Pesticide Penalties Levied in Washington: Pay up now and it’s OK to sell your product.

Wholesale Prices and $3 Billion of Diversionable Product
December 1, 2017
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Pesticide Penalties Levied in Washington: Pay up now and it’s OK to sell your product.

It apparently costs $650 per day to be allowed (by the LCB) to continue operations after being charged with pesticide-violations.

The mission of the LCB is to “Promote public safety and trust through fair administration and enforcement of liquor, cannabis, tobacco, and vapor laws.”  This post highlights one way in which that Agency is consistently and egregiously failing Washington consumers and, thereby, failing to achieve their mission objectives.

This aspect of the LCB’s failure to protect Washingtonians is summed up, succinctly, in the fact that there is only one record on file (through Dec of 2017) in which the LCB has caused pesticide-tainted product to be destroyed or recalled from the market.  There are also precisely zero times that the LCB has mandated a product recall within the cannabis market they regulate.  I became aware of this as I waited for the LCB response to an earlier suggestion I made on HI-Blog that the product tested by a certain lab appeared to represent a higher risk to the public and presented an immediate risk to public safety and health.

In the first 3 1/2  years of Washington’s State-legal cannabis market, LCB enforcement personnel conducted about 5,000 site visits (premises checks, in LCB parlance) to marijuana wholesale businesses.  One result was that farmers were accused of being in violation of “pesticide” rules approximately 44 times.  Six of those accusations appear to have taken the form of Warning letters.

For the remaining 38 cases, accusation took the form of Administrative Notices of Violation (AVN) that, specifically, accused the farms of “Using unauthorized pesticides, soil amendments, fertilizers, other crop production aids.”  Such violations could involve either the use of unauthorized crop production aids and/or the use of authorized crop production aids inappropriately (or at levels that exceed allowable action levels).  These are extremely serious violations, as the use of “unauthorized crop production aids” has a tendency to poison consumers of such products.  Such violations tend to compromise public safety (and health).

This article describes the resolution of these 38 AVNs.

Three of them do not seem to have reached any status other than “Escalation”.  No fines or suspensions or destructions or recalls or cancellations-of-license seem to have been applied.  These three cases show a pattern of having the initial AVN challenged and escalated … often to a level that includes informal hearings, administrative hearings, and involvement of the office of the State Attorney General.  The affected businesses appear to be conducting business as usual while things escalate.

For the remaining 35 cases, some sort of penalty was applied (typically a fine and temporary suspension).

  • 35 fines were levied (at an average level just over $5,000
  • 30 temporary suspensions were levied (at an average duration of just under 10 days)
  • 1 order was issued that required the destruction of plants

In addition, the Board of the LCB appears to have directly intervened in approximately 15 of these 35 cases.  When the Board intervened, the results were as follows:

  • Fines were reduced in amount 8 times (median reduction $2,600)
  • A suspension was reduced in duration 1 time (from 10 to 6 days)
  • Fines were increased in amount 6 times (median increase $6,500)

I am not completely sure why fines would be INCREASED as a result of intervention by the Board, but it appears, in cross-referencing data sources that such increases occurred in lieu of the farm having to suspend operations for the suggested suspension duration of 10 days.  This means that the cost for a pesticide-using farm to continue using inappropriate pesticides and/or to use pesticides inappropriately and/or to continue to grow and harvest and process and sell product on which possibly inappropriate pesticides were used possibly inappropriately is, taken as a median, $650 per day.  Pay to play.  Pay to play with poisons. Lawyers can be amazing, at times.

In contrast to the Board of the LCB showing their willingness to allow the continued production of pesticide-tainted product for a fee amounting to just over $27 per hour, not a single LCB-ordered product recall resulted from any of the pesticide-related infractions  Not a single one.

To be completely transparent, there are 5 occasions listed on the LCB website in which wholesalers voluntarily chose to recall some (or all) of their product from retailer’s shelves.  It would appear that each of these 5 voluntary recalls was associated (in part) with pesticide issues.

In one case, the farm in question had little history of sales and has had very little indication of sales since their recall.  In another case, there was a noticeable fall-off in sales for the farm for approximately three months following their recall.

In two of the cases where farms voluntarily recalled product, there appears to have been no noticeable disruption in their subsequent levels of sales.

