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#4- Testing Labs: The First Six Months

 
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Cannalaw Connections
Those chemicals got sprayed, they were ingested in people, and it caused a lot of consequences that hasn’t really been talked about.
- Dr. James Namnath
Complete Transcription

This is Cannalaw Connections where we connect you with the legal, scientific, and financial experts of the California Canna business industry. Brought to you by from Los Angeles, California Evergreen Law proudly presents Cannalaw Connections hosted by California canna business attorney Chris Hoo.

Chris: Alright, hello everyone out there, and welcome to another episode of Cannalaw Connections. My name is Chris Hoo and I'm an attorney specializing in commercial cannabis specifically in testing labs and manufacturing. I can't believe that we're already in the fifth month of commercial recreational cannabis being legal here in California. And it's really exciting there's lots of great things happening. Just seems like the commercial cannabis industry is changing every single day. And I know that I'll be speaking from experience next week when I'm in Washington D.C. for the NCIA lobby days, that's when we're basically trying to ride the legalization wave in the country and pushing federal legalization because we really are here in a bubble here in California, and the West Coast really. Up in the West Coast we have an entire block of legalized states, but enough about me. Today we have a very special guest, his name is Dr. James Namnath. Dr. James is a PhD in chemistry, he's also lab directors for multiple labs in up and down the West Coast in Oregon and California. And he's also a co-founder of Cancare, is that right Dr. James? Cancare?

Dr. James: Yeah, actually I'm the founder.

Chris: You're the what founder?

Dr. James: The only founder.

Chris: You're the only founder of Cancare, which is a company that's focused on finding products, pesticide products specifically for marijuana growing, and they're organic as well. So, Dr. James is telling me that he just got four approvals, four certified organic approvals for his products, it's very exciting. He'll tell us a little bit more about that today, but let's just get right into it. Today we're talking about testing labs which is Dr. James specialty.

So, Dr. James, before we get into it, can you tell us a little bit about your background and how you got involved in testing cannabis in Oregon and in California?

Dr. James: Well, actually I've been involved with agricultural products and pesticides for about thirty-five years after my doctorate from USC in physical chemistry. And I recently retired from the industry to start on my own ventures, I still have a little life left in me, so I decided to do it for myself. And so, I decided to take advantage of the opportunities in the cannabis area. I'm actually a veteran of all of the major agriculture companies. So, when you think about companies like Monsanto, Syngenta, Bayer, I've actually been there, I've been senior manager at all those companies. And it was always a joke, let's say, in meetings where people would discuss whether or not they should get into the cannabis market, and of course the meeting directors would always say, "What have you been smoking lately?" Right? And so, there were actually some meetings where they're like, "You know, that's actually not a bad idea." So, I was last with a company called Bayer, which makes aspirin as well as one of the biggest agricultural companies they're buying out Monsanto this year. As a matter of fact, I used to work at Monsanto also, so I know both sides really well.

And so, I knew a lot of the products could work for cannabis, and when I set out on my own I had a decision to make as to where to do this and how to do it. I knew what products I wanted to develop, and so I purposely resettled to Oregon because recreational cannabis was legal here, and I quite frankly had a problem with what products were allowed to be used on the crops. I had the same reaction from regulators in Colorado, and Washington. And so, it began about two and a half a years, three years ago. So, I set out to make these products that I in settling here and working with the growers I figured out exactly what the main pest, or difficulties were with the growers and what their practices were. And so, I came up with these products. [00:05:02.26] And in terms of my analytical capabilities I was also a manager of some of the major analytical laboratories in those corporations. So, I set out to encompass both the testing and the products area, as well as the servicing area. You know, in mainstream agriculture there are structures for dealing with crop chemicals, pesticides, etc. It's a whole industry aligned in that, that I felt that I could actually contribute to transporting all of that ecosystem into the marijuana market.

Chris: Fascinating.

Dr. James: So, that's where we're at today.

Chris: Interesting, Dr. James.

So, it sounds like marijuana kind of found you, or you fell into it, it wasn't something you specifically set out to create products for.

