LICENSED VERTICAL CANNABIS OPERATOR
The Case for SB 1646
Arizona 2021 Legislative Session
The medical marijuana testing program became effective on November 1, 2020 as required by the passage of State Bill 1494 in 2019. SB 1494 was a mandatory marijuana testing bill that became Arizona law in Spring 2019. As of January 2021, there are no marijuana testing laboratories in any county except Maricopa and Navajo County. There are over 11,000 dispensary agents and 100 laboratory agents in Arizona. Only 4 of the 10 marijuana testing laboratories that are certified statewide have been approved for all the tests required by SB 1494.
As of February 2 2021, 80% of the 130 licensed dispensaries have converted to dual medical & adult use. The industry is now serving 2-4 times more customers due to the passage of Proposition 207 that legalized recreational marijuana in Arizona and is generating millions in state and local tax revenue on a monthly basis.
Prior to the sale of adult use marijuana, the turnaround time for tested products was several weeks or even a couple of months. The problem is the testing program has only existed for three months and has disrupted the state supply chain significantly while forcing many dispensaries to increase prices or reduce product selection. It is bound to get even worse in the coming months if something doesn’t change. The laboratories are not at the scale they should be for multiple reasons, but mainly because they tried to open a complex scientific & technical business during the COVID-19 pandemic while trying to get ISO certification and accreditation from travel-bound independent certifying agencies.
The average full-panel test is costing dispensaries around $800-$1000 per test and is increasing the costs for each producer by between $20,000-$50,000 on a monthly basis. This means the only way Regulated Marijuana can survive is by passing additional costs on to a vulnerable patient population in the middle of a pandemic. Full-panel marijuana tests in most other states cost less than half what licensed Arizona producers have to pay. The 39,000+ patients in Pima County where there are no state-licensed marijuana testing laboratories are being affected the most by price disruption. Additionally, one of the microbial tests required by SB 1494 can be done using qPCR which is in high demand due to its use in COVID-19 tests.
We are asking that AZDHS provide “technical assistance” until SB 1646 becomes law. Unfortunately, small testing laboratories that could not afford new equipment and ISO certification to meet SB 1494 requirements like PreMed Testing in Marana ceased operations in 2020 even though they were able to conduct about 40-50% of the product tests required by AZDHS. They had completed over 5,000 tests for The Downtown & D2 Dispensaries between 2016 and 2020.
Because time is of the essence, we need a better solution than disrupting the legal supply chain and driving patients & new adult use customers to the illicit non-taxed market. The marijuana industry is projected to generate hundreds of millions in state & local taxes annually in 2021. Instead, the slow turnaround of marijuana test results causes statewide supply chain disruption which dominos into long lines & super-spreader events at the new dual use dispensaries.
It is clear that SB 1494 has created an untenable regulatory situation for the Arizona Department of Health Services, the same agency tasked with fighting the unrelenting coronavirus disease. Medical marijuana existed in Arizona with no major safety issues or recalls for almost 10 years prior to the new mandatory testing requirement. I have been a part of the marijuana industry since it's inception here in our great state and I know we can do better than SB 1494.
A sensible solution is desperately needed and it has been presented by Senator Thomas Shope. We are grateful that he has sponsored a sophisticated and rational marijuana testing law titled Senate Bill 1646. SB 1646 is the right solution because it eliminates repetitive and redundant tests while implementing the testing program using an approach that combines strategic milestones & key metrics to set the testing compliance timeline. SB 1646 also gives testing laboratories the ability to open multiple locations with one third-party accreditation.
SB 1646 solves many of the newly created problems while focusing on patient safety, access to tested products, and a cannabis ecosystem that will contribute to Arizona’s vibrant & growing economy.
I ask you to support SB 1646 and help make it Arizona law.
Moe Asnani | February 2, 2021