In one instance, the farm was subsequently ordered to cease operations (they had their license cancelled).  This farm had a history of selling it’s (presumably pesticide-laden) product primarily to retail.  In the month after the suspension of their license was ordered, they sold over $100,000 of product to another wholesaler.  That struck me as odd, given that they had been told to cease operations by the LCB.  My interpretation of this was that the LCB allowed them to sell their remaining stock and/or inventory to another farm or wholesaler for continued production and/or processing (and, subsequently, for sale to the public).

Sweet deal.  The same LCB that has, in almost 4 years not ordered a single product recall allows a farm charged with all kinds of violations (including a pesticide violation) to sell off their inventory, in spite of having their license cancelled.

I don’t mean to get technical, but that seems like diversion (or, at least, illegal sales) to me.

Does anyone else see something wrong with the picture painted above?

To recap: As of the end of 2017, there have been about 5,000 site visits over 3+ years to the 1,170 licensed state-legal cannabis farms.  Over the course of those visits, 44 “infractions” regarding the inappropriate use of “crop production aids” were noted.  That implies that only 1 in 114 times is there evidence of the inappropriate use of crop production aids (or about 0.88% of the time).

Either regulated farmers are very good about using crop production aids, or the LCB’s attention is not focused on this problem (much like “bugs” in a traceability system … if one does not look for them, one has plausible deniability).  Farms are 7 times more likely to be cited for issues in their use of traceability.  They are 5 times more likely to be cited for issues with their security / camera systems, .They are also more likely to be cited for violating a Board-approved operating plan, improper record-keeping, and true party of interest violations.

With over 1,000 farms growing cannabis in the regulated system (with some active for over 3 years), 38 penalized violations seems a small number, and is suggestive that inappropriate pesticide usage is not as common as generally believed.  An alternate narrative consistent with this low rate of pesticide citations is that the poisoning of cannabis consumers is not an enforcement priority for the rule enforcement arm of the LCB.

One would hope that this is not the case, as testing for pesticides IS NOT REQUIRED for any product either than that which seeks to be classified as “Certified Medical Grade”, per DOH guidelines.

At about this time last year, the LCB initiated a program in conjunction with the Dept of Agriculture in which products were bought at retail and tested for pesticides at the AG lab in Yakima.  I have yet to see summary results of this testing made public, but – per the original scope of the project, it would be expected that over 300 such samples will now have been tested.

I wonder if the pesticide failure rates of those tests will be consistent with the 0.88% rate at which LCB on-site farm visits turned up sufficient evidence of the inappropriate use of “crop production aids” to issue either a warning or an AVN?

I eagerly await the summary results from that program, as my efforts to access the results in a useful way have, thusfar, been unsuccessful. (*Author’s note – check out the link I posted in the comments section of this post for a summary of the LCB/AG work that addresses this question).  The fact that we have heard little of the results of this effort in the media or from the LCB is odd.  Perhaps those results do not fit the narrative that the LCB would have us believe – namely that they are living up to their Vision, Mission, Goals and Values and that the cannabis being sold in regulated stores across non-prohibitionist areas of the state is safe for human consumption.

Perhaps the LCB is concerned that informed public awareness of the lack of competent and effective regulatory oversight of state-regulated cannabis might compromise future tax revenue and promote a supposedly dead unregulated market?

I have appended the LCB’s Vision, Mission, Goals and Values below for your reference, with a Pass/Fail grade associated with each.

The grading is mine and is, in part, a distillation of my observations of the LCB’s behavior over the past three years.  I have met many good people that work in that agency who appear to conduct themselves in accordance with this written framework.  Very few of them are in senior leadership roles.  My grades reflect my overall judgement of how the agency acts and communicates externally and observations regarding what appears to be a largely dysfunctional internal culture.  Some of that has come from their public communications, but much more has come from my examination of the data and other materials that they (with thanks to our “Sunshine Act”) make available.

I truly believe that the failure of the LCB to live up to their “goals” is largely the result of them having a virtually non-functional Board overseeing a grossly deficient senior management team which lets it’s needs and desires stand in the way of the fair administration and enforcement of their mandate.  Since I-502 was passed, has anyone seen, for example, a Board member vote in the negative on a proposal put forward by staff?

Perhaps the Governor might exercise a bit more care in choosing future members of the Liquor and Cannabis Board.

Perhaps the Legislature might exercise a bit more care when granting the LCB the “authority and discretion” to implement regulations as they see fit.