Dr. James: Well, I actually have some very interesting stories about my career in marijuana and it goes back way into the early '80s. One day we might want to talk about it because it was one of the instances where the federal government, you might faintly recall the federal government buying agricultural chemicals to destroy marijuana crops in places like Mexico. And they were actually doing it against the will of the companies that produced them. And the drug enforcement agency just kind of said shove it, we're going to spray these crops. And so, I was actually assigned to figure out what the U.S. government was doing spraying this stuff down in Mexico. And actually, it's not a very pretty story. So, it's a very long story, it's very controversial, but it made a lot of people sick in the United States, it did, okay? So, those chemicals got sprayed, they were ingested in people, and it caused a lot of consequences that really hasn't been talked about very much. So, I have a pretty deep history about what pesticides can do when they're applied to marijuana in a bad way. And so therefore I'm really dedicated to making this a clean crop given all my history, so it's not just a casual lately kind of thing, it's been over thirty-five years.

Chris: Absolutely, right, and we can definitely see that in the passion, and the results of your work, Dr. James, so thank you so much for it.

Dr. James: Yeah.

Chris: So, we're in California here and like I said, we're only in our, what? Fifth month now? Of recreational cannabis being legal here. You come from other states, Oregon specifically where they've had recreational cannabis for a few years now, they've had required testing for a few years now, so in the short time that we've had required testing here in California in five months, what kind of changes have you seen in comparing it to Oregon as well?

What changes have you seen in California in the past few months?

Dr. James: Well, to be honest with you, in California there's been virtually no change. You basically have the same unmonitored, and I'll have to say quite frankly, dirty crop. And you know, it's very disconcerting what is going into the dispensaries today, isn't much different then what was going in in December.

Chris: Absolutely.

Dr. James: And it's only because everything is optional.

Chris: Right.

Dr. James: So, the industry from my point of view, has opted not to come clean, and has not really enforced it along the way in terms of making sure that suppliers understand they're not supposed to be using banned pesticides on the crop. And the dispensaries are not enforcing the use of tested laboratories, they prefer to label the products as untested. quite frankly I don't know what they're specifically saying, but as far as I know there's not been a rush to have products tested at accredited laboratories in the last five months.

Chris: Yeah, absolutely, that makes sense from what I heard from potential clients, and from dispensaries as well. So, going back to Oregon, they talk about there being a bottle neck, and you're just talking about it now last, I check there are only twenty-seven accredited testing labs in California, that's not nearly enough to handle the amount of product that needs to be tested in California, Dr. James. So, based on your experience in Oregon, how is California going to handle a bottle neck, and what are some of the results of having the bottle neck?

And what are some of the delays we're going to be seeing as the result of the bottle neck?

Dr. James: I think that in terms of the technical bottle neck the industry, even though it's small, will respond to that. If every laboratory has to double up, triple up, and get innovative, it will. [00:10:02.19] The problem I have quite frankly at this moment in time is to know what is going to be the real demand, because the state of California is being a little unpredictable in terms of like maybe yielding to the dispensary and grower demands to further delay the implementation. So, that makes it very difficult for those of us who operate in the laboratory space, that you know, should we have three employees, or thirty employees? Well, we can't make those decisions if hanging over us has been a fog of regulatory unknowns that maybe at the last minute they're going to say, "Oh, it's not July 1, it's January 1 of next year." Okay? You're making some very big financial decisions right now, and the thing is you're not going to decide until the state is decisive. Okay? And I'm getting signals of them being very wishy washy about the situation.

Chris: Yeah, absolutely.

Dr. James: I'm feeling, even from my discussions from other laboratories that there's a lot of pressure to reduce the requirements and the deadlines, pushing the deadlines out. Even some of the laboratories are pushing for that and I don't understand that. I mean, let me just tell you what I believe in this situation is that if you look at Colorado, Oregon, and Washington, they set a zero-tolerance situation. They said, "We're not going to tolerate contaminated marijuana." And they stuck to it. And I don't think there was ever a supply shortage, I think that the clean marijuana made it to the market, tested clean, it was definitely clean because the auditing and the procedures they go through in those states are I'm telling you, excellent.

Chris: Really?

Dr. James: Those states have successfully- Yeah, I can tell you right now that the procedures put in place are exactly correct in that when a laboratory says there's no contamination, there is no contamination, and there's nobody able to corrupt the system and sneak things through.

Chris: Wow, interesting.

Dr. James: No, in Colorado, not in Oregon, not in Washington. I know that from both sides of the fence. I know that from the growers, there's a lot of growers that are just out of business, they're doing something different, alright? I don't know what they're doing.

Chris: Yeah.

