Cannabis Test Lab Says Competitors Fudging Results
By Julie Manganis
Law360 (January 31, 2025, 4:36 PM EST) -- A Massachusetts cannabis testing lab accused eight of its competitors of intentionally inflating results for potency and concealing findings of contamination in order to lure away customers, according to a lawsuit filed in state court.
MCR Labs LLC, which opened in 2013 shortly after the state legalized medical cannabis, said in the complaint filed Thursday in Suffolk County Superior Court that its business has suffered "severely" from the practice of "lab shopping," as current and potential customers "are drawn away by labs willing to provide biased results that reflect higher but inaccurate THC levels and ignore safety failures."
MCR's complaint names competitors Analytics Labs LLC and Green Valley Analytics in Holyoke, Assured Testing Laboratories LLC in Tyngsboro, CDX Analytics in Salem, Green Analytics Massachusetts (formerly Steep Hill) in Framingham, Kaycha MA LLC in Wellesley, Massbiolytics Corp in Dracut, and Safe Tiva Labs in Leverett.
It alleges unfair and deceptive practices, interference in business relationships, and unjust enrichment. In addition to damages, the complaint asks for an injunction barring the defendants from providing falsified results.
Massachusetts, which legalized recreational cannabis in 2016, has regulations in place requiring growers to have their products tested to confirm potency and identify potential contaminants before they can be sold to retailers. MCR said the defendant labs have both overstated the levels of THC, the psychoactive compound in cannabis, and underreported or ignored the presence of contaminants including mold, yeast, pesticides, and lead.
Besides harming MCR and other labs that do not engage in such practices, the defendants are also harming consumers and creating a "significant public health risk," MCR said in the complaint. "This race-to-the-bottom willingness to manipulate testing also results in unknowing consumers overpaying for lower-potency cannabis riddled with dangerous contaminants," MCR said. "Given the rampant corruption of compliance testing, neither consumers nor dispensaries could be expected to know which products on the shelf may be unlawfully contaminated or have misleading potency claims."
MCR said it has lost "dozens" of customers who, also faced with competitive pressure, have been enticed to send their products to the defendant labs. The complaint includes examples, based on reports to state regulatory body the Cannabis Control Commission, of large spikes in the reported THC content of products after MCR customers switched to new test labs.
One lab, which the complaint said "has been one of the most notorious inflators of total THC potency," acquired a former MCR customer in January 2024. That cultivator immediately saw a 46.3% jump in potency test results. Another former MCR customer saw a 43.7% jump after switching to one of the defendant labs, the complaint said.
"This increase cannot be achieved without result manipulation," according to MCR Labs, which said it obtained the information from the Cannabis Control Commission through a public records request and the commission's website. Similar jumps were reported for other labs, the complaint said. At the same time the labs are inflating THC claims, they're underreporting contaminants, citing a Wall Street Journal analysis that showed "a disproportionate share" of samples reported to be just under the legal threshold for sale.
MCR goes on to cite examples of labs that reported low failure rates for contaminants, including one that faced scrutiny after a customer saw mold on a product tested there, had it tested at another lab, and then shared the results on social media. Shortly after that, lab's rate of samples testing positive for contaminants "skyrocketed," and it shut down soon after, the complaint said.
Counsel for MCR declined to comment beyond the pleadings Friday. Green Valley Analytics CEO Jonathan Ferguson declined to comment Friday. The other defendants did not immediately respond to requests for comment Friday.
MCR is represented by Patrick J. Sheehan of Whatley Kallas LLP, Gillian L. Wade, Collins Kilgore, Edwin J. Kilpela Jr., and David Slade of Wade Kilpela Slade LLP, and Alex Barlow of Scott + Scott Attorneys at Law LLP. Counsel information for the defendants was not immediately available Friday.
The case is MCR Labs LLC v. Analytics Labs LLC, et al., case number 2584CV00260, in the Suffolk County Superior Court of the Commonwealth of Massachusetts.
--Editing by Stephen Berg
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