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cannabis testing lab could be saddled with a nearly 10-year ban from operating in Nevada’s licensed cannabis industry after state regulators discovered alleged violations including inflating THC potency results and manipulating results for contamination, from the Cannabis Business Times.In a
filed in January 2021, the Nevada Cannabis Compliance Board (CCB) wrote that Cannex Nevada LLC (now doing business as LettuceTest LLC) had failed to correct “systemic issues cited over multiple years of inspections, several of them repeat offenses.” The complaint detailed 22 alleged violations that showed the lab was not conducting impartial analysis of cannabis products, according to regulators.The alleged violations include using lab procedures likely to inflate tests for THC, a repeat violation that resulted in a license suspension for the business in 2017. The complaint also alleges that Cannex routinely retested samples that failed tests for contamination including heavy metals and microbes in an effort to obtain a more favorable result.
“Rather than protecting consumers through accurate and honest testing, Cannex implemented processes that were designed to protect monetary assets of their clients without regard for consumer safety,” the CCB complaint states.
During a special meeting of the CCB last month, attorney Kimberly Maxson-Rushton told the board that all 22 alleged violations occurred in 2019, when Nevada’s cannabis industry was regulated by the Marijuana Enforcement Division, the predecessor of the CCB. Maxson-Rushton said that the lab had fulfilled a corrective action plan and met statutory requirements following documentation of the violations in 2019, so the CCB should not pursue the same violations with the 2021 complaint.
“Even if (Cannex) didn’t agree [with the 2019 audit and investigation], they have the obligation to demonstrate compliance to the satisfaction of the agency that holds their license,” Maxson-Rushton said. “And that’s what they did. And so, again, it begs that question: When all of that was done in 2020, before [the CCB was] even in place, why file a complaint in 2021?”
Board Denies Motion To Dismiss Disciplinary Action on Nevada Cannabis Testing Lab
On September 27, the CCB denied two motions from Cannex to dismiss disciplinary action against the business. The board rejected claims that the 2019 violations had been properly addressed.
“There are some serious allegations in that matter,” CCB member Dennis Neilander said during the meeting. “And I don’t believe the party filing the motion has carried the burden to dismiss because in reviewing the record, there’s been a finding by the hearing officer. And so, in light of those facts, I would support denying the motions — both of them.”
Cannex faces penalties including the loss of its license, a nearly 10-year ban from regaining licensing to operate in the Nevada cannabis industry and fines of up to $62,500, according to the complaint. A meeting date to consider the disciplinary action has not yet been scheduled by the board.
Tyler Williams, chief technical officer of industry standards initiative
, says that the “$62,500 fine for a least 22 violations, some of which are a severe threat to public health (i.e., heavy metals, microbes), is far too small.”“They likely made more money just from performing those tests alone,” he wrote in an email to High There.
In its complaint, the CCB identified five cannabis cultivators with which the lab allegedly engaged in improper testing practices. Alleged violations included providing the growers with informal test results over the phone. State regulations have no provisions for preliminary reports and require that lab results be reported to the CCB and the licensee at the same time. Williams believes the companies named in the complaint should also face scrutiny.
“I would like to see what the state is doing to investigate the manufacturers as well,” he said. “At the end of the day, the labs should be the gatekeepers and not let sites persuade them to give the results they want. On the other hand, if sites are pushing, bribing, etc., they should be punished as well. Both sides have a responsibility to public safety.”