So Dr. James it sounds like what you're saying is that California has a testing bottle neck because the regulations has allowed it?

Dr. James: I don't know if there really is a bottle neck, the unknown is that the California is sort of fainting, they're sort of like shadowboxing with itself. And therefore, laboratory operators like myself can't formally commit to an investment to a certain level.

Chris: Yeah.

Dr. James: So, it's a big issue. Whether we're going to be as a laboratory handling a hundred samples a day, or ten thousand samples a day. That makes a big difference.

Chris: Right.

Dr. James: To give you an idea, a laboratory with about two, or three people can handle a hundred, two hundred samples, not too difficult with one shift. If you look at the projections for this crop there's probably a need for ten thousand samples to be processed per day, if it averages out. You know, because it's a grown crop, you don't know whether there's going to be a surge in seasonal demands of if it happens to be a lot of outdoor crops. Like for example in Oregon a lot of it is still outdoors. So, you have a huge labor output for a laboratory from like November through January. In Colorado where it's predominantly indoor, it's pretty even throughout the year. California, I can't really estimate what the mix is going to be. I think overtime it's going to be mostly indoor, we can get into why I think that's true. So, the supply and demand seasonally is a problem for a laboratory adjusting to it because there still is a labor need. As I was trying to mention to you, to support a hundred to two hundred some samples analysis a day, that's about one to two people. If you're looking at the state of California requiring tens of thousands per day, then you're talking about a labor force of three hundred to a thousand, and these aren't inexpensive people, these are professional scientist who make a really good salary. So, for us that's the big unknown. [00:15:02.28] We could probably, you know, in order to meet an unexpected high-demand, we could probably ramp up equipment wise fairly quickly within sixty to ninety days. But you know, bringing on the right people, you're basically going to be attracting them from other industries to come in. Nobody goes to school to be a cannabis analysis chemist, you know?

Chris: Right, understand. Okay.

Dr. James: So, that's the challenge we have.

Chris: Okay, thanks for sharing that, Dr. James. Getting into the specifics of the testing, I know that for raw flower the sample size is fifty pounds.

Can you tell me how are the samples taken for concentrates, or edibles? It's obviously not three pounds, so...

Dr. James: It's a lot of variables involved there, and the way the California rules are setup right now, it's kind of an unknown situation. But to back track a little bit, on a fifty-pound situation that's not, you know, I don't know how California decided fifty pounds, in Oregon it's fifteen pounds, and they go back to ten pounds, that's kind of what they're doing for flower, and probably Colorado. And that's fairly reasonable, you pull a few ounces and you're able to do it. Fifty pounds, you know, one thing we don't know if growers are going to risk fifty pounds at a time, and we don't know if growers actually produce fifty pounds of the same strain of the same harvest. So, we don't know that fifty is a real number that is going to happen. So, there's complications there. When we go to the process materials like the oils- Okay, I'm going to cover that separate from edibles because those are even more difficult, we'll get way uphill with them. But with the oils the situation is that technically we're supposed to only test one batch at a time. So, for example if you are a carbon dioxide extractor and you're able to produce a couple of pounds a day, that's what we're going to test. And we're going to do a sampling of it's a little less than one percent, you know, zero-point three percent. And we'll take little sticks and take samples throughout, and that's not uncommon.

The difficulty becomes when you take that oil, and you put in a product such as a vape pen cartridge then questions arise because with a vape pen cartridge, you're now looking at did the vape pen cartridge stuff come from the same batch? Or did they come from several batches? So, in sampling that you have to consider what it was done for. There are some allowances of if you've established a system, for example in Oregon, Colorado you can use control study that says we know exactly what we're doing in the processing, and we can sample it. And instead of, like for example if you do let's say a thousand vape pen cartridges we have thirty of them, and analyze all thirty. So, you have to do thirty test per thousand, fifty per ten thousand. You can reduce those number of test over time if you demonstrate that there's a consistently in the results, you know where they got it from, but that's kind of unknown. So, I can't give you a real simple answer to that-

Chris: Right.

Dr. James: -because no one’s really stepped through it yet.

Chris: I understand.

So, we're, like they say a lot in this industry, we're building the plane as it's being flown?

