Montana marijuana industry jolted by new pesticide testing rules

State regulators recently quadrupled the roster of pesticides for which cannabis products must be tested, and the downstream effects of that change have been, for some, disorienting. Products that once passed laboratory tests have since been recalled from the shelves and one of the only two testing labs in the state saw its license to test for pesticides suspended last month. There is no state-run testing site in Montana, effectively leaving Fidelity Diagnostics in Missoula as the last lab standing.

Inside a former trucking company headquarters tucked into Missoula’s west side, black lab coats hang on chemists and technicians mashing marijuana into homogenized plant matter, drawing liquids into test tubes and reading computerized data from the resulting samples. Air conditioning machines hum overhead of testing instruments worth hundreds of thousands of dollars and extracted specimens wait for their turn to be measured by their reaction to beams of light and magnetic fields.

It’s the typical, sterile, scientific setting you’d imagine in a testing lab but with the occasional tie-dye Star Wars shirt or band stickers that distinguish the increasingly professionalized cannabis industry in Montana. Many components of marijuana products — recreational and medical — are tested here, from potency to molds to pesticides.

“It’s one of the most important parts,” said Fidelity Lab Director Andre Umansky. “It’s what separates us from the black market.”

Since legalization came into full bloom in 2022, the marijuana industry has spread out into public view mainly by way of the dispensaries. Before recreational sales began, Montana had 380 licensed dispensaries. When state lawmakers voted to extend the freeze on the number of dispensaries earlier this year, that number was at about 500.

Testing labs, by comparison, have steadily winnowed in numbers.

In 2021, Montana had five testing labs. Last month, Fidelity Diagnostics became the last fully functioning lab in the state when its only competitor, Nordic Labs, was suspended for its pesticide testing procedures falling well outside of validated protocols, presenting an “immediate threat to health, safety or welfare of consumers,” according to state document outlining the suspension.

State regulators are working with Nordic Labs to correct their pesticide methodologies, but for now, Umansky understands his operation has become the lone screen to prevent contaminated marijuana products from reaching the shelves.

“We can see that as a concern,” he said in a conference room at Fidelity Diagnostics on Tuesday.

The state’s expansion in February increased the number of pesticide tests from 16 to 59, a huge jump that, despite a six-month notice, caught many marijuana producers off guard.

To keep up with that expansion, Melissa Umansky, co-founder of the lab and Andre’s wife, said Fidelity Diagnostics began ramping up with staffing and additional testing equipment in case one machine goes down.

“We know what our sample volume is. We look at our trends; we make decisions based on our client needs,” she said. “Recently we’ve had to fast-track that, quickly, without a timeline of how long this is going to go. But we do know the industry needs us.”

The chokepoint has even spurred some marijuana producers to circulate a template letter to regulators requesting they be allowed to forego testing so long as their products on the shelves are labeled as such. The Cannabis Control Division, part of the Montana Department of Revenue, isn’t entertaining that idea.

“We do not believe that recommendation to be a reasonable solution,” CCD Administrator Kristan Barbour told the Montana State News Bureau. “The CCD’s mission is to ensure the health, safety and welfare of all Montanans. Removing the testing requirement of cannabis products to be safely consumed conflicts with the cornerstone of the program’s purpose.”

“There’s only a finite group of people that can get this work done, so I think we’re all going to feel that shift,” she added.

Stress test

The U.S. Food and Drug Administration’s pesticide residue program requires 800 different substances be tested on domestic and imported fruits and vegetables. The state’s expansion of pesticide panels to 60 different pesticides required for testing weed was essentially a copy of that in Oregon, Barbour said. Still, it took less than two months for the pesticide panel expansion to halve the testing lab capacity in Montana.

In April, a state audit found four deficiencies in Nordic Labs processes, all related to pesticide testing. According to documents outlining Nordic’s suspension, the lab’s methods could not be validated, the scientific director could not ensure compliance with international standards required of testing labs and records had been corrupted or overwritten by the company’s recent software implementation. The fourth item dealing in standard operating procedures is entirely redacted; Barbour said this and other information was removed to protect proprietary details.

Nordic, in a licensing modification agreement, was no longer able to test for pesticides as of April 15. Three days later, a third-party laboratory accrediting organization for International Organization for Standardization agreed to investigate Nordic’s pesticide methods. Once Nordic’s pesticide testing methods meet the requirements in state rules and of the International Organization for Standardization, the Cannabis Control Division will restore the lab’s ability to test for pesticides.

A message placed Wednesday seeking comment from Nordic Labs was not returned by press time.

“It is an ongoing situation, and we are working with Nordic through this process,” Barbour said.

While Nordic remains a partially licensed lab in Montana, the cannabis industry here has seen fewer and fewer testing facilities while the number of businesses has continued to grow.

Barbour described multiple factors that have troubled the testing component of the state’s marijuana sector. Labs are expensive investments to start up, often well over a million dollars in equipment, and accreditation is a time-consuming exercise. Compliance has also been an issue for some labs, particularly so since the Department of Revenue, which houses CCD, took oversight of the testing labs from the state health department in 2023.

