Starting Oct. 1, new products headed to marijuana dispensary shelves will have to undergo a battery of tests that assess potency and look for biological contaminants such as E. coli, residual solvents from the extraction process used to make oil, and dozens of pesticides.
The policy shift transforms Oregon’s marijuana labs from an unregulated cottage industry into a central part of the state’s regulated market. Yet while hundreds of prospective marijuana producers have flooded the Oregon Liquor Control Commission with applications for licenses, only eight testing labs have applied so far. None has received a license yet.
That trickle of applications worries state officials who hope to license at least three labs by late summer. Without enough labs to test a large volume of samples, growers risk not getting their products tested and onto the market.
“No product will flow through retail without having labs in the process to do the testing,” said Steven Marks, executive director of the liquor commission.
Officials don’t know exactly how many samples will need to be processed weekly to keep stores stocked. Already the state has issued more than 130 producer licenses, most of them to large-scale operations. The liquor commission’s own analysis estimates that labs will test about 2,500 samples each month to meet demand, figures based on the experience in Colorado and Washington.
Marks said licensed marijuana growers who got an early start on production may see delays getting their goods into stores if labs aren’t ready.
“The problem with our early growers is if there is no lab capacity,” said Marks, “they will be landlocked with their product.”
States with regulated marijuana markets have grappled with how to deal with testing. Connecticut, Nevada and Washington require routine pesticide screening for medical marijuana. Currently, Colorado does not require regular pesticide testing for cannabis.
Under Oregon’s new rules, labs must meet the same stringent standards as the environmental laboratories that test water and soil. They have to undergo a state accreditation process and obtain a license from the liquor commission. For labs, the requirements mean buying additional equipment and hiring experienced staff.
Part of the accreditation program, which is overseen by three state agencies, involves running blind tests on pesticide-spiked samples provided by an outside company. Those tests help confirm that a lab’s equipment can detect certain chemicals. Labs have to run the tests on all 59 pesticides on the state’s list. Similar tests are required for solvents and potency before labs can be accredited.
Shannon Swantek, a compliance specialist with the division that accredits labs, said she’s received 34 partial applications from labs and three complete ones. She estimates 10 to 15 labs will be accredited by Oct. 1. Those labs must then undergo a separate licensing process through the liquor commission before they can begin testing for the new market.
Alex Hoggan, who has spent about $ 750,000 to equip his Milwaukie lab, Chemhistory, said he and his employees are focused on accreditation. He has not yet applied for a state license.
“We think we can do it, but it’s going to be right to the edge,” Hoggan said.
He said the new approach to testing is likely to have a broad impact. He predicted growers and processors will see two major shifts: The price of tests will rise because they are more sophisticated and comprehensive than what’s in place now and concentrate makers will see a high failure rate among their products.
Those products, which include butane hash oil, tend to concentrate not just THC but pesticides. For instance, a flower that passes the state’s pesticide screen may flunk once it’s processed into oil.
“It’s really hard to find clean cannabis at the moment,” Hoggan said. “If we were testing to the new (recreational) law, which we will be doing in a couple months, there will be a lot of fails. I mean a lot. The question is: Have the growers had enough time to figure out their pesticide use?”
Rodger Voelker, lab director at OG Analytical in Eugene, has long pressed the state to tighten its lab standards and oversight. He said he, too, is working on getting his lab through the accreditation process and has not yet applied for a license.
“It’s all good stuff, but it takes a lot of time,” he said. “We certainly are trying, but it’s a complicated process. I knew it would be, but until you get into it you don’t appreciate how complicated it gets.”
Jeremy Sackett, co-founder and director of operations for Cascadia Labs, said food safety and pharmaceutical laboratories typically get a year or longer to adapt to major regulatory shifts; marijuana labs were given the state’s final rules this year. Still, he expects his two labs, one in Portland and the other in Bend, to be ready to take samples by early fall.
That’s good news for growers like Laura Rivero, operations manager for Yerba Buena, a licensed recreational producer in Washington County. Rivero said her facility has already had its first harvest. By October, she expects the large-scale operation to have as many as 10 more.
“We were prepared to flip the switch the day we got our license, and that is exactly what we did,” she said.
She said if labs aren’t ready to take Yerba Buena’s product, she’ll end up stockpiling it.
“We don’t have much of a choice,” she said. “We can’t transfer it to anyone who is not licensed. It creates a major storage issue for us.”
Even if there’s a lag in getting product into the new recreational market this fall, consumers may not see much of a difference.
Marks expects a gradual transition from medical dispensaries to recreational shops starting in October. Dispensaries may have inventory they want to sell before they switch to the system overseen by the liquor commission. Shops have until the end of December to make the switch if they plan to sell on the recreational market.
Long term, Marks said his chief concern isn’t a limited supply of marijuana. He worries about having too much. The state didn’t cap how many licenses the liquor commission can issue; more than 1,100 applications have already been filed, about 760 of them from producers.
“We will have a lot of production in our system,” he said. “That’s what I worry about more — when the market experiences this heavy supply of marijuana and Oregonians can’t find their way to consume any more and people are stuck with all this production.”
— Noelle Crombie