Dr. James: Exactly, but you understand though when you step through the processing, you know, your end product retail value skyrockets. So, when you're testing for a thousand vape pen cartridges that might have a value of like fifty bucks a piece, you've now taken what could literally be let's say a thousand, it would be made with basically twelve grams of product, which is like maybe a hundred dollars’ worth, but a thousand vape pen cartridge has a value of like fifty thousand dollars, okay? So, in some ways it's not that difficult, and if are you a vape pen cartridge manufacturer, and you have to pull thirty test which may cause you thirty thousand dollars, it may be okay because you have a value of a thousand times- You know, no it wouldn't be thirty thousand. But you have to look at that value, right? But as you keep going up in the processing chain, your retail upcharge is there to support additional testing. So, that's the things we have to work on in the industry.

Chris: Okay. So, I know that you're saying that the prices are changing day by day and that there's still a lot of factors up in the air, but as of now,

How much does it cost to do all the test for a fifty-pound batch of raw flower?

Dr. James: Well, let's just say as a laboratory operator I would like a certain pricing. [Laugh] Okay, that let's just say that the current market is supporting around a five-hundred-dollar test package. [00:20:29.02]

Chris: Okay.

Dr. James: Okay? That's not, I mean, maybe Oregon is a little bit less, you know, maybe the difficulty is in the state of California when it was unregulated the testing package was pretty low, maybe a few hundred dollars, maybe less. So, a lot of dispensaries, and growers are accustomed to a low price point batch test. But those batch test didn't go through accreditation, didn't go through quality control, and only related to a couple of test, much lower quality, and they weren't actually audited results. And most people would be not surprised that the potency test was really the important thing and those in general were very corrupted test

Chris: Oh yeah, I believe it.

Dr. James: So, in California the habit was for a retailer, producer, I mean, distributer to direct a grower to go to a certain laboratory, which would give you marvelous THC results. And so, I've verified this a lot, when people thought they were getting a flower that had twenty-percent THC it could be five percent for all you know. And so, I tested a few laboratories, that's true, from my results was that there was a lot of conjured up results at a certain low price point. But you know, those retailers delivered a lot of customers to those laboratories that basically I don't know if they ever ran those test, you know? Got paid a couple hundred bucks to do-

Chris: That's certainly a shame to hear about that.

Dr. James: It is.

Chris: I mean, I'm optimistic, Dr. James, I hope you are too, but that's what our goal is, right? To shake out this corruption, to shake out the B.S. eventually, right?

Dr. James: I'm very impressed with the California rules so far. I think that they will result in that, and any California regulator hearing me, I think they've done a great job. I'll just say stick to your guns, it'll happen. Just like these rules aren't much different then what you see in Oregon, and Colorado, and Washington. And they've done a good job, and it can be done. It's just that the- And I'm pretty sure the folks in Sacramento are not going to yield, and it's going to happen. So, eighty percent of the current producers are not going to make it. They're either going to keep going illegal, or I don't know what they're going to do, but they're not going to make it in this legal crowd. And that's fine, because what does make it through, the five, ten, fifteen percent is going to be clean. And that's what the industry needs is a clean crop.

Chris: Absolutely.

Dr. James: Yeah, you know, there are people who have come up to Oregon and checked out the products with me and the people who use the product they can just tell there's a big difference.

Chris: Oh yeah, absolutely.

Dr. James: When a product up here in Oregon says it's twenty-five percent THC, it is twenty-five percent THC. You can tell.

Chris: Yeah, okay.

Dr. James: And not only that, but you'll get some let's say that's an object we can achieve.

Chris: That's great, I'm glad to hear how optimistic you are.

Dr. James: And the rules have been established that can clearly do it. I don't see anything- It's just that I'm saying that it seemed to me, my little impression is a lot of overwhelming lobbying to relax the rules and keep them relaxed a little longer.

Chris: I understand.

Dr. James: I don't think that's good.

Chris: I agree, I completely agree with you Dr. James. Great. So, Dr. James, getting to the actual licensing procedure for getting your lab, because I know that you have a couple labs throughout California, and in Oregon. And then when you apply there's obviously some requirements that the state has specifically for distances from a school, from daycare centers, from youth centers, this obviously, it's at that state level to be six hundred feet, but then at the city level they can make it even further, they can make the buffer bigger.

So, they can require you to be two-thousand feet from a school, have you encountered these kinds of restrictions when applying for your license?

