A cannabis testing lab with locations in New York, Massachusetts and Maine is taking its longstanding fight against inaccurate testing to court.
MCR Labs sued eight of its Massachusetts competitors in Suffolk Superior Court on Jan. 30, claiming that the defendants were deliberately passing contaminated cannabis, while also inflating the THC potency. This in turn, damaged MCR’s business when cultivators and manufacturers gravitated toward those labs.
The lawsuit names CDX Analytics, Green Valley Analytics, Kaycha, Massbiolytics, Assured Testing Laboratories, Analytics Labs, SafeTiva Labs and Green Analytics Labs as the defendants, alleging that each of these companies inflated THC potency results or passed product that exceeded the state’s limit on mold and yeast, if not both.
Specifically, MCR Labs accused Analytical Laboratories, Assured Testing, Green Analytics, Kaycha and SafeTiva of both inflating THC results and passing contaminated product. They also accused CDX Analytics and MassBiolytics of passing contaminated product, while Green Valley Analytics allegedly inflated THC results.
MCR accused its competitors of unfair practices, interference with business relationships and unjust enrichment. It seeks to recover an unspecified amount of lost income.
“Defendant labs intentionally caused plaintiff’s customers to leave plaintiff, by indicating a willingness to provide manipulated testing results that ignored results showing contamination levels past the allowable action limit and/or unlawfully and deceptively inflated the total THC potency,” said the 50-page lawsuit.
MCR Labs says biased results lead to lab shopping
MCR further alleges that due to the testing discrepancies, they have lost numerous clients because of lab shopping.
“Plaintiff’s business has been severely impacted by the practice of lab-shopping, as plaintiff’s existing and potential customers (who themselves feel competitive pressure from THC potency inflation) are drawn away by labs willing to provide biased results that reflect higher but inaccurate THC levels and ignore safety failures.”
Massachusetts requires that all products sold in the legal cannabis market be tested for contaminants, including metals, pesticides, mold and yeast. Much like the majority of other states with legal cannabis, Massachusetts requires that the total amount of mold and yeast remain lower than 10,000 colony forming units per gram.
MCR Labs gave an example of how one company, Holistic Industries, allegedly took advantage of shoddy lab testing after leaving it as a client for Green Analytics. Holistic Industries has active retail, cultivation and manufacturer licenses in Massachusetts, according to the CRB Monitor database.
After receiving complaints about suspected moldy cannabis, the state’s Cannabis Control Commission (CCC) inspected Holistic Industries before reaching a settlement agreement in April 2024 where Holistic paid a $200,000 fine, conducted remediation efforts and was required to use a different testing lab selected by the CCC.
Once the company switched, its failure rate jumped up from the single digits to 59.5%, according to the lawsuit. During that same period, Holistic continued to also use the services of their old testing lab, Green Analytics where only about 4% of their samples failed.
On Feb. 3, the CCC issued a recall on 12 different contaminated products. The CCC identified Holistic Industries as one of about two dozen producers that offer the recalled products.
Although the lawsuit only covers actions that allegedly took place in Massachusetts, several of the defendants have operational testing labs in other states as well.
CDX was owned by Act Laboratories, which operates testing labs in Illinois, Michigan, New York, Ohio, Pennsylvania and Florida. Kaycha Labs has locations in Arizona, Colorado, Florida, Nevada, New York and North Carolina. And Green Analytics Labs has locations in Maryland, New Jersey, New York, Pennsylvania, Virginia and West Virginia. Green Analytics was previously a part of Steep Hill, which was sued in Arkansas for alleged THC inflation in February 2023.
MCR Labs’ lawsuit noted that testing irregularities in Massachusetts did not necessarily implicate wrongdoing by testing labs outside of the state.
“Kaycha Labs’s failure rate fluctuates across the various states in which it operates. For example, in Nevada, which has a robust compliance program and routinely fines or orders labs to close when said labs appear to be manipulating data, Kaycha’s failure rate is over 11% – which is both within the expected range for this test, and over four times greater than their Massachusetts failure rate,” said the lawsuit.
Kaycha’s failure rate in Massachusetts in 2023 and the first half of 2024 was 2.62%, according to the lawsuit.
The defendant labs did not respond to requests for comment.
Cannabis labs policing each other nationwide
There has been increasing scrutiny of bogus lab tests and contaminated cannabis over the last year, including an expose in the L.A. Times about pesticides in smokeable flower in California.
Recently, a cannabis operator in Colorado conducted his own secret shopper in and around Denver. Of the 15 samples he gathered, 13 tested as having excessively inflated potency claim, according to a report from MJBizDaily.
In the last year or so, state governments beyond Massachusetts have been cracking down on lab testing accuracy in California, Oregon, Michigan, Mississippi and Nevada.
A lawsuit similar to the one in Massachusetts was filed in federal court last June in California by Infinite Chemical Analysis Labs and Anresco Laboratories, against 13 competing testing labs. That lawsuit’s plaintiffs had the same attorneys as the MCR Labs lawsuit.
In this earlier case, the plaintiffs tested products that defendants had already tested to find examples of mislabeling of THC potency or contamination. The plaintiffs dismissed the case in September without explanation.
In contrast, MCR Labs spent at least a year gathering macro data on testing results to show larger trends of allegedly dishonest testing results from their defendants. Much of that data was gathered through public record requests to the CCC and other state agencies for reference data, according to MCR Labs Vice President of Marketing and Technology Yasha Kahn. He presented some of his preliminary findings last year at a cannabis convention in Boston.
“Make data publicly available. The public deserves to know if they are being misled,” he said in an interview last year. “The moment that the public can get access to the data, they will see that there are major differences between labs.”
