Deep Dive of the Week
First cannabis lab in the nation, highly-storied Steep Hill, is named in a THC potency lawsuit.
Where We Are:
Lawsuits have just been filed, where Steep Hill is both the defendant (RICO lawsuit in AR) as well as a plaintiff in a lawsuit in the state of PA (where they will no longer be operating as they have terminated their license with Green Analytics). The licensure termination, representing MA, NJ, PA, and MD also represents 83% of their revenue.
Steep Hill has been a vocal part of the cannabis lab space since inception and positioned themselves as experts and advisors in the early years of cannabis legalization. If this could happen to Steep Hill, what else is out there?
Steep Hill History / Deep Dive:
In 2008, Steep Hill was founded in California. A few short years later in 2011, it was selected as Mendocino County Inspector to partner with law enforcement to help ensure medical cannabis was safe.
In 2014, Steep Hill did work testing other labs’ samples posted in The Denver Post, calling out THC inflation, later referenced in the Cannabist. In May of that year, they were cleared to test in CO. In June, Steep Hill’s Lab opened in WA. In November of that year, they performed testing on Amsterdam Weed for Vice Magazine. Towards the end of 2015, Steep Hill made another move by expanding into New Mexico.
In March of 2016, Steep Hill issued an open letter to WA state cannabis community citing 3rd party audit, titled ‘Cannabis is safe, but some contaminants will kill you’). In June, they expanded to Alaska and Maryland. October saw more expansion – this time to PA and Washington DC. Later that month, they published an article regarding off-the-shelf testing they performed in California that found that 84% of marijuana samples submitted to its Berkeley, California, lab came back positive for pesticide residues.
In February of 2017, Steep Hill Maryland received approval from the state. They expanded to Arkansas and expanded to Los Angeles in June. In November, they opened a lab in Oregon. Later that month, they published findings of off-the-shelf testing they performed in AK.
Two months later in January of 2018, they were audited in Alaska due to reported potency discrepancies. Presumably that investigation was ongoing when they were featured in Wired Magazines, Inside the Lab Making sure your Weed is Safe, In April, they closed the Alaska lab, but also won a case vs. the state of NM for disclosure of Trade Secrets to competition via FOIA. In May, they expanded to Mexico, and announced plans to expand to six European markets. They also won pre-approval for Licensure for testing of Adult-Use cannabis in MD. In June of 2018, Alaska published a report that casts doubt on labs, including the already shuttered Steep Hill – but it also offered some suggestions on how to improve their system.
In 2019, Steep Hill expanded to NJ and then to OK. In July of 2020, their former CEO sued Steep Hill to try to stop sale of Oregon assets to EVIO. In April of 2021, Steep Hill expanded to Mississippi and Illinois.
In June of 2022, they received their license in VT. In September of that year, CanBud acquired Steep Hill, changing its own name on Canadian Stock Exchange to maintain the Steep Hill Brand.
In January of 2023, they were named as Mississippi’s testing lab. Then in February, they were Named in RICO lawsuit in Arkansas for THC Potency Inflation. Earlier this month, they terminated their licenses with Green Analytics, effectively terminating Steep Hill operations in MA, NJ, PA and MD (83% of revenue). A couple of days later, they were named as the plaintiff in lawsuit v. PA to stop the 2 lab testing rule.
Other Headlines You Should Know About
Last week, DA Kevin Steele of Montgomery County announced that THC gummies had tested positive for fentanyl and heroin by a field device. However, subsequent lab tests were unable to confirm this finding.
Green Analytics North, LLC d/b/a Steep Hill PA, Hanging Gardens, LLC, Pennsylvania Medical Solutions, LLC, Curaleaf PA, LLC, AES Compassionate Care, LLC, Standard Farms, LLC, and Parea BioSciences, LLC have filed a lawsuit against the PA Department of Health to stay the new rules that require producers to use two separate laboratories to test their product. Read the lawsuit here. Since Steep Hill terminated their license agreement with Green Analytics at the beginning of the month, effectively disbanding their operations in New Jersey, Massachusetts, and Pennsylvania. I wonder where that leaves their lawsuit in PA about the second test.
NY Insider performed potency analysis on 8 of the highest testing strains and have published some results. They reported their results and findings to the Office of Cannabis Management.
The NY Insider potency analysis has caused regulators to revoke the stop-gap testing measure that they hope is one of the primary causes of the potency inflation.
Colorado issued a recall of products that “initially passed contaminant testing, but subsequently failed retesting.” Reporting by Westword indicated that MED and the state ‘received information that led them to retest.’
What I’m Reading
Leo Bear-McGuinness’ piece on Analytical Cannabis’ about lab shopping.
Meditations on Moloch. Always worth a reread.