Dr. James: Well, it kind of goes both ways. [00:25:11.14] To be honest with you, at this point in time the state of California does not specifically any kind of location preference, alright? They're not the ones doing it. What the state did, and I actually thought it was pretty kind of brillant, they said you can get a California state license if you have a local license, okay? First. So, you have to have a local license first, and localities differ in terms of all those specifications that you set, alright? For example, the city of Palm Springs requires you, you cannot have any cannabis business within two hundred fifty feet of any residential property. Other cities don't have that requirement, and in fact, I don't want to get too into it, but one of my laboratories in southern California is right up against a residential property. Both- Well, I haven't got a Palm Springs license yet, but the southern California license are acceptable by the state because the state says we'll do whatever the city says, whatever the legality, could be city of county, okay? So, it's not quite that both of them are regulating those specifics at this time, so the state has kind of relied upon the localities to say whether or not any kind of operation is allowed. And so, therefore you find that's the kind of thing you have to find to locate a laboratory is just how difficult it is to locate at a certain place.

Chris: Yeah, of course.

Have you ran into any opposition in the local community like any schools, or churches, or family groups specifically saying we don't want a cannabis testing lab here, we don't want any commercial cannabis activity here?

Dr. James: I don't think the testing laboratories have been a focus of anybody's, you know, negativity. There are some localities that- I don't know, there's not that many that are like vocal in their- They tend to be more focused on dispensaries and manufacturing and growing.

Chris: Yeah, that makes sense. I think there's definitely more prejudice against the retailers. For example, in the city of Irvine, the city of Irvine recently only approved testing labs, they have a ban on all the other types of licenses, but only approved testing labs, which just shows you how testing labs are perceived differently by the general public.

Dr. James: Correct, and there's other cities, and those are the cities we've actually chosen to put our first laboratories in. And so, exactly right, there are some cities where that's the only allowed marijuana activity is the testing laboratory.

Chris: Okay.

Dr. James: How they decided that I don't know, but they did, and we found them, they didn't advertise it so that's my preferred location.

Chris: Well, I think it makes sense- I was just going to say I think it makes sense giving like the character of Irvine, and Orange County in general, it's more science based it's near a university. And then, even with the testing lab requirements themselves they're different. So, you already know this, Dr. James, but in order to be a testing lab director you need to have at least a bachelor’s degree in science, and you need to have professional experience in a research environment.

Dr. James: Correct.

Chris: No other cannabis licenses have those requirements, so that kind of makes sense there would be a different kind of expectation, and cities will have a different attitude towards testing labs as opposed to dispensaries or growers.

Dr. James: Right, those professional requirements actually extend all the way to the state level. So, you can actually successfully get a local license that may have skipped those professional requirements.

Chris: Absolutely.

Dr. James: But when you get to the state level that's not going to flow. So, but every locality there's written up rules, they're very similar, they wrote them by the same book.

Chris: Yeah.

Dr. James: Alright, so most of them have exactly the same thing that you're talking about that you have to have a bachelor’s degree in science, you have to have eight years of experience, you have a masters with two years, and if you have a doctorate you can get in right away. So, those are kind of things that I see the same kind of language, and then I think it's because they're kind of looking over each other’s previous stuff and not re-inventing the wheel.

Chris: Yeah, absolutely. So, Dr. James, I'm glad that you were talking a little bit about how much the test cost, and that these cost are going to be changing over the years [inaudible 00:30:06] And also you were talking about how you have your, what you would like to be paid for test, and what you're actually being paid. [00:30:13.18] So, when it comes to fees and cost in general, I was looking over the regulations for testing lab applications, and it's kind of interesting because for testing labs and for manufacturers when you are calculating your annual fee for your application you have to base it off of your expected value of your first year’s operations.

Dr. James: Yeah.

Chris: Which is an open interpretation obviously, but the way I interpreted it is okay well I don't know how much money I'm going to make, I'm just going to say I'm going to make zero and then I'm going to pay those fees for the year. Does that make sense Dr. James that people can do that?

Dr. James: Yep, that's what you have to do because there's like- No one’s been beating down our door saying throwing money at us to do test things so far. So, you can only assume zero, and I think that's a very defensible position.

Chris: Great, I'm glad to hear that. I'm glad to have that confirmed by an expert in the field.

