supply chain –
with sound risk management practices and accredited bodies such as
cannabis testing laboratories at its center.
This article first appeared as a white paper on the National
Cannabis Risk Management Association’s website.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.