Super potent weed spurs distrust in Michigan marijuana industry

Michigan marijuana customers can’t always trust everything they read, especially when it comes to the THC content on their labels.

Formal complaints filed by the Michigan Cannabis Regulatory Agency (CRA) in May against Viridis Laboratories, one of the state’s largest marijuana safety testing businesses, raise questions about the THC potency figures the lab reports, and that ultimately end up on retail packaging labels. Information in those same complaints indicate the CRA isn’t empowered or isn’t willing to quickly address the problem.

THC potency drives sales more than any other characteristic of marijuana, industry insiders say. The higher the potency, the higher the price, in most cases. With Marijuana prices plummeting 41% over the last year, according to statements CRA Director Andrew Brisbo made during the agency’s quarterly meeting Thursday, June 16, how much customers will pay is more important than ever.

“Potency inflation is an ongoing, longstanding, widely known issue across cannabis in the U.S. right now in legal markets ... ” said Lev Spivak-Birndorf, founder and chief science officer for Ann Arbor-based PSI Labs, one of the first to be licensed in the state. “I call it the cycle of potency inflation: people want high potency, so then stores are under pressure to try and deliver that ... and that drives growers to seek labs that give the highest results, and thus, we have this rampant lab shopping that we have going on.”

Lab shopping refers to growers and processors actively seeking out labs that issue the most financially beneficial test results, those that are less apt to fail product for contaminates or assign higher THC potency results.

If you don’t have a good regulatory system in place to check and stop it, the problem perpetuates and compounds, said Spivak-Birndorf, who believes it’s more of an epidemic than single-lab issue.

Accusations

The issue of potency exaggeration isn’t a new one. In the case of Viridis, the CRA has been questioning the labs’ results and testing methods since at least December 2020, according to updated formal administrative complaints the CRA filed May 19. Administrative complaints frequently result in fines but can rise to the loss of licensing.

It’s CRA policy to audit results for any marijuana flower that tests with THC potency in excess of 28%. The complaints claim Viridis-tested samples fall within this range 8.9% of the time, more than seven times as frequently as samples tested by other labs across the state. In total, Viridis samples tested at its locations in Lansing and Bay City account for 78% of all audited high-potency samples. Viridis previously claimed a nearly 70% market share on all testing.

Related: Largest Michigan marijuana recall ever blamed for 18 health complaints

The CRA said the testing method Viridis is using to reach those economically desirable results aren’t approved. The agency first notified Viridis of this on Feb. 2, 2021, according to the administrative complaint. It’s not clear why the CRA hasn’t done more to ensure Viridis is using approved methods. The agency has the ability to place product that doesn’t meet safety standards on hold, thereby blocking its sale to customers.

“We need to decline comment as these questions pertain to matters current in litigation,” CRA spokesman David Harns told MLive when asked why the agency was allowing noncompliant marijuana to market.

Robert Teitel, president of Iron Labs in Walled Lake, reviewed the Viridis complaints and said it is “unheard of” that a lab would use testing methods not approved by the CRA.

“There’s no lab in the state that operates that way,” he said. “Every (standard operating procedure) we have is approved by the state and by an accrediting body.”

In response to CRA complaints against Viridis, as well as a record-breaking product recall issued on Viridis-tested product in November -- that was later partially reversed by a Court of Claims judge as unjustified -- Viridis filed its own formal complaint against the CRA in the state’s administrative court. That litigation is ongoing.

‘Meritless’ allegations

Following the CRA’s decision to recall an estimated 64,000 pounds of Viridis-tested marijuana with a retail value near $229 million, the Michigan Chamber of Commerce supported Viridis in its court battle. The politically and economically powerful business organization filled a brief in support of Viridis that said the CRA recall “unconstitutionally exceeds the scope of the agency’s legislatively approved mandate.”

The CRA has also faced criticism from lawmakers, including state Sen. Aric Nesbitt, R-Lawton, who called the recall “clumsy” and “poorly done.”

The CRA, -- at the time operating as the Marijuana Regulatory Agency -- publicly offered little evidence for its recall claim that Viridis test results were inaccurate or unreliable. Some of that evidence supporting the CRA stance later filtered out through court filings and testimony.

It was revealed that Viridis passed product that was subsequently found to have been contaminated with aspergillus, a potentially harmful mold that can cause lung infection, and didn’t use incubation logs, which are necessary to properly determine yeast and mold contamination, among other deficiencies that are included in the CRA’s most recent administrative complaints.

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

Viridis claims it’s being targeted because the CRA wants the market share more evenly spread among the licensed labs. There are currently 18 licensed to test recreational marijuana.

“These CRA allegations against Viridis are from last August and continue to be baseless, meritless and totally detached from science, facts and data,” Viridis CEO Greg Michaud said. “We intend to defend our business against these false claims during the court process and show the vindictive and retaliatory nature of the CRA’s actions which are clearly designed to cause maximum disruption and damage.

“Court-ordered proficiency test results that Viridis is in possession of, which the CRA had been withholding, will directly contradict these findings, and we’re confident the truth will prevail when all facts come to light. We hope these legal proceedings will pave the way for more transparency, accountability, and reforms at the CRA. Our hope is that the CRA can one day fulfill its true mission of promoting patient and product safety instead of unfairly targeting Michigan businesses trying to grow, compete and create jobs.”

