Business
Inflated THC Levels, Price Gouging Would Be Banned Under California Bill
AB 1610 would create transparency and tackle inflated THC levels, which leads to price gouging.
Enormous pressure to inflate THC levels falls upon cultivators, manufacturers, and labs. And when THC levels are inflated, it creates unrealistic expectations for higher numbers, and it erodes trust in the integrity of the industry.
One California lawmaker has a solution: On March 15, Assemblymember Reggie Jones-Sawyer (D-Los Angeles) introduced Assembly Bill 1610, which he calls the “weed-out-the-weed” bill to create greater transparency in cannabis testing and help eliminate fraud in the legal markets.
“As consumers, we all want to know that what we purchase is safe, legal, and tested. This is why I introduced AB 1610,” said Assemblymember Jones-Sawyer. “As the cannabis industry continues to grow in California my bill will help protect consumers and maintain high quality cannabis products.”
SC Labs is sponsoring AB 1610 because it would improve transparency in the market by allowing or requiring in-person lab audits, randomized product shelf testing to ensure cannabis labels are accurate, and blind proficiency testing of labs.
“SC Labs is supporting this bill because without greater engagement from the state, there is no way to hold bad actors accountable,” says SC Labs Chief Compliance Officer Josh Wurzer. “Under the current system, bad actor labs and brands profit over companies that are working hard to follow the rules.”
Wurzer continues, “We want the legalized market to thrive, as it’s come under a lot of pressure recently from reduced prices and the persistence of illicit markets. Greater trust and transparency in legalized products will boost consumer confidence, ensure public safety, and strengthen the legal markets.”
The proposed reforms in the bill are common sense measures, Wurzer says, that will strengthen existing laws and give regulators the tools they need to stamp out fraud. That includes:
- Requiring blind proficiency testing so that labs are tested on their accuracy within their normal course of business
- Requiring all past recalls to be publicly shared online for consumers to access easily
- Requiring in-person annual audits of laboratories (many of the labs operating in California have been operating on provisional licenses and have yet to be inspected in person. This is something other states regularly do to ensure accountability)
- Allowing for the randomized testing of products available for retail sale to identify inconsistencies in testing
Wholesale prices for distillate are determined by THC content, and consumers favor flower for the same reasons. Companies “lab shop” to get the highest THC levels possible. What’s really happening is consumers are getting gouged for prices when they think they’re getting a higher amount of THC than what is really in their product.
Just how rampant is it? A few labs that were fed up with rampant potency inflation and recently set out to determine how bad the issue was. Their sampling of over 150 randomly chosen flower products by several lab leaders found that 87% of products illegally overstated their THC content, and several also contained harmful levels of pesticides. Furthermore, over half of the samples were over 20% deviant of their labeled THC values, which is over twice the legal permitted variance.
California does allow some room for error. The state’s threshold is +/- 10% for THC, but companies often illegally surpass that margin of error. “Any one cannabinoid, total THC, and/or total CBD claimed to be present on a label shall not be considered inaccurate if the difference in percentage on the certificate of analysis is plus or minus 10.0%” the California Department of Cannabis Control (DCC) states.
At least five class action lawsuits have been filed in recent months by consumers claiming damages for paying for artificially high THC levels. Some major and recognizable cannabis brands were called out.
When people are essentially getting less THC than what’s on the label, trust in the system will fall apart.
“When Californians voted to approve the cannabis use, we did so with a trust in the marketplace. Unfortunately, bad actors have violated that trust with improperly labeled products and artificially inflated prices,” said Assemblymember Jones-Sawyer. “This bill, with the ability to conduct testing and product review, improves accountability and gives regulators the tools to restore consumer trust.”
Products have been recalled in California and other legalized states for unsafe levels of everything, including mold, yeast, E. coli, and salmonella.
SC Labs has cannabis facilities in California, Oregon, Colorado, and Michigan, and the company is also a registered hemp lab in other states that require it, including Idaho, Illinois, New Mexico, New York, and Texas.
Source: https://hightimes.com/news/inflated-thc-levels-price-gouging-would-be-banned-under-california-bill/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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