“Once that shift was made, there was more of an eye toward holding people accountable on compliance and testing methodologies, and we started seeing some challenges for some people,” Barbour said. “Some labs had a hard time competing against one another to obtain the market share that was the right level for them to remain successful in the industry.”

Andre and Melissa Umansky opened Fidelity Diagnostics, loosely known in the industry as FiDi, in 2017 with a single testing instrument purchased on eBay. They’ve since grown with the industry, with 35 employees today, many of whom work in other parts of the state and navigate the logistics of transporting cannabis and cannabis products to the lab in Missoula.

The dynamic nature of marijuana makes testing difficult work; Umansky said testing soil would be simpler. When it comes to pesticides, the levels set by the state are set in the parts-per-million; some of Fidelity’s machines are searching for one part-per-billion. To get such an incredibly precise reading requires very expensive instruments. The machines sitting in Fidelity Diagnostics’ facility cost $400,000 each and about $40,000 per year to maintain.

Pesticide presence in decline

Andre Umansky said cannabis producers, more broadly, have adapted quickly under the new pesticide list. Where banned substances are found, Fidelity’s technicians go out to growing facilities to swab surfaces; Umansky said they’ve been able to find about 90% of the root causes. In many cases, people had detonated bug bombs in an empty room where plants would later be stored, not realizing those substances got into their heating and ventilation systems.

“We’ve worked really hard and been able to identify those,” he said. “We’re seeing a steady decline now in these pesticides.”

Chad Chambers is a co-owner and grower at Montana Kush and said the state’s expanded pesticides list should not have caused such a headache for the industry. There are many options, like essential oils or different chemical mixes, that can be used in succession to avoid pesticide use and prevent pests like spider mites from building up a tolerance to a single deterrent, he said.

“You have to have an arsenal of things,” Chambers said. “But if you maintain in the proper way, you never have to use a pesticide.”

Chambers said pesticides that haven’t been used in a year can still cling to the building’s features and crop up when a product is tested in a lab. Other times, contamination can happen outside a growers’ control. Pipes can burst, creating a friendly environment for mold, or neighbors in industrial areas can blast pesticides that seep in through the ventilation systems.

“It can get anywhere, especially inside your AC units,” Chambers said. “It gets into every nook and cranny. It’s a mist, that’s what it does.”

Recalls

Since the new pesticide list went into effect, the Cannabis Control Division has issued six recalls on cannabis products, some related to pesticides and contaminants, while other producers had reportedly skipped a step in the testing process.

None of the recalls — totaling more than 150 products — indicated any health concerns or complaints had been submitted to the CCD as a result of pesticides or contaminates.

Barbour, with the Cannabis Control Division, said the roster of recalled products is essentially a result of the industry “catching up” with new state rules and regulations. Many recalled products were still in the supply chain and had not reached dispensary shelves, she added.

Fruit Factory in the Flathead saw by far the most products pulled — 102 of the 164 products recalled for excessive contaminate residues are under the company’s name on the recall posted April 14.

Fruit Factory has dispensaries in northwest Montana, but a large component of the business is a processing facility that gathers a mass of marijuana from growers around the state and refines it into concentrates or distillate liquids for vaping cartridges, cannabis drinks or edibles.

David Laing, a co-owner of the company, declined to comment further on the recall due to an ongoing dispute with the CCD on the matter.

Laing did, however, criticize how state regulators have handled the pesticide rollout, claiming producers didn’t get a long enough runaway to clear their operations of those substances and the resulting compliance enforcement has been hard on smaller operations.

“Just because the panel has changed all of a sudden, it’s unsafe?” Laing said. “There’s guys out there that are hurting because of this.”

Upcoming public meeting

Because of the unprecedented situation of having more pesticides to test for, with fewer labs to conduct that testing, a trade group called the Montana Cannabis Guild has scheduled a public meeting on June 4 billed as a discussion about the uncertain testing environment in Montana.

Legislators will be on hand, as well as state regulators and people in the industry, said Montana Cannabis Guild CEO J.D. “Pepper” Petersen. The regulatory environment, recalls and pesticides are all important factors, but the crunch on labs is the immediate issue that needs to be addressed in an open forum, Petersen said.

“God forbid — we’re dealing with one lab — what happens if lightning strikes their building?” said Petersen, who also owns the Cannabis Corner in Helena. “We’ve got a $400 million-plus industry here that every bit of it is now dependent upon one laboratory, and that’s a lot of pressure for those guys.”

The meeting is scheduled for 11 a.m. to 1 p.m. at the Lewis and Clark County Library, and will be available on a streamed video conference. (Link here)

Barbour, who will likewise be in attendance, called the meeting an important opportunity to have a conversation about a new evolution in the industry.

“Our role is to be there and to listen, hopefully come away with solutions for the future,” Barbour said.