Budding business: Pot-testing labs growing in Oregon

BEND, Ore. — Cascadia Labs is nestled amid ornamental fruit trees in a quiet office park on the north end of Bend. In this lab, employees with backgrounds in the biotechnology and pharmaceutical industries spend their days testing a variety of products with one common ingredient, consumed by thousands of patients across Oregon: medical marijuana.

Cascadia Labs co-owner Jeremy Sackett, 32, is just one of the entrepreneurs who has joined Oregon’s medical pot industry, where new regulations aimed at increasing quality and safety have helped spawn businesses headed up by people with backgrounds in science and the legal profession. Sackett worked at biotechnology companies until a year ago, when he started Cascadia Labs LLC with his wife, Ashley Preece-Sackett, 34. The company now has customers across the state who send samples via a medical courier service. The couple recently opened an office in Portland to receive samples, and Sackett is building a lab in Portland, too.

It is a sign of how quickly the medical marijuana landscape is changing in Oregon that Cascadia Labs is expanding at the same time Sackett is helping to draft a law that would grant the state authority to regulate these labs. New regulations on medical marijuana, passed by the Legislature in 2013 and implemented this year, are supposed to provide patients with safe access to cannabis products. But a state official involved with the program said the lack of regulatory authority over labs in the law prevents the state from ensuring medical pot is safe.

Tom Burns, director of pharmacy programs for the Oregon Health Authority, said that the state’s lack of authority to regulate pot testing labs essentially means that no one is testing the labs that test medical pot.

“I think it’s clear that the Legislature wanted to make sure the products people got from a dispensary were safe,” Burns said. “And without being able to assure the testing that is being done is being done by a quality laboratory, I’m just not sure I can assure the product is safe.”

“I think it puts patients’ health at risk,” Burns added.

Oregon House Bill 3460 legalized and regulated storefronts where people with medical marijuana cards can buy cannabis products. The law requires marijuana sold by retailers to be tested for pesticides, mold and mildew, “and unfortunately, that’s all it said,” Burns said. When the state adopted rules to implement House Bill 3460, it included a requirement that labs meet a set of international standards for operations. However, the state lacks the authority to check for compliance. As a result, state officials currently must take dispensary operators at their word that they use labs that meet state requirements.

Oregon Rep. Peter Buckley, D-Ashland, one of the chief sponsors of House Bill 3460, said lawmakers did not intend to withhold authority for the state to regulate labs. “That is something we will need to rectify in the 2015 (legislative) session,” Buckley wrote in an email.

“Professionalizing the medical marijuana program will take time. We need to work out how to regulate the labs, and how to regulate growers as well. The main goal of (the bill) was to establish safe access as the state’s policy, and to focus on the regulation of the dispensaries that now offer safe access,” he said.

Oregon is not alone in playing catch-up when it comes to regulating the labs that test marijuana.

Colorado and Washington, the only two states that have legalized recreational pot, have also scrambled to come up with lab regulations. Voters in both states approved measures in 2012 to legalize recreational pot, but neither had adopted lab regulations by the time Oregon officials began to write rules last year to implement the state’s new marijuana regulations.

Brian Smith, a spokesman for the Washington State Liquor Control Board that regulates recreational pot, said state law charged the agency with accreditation of marijuana labs. The board eventually developed a checklist of lab requirements and contracts with Columbia Basin College in Pasco to check compliance with the standards.

Colorado adopted its lab regulations in May, state Department of Revenue spokeswoman Natriece Bryant wrote in an email. “Requirements cover personnel qualifications, standard operating procedures, analytical processes, proficiency testing, quality control, quality assurance, security, chain of custody, specimen retention, records retention and results reporting,” Bryant wrote.

In Oregon, Sackett and the Oregon Cannabis Industry Association are involved in writing a proposal for a bill to regulate labs that test marijuana. The group plans to propose that the Legislature in 2015 pass a law to require all marijuana testing labs to meet lab standards set by the International Organization for Standardization and use third-party accreditation groups to check lab compliance. They hope to publish a blueprint for the law — called a legislative concept — in August.

Sackett estimated there are at least 10 labs in Oregon that test marijuana products. “I believe that additional regulation will weed out fly-by-night labs,” Sackett said. Anthony Johnson, executive director of the Oregon Cannabis Industry Association, said he knew of five labs.

There is no typical career path among owners of Oregon marijuana testing labs. Sackett graduated from the University at Buffalo in New York with a bachelor’s in biochemical pharmacology, then volunteered for a summer counting bull trout for the U.S. Forest Service in Idaho.

That’s where Sackett met Preece-Sackett, and he decided to stay on the West Coast. The couple lived in California and then moved to Bend several years ago, where Sackett worked as an analytical chemist for a local biotechnology company.

Sackett said he was interested for years in opening a specialty lab to test marijuana, but his decision to take the leap to open Cascadia Labs last year was largely inspired by the story of Charlotte Figi, a Colorado girl with severe epilepsy whose case was featured last year in a story on CNN.

Charlotte’s parents administered an extract from a low-THC strain of marijuana to Charlotte and observed a significant reduction in the number of seizures. THC is the psychoactive compound in cannabis. The strain of marijuana has since become commonly known as the “Charlotte’s Web” strain.

“We actually have a few families in Bend with children with that form of epilepsy,” Sackett said. “That’s the cool thing about the science of it right now. We’re learning new things (as states decriminalize marijuana).”

Before state regulations took effect, customers were most interested in tests to determine the potency of various cannabis strains, Sackett said. Cascadia Labs continues to develop new tests and recently began offering a test for residual solvents left over from the process of extracting cannabis oil.

Sackett said that in the long term, he is thinking about expanding Cascadia Labs into other states and might also get into cannabis product development.

For now, Cascadia Labs’ by-the-book procedures could give it an edge if the state begins regulating the labs. Employees at Cascadia Labs keep records on product samples from the minute they arrive at the office, weighing them to establish the amount of cannabis product in their custody. Strict lab procedures could position the company to succeed if there is ever an end to the federal prohibition on marijuana.

“Our intention is to be ready to transition to federal oversight, so when that transition happens, we’ll be ready to go,” Sackett said. Despite the lack of state regulation, Cascadia Labs adheres to best practices for labs because “that’s the only way we know how to operate,” Sackett said.

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