“The Massachusetts cannabis industry is rife with a practice commonly known as ‘lab shopping,’ where cultivators determine which labs provide the most favorable results.”
On Jan. 30, MCR Labs filed a lawsuit in Suffolk County Superior Court against eight other Independent Testing Labs (ITLs) in Massachusetts for alleged “violations” of the state’s cannabis law, “intentional interference with advantageous business relations,” and “unjust enrichment.” The complaint reads, in part:
Plaintiff and Defendants are competitor analytical laboratories that operate in Massachusetts’ multibillion dollar cannabis industry, offering testing services to companies that cultivate, market, and sell cannabis and cannabis products in Massachusetts. Plaintiff brings this action to redress Defendants’ unfair methods of competition and deceptive acts and practices, which have stripped Plaintiff of its hard-earned business in the cannabis testing market in Massachusetts.
Defendant Labs’ unfair, unlawful, and deceptive conduct is twofold. Defendants (1) artificially inflate Total THC Potency in tests of their customers’ cannabis products; and/or (2) ignore “safety fails” in test results—manipulating tests for product batches that contain contaminants such as yeast and mold, lead, and pesticides that are banned or restricted under Massachusetts law, so that the test results will not show the presence of these unlawful contaminants.
The news is hardly shocking, as MCR Labs has been vocal for years about the industry’s testing problems. The Framingham-based company’s suit is loaded with data and charts, some of which had previously been presented, including in Talking Joints Memo reporting, showing how some labs apparently manipulate results. The complaint continues:
Because multiple labs (specifically, Defendants) are willing to engage in these unlawful and unscrupulous practices, the Massachusetts cannabis industry is rife with a practice commonly known as “lab shopping,” where cultivators determine which labs provide the most favorable results (regardless of their empirical validity) and engage those labs for compliance testing contracts and business relationships.
Considering that lab shopping and testing already comprised one of the most pressing issues facing the industry before this lawsuit, it’s clear that the MCR offensive will consume untold amounts of time and attention—not just for those who are directly involved, but also for everyone from regulators to cultivators. And of course, we will be covering the subject diligently.
We spent the weekend speaking with experts and stakeholders, and we plan on following the story closely in the coming weeks and months. Stay tuned for analytical takes from legal, testing, and our own in-house experts, and for input from the plaintiff and/or any defendants willing to speak. In the meantime, you can read the whole complaint here.
“We have fought against widespread result manipulation in the cannabis industry for years,” MCR Labs wrote in a statement. “Fraudulent testing practices harm patients, consumers, industry workers, and ethical businesses. … Honest and accurate testing is essential for consumer safety, public health, and a fair and prosperous market.”