Michigan marijuana lab proficiency is routinely tested, results are kept secret

Michigan licensors check the accuracy of marijuana safety labs that ensure the safety of products bought across the state, but they won’t share their findings.

Once per quarter, Michigan marijuana safety labs send personnel to a specific location at a specific time set by regulators to pick up samples of marijuana.

Back at their labs, technicians run a gauntlet of tests, looking for contaminates -- heavy metals, mold, pathogens, bugs and toxic chemicals -- and check the potency of THC and other compounds. They mimic what’s done for every marijuana product that makes it to store shelves.

The purpose: to see if the safety lab system is working. Will different labs looking at nearly identical samples reach similar results? They should. But whether that’s happening remains a mystery, due to a law that broadly stifles transparency related to the Michigan marijuana industry.

The Marijuana Tracking Act, which was passed alongside the laws creating the licensed recreational market, deems any information in the statewide marijuana tracking system confidential and exempt from public review. Most other state records or data that is created, received or compiled by government employees working on behalf of the public are open for inspection under the state Freedom of Information Act.

In the case of marijuana, the Marijuana Tracking Act subverts those rights.

MLive submitted a Freedom of Information Act (FOIA) request for the marijuana agency’s inter-lab test result comparisons and summary findings. The Cannabis Regulatory Agency -- recently renamed from the Marijuana Regulatory Agency -- denied that request, citing the confidentiality law.

“The statewide monitoring system is confidential and may only be disclosed for purposes of enforcing Michigan’s marijuana laws and, if requested by the licensee, sent to their financial institution,” CRA spokesman David Harns said. “The CRA has been consistent in our response to requests of this nature.”

Multi-million monitoring system

The statewide monitoring system uses software developed by Lakeland, Florida-based Marijuana Enforcement Tracking Reporting and Compliance (METRC) to track all Michigan marijuana inventory, production, sales, transfers, theft, diversion, company profiles, safety testing results and more.

The software is known by the company’s acronym, METRC, and it’s a stateside monopoly for the owners. Marijuana businesses have no other choice but to use METRC software, which they pay nearly $500 per year, per license for. METRC is also paid $35,000 annually by the state and charges up to 45 cents per tracking tag, which are required for all plants and product packages.

The licensing fees and tag sales, although not reported publicly, reach into the millions, based on the number of state licenses -- more than 2,600 as of March -- and plants produced. There were 1.1 million active plants tracked by the system as of the most recent monthly statistical report produced by the CRA.

METRC, with more than 150 employees, dominates nationally with contracts providing tracking software to marijuana markets in at least 20 other states or territories.

MLive appealed the FOIA denial for inter-lab comparison records on grounds that, while METRC may contain the data, the information is also likely analyzed, compared and summarized in reports outside of the METRC system.

The CRA hasn’t responded to direct questions about whether this is the case but maintains it is unwilling to release test results based on confidentiality.

However, it doesn’t appear the agency treats all METRC data as confidential.

“I know the agency does produce some level of reports (from METRC) because they release information related to sales and financial data,” said cannabis attorney John Fraser of the Dykema law firm. “I don’t see any way they would get that information other than through METRC.”

The CRA issues annual and monthly statistical reports using figures tracked with the METRC program.

MLive confirmed with multiple labs that, in addition to inter-lab comparison results submitted through METRC, they also sent the CRA results via emailed documents known as certificates of analysis. Harns said the certificates are considered METRC data.

It’s not just the general public who aren’t privy to the inter-lab test findings.

“I’m not sure what the (CRA) does with this information, but the outcome is never shared with us,” said Jackson-based Infinite Chemical Analysis Labs Director David Egerton. “Feedback would certainly be nice. Without it, these comparisons serve no purpose for the labs whatsoever.”

Harns said the agency is “looking for harmony between the safety compliance facilities, within the acceptable rate of error” and will notify labs that are “out of sync with the others.”

Lab shopping

It’s not clear what if any follow-up there is if the CRA finds a lab with results that are incorrect or outliers.

Variability in testing among licensed labs has given way to what industry insiders refer to as “lab shopping.”

Because demand and price rely largely on potency, growers and processors may seek out labs that produce higher THC results and are less likely to fail marijuana for contaminants.

