Article by Glen Korstrom, Business in Vancouver
Concerns about the quality and safety of legal cannabis, and the accuracy of measurements for active ingredients on product labels, are shaking some consumers’ confidence in the nascent legalized cannabis sector.
The fear for governments is that if consumers do not warm to pricier, legal cannabis products, and instead stick with their illegal dealers, governments will lose tax revenue and the black market will continue to thrive.
Statistics Canada data in March showed that the black market holds an 80% grip on cannabis sales. The agency said annualized Canadian household spending on cannabis totalled $5.9 billion in the fourth quarter of 2018, with $4.7 billion spent on black market products and about $1.2 billion for legal weed.
While a 20% slice of the market going to legal producers is a significant start for a new sector, there is much work to do if Prime Minister Justin Trudeau is to realize what he said were his government’s goals when he legalized cannabis last October, and ended 95 years of prohibition.
But a steady stream of complaints about the quality of legal cannabis has filled social media feeds. They have ranged from disparaging comments about Vancouver actor Seth Rogen’s March 27 announcement that he plans to partner with Canopy Growth Corp. (TSX:WEED; NYSE:CGC) in his launch of the Vancouver-based cannabis brand Houseplant to a tweet from Tantalus Labs CEO Dan Sutton criticizing the overall quality of cannabis on offer in the market.
Turning to lab testing
Concern about the quality of legal products has spurred some to take products to independent labs to test for pesticide use and determine the level of tetrahydrocannabinol (THC).
Entrepreneur and aspiring legal cannabis retailer Michael Barcellona bought eight strains of legal cannabis and had a Vancouver-based lab test the samples so he could be assured that if the province approves his retail licence, and he is able to sell legal weed, he will be providing safe and accurately labelled products to customers.
The results of his tests, however, showed that one strain – CannTrust Inc.’s (TSX:TRST) Kinky Kush, sold under its Liiv brand – failed a test for pesticides, Barcellona said.
The test was a basic one that merely showed the presence of a pesticide, as he did not pay the extra money to have the lab do a test to determine which pesticide the product contained.
A separate concern was that the Kinky Kush sample was labelled as having 27% THC even though the lab test revealed that the sample contained just 19% THC.