One laboratory’s concerns lead to a closer look at Montana’s still-developing cannabis program.
A cannabis testing laboratory in Montana, Stillwater Laboratories, stated it recently shut its business due to concerns over potential glitches in state-used software causing inaccurate results (1). The laboratory owners, Ron and Kristine Brost, explained that the large increase in cannabis sales in the state is not being mirrored by a similar jump in volume of cannabis being tested (1). Sales of cannabis for recreational uses began in January 2022; medical cannabis has been legal in the state since 2004 (2).
Responding to these concerns and others from laboratory, which had been one of the few in-state laboratories, was the director of Montana’s cannabis program with the Department of Revenue, Kristan Barbour (1). “Our program is regulatory in nature and the focus of that work is public health,” Barbour explained (1). “This has been an evolving process as our program is still young in its development. We have already seen advantages of the laboratory program staff collaborating more closely with inspectors, legal experts, and the administrative team to help build out a more robust laboratory auditing program. We are working on updating testing and lab rules, creating and refining data analytics for better monitoring of testing results, and identifying areas where further investigation is warranted.”
The Department of Revenue is also working to adapt Marijuana Enforcement Tracking Reporting and Compliance (METRC) to the state’s cannabis program and to close any loopholes (1). This software program is one source of the issue, the Brosts claimed (1). By law, cannabis must be tested in batches no more than five pounds, but within METRC is the ability to apply test results to batches up to 50 pounds, they stated (1). Barbour explained that the newly-created Cannabis Control Division Inspection Unit is investigating any inconsistencies (1).
Referencing sample testing data from 2021-2022, Barbour explained that the discrepancies are partly due to cultivators and dispensaries recently switching from sending in small samples for testing to larger batches, once the state permitted it (1).
“Cultivators and manufacturers were likely able to lower their average testing cost, per unit of product produced,” Barbour said (1). “This is a cost accounting principle that occurs in all manufacturing and production-oriented industries, and cannabis certainly was not immune from experiencing the benefits of economies of scale with regards to their lab testing costs in 2022. As production and corresponding revenue increases, certain operating expenses will decrease as a ratio of unit produced.”
For more on METRC, read our recent blog, The High Stakes of Traceability: Why Cannabis Facilities Need Transparent Supply Chains.
Editor's Note: The original headline of this article was clarified to reflect the METRC software functionality. As stated by Max Borchardt, MATTIO Communications, "Metrc allows for any amount of product to be placed into a package to allow for users to report their physical inventory. If there are limits to how large the packages are allowed to be based on state regulations, it is up to the user to adhere to that number. It is ultimately a compliance issue that the state would need to pursue."