“It’s very easy at this point for people to test; if they don’t like the result, they can hire another lab that is willing to give them the results they want,” said Lev Spivak-Birndorf, founder and chief science officer for Ann Arbor-based PSI Labs.

Spivak-Birndorf said it’s “quite common” that labs underreport failing levels of contaminants to avoid losing money on product.

Bay City-based Therapeutic Health Choice Lab Director Stacey Anderson said concerns over lab shopping may be the reason the CRA doesn’t want to release the comparison results. If data revealed a lab was issuing higher potency results than competitors, it could result in increased demand for their services.

The CRA declined to even release results that omitted identifiable lab information, which could alleviate that concern.

A legal challenge

Independent of MLive’s request for the inter-lab comparison data, attorneys for Viridis Laboratories, which holds two of the state’s 20-plus safety lab licenses, are seeking release of inter-lab comparison test results through the courts.

Viridis Laboratories, which operates labs in Lansing and Bay City, became the focus of a massive statewide recall in November due to CRA concerns its test results were inaccurate.

As part of ongoing litigation between Viridis and the CRA, Viridis attorneys filed a subpoena for the inter-lab proficiency test results, but the CRA is fighting the release in court, according to Viridis CEO Greg Michaud.

“Proficiency tests are a standard tool used by testing laboratories in most clinical and forensic science industries to assess performance of each laboratory compared to their peers,” he said. “Their primary purpose is to be used as an improvement tool for individual laboratories. It’s crucial that each laboratory is shown where they fall within the range of analytical results to encourage quality management system improvements that lead to more accurate results.

“Unfortunately, the CRA has refused to share the results of their quarterly proficiency tests. We’re demanding disclosure of these tests in the interest of safety, transparency and industry improvement. The public has a right to inspect these results.”

Leading up to the recall, the CRA audited multiple samples of marijuana that Viridis cleared as safe for sale and found it was contaminated with Aspergillus. Viridis claimed its test results were accurate and the samples must have been contaminated or mixed with black-market marijuana after the lab issued them.

A Court of Claims judge overturned a large portion of the recall on grounds that it was arbitrary and unjustified.

‘Out-of-control regulation’

One exception to the METRC confidentiality restriction that blocked release of the inter-lab test comparison audits, is when the CRA is releasing data to aid in enforcement of the law or its licensing rules.

“The responsibility of carrying out the Michigan Medical Marihuana Act, Marihuana Tracking Act, and Medical Marihuana Facilities Licensing Act is vested with (the Michigan Department of Licensing and Regulatory Affairs) and law-enforcement agencies — not private groups or individuals,” the denial letter written by LARA Deputy Director Adam Sandoval said. “In this instance, disclosure would not aid LARA or law enforcement’s ability to effectively carry out these statutes. Therefore, this exception does not apply here.”

Cannabis friendly politician Sen. Jeff Irwin, D-Ann Arbor, said he had concerns about the marijuana confidentiality law when it was originally passed back in 2016.

“I never really liked that METRC law in the first place,” said Irwin, who voted against it. “I always felt it was just a breathless, out-of-control regulation.”

Irwin claims his Republican counterparts who supported the secretive restrictions sought to “build the walls higher” to the barriers of entry on behalf of “millionaires and billionaires in the state who really want to corner this market.”

Irwin agrees there’s some personal information contained in METRC that shouldn’t be public, but a blanket exemption on all METRC data is overblown.

“Plus, this has all the data for all the cannabis in Michigan,” Irwin said. “Wouldn’t consumers benefit from having access to that information? I would think so.

“It’s hard for me to line up exactly how that happens but we live in an information age and providing more information to consumers is generally better and that’s how markets perform well.”

The CRA has historically been tight-lipped about recalls and investigations it’s conducted.

Most recently, the agency issued a hold on marijuana products with an estimated retail value in excess of $5 million. The hold affected a large chunk of the Michigan’s 400-plus retailers who had the product on shelves or in their inventory, but the CRA declined to disclose the reason when contacted by MLive.

The agency then released the hold several days later.

MLive reached out again for information.

“No comment,” was the only reply.