The Need for Uniform Testing in the Hemp Industry
When I was young my father had a t-shirt which had 4 identical cartoon pictures with the captions, “Banker, Broker, Lawyer, Crook.” I was reminded of that shirt while considering what would happen to a hemp processor in Georgia, where I work primarily, who imports hemp which was certified by an out-of-state lab as having a total delta-9 tetrahydrocannabinol (THC-Δ9) concentration within acceptable standards, only to have a Georgia lab conclude the opposite.
In Georgia, testing for THC-Δ9 is a crucial aspect of the hemp trade, as it potentially spells the difference between a hemp farmer and a marijuana trafficker. Per O.C.G.A. §2-23-8, the Georgia Department of Agriculture (DOA) has the right, itself or through contracted labs, to test all licensees’ (growers) and permittees’ (processors) hemp randomly. If the testing reveals a THC-Δ9 concentration of more than 0.3 percent on a dry weight basis, the entire crop with the same GPS position (for licensees) or “all related hemp products” (for permittees) will be destroyed at the owner’s expense.
As the cannabis world awaits published standards for interstate transportation of hemp by the USDA, thereby bringing the 2018 Farm Bill into full effect, let’s consider a scenario. Let’s assume that the USDA has issued regs which do not include standards for testing of cannabis plants for THC levels, at most requiring something similar to what O.C.G.A. §2-23-11 states: testing by, “post-decarboxylation or other similarly reliable methods.” The USDA has decided to leave the rest up to the individual States. With those assumptions, consider the following:
Matt holds a permit to process hemp in the State of Georgia pursuant to O.C.G.A. §2-23-6 and buys several thousand pounds of industrial hemp from farm outside Asheville, N.C., which he intends to process for lawful purposes at his facility in Georgia at a seven-figure price. The hemp has been tested in accordance with the N.C. Industrial Hemp Commission’s Rules governing sampling of THC levels in hemp plants (02 NCAC 62 .0103). Neither N.C., nor Georgia, specifies the specific type of testing which should be used to determine THC-Δ9 levels in cannabis. In N.C., a third-party lab provides Matt’s supplier with a COA (Certificate of Analysis) reflecting a .29 percent THC concentration level, obtained by using High Performance Liquid Chromatography (HPLC), a commonly accepted testing technique specifically referenced in Georgia’s “Procedures for Hemp Sampling and Testing,” which are in turn incorporated into the DOA’s Rules (which are themselves incorporated into the statutory scheme). According to my new friend Rod Kight, HPLC is “highly accurate” and produces “fast results,” so may be attractive to a private lab.
The hemp is delivered to Matt’s facility in Perry, Georgia, for processing, packaging and, ultimately, for sale in accordance with the Rules. Rule 40-32.3.02(a) requires Matt to report to the DOA any time voluntary sampling or testing shows a THC concentration in excess of 0.3 percent, but that’s no problem for Matt, because the COA sent from his grower in Asheville puts the concentration at 0.29 percent. Nonetheless, per the terms of Matt’s processer permit, the DOA comes to his facility and takes a sampling of the N.C. hemp to test for its THC concentration. Unlike the independent lab in N.C., however, the DOA’s lab uses Gas Chromatography (GC). GC causes decarboxylation, which converts THC-A into THC-Δ9, creating an inflated THC concentration reading compared to a process, like HPLC, which does not. HPLC can differentiate THC derivatives (THC-Δ9, THEa, CBD, CBDa) in addition to total THC (THC-Δ9 + THC-A). By contrast, GC can only report total THC because of its use of decarboxylation.
Using GC, Georgia finds a THC-Δ9 concentration of 0.31 percent THC using the same sample that caused the N.C. lab to issue a COA at 0.29 percent. Matt is found to have negligently possessed a crop with a greater than 0.3% THC-Δ9 concentration and his entire inventory from N.C. must be destroyed. Matt has just lost big because two certified labs used two different methods on the same sample to reach two similar, but not identical, conclusions.
This is a very real danger for people like Matt who currently – or will in the future – import hemp from other states. Hemp Industry Daily touched on this issue back in March, using the Big Sky Scientific case as one example of the disharmony among state testing standards. Big Sky Scientific is, perhaps, not the best example, however, because in that case the transporter was driving through a state, Idaho, which has chosen not to legalize hemp. Therefore, transporting hemp was just as illegal as transporting marijuana, at least until the feds issue regs that will implement the 2018 Farm Bill and make interstate transportation legal. I’m still trying to figure out why Big Sky Scientific’s scenario would not play out the same after regs are issued and interstate transportation is officially legal. Do we really think Idaho would just look at a manifest and agree not to seize a truckload of what they think might be marijuana? A question for another day, perhaps.
Here and now, I am concerned with what happens when the hemp Matt bought in N.C. becomes the marijuana Matt possesses in Georgia. Georgia’s Testing Procedures specifically authorize “modern scientific methods of liquid or gas chromatography for analysis.” The COA from N.C. was obtained by using HPLC, which is an accepted method in Georgia. However, GC is not only also an accepted testing method, but in my scenario, the one that the DOA’s lab used to determine the crop’s THC level. Both methods are equally acceptable in Georgia, yet led to divergent results with big consequences.
