Asked how the state verifies test results on THC levels in Arkansas’ legal cannabis system, the Alcoholic Beverage Control Division and Medical Marijuana Commission point to the Arkansas Department of Health.
But the Health Department points back at the commission and the ABC.
The state has no apparent procedure to confirm the test results, which play into the pricing of medical marijuana. That revelation comes as testing faces harsh scrutiny in Arkansas and beyond, as lawsuits question the integrity of testing companies that draw their revenue from marijuana cultivators. The growers know that their products rise in value with higher percentages of tetrahydrocannabinol, the psychoactive ingredient in cannabis.
“Amendment 98 placed responsibility for testing with the Arkansas Department of Health (ADH). Patient cards also fall under ADH,” state spokesman Scott Hardin told Arkansas Business in an email, referring to the constitutional amendment that legalized medicinal marijuana in 2016. Hardin works for the Department of Finance & Administration, parent agency of the ABC, and speaks for the Marijuana Commission.
“The [commission’s] role in the state’s medical marijuana program is licensing dispensaries, cultivators, processors and transporters,” Hardin continued. “ABC oversees the day-to-day operation of these facilities.” If a test result is questioned, he said, “neither the MMC or ABC would have authority to take action against the lab. ADH is responsible for their licensing and operational oversight.”
But a Health Department spokeswoman, Danyelle McNeill, said it’s her department’s job to “promulgate the labeling and testing standards” but that the ABC handles enforcement. “Because ABC licenses and regulates the cultivation facilities and dispensaries, they are responsible for enforcement of the labeling standards.”
Reginald Rogers, deputy general counsel for the Health Department, told Arkansas Business that its lab doesn’t test THC potency, and said any complaints about test accuracy would be forwarded to the ABC, which was designated as the enforcement arm in marijuana because it already enforced the state’s alcohol laws.
Meanwhile, allegations of potency fraud have surfaced in lawsuits across the country.
Arkansas Suit on Hold
In July, a federal lawsuit that sought class-action status accused three Arkansas cannabis cultivators and their lab tester of fraud for allegedly falsifying the potency of marijuana that they were selling. The named cultivators are Bold Team LLC, Natural State Medicinal Cultivation and Osage Creek Cultivation LLC. The plaintiffs also accused the cultivators and the lab they hired to do the testing, Steep Hill Arkansas of Little Rock, of violating the Racketeer Influenced & Corrupt Organizations Act.
The plaintiffs’ attorney, Luther Sutter, asked for the suit to be dismissed in October, but is prepared to refile it. Steep Hill had denied the allegations.
Steep Hill’s lawyer, Kevin Crass of Friday Eldredge & Clark LLP of Little Rock, said that the lab’s work is routinely and independently checked.
“Steep Hill is an ISO [International Organization for Standardization] accredited lab and has its practices audited each and every year by reputable third parties,” Crass said in a statement. “And that has been done since the inception of the business. And Steep Hill stands behind the quality, integrity and efficacy of the lab employees and the impartial test results.”
Sutter said in a statement that “Steep Hill refuses to test for the public because it does not want its methods verified,” adding that the legal complaint “will be re-filed against Steep Hill and its vendors unless Steep Hill becomes more transparent.”
In October, a similar lawsuit in California named cannabis companies Dreamfields Brands Inc. and its related company Med for America Inc. of Desert Hot Springs. It accused them of false advertising by inflating THC levels on labels. Dreamfields did not respond to an email seeking comment.
Plaintiffs’ attorneys say profit motives drive inflation in test results.
Dan Poirier, CEO of CLIP Labs, a San Diego cannabis test site, said labs sometimes tweak results at the request of the cultivators who pay them.
“That’s what’s going on across the country,” said Poirier, who cited THC values inflated “sometimes as much as two, three times. It’s egregious.”
CLIP Labs has been licensed for about 18 months, Poirier said, but keeping customers proved difficult. “The reason ... is because we were not providing the [THC] values that they needed in order to sell their products at the dispensary.”
Attorney Seth Goldberg, who works in the Philadelphia office of the law firm Duane Morris, said in an email that each state that has legalized cannabis has set rules on packaging, labeling and testing. “So this is really a state-by-state and case-by-case issue that is highly dependent on the applicable state regulations and regulatory compliance,” he said.
Jeff Rawson of Cambridge, Massachusetts, recently started the nonprofit Institute of Cannabis Science and is working to assure accurate cannabis testing. His group offers to help government agencies operate medical testing programs. “All of this stuff is new,” he said. “And you should expect it to take awhile for people to figure out how to do it right.”
Since Arkansas’ medical marijuana industry launched in May 2019, the largest year for sales was 2021 at $264.9 million. Sales this year are projected at $275 million. The price difference between a product with 18% THC and 28% could be $10 to $20 per one-eighth ounce.
Rawson said THC accuracy is important for many patients, including those with anxiety, who may grow more anxious with too much THC.
“I’ve seen people try to dismiss this issue as just ‘Oh, some potheads think they got 20% less high,’” he said. “But the dishonesty to the consumers … actually does impact many people.”
In Arkansas, some patients noticed differing effects from cannabis labeled with the same TCH content, according to the lawsuit Sutter filed in U.S. District Court in Little Rock.
Plaintiffs Don Plumlee, Jakie Hanan and Pete Edwards, doubted the THC labels.
They had the marijuana tested, and the lawsuit said those tests revealed that THC amounts had been overstated “by an average of 25%.”
In a separate matter, Perry Johnson Laboratory Accreditation Inc. of Troy, Michigan, said in a Nov. 22 report that it had looked into a complaint against Steep Hill Arkansas.
PJLA, a private third-party accreditation company, said the complaint questioned the validity of Steep Hill’s testing, but did not provide any test reports or samples of the cannabis in question. The report is on file with the Arkansas Department of Health.
PJLA said it couldn’t find “any discrepancies or ambiguities” in the data Steep Hill provided in response to the complaint. “There did not appear to be any manipulation of the data,” the report said.