Cannabis testing lab fined $57,500 after passing tainted cannabis products

State regulators voted Thursday to fine a testing lab over $57,000 after it was found to have intentionally passed tainted cannabis products.

The Cannabis Compliance Board voted to approve a $57,500 fine and 180-day license suspension after it found that Cannex Nevada, LLC, a Las Vegas-based testing facility, violated state regulations when it intentionally passed cannabis samples tainted by microbial contaminants and falsely inflated THC levels.

“I don’t want to see anything fail,” Board Chair Adriana Guzmán Fralick said before the vote. “I want to make sure that we protect not just our licensees, but we have to protect the public.”

The disciplinary action was less severe than what was originally suggested by a state hearing officer, who recommended the lab pay a fine over $82,000 and have its license revoked.

The lab, also known as Lettucetest LLC, first faced a complaint from the board in January 2021. That complaint detailed more than a dozen violations found by state inspectors. Prior to the complaint, the lab was suspended twice.

The lab was also the subject of health advisories in 2019 and 2020 after tainted products — including those that contained high levels of mold and yeast — were given a pass by the lab and sold in retail dispensaries.

Kimberly Maxson-Rushton, a lawyer representing the lab, argued it had actively tried to fix issues following a 2019 license suspension.

Maxson-Rushton also argued the lab’s owners had already paid a “pound of flesh” in legal costs and hearings related to the complaint.

“My client has lost more than $3 million as a result of this case,” the lawyer representing the lab, argued. “So here we are in 2024, still arguing whether or not it makes the CCB the gold standard of licensing to fine a licensee for the use of Post-it notes.”

According to the complaint, the lab was using Post-it notes to inform staff of certain directives, and later threw them away, despite being required to retain the notes for testing records.

Contact Taylor R. Avery at TAvery@reviewjournal.com. Follow @travery98 on X.