Maine is finalizing its testing rules for recreational marijuana, spelling out what a lab must do to get a state license and what safety and potency checks must be done on any marijuana products before they can be sold when the market opens in March.
The proposed rules cover everything from how samples are collected (by the lab, not the merchant) to pesticide use (eight are banned, but anything that can’t be used on organic fruits or vegetables must be reported) to Maine’s efforts to stop lab-shopping (failed tests must be retested with same lab).
They don’t address the biggest testing problem facing most states at launch: Will there be enough labs?
“We have seen that as a pain point in pretty much (every) other state,” said Erik Gundersen, the director of Maine Office of Marijuana Policy, whose office drafted the proposed testing rules. “I don’t think we’re going to be any different.”
Massachusetts delayed its adult-use roll-out from July to November 2018 until it could license two labs. They remain the only labs available to the state’s 28 adult-use marijuana shops, which is causing supply problems to this day. Just last week, the adult-use shop closest to Boston ran out of tested flower to sell.
Last year, California gave marijuana shops a six-month grace period after recreational sales began there even though state law requires strict potency and safety testing, in part to give regulators time to license enough labs to meet the testing demands of the world’s biggest cannabis market.
Maine is likely to feel some testing pain, but Gundersen isn’t expecting testing-related supply shortages. Maine has at least two labs that test medical cannabis products, ProVerde Laboratories in Portland and Nelson Analytical in Kennebunk, even though it isn’t mandated by state law.
Gundersen said at least two or three labs have expressed interest in getting a recreational testing license.
“I would imagine that there would still be some type of delays,” Gundersen predicted. “If we have at least a few in the fold then I think that it may not be perfect, but I think we’ll be able to manage it and ensure that the mandatory testing is happening.”
The Maine Medical Association calls marijuana contamination “one of the most significant risks” facing the legal market. Threats can range from E. coli poisoning to deadly lung infections, but most risks can’t be accurately calculated because federally funded research is severely restricted.
In Maine, no one is checking to see if the medical cannabis being sold now is safe. It has been legal since 1999, with 50,000 certified patients buying $50 million of cannabis a year to treat conditions that range from glaucoma to AIDS, but Maine is the only state left that doesn’t require any of it to be tested.
But Nick Des Lauriers, the business manager of ProVerde, said his lab has found that Maine’s marijuana is rife with contaminants of all kinds, ranging from high levels of residential solvents like naphtha in the concentrates to moldy flower. Failing cannabis products are the norm, he said.
“There are some bad people out there doing some pretty shady things to make a quick buck,” he said.
Maine had been hinting that medical testing requirements were coming, but Gundersen now talks about it as something that will only happen if state lawmakers adopt new legislation. It is something that many medical marijuana caregivers and patients oppose, worried it will drive up the cost of medicine.
Des Lauriers said he understands that concern. When ProVerde first came to Maine, it set “rock-bottom” pricing – half of what it charges in Massachusetts – to give Maine’s small caregivers the affordable testing required to grow safe medicine for family and friends.
But many of those caregivers have grown into thriving businesses that now serve hundreds of people, he said. ProVerde’s pricing structure has been subsidizing their operations, leaving the business itself in the ridiculous position of helping others make money while making none for itself, Des Lauriers said.
“We make zero money in Maine at the moment,” Des Lauriers said. “We barely cover our costs.”
ProVerde will definitely be raising its prices when recreational launches. Not only because recreational operations are clearly a for-profit business model, but because the state’s adult use rules require costly pesticide tests and travel to a customer’s location to conduct on-site sampling.
A full panel of tests under ProVerde’s old pricing structure was about $550. Des Lauriers said ProVerde can’t know how much it will charge for the same test until Maine finalizes the testing rules for products sold into the adult-use market, which is slated to serve 325,000 Mainers and 8.5 million tourists a year.
He singled out the pesticide test as an example. If Maine requires a lab to only test for the eight banned pesticides cited by name in its rules, a pesticide panel would cost about $200, he said. But if it demands a lab report any pesticide that can’t be use on organic produce, the cost of that test jumps to $800.
“People in the industry simply do not understand the costs involved,” Des Lauriers said.
Chris Altomare, a young biochemistry major out of Alvernia University in Pennsylvania, is trying to raise $1.8 million to set up Nova-Analytics in Portland. That would build out the lab, lease the equipment, get the certification needed to validate his methods, and buy testing supplies.
A lab must pay $250 to apply for a state license, an annual license fee of $1,000, and then pay up to $2,500 a year to the Maine Center for Disease Control to certify the technology it uses to check marijuana for potency, insects, residual solvents, pesticides, heavy metals, molds, and bacteria.
It’s expensive to launch, but Altomare believes there is money to be made. “More regulation = Increased Revenue” is how he words it in his investor materials. By the end of his third year of operation, Altomare is banking on netting $10.2 million on more than 16,000 tests a year.
Although small, Maine’s adult-use market is luring lab operators from out of state and out of retirement.
The ink on Jacob Cottrell’s University of Florida mechanical engineering degree was barely dry when he moved to Maine a few years ago to work for an extraction lab. When the lab bought equipment to test its own work, Cottrell liked it, felt as if it suited him more, and decided to launch his own testing lab.
“Not a whole lot of labs to go around,” he said. “But a lot of people more people are going to need them.”
Esotera Analytical is now seeking the third-party accreditation needed to operate as a recognized testing facility in Maine. But he does not need that to run small-scale potency and residual solvent tests now for medical marijuana caregivers who want to check their grows and extracts.
Clayton Sulak, the former owner of Tested Labs in Falmouth, is looking to get back into the testing field after selling his testing operation to Nelson Analytical. He wants to open up a new facility in Richmond, but is still working on getting the local approvals needed to move ahead.
Two or three labs may be enough, at least at first. Gundersen knows of 21 Maine towns that are going to welcome recreational marijuana businesses. He expects that number will grow, but not by so much that it would overwhelm two or three state-licensed testing labs.
“Once you flip the switch on the system, we aren’t going to have a fully matured and developed industry,” Gundersen said. “If I was to go to Denver, Colorado, and walk into a marijuana shop, it is going to look a lot different than when somebody in 2020 walks into one here just because it takes time.”
If Maine is like other states, its work on testing labs won’t end when it finishes writing its regulations, or even when its adult-use market matures. States have struggled to find a way to explain wide variation in testing results among labs and cited and shuttered labs for falsifying results.
Alaska launched in 2014 with four labs, and at times has dipped down to as few as two, in part due to a state investigation that found widely varying results when testing samples of the same cannabis muffin, cookie, capsules and dried flower for potency.
“Testing facility oversight has been a real challenge,” said Erika McConnell, the head of Alaska’s Alcohol & Marijuana Control Office. “We have found that our initial standards and requirements were too vague. We have been focused on improvements to the regulations for over a year now.”
This story was updated at 3 p.m. on Oct. 7 to correct the amount of Maine’s annual license fee.
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