How a NY Cannabis Insider experiment led to statewide policy change

March 10, 2023 ·

NY Cannabis Insider bought the eight highest-potency strains of legal recreational cannabis available in New York State on Feb. 24, drove them straight to a state-certified laboratory, placed them in anonymized Ziploc bags and submitted them for potency testing.

What came back has kicked open a hornet’s nest within the NY cannabis ecosystem and led to a regulatory policy change within the past 24 hours that affects every cannabis grower, processor and consumer in the state.

That’s because our lab results, which arrived on Friday, showed that the majority of the best-selling weed available in the nascent marketplace contained drastically lower THC than advertised:

  • One strain showed 33.8% THC on the consumer-facing label, while testing said the actual number was 21.7%
  • The lab found another product contained 17.7% THC, while its label advertised 28.5% – a roughly 47% difference
  • Only three samples came within a 10% margin of error from their labeled potency, which is more or less the variance state regulators are proposing be allowed for the New York industry
  • Only one out of the five brands had gone through testing for state-certified potency, and its strength was almost exactly what the label stated.

If you’re quick to blame the growers or processors who labeled these products, know that reality is more complicated.

The discrepancy between the label and what’s inside was due primarily to a government Band-Aid – called line testing – that allows flower and pre-rolls to get to shelves fast without measuring actual potency, and instead advertise “anticipated potency.”

Anticipated potency is the midpoint of the seed’s expected range of THC output, as reported by the producer of the seeds.

It is not a guarantee of what’s in that specific jar or joint.

“You’re relying on seeds and it’s never going to be accurate,” said Bob Miller, the chief operating officer at ACT Laboratories, one of New York State’s certified testing labs.

In California, classaction lawsuits over mislabeled THC have been filed against Lowell FarmsStiiizyJeeter and Iron Works Collective. In Arkansas, a medical cannabis patient sued a testing lab and some growers for the same reason. In Canada, a labeling lawsuit was filed against more than a dozen cannabis companies over “drastically different” THC content compared to labels.

“Cannabis consumers have a right to rely on the accuracy of representations on packaging and labeling, and manufacturers and marketers have a duty to ensure the safety of their products and the accuracy of the representations on their labels,” said Sheri Tarr, the chief advisor of cannabis consulting firm ‘68 Partners. Tarr spent the bulk of her career as a plaintiff’s attorney holding pharmaceutical companies accountable for deceptive marketing.

She added, “There is an uptick in litigation involving deceptive marketing and defective manufacturing, and plaintiffs’ lawyers who are lying in wait will not likely be deterred from commencing legal actions against our operators because New York was trying to fix a demand problem.”

Since the lab results arrived on Friday, NY Cannabis Insider has talked with growers, processors, consultants, attorneys, reporters, laboratory staff and others in the cannabis space, and on Tuesday, we presented a summary of those conversations – and an explanation to our testing data – to executives at the Office of Cannabis Management.

By the following morning, the OCM concluded that the state’s flower “should be tested for potency” and announced an end to its line testing program for flower and pre-rolls.

The statement also said: “The Office of Cannabis Management is updating our testing protocols due to a greater than expected variability of potency testing for flower that doesn’t exist for concentrates and edibles. As an agency tasked with developing new regulations and standards, we constantly monitor data, and when dynamics change, we update the standards and protocols to reflect the findings.”

Half an hour after OCM spoke with NY Cannabis Insider, the agency’s compliance unit sent an email to all state-licensed cultivators and processors about the updated guidance.

That update also included a pass for those with line testing in process – and the agency made clear to NY Cannabis Insider that it has no plans to pull the remaining line-tested flower or pre-roll products from the state’s four operating dispensaries.

This may be “problematic for licensees and consumers,” said Tarr from ‘68 Partners. “For conditionally licensed operators, the window of liability for claims related to mislabeling remains open.”

“Likewise, for consumers who have the right to rely on the accuracy of representations on a product label, this could cause confusion at minimum, and worse a sense of being misled.”

Applauding OCM’s “important step” on Wednesday and with appreciation for the complexity of it all, Tarr said, “I question whether this half-step change to line-testing is worth the risk of exposure and tarnished brand equity.”

An obituary for line testing

The first-ever mass cultivation of legal outdoor cannabis in New York State was an experiment.

Gov. Kathy Hochul signed the conditional cultivator program into law in February 2022, creating a pathway for hemp farmers to apply for a license to grow legal weed in the upcoming season.

In October, she said that the state’s plan to have 20 dispensaries open by the end of the year was “still on track” – and to expect “another 20″ to open every month or so thereafter.

The clock was ticking.

By November, so many licensed growers were failing lab testing that the OCM relaxed its guidelines and temporarily eliminated tests for bacteria, yeast and mold.

That month, the agency also released guidance describing a temporary testing program called “line testing,” designed to expedite the path of products through labs.

In other words, if Hochul’s promise was to become a reality, New York growers needed their weed tested fast and the OCM needed to provide them with a way to get that done.

OCM Director of Policy John Kagia told NY Cannabis Insider on Tuesday that the agency’s overall policy approach includes examining the current state of the market and developing “levers” to stimulate or activate it in ways that reflect OCM goals, including equity, public health and safety, and consumer protection.

After monitoring demand, product availability and the timing of store openings, “we felt than line testing would be an effective way to get larger cohorts of products through the testing process,” Kagia said.

Though Hochul’s expectation of 20 retail stores by year’s end never came close to fruition (the first dispensary opened on Dec. 29), line testing did its part to see that Housing Works Cannabis Co. had enough flower for opening day.

But is line testing’s potential for potency inflation a concern for regulators?

“We certainly considered that as part of the potential risk here,” Kagia said. “The development of the line testing framework and guidance was very, very robustly debated within the office.”

Kagia said the OCM had always viewed line testing as an interim measure, but never ruled when it would end. He pointed out that only 17% of the flower and pre-rolls on the market have gone through line testing.

However, seven out of the eight strains that NY Cannabis Insider purchased were line tested, and the first store visited was out of all of them.

That’s because high-strength weed sells. Consumers tend to value high-THC products over other factors, such as brand loyalty, aroma, or even price. Though other cannabinoids and terpenes in a strain can have significant effects on the overall experience, potency is king and a primary sales driver (this is particularly true for male consumers).

But here’s the risk to all cannabis consumers: if growers and processors self-test and see a low THC number, they may opt to rely on the seed’s average output and slap a higher-proof label on the product – and this was allowed under OCM’s line-testing guidelines.

“Allowing New York’s line tested flower products to effectively make up their potency number was likely an oversight by the regulators,” said Aaron Raskin, co-founder of Lobo, a New York cannabis brand that was one of the eight we tested, and the only brand that didn’t have a large discrepancy in its label vs. content.

That may be because Lobo opted to “batch test” their product and show the actual THC percentage that came from a certified lab. Lobo’s Wedding Cake strain displayed 27% THC on its label, and lab results showed it contained 26.3%. That’s well within the variance that state regulators are proposing for the industry.

“It is great and really encouraging to see that once the OCM was made aware of the unintended consequences of this loophole, they acted swiftly to close it,” Raskin said.

“If left unchecked, it could have easily skewed the shelf and primed the consumer towards unrealistic numbers, at least for outdoor flower, creating an unfair advantage to those with inaccurate higher THC numbers.”

On Tuesday, OCM Director of Health and Safety Nicole Quackenbush added that the agency is in the process of setting up a reference lab for retesting, monitoring, and compliance.

“More to follow on that front,” she said. (Full Story)

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