The CRA each quarter conducts audits of labs by having them test samples from the same batch of product and comparing results. The findings have not been made public. Virids attorneys have sought but not obtained the results. MLive filed Freedom of Information Act records requests for the results but they were denied. The CRA maintains the results are confidential.

Loss of trust

Someone recently wanted to doublecheck the accuracy of marijuana with a retail label boasting THC potency unheard for flower: 40%.

“The sample was brought in sealed,” said Dr. David Crocker, COO of the Spott, a licensed safety compliance lab in Kalamazoo. “It was product that had previously been tested by Viridis. It came from a Lume dispensary with total cannabinoids just over 50% and total THC around 40%.”

The Spott ran it through its own potency test and reached a very different outcome. According to the Spott, the marijuana had a total of about 26.4% THC, compared to the 40.3% that appeared on the label. The Spott results and an image of the Lume product label were shared by an employee of the Spott on social media.

Lume, the grower of the strain, maintains the results are accurate.

“We tested the latest batch of Super Jenny several times with multiple independent labs and have full confidence that the THC percentages on our packaging labels are accurate,” Lume Chief Marketing Officer John Gregory said. “The fact is, given our state-of-the-art cultivation and unrivaled environmental controls, we are growing some of the most potent cannabis in the country and will continue to yield above-average THC percentage results.”

Viridis Laboratories CEO Greg Michaud also stands by the testing results.

“Our processes, from gathering and storing samples to testing, were developed through our founders’ expertise and decades of experience in forensic science and toxicology at the Michigan State Police,” Michaud said. “Viridis adheres to the highest standards based in science and best practices.”

Michaud and other company founders previously worked in the Michigan State Police Forensic Sciences Division testing seized drugs.

“Our labs have the highest accreditation awarded to cannabis testing laboratories from the American Association for Laboratory Accreditation and they are the only labs in the state with a Patient Focused Certification through Americans for Safe Access,” Michaud said.

Crocker wouldn’t identify who submitted the sample to the Spott for testing.

“Never in my life,” he said when asked if he’s previously seen THC potency that high, but also added that it’s not surprising.

Growers and other customers “will say outright that they need high THC levels and low failure rates, in order to give you their business,” Crocker said. “I think human nature, being what it is, if you set up these perverse incentives, on the macro, the wrong things are going to happen.”

Spivak-Birndorf said 40% THC potency is far beyond any results his lab has ever seen.

“The highest we ever test or ever see is right around 32%,” said the doctor of geochemistry. “I looked at 7,900 samples we did over the last couple of years and in that data set 99.7% of them were below 30%.”

Crocker, who’s worked in the marijuana industry for 13 years, said issues with lab accuracy are tarnishing reputations of the marketplace and regulators.

“The people I talk to don’t trust a lot of the labs; they don’t trust the state,” he said.

Solving the problem

Spivak-Birndorf said part of the issue stems from the nature of the state’s safety system that relies on close business relationships. Labs are asked to be honest and accurate, but in doing so may have to disappoint their customers and cost them potentially tens of thousands of dollars along the way.

Spivak-Birndorf equated the system to previous failures with environmental testing in which businesses hired labs to tell them how much contamination they were putting into the environment. The labs downplayed results, leading environmental regulators to increase separation between testing entities and the companies they test.

“The cannabis industry hasn’t quite matured to that level of realization,” he said. “What Michigan is missing right now is a reference lab.”

A reference lab is a state-funded lab that is in place to audit the results of commercial labs. Their customer is the government.

“While a reference lab isn’t the silver bullet to solve everything,” Spivak-Birndorf said, “if you did have a lab that was kind of an uninterested party controlled by the state that was able to run tests on disputed samples, and actually weigh in on which was more accurate, that would make all the difference in the world.”

Perhaps the biggest factor, Spivak-Birndorf, Crocker and Teitel agree, is customer behavior. They’re the ones placing a premium on THC potency, something most in the industry think is misguided and the result of a lack of knowledge regarding cannabis use.

“I think it will sort itself out,” Crocker said. “I think eventually the public will come to realize in larger numbers that high THC doesn’t necessarily represent high value. It’s like saying pure grain alcohol is better than a good wine or something like that

“I also think the public will begin to demand that the state regulates it properly so that the results they get are accurate and fair. When that happens, the labs will fall in line.”

In the meantime, labs that follow the rules and seek accuracy above all else may struggle. “There will probably be some that go out of business before this gets sorted out,” Crocker said.

“In its current trajectory, the commercially regulated market in Michigan is at risk of kind of going off the rails here,” Spivak-Birndorf said. “Consumers need to mature, the state needs to get better at their jobs ... and distributors and buyers need to help consumers get educated and not so fixated on THC, especially given that’s what’s on the label may not reflect true potency.

“And on the lab side of it we have to have an ethical duty to try our best to put out what we think is the most accurate information and not fall into the trap of trying to succeed in business by providing information that might be more desirable to our clients.”

Read superseding complaint filed against Viridis:

Viridis Laboratories, LLC First Superseding Formal Complaint (2) SC-000009 by Fergus Burns on Scribd