Kenny Novotny had a problem.
The owner of 1440 Processing was seeing lab results on over 90% of cannabis he bought and submitted for testing had failed.
Those failed batches came from marijuana growers who supposedly tested the marijuana themselves after harvest, he said. They were supposed to be up to the standards outlined in Oklahoma state law, and shouldn’t have had elevated levels of pesticides, heavy metals or other dangerous chemicals — but they often did.
Financial incentives to cut corners, black market sales and a lack of state enforcement ability are forcing professionals like Novotny in the booming industry to self-police their products.
Novotny is a processor, meaning he uses specialized lab equipment worth millions of dollars to extract THC from marijuana plants, and infuse the chemical into a variety of products, including edibles, tinctures, pills and more. This kind of manufacturing massively expands the type of products available to patients beyond just the typical greens one might load into a pipe or roll into a joint.
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Using tainted marijuana could not only damage the quality of the final product, it would damage Novotny’s machines, and could ultimately harm medical marijuana users who consume the products.
So why is it that some marijuana that’s supposedly been tested and “approved” can fail so spectacularly when being re-tested?
It could be because some growers are mixing tainted, or lower-quality, marijuana with good marijuana, or even forging lab results.
The Oklahoma Medical Marijuana Authority, which oversees marijuana licensing in the state, recently shut down a lab it claims forged results for samples of medical marijuana, court records show.
But the OMMA had just two dozen inspectors last month who were responsible for monitoring more than 12,000 business licensees. The agency plans to triple the number of inspectors on staff by December to make sure every business is visited at least once this year, but until that point some businesses go without inspection for more than a year at a time.
Without a watchful eye, there’s a financial incentive to cut corners when it comes to testing. It costs about $300 to test every 10 pounds of marijuana that a grower harvests, so it can get expensive quickly.
But that cost is worth the price for Novotny, even if a grower has promised quality product, and even if that grower has the documentation to “prove” it.
“What our validation is, is to take the product, us pay $300 and send it off to make sure that what our trusted testers tell us matches the sheet of paper that they gave us,” Novotny said.
Struggles to police the black market
Novotny has also seen evidence of what he believes is continued trade of black market cannabis that either comes in from another state or is transported out.
One indication is when “brokers” message him on Instagram offering to sell thousands of pounds of marijuana, but disappear when Novotny replies saying he only buys from farms he can visit.
The Oklahoma Bureau of Narcotics is tasked with investigating these kind of cases where illegal, likely black market supply, is shipped across Oklahoma borders.
“It hasn’t met testing standards and we just don’t know if it would even pass Oklahoma standards,” OBN spokesman Mark Woodward said. “And it’s going to dispensaries where it’s often sold to patients who could have adverse effects from untested, black market product from out of state.”
Then, there are the sellers offering “freshly harvested” batches during winter months at bargain prices similar to product grown at large-scale outdoor farms.
“And you’re looking at it like, what do you mean you just cut it? Not in Oklahoma, you didn’t,” Novotny said.
To clamp down on black market weed, the state is trying to implement a seed-to-sale tracking system. The system is similar to what other states use to track marijuana inventory along the supply chain, and would allow for nearly any medical marijuana item sold to be traced back to its source with a few computer keystrokes.
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Without the tracking system, medical marijuana in Oklahoma is a billion-dollar industry with little ability to discern where supply is coming from. On average, Oklahomans with medical marijuana licenses are spending more than $200 per month on cannabis, according to an analysis of patient licenses and tax revenue.
The number of total sales since Oklahoma voters approved medical marijuana in 2018 is on track to surpass $2 billion this year.
It’s widely believed seed-to-sale tracking could virtually eliminate black market trade among licensed cannabis businesses by more thoroughly identifying sources of marijuana and where those products are sold.
Implementation of the system has been delayed, however, because of a lawsuit alleging the tracking service picked by the OMMA, Metrc, would have a monopoly on tracking.
That case was recently moved from Okmulgee County to Oklahoma County after the plaintiff suing the state didn’t appear in court.
In the meantime, OMMA recently replaced its executive director. Adria Berry will be the fourth person in that role in the past three years. Gov. Kevin Stitt has vowed to crack down on the issues that still plague Oklahoma’s cannabis industry.
“I am committed to tackling the major challenges that the explosion of marijuana in Oklahoma is causing across our state,” said Stitt. “Foreign nationals are gobbling up land in rural communities and drug traffickers are exploiting our laws and threatening our public safety. Adria Berry is the right leader to help us solve these problems and protect Oklahomans.”
The state legislature also beefed up enforcement this year, sending $5 million from licensing fees to the OBN to fund a full-time unit of investigators.
The bureau is already working to identify illegal weed operations and shutting them down when they’re found.
“Many of those are completely licensed facilities, but we’ve traced 100% of their product being sold on the illicit market” in other states, Woodward said.
Each one of those busts is part of a larger investigation into organized crime, he said. Along with the illegal drug trade, investigators found evidence of human trafficking and forced labor.
And new laws passed this year could ultimately reduce the number of approved licenses. The OMMA soon will be able to issue “cease and desist” letters for serious violations and dangers to public health. Companies with foreign financial support will have to disclose that connection.
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Moving ahead despite the circumstances
Novotny, the owner of 1440 Processing, wants to be the “Pfizer of cannabis” products with a strong focus on medicinal use, he told The Oklahoman during a recent tour of his facility in Choctaw. Cannabis with varying levels of naturally occurring THC, CBD and terpenes are used with the hope that it will alleviate a wide variety of ailments. Labs like 1440 Processing make sure those ingredients are produced to exact specifications for each client.
His problem with failed marijuana batches pops up less frequently now that 1440 Processing has a list of about a dozen marijuana farmers who Novotny trusts. When he gets a bad batch, he sends it back and notifies OMMA.
“If we don’t know the farmers, haven’t met the farmers, don’t have a relationship with them, we would test the material again,” he said. “Because if you put material that’s got pesticides into a machine, it’s very, very, very difficult to get them out.”