Potency Inflation Runs Rampant In Cannabis Industry Despite Measures To Combat It

In the race to the highest THC potency, the integrity of cannabis lab testing data is at stake.

Consumers can’t always trust the labels of cannabis products in states with mature cannabis markets, as the incentives to inflate THC potency numbers reach new proportions. Growers are going selectively to labs known to dish out higher THC numbers—lab shopping—worsening the problem, Cannabis Business Times reports.

Some are speaking out about the true scope and severity of potency inflation—a problem that lingers on despite ongoing statewide measures to prevent it.

Ben Rosman, CEO and co-founder of PSI Labs, has consistently called for standardized regulations to fight the issue of potency inflation, which leads to more compounding issues.

“It's highly problematic,” says Rosman. “It's everywhere.”

PSI Labs opened laboratory locations in Michigan and California to provide transparent, accurate, and reliable data for cannabis testing.

Rosman said what he’s seeing is companies that are picking and choosing their lab based on who will give the highest numbers. Call it “lab shopping.” And the companies go to the labs that offer the highest “grades.”

“I really liken it to grade inflation,” says Rosman. “You know, right now, everyone who's using these labs get between an A- to an A++++. When you know, A- is on the low end of the spectrum, if you give a grower of B+, they see it as an F!”

Rosman continues, “You get these extraordinary strains that have 27% potency. And they think that's subpar because they're expecting to see 35% or 40%, which is, you know, almost Guinness Book of World Records. But that's, that's the data that they're being delivered elsewhere. So it's highly problematic.”

Some states offer a little wiggle room in terms of allowable THC and cannabinoid content variance on the label. In Arizona, for instance, the margin or error for medical cannabis is +/- 20%. In Michigan, the margin of error for cannabis products is +/-15%. In California, the margin is +/- 10%.

California-based SC Labs also provides compliance and potency analysis, testing for 15 cannabinoids and 40 terpenenoids.

“Potency inflation exists in every market SC Labs participates in to a different degree and, from my discussions with other lab operators and cannabis business operators, it is an issue in several other markets as well,” says SC Labs President and co-founder Josh Wurzer.

“It is clearly the most pervasive in Oregon followed by California and Colorado, and it has been that way for several years,” Wurzer says. “In these states you have an oversupply of lab testing coupled with a depressed cannabis market which means a lot of the labs are struggling financially which only incentivises this type of activity.

“Additionally, regulators in these states aren't performing the types of monitoring and enforcement, like secret shopping, following up on complaints of suspicious activity, or auditing unusually high published cannabinoid results, that would catch labs who are giving artificially high numbers,” adds Wurzer.

Since most of the THC is exhaled anyway, as Wurzer frequently points out, the concentration of THC in products plays a smaller factor in potency than you’d think.

When everyone receives a good grade, it impacts the integrity of lab results. In addition, companies often expect unrealistic results. Lab operators worry about high expectations within the industry.

People are beginning to catch on.

Steep Hill Arkansas was among the plaintiffs slapped with a RICO lawsuit last month for allegedly inflating numbers. The lawsuit argues that the plaintiffs “intentionally refused to implement reasonable production standards, instead preferring to do business with Steep Hill that regularly intentionally inflates the amount of THC in its customer's flower.”

The issue eventually made its way to legislators in California, so standardized cannabinoid potency method was mandated under Senate Bill 544, announced on July 22. It requires California’s Department of Cannabis Control (DCC) to establish standardized cannabinoid test methods by January 1, 2023.

DCC Director Nicole Elliott said SB 511 would provide “greater integrity” to the process. But critics pointed out that most labs already use this methodology, and know how to work around it, so it won’t end the problem of accurate lab results.

“There are still ways to juke the stats with that Senate Bill, and I think everyone knows that the intention is in the right place,” Rosman says. “But it's not going to solve the problem by any means.”

“We are headquartered in Michigan, and we saw this happening in California, and kind of wondered, ‘When is it coming here to Michigan?’ At the time, the biggest problem with lab shopping in Michigan had to do with total yeast and mold—so labs overlooking contaminated samples and saying this doesn't have mold in it.”

Are Consumers Too Focused on THC Levels?

Within the industry, there's a myopic focus on THC among consumers, but the emphasis on THC alone is misplaced.

“We don't buy alcohol based on the highest alcohol content,” Rosman contends. “That's not how we're shopping. And it's similar for cannabis. Although, as consumers, we're kind of not given the information yet so that we can be informed consumers.”

Forbes reported on the “cannabis industry’s greatest lie”: that THC is the only factor that matters. Research conducted by the University of Colorado and published in JAMA Psychiatry found THC content alone is a poor indicator of potency.

“When you have those very high potency strains—they shouldn't be celebrated, but they should be celebrated, because they're so rare, because those strains were cultivated specifically to produce such a high potency,” Rosman says. “But we need to remember that those are the exception and not the standard. And when you walk into a dispensary, and the top shelf is littered with all these different strains that are over 30%. You know, you should ask yourself, Is there a problem here? Because it's probably not accurate data.”

“Transparency is key,” Rosman says. “So that's why I think being able to open up the data and not to shame anyone, you can anonymize the growers, processors, manufacturers, even the labs, lab one lead to lab three, only the state is made aware of that. But to make it clear that there are certain outliers, and there are certain consensus sets of data, and it would become clear very quickly, that a couple of labs are consistently higher than others.”

Good guys finish last—at least that’s the case when it comes to cannabis testing labs. That’s because in many cases, companies would sacrifice the integrity of their results in order to get a higher THC count, by whatever means necessary.

The reality is that pointing out shortcomings like potency inflation isn’t going to be a popular opinion.

“Delivering accurate potency results, especially when it comes to flower, often results in losing clients,” Rosman adds. “But that's all we can do. And so we talk to state legislators, we speak with our own state regulatory authority. And, you know, we, we work with our clients a lot, and we tell them going back to the great inflation example. A lot of folks are producing a quality bud. But if everyone around you is getting those A pluses, even if it's undeservedly, so, their product is diluted, in the mix.”