Dr. James: [Chuckle]

Chris: Okay, great, and then the last question I have for closing, Dr. James, is that we're talking about July 1st being like the day of regulation, that's supposed to be the due date, right? When the bureau says we're enforcing now, you're in trouble for not having these tested. And you're saying B.S. you're hearing people talking about pushing back the deadline further and further. So, let me just put it out there, July 1st is when we're supposed to be regulating everything, that's when the bureau says okay, no more fooling around, we're going to start fining you and we're enforcing these regulations trying to generate July 1st. What in your opinion, let's assume that that's going to be enforced during July 1st:

What in your opinion can testing labs and the other licensees that work with them, how can they prepare for this July 1st deadline and being ready and making sure they're not getting dinged with the fines from the bureau?

Dr. James: Well, you know, the way we can only operate business wise is we have a list associated with certain growers and distributors that we feel that will give us a baseline of business. And so, we're directing our business activities toward them, and they are directing their business focus to become compliant by July 1. So, just those alone is enough business to kind of give us a heartbeat on our laboratory operations to give us a number of guaranteed number of slots of things, and these are growers that already have significant business, all the way to retail and they want to be able to say that they're in compliance I think that they're fortunate that we have those business arrangements where we can work with distributors who have retail assignments that want to be compliant on July 1.

Chris: Absolutely.

Dr. James: How others in the industry deal with the situation, I'm not sure. There are other aspects of it as they become licensed that in the regulations as a grower/distributor, you're supposed to identify who your laboratory quality assurance is, that's in the regulations. And so, no one’s been writing us, except for the ones we work with to document that we're contracted to do the testing.

Chris: Absolutely.

Dr. James: So, I can't really- This being the middle of May, you basically have about six weeks to go and I can't really take a whole statewide approach one this.

Chris: Absolutely. And then also I want to reiterate that in the regulations when you are applying, and you get your license, you are also signing a declaration saying that you're only going to be doing business with other licensees. And if the bureau catches you doing business with non-licensees, they will take away your license. So, it's kind of like it's built into the regulations itself that we want to have a closed system only actual licensees who are licensed, and we're going to punish you for sneaking around and going to the illicit market that we're trying to avoid.

Dr. James: Yeah, that's the way you've got to do it. That's the way they did it in the other states. And I'd have to say that there's very little, they might exist, but they cleanly can only operate in the illegal market and have no touching the legal stuff in other places like Colorado and Oregon. The illegal guys, they still exist, they do.

Chris: Yeah, but their days are limited. Hopefully, their days are limited.

Dr. James: Yeah, as more and more compliance occurs, and I think California they love compliance in California, I'm pretty sure it's going to happen.

Chris: Yeah, they do.

Dr. James: And so, I think that they just have to stick to their guns and it will happen. [00:35:15.17] I'm pleased to report that I have very close associates in one of the major growing counties in northern California, and they did a terrific job of doing an aerial survey of their entire county. They know exactly where the marijuana is grown, and what they did is they sent out cease and desist order to every parcel where they detected marijuana being grown outdoors. And they basically said you either get a license, or you will stop doing that. They got a good response of the parcels, they're up to about twenty percent of the parcels complying.

Chris: That's pretty good.

Dr. James: And they will enforce the other- They know where the other eighty percent is. So, I think it's pretty clear that this can happen, and in terms of outdoor growing marijuana people should know it's a very detectable thing. You know, there's this technology called infrared sensing from satellites, or drone planes. You can pick off marijuana, it sticks out like a sore thumb on an infrared photograph. So, I'm encouraged by that, I think that there's going to be compliance, enforcement and a good clean crop, and I'm hopeful for that.

Chris: I am too Dr. James.

Dr. James: Yeah.

Chris: Okay, well thank you so much for talking to us today. It was really interesting talking to you and picking your brain.

Do you have any thoughts, or pearls of wisdom you want to share with us as we enter into our second half of the year?

Dr. James: Just a little bit of words of advertising the laboratories in southern California that I'm a director, it's called E-Labs E dash L-a-b-s in Monrovia, and in Cathay, there'll be more of them. As far as events are concerned I don't want to advertise it too much, but I'll be speaking at the Cannawest conference in Redondo Beach first week of June.

Chris: Okay.

Dr. James: And I'll go over some details. I've done a lot of pesticide tuning our instruments here. We've gotten lots of samples of California flower and processed stuff, so I'm going to talk about the results there. You would be amazed what's going on presently.

Chris: Absolutely.

Dr. James: And we can only hope it's going to be a lot better, because as a chemist and as a pesticide scientist I can just say the results are astounding. Okay?

