Colorado Officials Weigh Changes To How Marijuana Is Sampled For Testing To Help Avoid Fraud

*“I think that sample fraud should be a death sentence for a licensee.
Right now, it’s a $15,000 slap on the wrist.”*

*By Christopher Osher, ProPublica and Evan Wyloge, The Denver Gazette*

*This story was originally published by ProPublica.*

Colorado marijuana manufacturers would no longer be allowed to choose which
product samples they send for mandatory lab testing under a new regulatory
proposal discussed at a policy forum on Friday.

Instead, the state’s Marijuana Enforcement Division may require independent
labs or outside vendors to collect product samples for the testing that’s
required before companies can sell their products to ensure they’re free of
contaminants.

The change would address a long-standing complaint from some marijuana
manufacturers that bad actors are cheating the system. They say some
companies are selecting samples that can pass tests while sending products
to dispensaries that might be contaminated with chemical solvents, fungus
or pesticides.

A Denver Gazette and ProPublica investigation last month showed that the
system for testing marijuana products relies on an honor code that’s open
to manipulation.

In 2024 alone, Colorado officials found two dozen cases in which companies
had violated testing rules, often by submitting samples that were different
from what the companies sold in stores or by using unauthorized chemical
treatments, according to a review of enforcement actions by the news
outlets. The state’s rules on selecting samples require what gets turned
over to a lab to be representative of what marijuana companies actually
deliver to dispensaries for sale to consumers.

“Sample adulteration is a common violation,” Kyle Lambert, deputy director
of the division, said during the policy forum. “This is something that we
have an interest in more comprehensively addressing based on what we see
out there.”

Colorado officials have long prided themselves on creating the nation’s
first regulated recreational marijuana market, but the news outlets found
that the state has fallen behind as other states have adopted more robust
regulations.

The Denver Gazette and ProPublica highlighted how a popular brand of vapes
contaminated with a toxic chemical ended up at marijuana dispensaries. In
that case and others, manufacturers were found by regulators to be swapping
marijuana distillate, the liquid that goes in vapes, for products
chemically converted from much cheaper hemp, which is prohibited in
Colorado. The company, Ware Hause, surrendered its marijuana manufacturing
license. Its owner declined to comment on Tuesday.

The Marijuana Enforcement Division first disclosed it is considering a new
sampling system in January. The state’s move marks a shift: Last year, the
state fought a lawsuit by a marijuana cultivator aimed at forcing the
division to overhaul its testing rules. The suit, brought by Mammoth Farms,
also pushed for the division to bar manufacturers from selecting product
samples for testing. The division’s lawyers said in a court filing that
such a revision would be “impracticable.”

A Denver judge dismissed the lawsuit on technical grounds in May, stating
that the company should have first petitioned regulators for rule changes.
After the dismissal, Mammoth Farms sought rule changes with the Marijuana
Enforcement Division. The division agreed to begin requiring more chemical
testing this summer but did not adopt a proposal to overhaul how samples
are collected.

Dominique Mendiola, the senior director of the division, said in a
statement that the move to consider changes stemmed from concerns raised by
marijuana companies last year.

“The division has committed to further researching this topic and leading
the facilitation of this dialogue with stakeholders in order to analyze the
details and operability of what it would take to implement recommendations
to shift to third-party test batch collection requirements,” she said.

Twenty-six states and the District of Columbia require lab personnel to
collect samples to ensure manufacturers don’t cherry-pick products for
testing while holding back contaminated products.

Over the next few months, the state will hold discussions with testing
labs, marijuana cultivators and manufacturers and industry experts to
fashion a formal proposal, Lambert said. He added that he expects the
division will take up specific policy recommendations this summer.

State officials want to gauge the cost, Lambert said, and make sure they
develop effective regulations. The state is also considering who would
collect the samples—licensed lab personnel or third-party samplers the
state would credential.

Kareem Kassem, a director at SC Labs, which has a testing lab in Colorado,
said during the forum that all sampling should be done under video
surveillance and that vehicles that transport samples should be equipped
with GPS monitoring.

Other industry representatives noted that changing testing regulations
could be expensive and that those costs would be passed on to consumers.
They also stressed that other states had marijuana testing scandals even
when lab personnel collected samples.

Stephen Cobb, co-owner of the marijuana manufacturer Concentrate Brands,
pointed to sample collection scandals in California and said the problem
was only fixed after regulators stepped in.

“We can solve sample fraud,” Cobb said, “but only if there is a massive
investment in regulatory oversight on that. Otherwise, it just kind of
passes the buck.”

The Marijuana Enforcement Division said costs and budgeting issues would be
part of the discussions.

Still, Justin Singer, the CEO of Denver-based cannabis firm Ripple,
applauded the division’s move.

“I think that sample fraud should be a death sentence for a licensee,”
Singer said during the policy forum. “Right now, it’s a $15,000 slap on the
wrist.”

He has tracked the division’s enforcement actions and provided The Denver
Gazette and ProPublica a spreadsheet and links to those cases. Ripple’s
analysis shows that, from the start of 2023 until now, half of the state’s
135 final enforcement actions against marijuana companies involved issues
with self-sampling and testing.

Singer is also pushing a legislative overhaul to the state’s marijuana
testing regimen that would transfer testing oversight to the Colorado
Department of Public Health and Environment and create a program where
state regulators would randomly test products from dispensaries to ensure
they aren’t contaminated.

“I hope we all can agree that if we’re not giving consumers as an industry
what they think they are buying, then we’re destroying our own industry
from within,” Singer said. “Sample fraud and testing fraud is a cancer on
our industry. It is a cancer on the businesses that are trying to do good
work. It is a cancer on the labs that are trying to be honest.”

*This article was produced for ProPublica’s Local Reporting Network in
partnership with **The Denver Gazette**. **Sign up for Dispatches** to get
stories in your inbox every week.*

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Testing To Help Avoid Fraud appeared first on Marijuana Moment.