Major Shortcomings Revealed at Oregon’s Cannabis Testing Labs

Oregon’s cannabis testing system is failing — at least according to a new report from the state’s auditing division.

The report, titled “Oregon’s Framework for Regulating Marijuana Should Be Strengthened to Better Mitigate Diversion Risk and Improve Laboratory Testing”, was issued by Oregon’s Secretary of State Dennis Richardson, and was published publicly on Jan 30. The purpose of the audit was to establish whether Oregon’s cannabis market controls are effectively stopping the leakage of cannabis product into the illegal black market in the state, and to monitor the accuracy of the state’s cannabis testing laboratories.

Regulation of cannabis within the state

Firstly, it was observed that the Oregon Liquor Control Commission (OLCC), which is responsible for regulating the state’s recreational cannabis market, has put in place many effective control measures, such as seed-to-sale product tracking and surveillance cameras, to prevent any leakage of product into the black market. However, the auditors also noted that staffing shortages and an unexpected volume of license applications and approvals have meant that the Commission has been rather overwhelmed when it comes to carrying out compliance inspections — only 3% of retailers and 32% of growing operations were inspected by OLCC personnel in 2018.

Next, the Oregon Health Authority (OHA), responsible for overseeing the state’s medical marijuana program and the marijuana lab testing rules, was looked at. Unlike the OLCC, the OHA lacks the statutory authority to put effective controls in place, such as surveillance cameras in facilities that deal with medical cannabis product. Unfortunately, like the OLCC, the OHA deals with a similar understaffing problem. The OHA has just four permanent staff, who are meant to be responsible for overseeing the state’s 14,000 different growing sites. Additionally, the report notes that the OHA “has struggled with decreasing revenues, turnover, and performance management.”

Cannabis testing fails to hit the mark

The final two points that the audit highlights concern cannabis testing methods within the state.

All recreational cannabis product in the state is required to undergo mandatory testing, which determines the potency of the product as well as detects the presence of any residual pesticides or solvent matter that is on the cannabis product. But this is not always necessarily the case for medicinal cannabis. The report notes that medical product which enters the market through medical dispensaries and processors is required to be tested in the same way and reported to OHA — but cannabis product directly transferred from growers to patients without an intermediate dispensary is currently not required to be tested. As a result, most of the medical marijuana available in the state is not being properly tested. Additionally, Oregon currently has no requirement for heavy metal or biological testing, despite this being required in other states such as California. As a result, even tested cannabis is not guaranteed to be contaminant free.

Finally, the audit highlighted the state’s lack of an adequate verification process for cannabis testing results. The auditors put this down to the limited authority of the OHA, combined with inadequate staffing and inefficient existing processes which impact the OHA’s ability to properly oversee cannabis testing in the state. Proper verification is important, as mounting industry pressure on account of the expansion of the cannabis market may tempt testing labs into deviating from accredited operational standards, thereby potentially affecting the accuracy of any testing results.

Without a proper system of verification, the integrity and accuracy of the state’s cannabis testing system are near solely dependent on the expertise and professionalism of the laboratory workers. As evidenced by one particularly high-profile case of lab result fraud in California, this can sometimes not be enough. The audit also notes that while most workers in Oregon’s cannabis industry are required to obtain a worker permit from the OLCC, pay a $100 fee, pass a basic knowledge test on the industry rules, and submit to a background check, laboratory and research facility personnel are not required to undertake any of these measures. This means that overall, very little is actually known to regulators about the staff employed in Oregon’s cannabis testing labs.

Growers and processors are lab-shopping to get favorable results

Several labs that spoke with the auditors also expressed concerns over “lab-shopping” — the name given to what happens when growers or processors jump from lab to lab to find the most favorable results for their product.

The audit states that the use of multiple testing labs by OLCC licensees is “not uncommon”, with 24% of growers and 43% of processors having used three or more labs between January 2017 and July 2018. In the same period, 38 growers or processors were found to use five or more labs, with one processor using nine separate cannabis testing labs for their product.

There are several legitimate reasons why a grower or processor might want to have their product tested by more than one lab — such as variation in the quality of service between labs; the closure of a previously used lab service; or a change of ownership or methodology. However, repeated or frequent use of multiple lab services could be an indication that a client is trying to shop around for an “optimal” test result, such as a higher potency or purity result that means the client can charge more for their product.

Due to cannabis remaining federally illegal, there are no federal standards for laboratory testing of cannabis. This allows labs to use their own preferred methodologies for testing cannabis product, and with no external verification occurring (either through regular OHA inspections, or “shelf audits” where on-sale product is tested to ensure it is in keeping with reported test results), labs are free to use whatever methods they choose — and whatever methods might attract more business to their facility.

Recommendations from the audit

The audit report concludes with 23 recommendations that are intended to improve Oregon’s cannabis regulatory system, all of which the OLCC and OHA have agreed to implement, although the OHA did indicate that it currently lacks the statutory authority to take immediate action on three of the recommendations.

Both the OLCC and OHA’s responses to the recommendations, detailing how and when they will take action on each recommendation point, have been published at the end of the audit report for the public to read. Both regulatory bodies are expecting to fully implement each recommendation within the next six months of operation.