Arizona Cannabis Testing Lab to Pay $470K to Keep License

Despite unreliable THC testing, multiple procedure violations and an owner-client conflict of interest, one Arizona cannabis testing lab is buying its way out of trouble to retain one of the state’s 20 licenses.

OnPoint Laboratories, of Snowflake, a small town in eastern Arizona, has agreed to a nearly $470,000 settlement with the Arizona Department of Health and Services, the Arizona Republic reported.

The agreement comes after ADHS regulators sent a notice to OnPoint in August, threatening to revoke its license following a report from inspectors that the laboratory was using methods that could inflate the reported potency of cannabis samples it was testing, as well as other violations.

“The potency scaling person weighing a sample portion for potency testing stated, ‘I pick the top of the bud where the crystals are,’” according to ADHS documents obtained by the Republic. The worker told an inspector she was trained to prepare the potency samples that way, according to the newspaper.

But OnPoint Labs isn’t the only Arizona licensee facing regulatory issues.

ADHS officials sent a similar intent to revoke notice to Pure Labs, of Phoenix, in January. The company is currently negotiating a settlement agreement to keep its license, according to the Republic.

The laboratory crackdowns come while Arizona is still finding its adult-use footing.

In one of the quickest program rollouts in the country, Arizona voters passed Proposition 207 in November 2020, and then the state launched adult-use sales Jan. 22, 2021. OnPoint owner and CEO Jeff Cardot told the Republic the quick transition from medical to adult use put pressure on labs to meet new state testing requirements, which was where its inspection problems arose.

The violations included “inventory control, security, administration, operations, quality assurance, proficiency and accuracy testing, chemical analyses and microbiological analyses,” according to ADHS.

In addition, Cardot owned real estate in Tempe tied to a lease with a cannabis dispensary, creating a conflict of interest with a client in the eyes of state regulators. But that building recently sold, the Republic reported.

As part of the settlement with ADHS, Cardot agreed to steer clear of business dealings with those tied to the state’s cannabis testing requirements. In addition, OnPoint must follow through on a correction plan to address its THC testing procedures and unmet license-holder obligations.