Perhaps the LCB will begin adopting more honesty (rather than semantic approximations thereof) in their communications and dealings with both the public and our Legislature.

Perhaps pigs will fly (in something other than black helicopters).

Until then …. Enjoy your regulated cannabis. It is safe.  The LCB has told us so.

 

Vision, Mission, Goals, Values of the LCB (Feb. 2018)

Vision

  • Safe communities for Washington State (FAIL)

Mission

  • Promote public safety and trust through fair administration and enforcement of liquor, cannabis, tobacco, and vapor laws. (FAIL)

Goals

  • Ensure the highest level of public safety by continually improving and enforcing laws, regulations, and policies that reflect today’s dynamic environment. (FAIL)
  • Inform and engage licensees, the public and stakeholders in addressing issues related to our mission. (PASS)
  • Promote a culture that inspires and values a highly-motivated, competent and diverse workforce that establishes the WSLCB as the employer of choice. (FAIL)
  • Ensure operational excellence. (FAIL)

Values

  • Respect and courtesy (PASS)
  • Professionalism (FAIL)
  • Open communication (FAIL)
  • Accountability and integrity (FAIL)
  • Continuous improvement and meaningful results (FAIL)
  • Customer focus (FAIL)

21 Comments

  1. Dani Luce says:

    Thank you for the inside view.

  2. Steve Sarich says:

    Great article, but a little hard to read….the grey type is somewhat small and the gray is pretty light. But the article really is fabulous, Jim!
    It certainly proves that “product safety” has a zero priority for the LCB.

    Steve Sarich

    • Jim MacRae says:

      I generally read my posts blown up on a bigger screen. In a pinch, I use reading glasses on my phone. I appreciate your stylistic feedback, but doubt I will change anything in the short term. Have you tried using a different browser? I generally get good results with either Edge or IE. I just tried Firefox and tend to agree with your comments when looking at it there. Have never tried on Chrome (shiny things are too distracting to me).

      I don’t know if “product safety” has zero priority (they use the great red hand of masturbatory wonderfulness to label edibles as inappropriate for kids, for example, and I have it on good authority that they might react to a massive fentanyl contamination … lots of rapid-onset deaths are harder to ignore than a few asthmatics dropping dead and cancers and lesions cropping up down the road).

      I agree, though, that product (and public) safety do not seem too high on how they prioritize their activities.

  3. You have framed the issue very well. The management is firmly to blame for the lack of trust that the people have in the state’s regulated scheme. I am a firm believer in the idea that people will behave better when their actions are revealed to the greater public. Thank you for encouraging transparent government.

    • Jim MacRae says:

      I agree, Jed .. thanks.

      One thing that I’d think the regulators and legislators would “get” is just how much they are compromising not only the taxation benefits of this market but also all of the other direct benefits it brings and harm reduction benefits it COULD bring.

      I am increasingly of the belief that the non-regulated market in WA is on the rise. Perhaps this is how law enforcement executes a market development campaign to justify continued funding?

  4. Allison Bigelow says:

    Thank you for your continued vigilance! These bugs need to be called out! I appreciate your work.

    • Jim MacRae says:

      Thank-you, Allison.
      Please know that I also appreciate the work that you do.

      I will confess to be less and less a fan of LCB oversight of this market. They seem to forget that they are, in part, regulating MEDICINE now … and not just sin.

  5. Jim MacRae says:

    From Jim (the author): The following link points to a summary of the first few months of the LCB/Dept of Agriculture pesticide-testing program I mentioned in the main post. My thanks to Nick Mosely of Confidence Analytics for sharing this.

    It shows that observed pesticide failure rates (both the AG ones (which are, presumably, done in response to complaints against specific farms) and ones observed by Confidence Analytics (which are, presumably from producers either going for medical-grade certifications or just generally caring about what is on and in product they are putting their names behind) are quite a bit higher than the 0.88% “failure” rate that LCB site visits has demonstrated.

    https://docs.google.com/document/d/1Y3rbHB4NOjcqytdHhCByKa8mBNZ8v-WzF1HCAhhmkv0/edit?usp=sharing

  6. Bjorn says:

    I would like to see a one strike and you are out rule strictly enforced. If a parent poisons their child, are they just told not to do it again and allowed to go on their merry way… A business doesn’t accidentally use Eagle 20 or any other illegal pesticide, to think that they won’t do it again or something else illegal, is naive and dangerous. Only testing medical marijuana for pesticides is absurd, it is ok to poison people as long as they are healthy? There is so much fixing that needs to be done in this industry that it is nuts.
    -Bjorn

    • Jim MacRae says:

      I do not disagree with you on these points, Bjorn. However, mandatory testing of all product would be prohibitively expensive, if it were to test for a reasonable number of non-approved pesticides (there are 1,000s to choose from).

