In April 2022, new Washington State Liquor and Cannabis Board (LCB) cannabis pesticide testing final rules took effect. Under the rules, cannabis flower and intermediate products must undergo contaminant testing. The rationale for the is consumer safety – which seems like a legitimate concern given that recreational use cannabis producers were previously not required to test for pesticides at all. Indeed, one cannabis testing laboratory released a white paper earlier this year claiming that cannabis pesticide contamination is a serious issue in Washington, especially for concentrates that, when tested on an “off the shelf” basis in 2018, had pesticide failure rate as high as 40%.
While the LCB’s goals may be sincere, they will have some pretty significant effects on the industry. In this post, we outline what we think are the two biggest ones:
Cannabis pesticide testing is now required for cannabis flower and all intermediate cannabis products that are used in the creation of end products like cannabis extract and concentrates; and
Lots, batches, and (“theoretically” according to the LCB) harvests that fail pesticide sample testing may no longer be remediated and those that fail must be destroyed.
Strangely, while it appears that the new regulations allow for producers and processors to pay for retesting of failed samples, our understanding from the LCB is that licensees can only retest failed sample tests for Pyrethrins (a naturally occurring pesticide found in over 2,000 registered pesticide products). Licensees will have to destroy crops from all other failed sample tests without any opportunity for retesting or remediation. This is a pretty extreme rule that is likely to have massive consequences for the industry.
Additionally, the LCB has not issued guidance on the implication that a failed lot or batch would be considered to have on the harvest it came from, though it did say that theoretically failed sample tests could result in an entire harvest needing to be destroyed, depending on the test results. Neither was the LCB forthcoming in how it planned to enforce the pesticide testing requirements.
In the absence of regulatory guidance, market participants are bound to change their practices and contracts to make sure they are not the ones left without a chair when the music stops. It is hard to imagine these new rules not resulting in downstream testing compliance requirements by retailers to processors and producers. Processors in particular, says the white paper cited above “who extract cannabis oil from plant material hold the greatest risk.” Because producers alone have direct control over pesticide use and avoidance procedures pre-harvest, the burden of compliance will likely be shifted to them.
The only way for retailers and processors to ensure they are not the party left holding the (tainted) bag is to contractually require producers to prove post-harvest cannabis pesticide testing compliance before accepting delivery of product. Retailers and processors will also require producers to indemnify them, even if the producers certify that they have complaint products. There may also be implications for testing labs as well, though if they are smart, they will provide only very limited recourse for inaccurate cannabis pesticide testing. In order to ensure acceptance by processors and retailers, producers will need to determine a cost efficient and reliable system of pre and post-harvest pesticide testing. All of this is likely to have significant contractual, economic, and regulatory consequences for the entire marketplace.
Adding to what is likely to be an uncertain and potentially costly implementation period are serious infrastructure concerns with respect to producers and processors being able to access adequate cannabis pesticide testing from certified labs within the state. The white paper cited above states that “only five out of the eleven Washington state certified laboratories have the technological capability, and WSLCB authorization, for cannabis pesticide testing.” The pesticide action level rule lists 59 pesticide compounds and their acceptable thresholds, but few labs in the state have the technology or accreditation to test for all 59. The LCB did comment on the infrastructure issue and is hopeful that problem will be short term.
All market participants are likely to be impacted to some degree by these new rules and the LCB’s currently unknown enforcement policies. Making matters worse, the ability, or lack thereof, to access reliable and efficient cannabis pesticide testingfacilities raises significant compliance and enforcement issues for producers, processors, and retailers.
We will be monitoring cannabis pesticide testing developments on this issue and intend to follow this post with proposed best practices for compliance and enforcement with these new regulations.
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