Medical Cannabis Lawsuit Alleges THC Potency Fraud by Arkansas Cannabis Companies

ARKANSAS– A new lawsuit has been filed in Arkansas, alleging that licensed cannabis companies have conspired to deceive patients by falsifying THC testing results. The suit, filed by MMJ patient Jakie Hanan in federal court, names at least four companies, including three growers – Osage Creek Cultivation, NSMC-OPCO, and Bold Team – and one testing lab, Steep Hill Arkansas.

According to the suit, testing by third-party labs revealed that products from the three growers and tested by Steep Hill “averaged 25%+ higher than the other labs,” while the backup labs all found THC results within 10% of each other. Hanan alleges that the companies conspired to defraud patients by falsely increasing THC testing results.

The suit asserts that there is incentive for cultivators to exaggerate the THC content of flower as cannabis with a higher concentration of THC is more valuable and can be sold for more money. As a result, cultivators often choose a lab that reports the highest THC value.

The case, which is ongoing, has more than $5 million in dispute, according to Law360. The companies named in the suit are fighting the allegations, with Steep Hill requesting the case be moved to federal court from state court, NSMC-OPCO arguing in court that Hanan’s case doesn’t contain sufficient facts for a legal case, and the other two companies filing motions to dismiss in state court.

This latest suit is just one in a wave of legal actions being filed against various cannabis businesses, all alleging the same crime of THC potency inflation in order to boost sales. As a result, more state governments are considering the possibility of state-run cannabis labs to back-check private labs accused of corruption.