So, do we believe that Georgia will defer to an out-of-state lab’s results over its own DOA’s testing? Of course not, but then it appears to me that Matt did not know what he possessed or, put another way, what Matt possessed depends on which side of Lake Chatuge he was standing. Think I’m exaggerating? In 2010/11, Dale Gieringer and Arno Hazekamp sent an identical set of cannabis samples to ten anonymous labs. Check out the variance in results between HPLC and GC testing! So what is hemp in N.C. may well be marijuana in Georgia. Banker, Broker, Lawyer, Crook. Hemp, Marijuana.
The first point this scenario raises is the urgent need for the USDA to publish testing standards which insist on uniformity in terms of process, thus creating certainty as to what will be considered legal hemp from state to state. Failing to establish uniformity almost guarantees mayhem as buyers and growers attempt to create an interstate market for hemp because of the uncertainty a buyer in one state faces when attempting to import hemp from another state. The uncertainty will cripple the growth of the market, as, realistically, who is going to invest any significant money in a product they may have to burn when it arrives at their door? Legally, this disharmony will make Big Sky Scientific look like dealing with a parking ticket.
Uniformity in the regulation of lab testing is the solution. The more specific the better. Uniformity should include routine analytical standard operating procedures for sampling, sample preparation, laboratory equipment, procedures, no quality control samples, no precision, accuracy, comparability and completeness parameters. The standards are necessary because the Georgia-N.C. dichotomy does not appear to me to be unique. States’ testing standards vary wildly. For instance, I also attempted to locate rules or regulations for testing in South Carolina, but all I came up with was this memo which ostensibly tells law enforcement officers than all cannabis should be submitted to the Law Enforcement Division’s Drug Analysis Laboratory, with no mention of what process would be used to test THC levels. Again, this sets up a Big Sky Scientific scenario every time an officer encounters a truckload of completely legal hemp.
Until we have uniformity, does Matt have any recourse against the supplier in N.C.? I doubt it, unless he was smart enough to write into their contract that the deal was subject to inspection in Georgia consistent with the laws of that State. If I were a processor importing hemp, I would make sure the attorney writing my contracts researched what State’s testing standards (among those that have them) are the most stringent and insist that any hemp I am going to buy meet those standards, no matter where the hemp is coming from. Basically the California Emissions Standards (RIP) of hemp. If Matt did this, he may be able to point the finger at the supplier and the N.C. lab for failing to use an appropriate test in order to recover the value of his lost crop. That contract better have been pretty specific, though.
The same quandary faces lawmakers, in my opinion. Georgia is fairly specific when you get all the way down to the Testing Procedures. As noted, the Procedures authorize “modern scientific methods of liquid or gas chromatography for analysis.” However, as Gieringer and Hazekamp demonstrate, that’s still not specific enough because HPLC and GC can have highly divergent results in terms of THC testing. When the government can take away thousands or millions of dollars’ worth of property from a buyer if the testing runs afoul of this law, this is an intolerable amount of flexibility.
I would be surprised, though, if Georgia is going to refine its regulations any more than it has without being forced to do so. That still leaves Matt wondering what he can do after he is ordered to destroy his seven-figure crop. Why is it not good enough that Matt has a COA from an accredited lab in N.C.? In my opinion the COA from N.C. should be enough for Matt to rely on as a means of legally challenging any order to destroy his crop. Still, I suspect that, without uniform testing regulations from the feds, somebody is going to have to go to court and then appellate court to make the argument that another state’s testing (if acceptable under Georgia law) can trump Georgia’s testing because as I read the law right now, Georgia considers itself the final word in all testing. Matt has a strong argument under the Full Faith & Credit Clause to say that he should be able to rely on the N.C. COA, even if Georgia reaches a different result. That is, because Georgia and N.C. are co-equal states, N.C.’s testing results are just as legitimate as Georgia’s. The Full Faith & Credit Clause allows citizens of the United States to move freely and do business among the several states and this sort of conflict is exactly what that Clause was meant to resolve.
I might also argue that he has a right to due process, i.e. notice and the opportunity to be heard in some kind of adversarial hearing, before the DOA can compel him to burn his inventory. Right now, Georgia requires the notice, but Matt has no opportunity to object to the DOA’s conclusions or order, which I believe violates his right to due process under both the United States and Georgia Constitutions. Matt would probably need to seek a declaratory judgment that the statutory scheme is flawed in this way, presumably requesting that the DOA be enjoined from destroying his crop while the issue is settled.
If neither of those arguments work, Matt might also consider a challenge to Georgia’s testing rules as unconstitutionally vague. A law is unconstitutionally vague when it fails to give a citizen of ordinary intelligence fair warning of what is legal and what is not. If N.C. can use HPLC to issue a COA that Matt’s crop has a THC-Δ9 concentration of .29 and HPLC is specifically referenced in Georgia’s testing rules, then how is Matt on notice that what he has will not be considered hemp in Georgia? It seems to me that he cannot know and if he cannot know then the statute fails to give him fair warning of what violates the law.
I return, then, to the most important point of this discussion: it is essential to the long-term growth of the hemp industry that the USDA establish a national standard for hemp testing to facilitate commerce between the states and create certainty as to the product being sold.
In some ways, I am old to this world as I have been a criminal defense attorney in Georgia and Virginia for nearly 20 years and thus have had significant exposure to the cannabis world when it still existed mainly in the shadows. In others, I am so new to this world that I do not even call it a space yet. I appreciate as much information and input as anyone kind enough to read this can offer and I look forward to analyzing more aspects of the law in Georgia and other states as they relate to this fascinating field.