John Schroyer
Yet another lawsuit has been filed alleging THC potency fraud in the cannabis industry, with the latest legal action coming in the medical marijuana market of Arkansas.
A lawsuit filed by MMJ patient Jakie Hanan in federal court alleges that at least four licensed cannabis companies conspired to defraud patients by falsely increasing THC testing results, Law360 reported.
The companies Hanan named in the suit include three growers – Osage Creek Cultivation, NSMC-OPCO, and Bold Team – and one testing lab, Steep Hill Arkansas.
The suit alleges that testing by third-party labs revealed that products from the three growers and tested by Steep Hill “averaged 25%+ higher than the other labs,” while the backup labs all found THC results within 10% of each other.
“Marijuana flower with higher concentration of THC is more valuable. So there is incentive to exaggerate the THC content of flower — it can be sold for more money. As a result, cultivators often choose a lab that reports the highest THC value,” the suit asserts.
There’s more than $5 million in dispute in the case, Law360 reported.
The four companies are fighting the suit, according to Law360:
- Steep Hill requested the case be moved to federal court from state court.
- NSMC-OPCO argued in court that Hanan’s case doesn’t contain sufficient facts for a legal case.
- The other two companies filed motions to dismiss in state court.
The suit is the latest in a wave of legal actions filed against various cannabis businesses, all alleging the same core crime of THC potency inflation in order to boost sales. It’s also a reason more state governments are looking into the possibility of state-run cannabis labs, to back-check private labs accused of corruption.
