Oregon Cannabis: Challenging Testing Requirements Take Effect March 1, 2023

16 Feb Oregon Cannabis: Challenging Testing Requirements Take Effect March 1, 2023

I’ve spoken with a handful of clients recently who are anxious about Oregon’s new cannabis testing requirements. These requirements cover heavy metals and microbiological contaminants, and they take effect on March 1, 2023. The scuttlebutt is that many failed tests are inevitable if the labs do their jobs. And the labs are under scrutiny at this point: we’ve covered the recent OLCC labs inquisition, centered around inflated THC numbers.

New testing requirements for heavy metals and microbiological contaminants

Per the relevant OHA bulletin, as of March 1, 2023, all marijuana items and hemp-derived vapor items must be tested for:

• Heavy metals, if harvested or manufactured on or after March 1, 2023; and
• Microbiological containments [sic], if harvested or manufactured on or after March 1, 2023.

This is in addition to other tests and testing requirements currently in place, including those for mycotoxins effective last July. The OHA bulletin further provides:

For finished inhalable cannabinoid products and finished concentrates and extracts, all testing is to be performed on the finished item. Once the new tests are in effect, no other testing will need to be performed along the way, but licensees may choose to process marijuana that has passed pesticide testing when processing extracts in order to be eligible for remediation. Other finished cannabinoid products will only require a potency test; all other tests will be performed on the cannabinoid concentrate, extract, or marijuana used to make the product. An example of this is that starting March 1, 2023, water activity and moisture content testing will not be required on marijuana or usable marijuana if it will be made into a concentrate or extract. The finished concentrate or extract will be required to be tested for pesticides, solvents (if required), potency, mycotoxins, heavy metals and microbiological contaminants. It should be noted that if an item receives a passing test before it is required, the test result does not transfer to the new item being created.

That’s a meaty paragraph, and it’s a longer bulletin generally. I encourage interested parties to read the whole thing. OHA also publishes a handy, up-to-date testing guide, with various summaries, FAQ pages and other links. And for anyone who wants to dig into the nitty gritty of the rules themselves, those can be found beginning at OAR 333-007-0300.

Liability (and litigation?) over failed cannabis tests

The new rules could create headaches for marijuana producers and processors in particular– as well as any hemp growers still around. Note the first sentence in that bulletin excerpt above, which concludes: “… all testing is to be performed on the finished item.” (My emphasis.)

If flower is manifested from a producer to a processor (perhaps via a wholesaler) and through to a lab, for example, you can bet there will be disagreements over where, when and how contaminants made their way into a failed product. Almost no one in the Oregon industry—which operates largely on simple purchase orders and “net terms” transactions—is parsing out liability, indemnities or other relevant testing issues via contract. I expect to see problems here.

It’s hard to keep up

I’m sympathetic to Oregon cannabis licensees who have a hard time keeping up with administrative rule and policy changes, despite OLCC and OHA publishing a steady stream of bulletins, notices, etc. There are just so many changes, all the time.

Almost every year, the legislature passes a myriad of new cannabis laws. In the last two sessions alone, we had 14 of them. Some of these bills are slim but others are omnibus, triggering changes up and down the program. These changes ensue in round after round of rulemaking.

New rules, in turn, may be buttressed by written policy statements and clarifications, in addition to the many unwritten policies and procedures of OLCC– many of which have evolved over the years. In other cases, the OLCC will make rules of its own accord, often in reaction to market activity and not at any legislative behest.

With these new testing requirements, some labs have taken the lead on getting notice to their clients; this is very helpful, as the underlying OHA bulletin is nearly a year old at this point (publication date of March 31, 2022). I don’t see anything newer on the OHA or OLCC website with respect to these imminent strictures. Instead, the most recent “testing” and labeling guidance I can find is a January 6, 2023 joint bulletin by OHA and OLCC in the context of pre-rolls. And that is not this.

No excuses

All of that said, the new rules are what they are. People are going to have to figure out how to keep these heavy metals and contaminants out of regulated Oregon cannabis, and how to resolve issues of failed cannabis tests. The primary issue will be reanalysis and disposal protocols. Key corollaries are economic fallout and liability, with respect to unsalvageable product.

Anyone who has been around this program long enough understands that fallout around cannabis testing is a very old story in Oregon. Today, much of the cannabis destined for this new testing paradigm is already in flower. Let’s see how this story continues, starting next month.