State agency advancing plans for marijuana testing lab for industry investigations, audits
Michigan marijuana regulators are pushing lawmakers to give them explicit authority to collect, possess and test cannabis for regulatory purposes at a yet-to-bebuilt, state-run laboratory, a move that is generating opposition from an existing private lab.
The establishment of a government-controlled marijuana laboratory, which would be staffed by five full-time state employees, would allow the Cannabis Regulatory Agency to bring testing operations in-house that have largely been farmed out to private, licensed testing facilities during investigations, state officials said.
“No unbiased, thirdparty testing lab currently exists in Michigan to provide objective standards for licensed safety compliance facilities to follow,” said David Harns, a spokesman for the Cannabis Regulatory Agency. “The reference lab will assist in industry standardization by optimizing and verifying standard methods and will improve oversight of the cannabis industry by enhancing audit and investigative capabilities.”
The legislation, which has yet to move from the House Regulatory Reform Committee, would need support from a threefourths majority in the House and Senate — a threshold meant to make it more difficult for lawmakers to amend a voter-initiated law. The legislation has the support of the Michigan Cannabis Industry Association.
“The state funded lab, in conjunction with this legislation, will allow the CRA to test marijuana for various purposes such as investigations and method development and make Michigan a leader in cannabis science,” Rep. Tyrone Carter, the Detroit Democrat who introduced the legislation, said Tuesday.
Viridis CEO and founder Greg Michaud slammed the planned state lab, arguing in a Tuesday statement that the state could not be “fair, impartial and transparent.”
The state is ignoring the availability of private labs or the opportunity to draw on the resources of other existing state labs in other departments, said Michaud, whose company is suing the state over the handling of a 2021 recall.
Michigan’s cannabis industry, which began roughly five years ago with the 2018 voter-initiated legalization of recreational marijuana, cleared more than $3 billion in adultuse and medical marijuana sales last year, state data show.
The state regulatory agency governing the industry has worked to keep up with changes and unforeseen demands in the market, including the need for state-determined testing standards and methods. State-licensed testing facilities, also called safety compliance facilities, are required to test marijuana for the amount of tetrahydrocannabinol (THC) in the product, as well as pesticides, microbes, heavy metals, molds and residual solvents.
State lawmakers and Gov. Gretchen Whitmer set aside $2.8 million for the lab and $1.6 million in ongoing funding for its operation in the last state budget. But the agency told the House Regulatory Reform Committee on Tuesday it still needs explicit permissions in state law that would allow it to operate the lab — prompting a push for the legislation discussed Tuesday.
The agency already has started development of the lab and ordered some equipment, but construction has yet to begin.
“We’re targeting the end of this year to start doing some of the testing,” said Derek Sova, a policy and legislative specialist at the Cannabis Regulatory Agency.
The lab, which would be located at the agency’s headquarters in Lansing, would not take over contracted testing for individual facilities in the marijuana market.
Instead, the lab would be used to do in-house testing of samples collected in investigations and audits, to develop or verify testing methods, audit the processes of third-party credentialing bodies and review the efficiency and consistency of licensed laboratories, Harns said. The in-house facility also is expected to quicken the state’s turnaround on investigative testing.
The current system requires the state to send marijuana samples of a licensee under investigation to separate licensed laboratories within the same market, which creates something of a conflict since those facilities are likely competitors, Harns said.
The cost of the additional testing is not borne by the state, Harns said, but is worked out between the facility being investigated and the licensed lab receiving the marijuana product for testing.
“The lab and the company under investigation have to figure that out on their own,” Harns said of the current system.
The industry reported nearly $3.1 billion in marijuana sales in the 2023 calendar year, with adultuse sales making up more than 97% of the total and medical marijuana sales accounting for the rest, according to the agency’s monthly reports.
The establishment of a state-run lab comes about two years after the Cannabis Regulatory Agency issued one of its largest recalls to date that resulted in 60% to 70% of the state’s on-shelf cannabis products being recalled. The reason for the recall, the agency said in November 2021, was because of “inaccurate and/or unreliable results of products tested” by safety compliance centers.
Viridis Laboratories and Viridis North, whose testing were called into question in a 2021 recall, later sued regulators for what it described as an “unjustified, prejudiced and retaliatory” recall that cost an estimated $229 million disruption to the industry. In the Viridis case, the state had sent some of the product tested by Viridis to other competitors for retesting to affirm or negate Viridis results.
Viridis CEO Michaud pointed to the 2021 recall and ongoing, acrimonious litigation as proof the state is unfit to run such a facility.
“The CRA should be drawing upon the enormous talent, expertise, and credentials of the private sector or utilizing existing state laboratory services in other state departments instead of creating a new government-run lab that will saddle taxpayers with higher costs and another layer of bureaucracy that will do little to address the challenges in the growing cannabis sector,” he said.
The Cannabis Regulatory Agency declined to respond to Viridis’ statement, citing the company’s ongoing litigation.
Others in the industry said a state lab could increase impartiality and fairness in the industry.
“Other states have reference labs, and we should have always had one,” said Robin Schneider, executive director for the roughly 400-member Michigan Cannabis Industry Association.
“All of our lab members have been adamant that they want the state to have a lab so they can do better enforcement and ensure the labs are operating equally,” Schneider said.
Viridis is not a member of the association.
With disputes among some safety compliance facilities over the proper testing methods for potency and contaminants, the entrance of a third party such as the state to set a clear standard could be useful, said Barton Morris, a Troy attorney and founder of the Cannabis Legal Group.
“When we have different labs with different methods there’s not a lot of uniformity or reliability,” said Morris, who chairs the Cannabis Law Section of the State Bar of Michigan. “Ultimately, I think it’s going to lead to a safer and better regulated industry.”