This year, Gov. Jared Polis proclaimed, “Colorado has always been a national leader in cannabis …” However, a look beyond the marketing schemes and flowery language shows a far more dangerous truth.
The marijuana being sold in Colorado’s dispensaries comes with inherent risks, which have persisted because of a lack of urgency from regulators. That’s not just conjecture. Recently, an executive from a leading Colorado marijuana company detailed to me how operators in the industry regularly skirt regulations to maximize profits.
These revelations should shock all who trust the word of the industry and believe it can be properly regulated in a post-legalization regime.
This executive, who has become frustrated with the state’s inability to regulate the industry and his competitors, told me, “of all industries to trust on the honor system for testing, mine is not.” The misdeeds of a few companies hurt the perception of the industry, which is why he reached out.
To make his case, he pointed to an advisory from Colorado’s Marijuana Enforcement Division that warned of a “threat to public health and safety” due to the contamination of marijuana with mold and yeast. This advisory resulted in a voluntary recall, but he said that the division was warned about this issue at least six months prior. It raises the question of why this unacceptable shortcoming happened when consumers were in danger.
The harms of these products are widely known, including by the supporters of marijuana. The Colorado-based Medical Alternatives Clinics, which provides “medical” marijuana doctors to those seeking a recommendation, said moldy marijuana “can make you extremely sick, and, in some cases, it can even be deadly.”
It also raises the question of why the industry didn’t report the issue sooner, if companies are really testing their products and maintaining high quality control standards. According to this industry insider, companies have found ways to circumvent testing processes to avoid the detection of harmful chemicals and pesticides.
The industry regularly games the system by submitting a good batch for testing, while withholding others that they know would fail. These products are then sold together to consumers as if they were all from the same initial good batch. This occurrence gives greater credence to the phrase “buyer beware.”
Despite trusting the industry and its supposedly regulated products, consumers don’t actually know what they are buying or how it was produced. In this sense, the products being sold by pot shops are no different from the products that are being sold in the illicit market — they are being produced with many of the same harmful chemicals and pesticides.
After a recall in Colorado due to marijuana having an unacceptably high level of mold and yeast, Benzinga reported, “this recall is the sixth issued by the Colorado Marijuana Enforcement Division this year and the second within the last week alone.” This issue goes much deeper than one bad batch, grower, or dispensary.
This marijuana executive also warned about the regular occurrence of covert buys, when legal marijuana companies purchase contaminated products and sell them as regulated products.
He estimated that more than half of the products that are purchased within regulated marijuana dispensaries are contaminated with prohibited chemicals, adding that “nearly 90% of the distillate on the wholesale market in Colorado is comprised of illegal intoxicating hemp.”
This issue is coupled with the fact that the state has failed to displace the illicit market, despite years of claiming a regulated market would prevail. Yet consumers erroneously believe they are consuming a safe product, figuring that legal dispensaries and growers are meeting state-imposed safety standards.
The state’s failure to regulate marijuana has resulted in the spread of a similarly unsafe drug: hemp-derived THC. In 2018, the Farm Bill legalized hemp, which resulted in a cascade of public health disasters. The whistleblower explained some companies convert hemp-derived CBD into THC with a chemical called methylene chloride, also known as dichloromethane. In effect, marijuana products are sold as traditional Delta-9 THC, while they might actually be hemp-derived THC, such as Delta 8.
As with Delta 9, the FDA has not approved Delta 8 products. The FDA warned, “some manufacturers may use potentially unsafe household chemicals to make delta-8 THC through this chemical synthesis process…If consumed or inhaled, these chemicals, including some used to make (synthesize) delta-8 THC and the by-products created during synthesis, can be harmful.” The state of Colorado also warned, “not enough is known about the health effects of using THC products made out of hemp,” adding that “in Colorado, it is illegal to make or sell THC products that have been manufactured from hemp.”
In August, Mammoth Management filed a lawsuit against Bonanza Cannabis Co. alleging that Bonanza “engaged in deceptive trade practices by possessing, distributing and selling illicit hemp-derived synthetic THC in its vape cartridge products.”
Consumers should also take note. The industry favors the CBD-based conversion process because it is much cheaper to produce, thereby maximizing profits. It also allows them to avoid paying taxes on grown marijuana. This is expedient for licensed companies that operate outside the law, but it threatens to push compliant companies, like that of the whistleblower I spoke with, out of business.
These come amid financial struggles facing the state’s marijuana industry. In June, Politico highlighted Colorado’s “dramatic marijuana market downturn,” noting that sales have declined from $2.2 billion in 2020 to $1.5 billion in 2023, with similar declines in tax revenue from marijuana. In turn, this has led to “layoffs, closures and downsizing.”
Clearly, the industry cannot be trusted to adhere to existing standards, and we need regulators to step in. However, the Marijuana Enforcement Division has demonstrated an inability to ensure the industry operates within established guardrails. The whistleblower said he sent warnings to the governor’s office, reporters, and other advocacy groups, who have been unresponsive because they don’t want to cast the state’s fledgling marijuana industry in a negative light.
The Marijuana Enforcement Division should implement a regulatory overhaul that emphasizes strict product testing and strict product standards. It must also crack down on the companies that are violating — often knowingly — existing standards. Additional regulations are required to prevent the conversion of hemp-derived CBD into THC.
The ballot measure that made Colorado the first state to legalize recreational marijuana stated, “marijuana sold in this state will be labeled and subject to additional regulations to ensure that consumers are informed and protected.” Yet, we are learning from those inside the industry that the state has failed to live up to this promise. The recent lawsuit confirms this fact. A regulatory overhaul is needed to protect public health and regain the trust of consumers.
Luke Niforatos is the executive vice president of Smart Approaches to Marijuana and a leading national drug policy expert.
Luke Niforatos is the executive vice president of Smart Approaches to Marijuana (SAM) and a leading national drug policy expert.
H/T; gazette.com
