‘This Industry Is Going to Fail Unless We Act’: Dave Cho on Cannabis Lab Shopping
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For Dave Cho, the world of cannabis came as a bit of a shock. He had spent 37 years in the pharmaceutical sector, an industry with rigorous, decades-old regulations. Then he opened a cannabis lab, Shasta Laboratory, in California’s Bay Area. And things were a little different from his pharma days.
The regulations weren’t as encompassing. The testing methods weren’t as validated. And the level of fraudulent testing was – and still is – astonishing.
Speaking to Analytical Cannabis about the scale of this kind of testing fraud, Cho recounted an interaction with a cannabis company that wanted its product’s THC content to be 3% higher.
“We were only 3% lower than other labs, and the customer said, ‘No, I’d like to go with [the] other lab who gave who gave higher number.’ For 3%? That’s not a big difference. But that is the current situation.”
This kind of dubious practice is called lab shopping. It goes like this: wishing to cash in on the consumer demand for high-THC products, a cannabis company can “shop” around different labs until it finds one that will provide high enough THC test results.
Over time, lab shopping can lead to cannabis market saturated with fraudulent goods. Dispensary shelves can be stocked with vapes, edibles, and flower that aren’t nearly as potent as their labels claim.
This, many industry insiders concede, is what has happened to large swathes of California’s market. Now, with so many state labs apparently happy to tweak their THC numbers, Cho isn’t sure how long a lab like his can last.
“I’m in quite a difficult time, to be honest with you – whether it’s worth it to sustain this vision continually or not,” he told Analytical Cannabis.
To keep his business going, Cho says there need to be some big changes in the market and how it’s regulated. But those changes won’t be easily made.
“Lab shopping will be very hard to control by some kind of rule enforcement,” he said. “I’ve shared my opinion with the Department of Department of Cannabis Control [DCC]; whatever they do, probably it will fail.”
“[The] only option is money related. For example, high potency products, they have got to collect double or triple the tax. Otherwise, what is the interest to the cultivators and the extraction company? Because they will continue to shop around regardless, this is a free market.”
“There’s no clear solution other than taxing or some other kind of money related [proposal]. Otherwise, this is going to keep on going.”
While the DCC hasn’t yet proposed any tax measures to tackle lab shopping, it has mandated certain lab testing requirements across the state, in an effort to weed out bad actors. One of these requirements will be for all labs to follow the same compulsory, standardized cannabinoid test from next January.
The test’s requirements include that the cannabis samples be ground down to less than one millimeter, that the test be carried out by high-performance liquid chromatography (HPLC), and that there should be at least two spike concentration levels and at least three spike replicates recorded. The full details of the proposed testing method can be found here.
More than a test
But one compulsory cannabinoid test won’t be enough to end California’s lab shopping problem. According to some cannabis testers in the state, it might just raise further problems.
Speaking to Analytical Cannabis in July, Jeff Wurzer, co-founder of SC Labs, remarked that the new rule is “bringing a whole host of problems.”
“It’s not ready for primetime; all the labs have sort of come out against it, and it doesn’t really stop the inflation problem. There’s [sic] things that people are trying that may not work.”
So, beyond a cannabinoid test – and falling short of tax measures – what else can the DCC do? Well, maybe provide some education, says Cho.
“We pick [sic] up a couple of samples from the dispensary, 35% total THC,” Cho tells Analytical Cannabis. “We analyze it. [It was] barely 22%.”
“Already over 20% is high total THC; our body cannot take that much. But I don’t know why this market is brainwashed by 34, 35, even 38%. And they don’t really understand about this concept, and how our body is going to react. But that’s the market out there. We really need a public education; we have to deliver.”
To help break the consumer demand for high-THC products, Cho suggests that the cannabis industry should get honest about how much THC is really necessary to achieve a high. Speaking about edible products, he remarked that the standard dose of 10 milligrams of THC is already too potent for most buyers.
“10 milligrams is quite strong. Everything over 10 milligrams? Oh, no, give me a break. That’s going to be extremely strong, especially taking [via] the mouth. That’s going to [be processed via a] different mechanism. There’s one metabolite called 11-OH-THC, a very high active compound [which is formed in the stomach when the edible is broken down]. That’s going to really hit people quite hard.”
And Cho isn’t the only cannabis tester in California calling for a wider diversity of products. Speaking to Analytical Cannabis this February, SC Labs co-founder Jeff Gray remarked that the market it too focused on THC, but new industry events like California’s State Fair Cannabis Awards could boost the appeal of less intoxicating produce.
“The market here is dominated by THC, when really the sophistication of the chemistry within the plant is such that you should be evaluating the quality of your cannabis based on something much broader.”
“I think with more information, you’ll see greater diversity,” Gray reflected. “Hopefully, the competition, because the way that it’s structured, will highlight some of the diversity of cannabis as well.”
Alone, of course, the State Fair Cannabis Awards won’t be enough to educate California’s cannabis consumers to make a difference in the market. But with more such events and outspoken industry insiders like Cho and Gray, there’s hope that buyer-habits could change over time.
Then again, as Cho says, perhaps the only real way to change how cannabis consumers spend their money is to change how much products cost. But given that many workers in state’s market have already decried the onus taxes have on cannabis businesses, it seem unlikely that the DCC will impose such a “potency tax” any time soon.