Business
Legal Cannabis is More Expensive But Is Lab-Tested and Safe, NOT! – Colorado Sees Tons of Cheating on Weed Contaminant Testing
The benefits of legal cannabis purchases may not be a benefit after all.
According to the Colorado Marijuana Enforcement Division (MED), state investigators have uncovered numerous instances of marijuana product adulteration by businesses attempting to manipulate contaminant testing. Since the commencement of recreational marijuana sales in Colorado, contamination from mold or illegal pesticides has persisted as a significant issue.
As reported by MJ BIZ, in 2021, the MED approved decontamination and remediation methods for failed marijuana batches; however, these approaches can be expensive and do not guarantee the successful salvage of the harvests.
In a memo dated June 2, the MED cautioned business owners about an imminent public health hazard resulting from illicit practices aimed at circumventing Colorado’s testing protocols.
The Colorado Marijuana Enforcement Division (MED) has identified numerous instances where Regulated Marijuana Businesses have engaged in the adulteration of Test Batches to pass required testing. This has resulted in the imposition of administrative actions, penalties, and, in some instances, Health and Safety Advisories. The memo emphasizes that adulterating or altering Test Batches poses a significant public safety concern as they no longer accurately represent the Harvest or Production Batch they were extracted from.
This year alone, the MED has issued thirteen marijuana recalls, all due to the presence of microbial, mold, and yeast. However, most recall notices also mentioned businesses that had submitted marijuana “improperly for testing” or “not by” MED regulations.
While ultra-violet light and ozone machines are approved remediation techniques utilized to eliminate mold from an entire batch, these practices are widely accepted in today’s marijuana industry. Nevertheless, the MED reveals that certain growers, aware that their plants will fail to test, have resorted to falsifying testing samples to evade the financial consequences of remediation, retesting, or destroying the harvest.
During state rulemaking hearings and disciplinary settlements, reports have emerged regarding cultivations employing radon machines, microwaving marijuana flowers, and manipulating samples with hydrogen peroxide. In 2022, representatives from the Colorado Attorney General’s Office alerted members of the marijuana industry about a rising number of contamination cases that could potentially have adverse health effects on dispensary shoppers.
In their recent memo, the leadership of the Marijuana Enforcement Division (MED) cautioned business owners that any evidence of “willful or deliberate” adulteration or alteration of marijuana testing samples could lead to severe consequences. These include license suspension or revocation, substantial fines amounting to six figures, and even the possibility of being charged with a class two misdemeanor for endangering public safety.
It is worth noting that in the past, the MED has not enforced such strict measures as it does now.
Details of An Adulteration Settlement
State regulators have recently disclosed the settlement details involving Bonsai Cultivation, almost four years after one of the largest marijuana recalls in Colorado’s history. The settlement outlines various issues, including references to moldy marijuana samples, attempts to cover up product adulteration, and substantial fines imposed on the company to continue its operations.
On October 14, 2019, the Colorado Marijuana Enforcement Division (MED) announced that plant samples obtained from Bonsai Cultivation had failed mold and yeast testing. Consequently, a recall was initiated, affecting many Bonsai products such as flowers, shakes, pre-rolls, and extractions. This recall impacted up to 144 dispensaries and eleven extraction facilities across the state, making it one of the most extensive recalls in Colorado’s history at that time. However, the recall itself was just the beginning, per the terms outlined in the agreement between Bonsai and the state licensing authority.
Further investigation into the cultivation practices of Bonsai revealed that the company had been manipulating marijuana samples to achieve process validation. According to officials from the Denver licensing authority, Bonsai had been employing hydrogen peroxide to cover flowers, shake, or trim and treating them with a UV light and ozone machine to eliminate mold or yeast. It is important to note that while UV light and ozone machines are now accepted for mold remediation in Colorado, it was not permitted until 2021. Furthermore, their usage must be appropriately documented and approved by the Marijuana Enforcement Division (MED).
During the inquiry conducted by Denver Health investigators, Roger Schaefer, the general manager of Bonsai, admitted that the 86 testing samples treated with peroxide and machine remediation had been produced on a single day in 2019. Additionally, Bonsai’s CEO, Thomas Stevenson, acknowledged his awareness of the impurity of the production process.
Despite resurfacing in dispensaries across Colorado soon after the 2019 recall, Bonsai Cultivation, and state licensing officials settled the alleged infractions in February. The settlement, disclosed by the Marijuana Enforcement Division (MED) in March, stipulates that Bonsai had to successfully pass a sampling process approved by the state to maintain its operations. Additionally, the company was required to pay a $20,000 fine to the state. However, this was only one penalty Bonsai had to endure to continue its business activities.
As per a settlement reached in 2020 with Excise & Licenses, Bonsai had to pay a $150,000 fine to the City of Denver for the same violations. Furthermore, its license was placed on probation for two years. Roger Schaefer, the general manager of Bonsai, was permitted to remain an employee as long as his responsibilities did not involve marijuana testing, data tracking, compliance and management tracking, product curing, and testing submissions, according to the terms of that settlement. Throughout this process, Bonsai was allowed to continue its operations.
Marijuana’s Mold Problem
Since the initiation of recreational marijuana sales in Colorado, the issue of marijuana contamination, whether due to mold or illegal pesticides, has persisted. The Denver Department of Public Health and Environment (DDPHE) took the lead in inspecting and penalizing non-compliant cultivations 2014. In 2018, it initiated a comprehensive evaluation of dispensary flowers throughout the city.
An investigation conducted by Westword, analyzing city health inspection reports, uncovered that approximately 80 percent of surveyed dispensaries, during the 2018 assessment, carried marijuana that would have failed the state’s mold testing. During that time, the Marijuana Industry Group argued that the testing standards set by the state were excessively stringent, a sentiment that some marijuana growers still echo. In 2020, the DDPHE discontinued its inspections of marijuana businesses, transferring the responsibility to the Marijuana Enforcement Division (MED). The DDPHE still needs to release the final report for its 2018 assessment.
Based on the Marijuana Enforcement Division’s (MED) latest statewide market update, it was found that approximately 15 percent of marijuana flower, shake, and trim failed microbial testing in 2020.
State regulators approved marijuana remediation techniques in 2021, and ozone machines emerged as a popular choice among approved methods. However, it is worth noting that growers and extractors are not obligated to inform consumers about remediation on packaging. Additionally, using peroxide, a chemical antiseptic, is not an approved remediation method.
Despite implementing new remediation regulations, full compliance among growers still needs improvement. The Marijuana Enforcement Division (MED) has issued more than twenty marijuana recalls since 2022, with a significant portion linked to issues such as mold, yeast, and improper testing procedures.
Conclusion
The issue of marijuana contamination in Colorado, particularly from mold or illegal pesticides, continues to be a significant concern. The Colorado Marijuana Enforcement Division (MED) has uncovered numerous instances of businesses attempting to manipulate contaminant testing, which poses a serious public safety risk. While the MED has approved decontamination and remediation methods for failed marijuana batches, these approaches are expensive and not guaranteed to salvage the harvests.
The MED has emphasized the severe consequences, including license suspension or revocation, substantial fines, and potential criminal charges for willful adulteration or alteration of marijuana testing samples. Despite efforts to address the problem, marijuana recalls due to contamination persist, highlighting the need for improved compliance among growers and stricter enforcement measures.
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
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.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
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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