      I believe a well-designed sampling scheme applied to LCB-funded (may as well use the fines they collect or something useful) “secret shopper” purchases at retail should be instituted … with VERY HEAVY penalties for failure (and failure should NOT be 1 part-per-billion-type of incidental detections).

      Again … doing it better than it currently is being done should be easy. Doing well will be more difficult (and expensive).

      • Bjorn says:

        Jim,
        I wasn’t meaning that literally every flower would be tested for pesticides, I just meant that when a lot is tested, that testing should include pesticide testing. If the state cut back on taxes, that could help pay for this additional test , if done properly. I checked with Medicine Creek about a full test for potency, microbial and pesticide and it is actually cheaper than just potency and microbial at Confidence. I didn’t see how much extra Confidence charges if one includes pesticides, I believe they are one of the more expensive labs to use. We switched from Confidence to Capitol Analysis when the testing requirements changed and Confidence raised their prices quite a bit. Being small we were trying to save a buck and with our location, dropping in at Capitol wasn’t a big deal so we didn’t miss the pickups from Confidence too much.
        The secret shopper approach could be a good option too, as long as they didn’t just happen once in a blue moon. Do you have any idea if Medicine Creek and Confidence have comparable testing abilities? What do think is the best lab? Confidence?
        Thanks again for your cool blog,
        Bjorn

        • Jim MacRae says:

          I try to avoid recommending labs.

          If you filter for the “Testing” category on HI-Blog, a series of articles that I wrote in November and December 2015 will come up. I indicate a number of labs that, at the time, I referred to as “Friendly”.

          Generally, I do not recommend people go with those labs. At some point later, I broke the blinding of the lab names … that is in this post.

  7. Don Skakie says:

    The danger and the solution are both very apparent. There should be no pesticide use allowed on any cannabis crop in Washington. This would also do much to stem the oversupply in the market and stabilize pricing of quality products fit for public consumption.

    • Jim MacRae says:

      Interesting thought re: the impact such a move would have on supply and quality.
      I like the way you think, Don.

      • Don Skakie says:

        Thanks Jim, it must be the pesticide-free Cannabis I’m consuming.

        • Jim MacRae says:

          I certainly hope so, Don.

          Increasingly, in the face of the regulatory sham that seems bereft of consumer protection, the only product that anyone should be consuming is product that comes from a farmer/processor/retailer that they trust. I just hope that most consumers are good judges of character.

          • Don Skakie says:

            Sadly, I doubt that is the case. I believe most cannabis consumers in Washington State aren’t even aware that we don’t have home grow as does every other jurisdiction that has reformed its cannabis laws.

  8. Adam says:

    Very revealing analysis, Jim, thanks as always for your work.

    I would also like to point out that pesticide misuse is a worker safety issue, as well as a threat to consumers, as you discuss. Farms that are using chemicals improperly are not likely to be taking steps to make sure workers have proper protective equipment, reentry intervals are observed, or adhering to other basic pesticide safety measures. Also, many of the chemicals that are not supposed to be used on cannabis were not manufactured for indoor use, meaning that residues likely linger longer than they would outside, in the sun, rain, and wind. I have a bad feeling that some cultivation workers will experience detrimental impacts to their health due to working in the cannabis industry. Hopefully I’m wrong, but no one should have to risk their health to make a living.

    • Jim MacRae says:

      Thank-you, Adam … and good point.

      My primary concern in posting this was the virtual lack of consumer protection apparent in the listed LCB behaviors.
      I had not thought about the potential impacts on 1,000s of workers. Imagine “guerilla spraying” that only goes on late at night when most staff are not there and the cameras are not overly sensitive. Staff showing up the next day might not even know of the application hours before they start their shift nor, by extension, adequately protected from it’s aftermath.

      Nasty thought.

      • Don Skakie says:

        Nasty indeed. Perhaps this is something that WAOSHA or even Federal OSHA should be looking into. I do agree this crosses the line from being an LCB regulatory issue and crosses into a worker/workplace and consumer protection issue regardless that the substance being sprayed is cannabis.

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