Chris:[Chuckle] That's exciting then.

Dr. James: Yeah, so I'll be there talking about that. The California both the bureau of cannabis control and department of pesticide regulations have asked me to present in their headquarters as to what I've been finding. And I'm encouraging to enforce things they can get there because it's a clean crop in other states now. And that's my message.

Chris: Excellent. Thank you so much Dr. James for speaking on this subject tonight.

Dr. James: Yeah, have a good one buddy.

Chris: Okay, have a good night.


Well, that wraps up another episode of Cannalaw Connections. Thank you so much for joining me, Chris Hoo. And again, we are here every month, we have a monthly recording at Cannalaw Connections. Next month we'll be talking about manufacturing.

And we also have in-person meet up every month at the We Work off of La Brea in Hollywood, that's the first Tuesday of every month. This next month it will be June 5th from 6:30 to 8:00. And this June 5th we actually have a very special guest from the employment development department. They'll be speaking about taxes and payroll taxes and how to get your cannabis business off the ground. So, it won't be me talking about regulations this time, it will be the EDD department talking. And same thing, we'll be having questions and answers, we'll be having nice discussion networking and some good food. So, come check us out. Thanks again for listening to Cannalaw Connections. Okay, and don't forget to follow us on Instagram at evergreen_law.

Thank you for listening to Cannalaw Connections. To hear more and read the show notes from this episode head over to evergreenlaw.co/podcast.

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Cannalaw Connections
Those chemicals got sprayed, they were ingested in people, and it caused a lot of consequences that hasn’t really been talked about.
- Dr. James Namnath
Complete Transcription

This is Cannalaw Connections where we connect you with the legal, scientific, and financial experts of the California Canna business industry. Brought to you by from Los Angeles, California Evergreen Law proudly presents Cannalaw Connections hosted by California canna business attorney Chris Hoo.

Chris: Alright, hello everyone out there, and welcome to another episode of Cannalaw Connections. My name is Chris Hoo and I'm an attorney specializing in commercial cannabis specifically in testing labs and manufacturing. I can't believe that we're already in the fifth month of commercial recreational cannabis being legal here in California. And it's really exciting there's lots of great things happening. Just seems like the commercial cannabis industry is changing every single day. And I know that I'll be speaking from experience next week when I'm in Washington D.C. for the NCIA lobby days, that's when we're basically trying to ride the legalization wave in the country and pushing federal legalization because we really are here in a bubble here in California, and the West Coast really. Up in the West Coast we have an entire block of legalized states, but enough about me. Today we have a very special guest, his name is Dr. James Namnath. Dr. James is a PhD in chemistry, he's also lab directors for multiple labs in up and down the West Coast in Oregon and California. And he's also a co-founder of Cancare, is that right Dr. James? Cancare?

Dr. James: Yeah, actually I'm the founder.

Chris: You're the what founder?

Dr. James: The only founder.

Chris: You're the only founder of Cancare, which is a company that's focused on finding products, pesticide products specifically for marijuana growing, and they're organic as well. So, Dr. James is telling me that he just got four approvals, four certified organic approvals for his products, it's very exciting. He'll tell us a little bit more about that today, but let's just get right into it. Today we're talking about testing labs which is Dr. James specialty.

So, Dr. James, before we get into it, can you tell us a little bit about your background and how you got involved in testing cannabis in Oregon and in California?

Dr. James: Well, actually I've been involved with agricultural products and pesticides for about thirty-five years after my doctorate from USC in physical chemistry. And I recently retired from the industry to start on my own ventures, I still have a little life left in me, so I decided to do it for myself. And so, I decided to take advantage of the opportunities in the cannabis area. I'm actually a veteran of all of the major agriculture companies. So, when you think about companies like Monsanto, Syngenta, Bayer, I've actually been there, I've been senior manager at all those companies. And it was always a joke, let's say, in meetings where people would discuss whether or not they should get into the cannabis market, and of course the meeting directors would always say, "What have you been smoking lately?" Right? And so, there were actually some meetings where they're like, "You know, that's actually not a bad idea." So, I was last with a company called Bayer, which makes aspirin as well as one of the biggest agricultural companies they're buying out Monsanto this year. As a matter of fact, I used to work at Monsanto also, so I know both sides really well.

And so, I knew a lot of the products could work for cannabis, and when I set out on my own I had a decision to make as to where to do this and how to do it. I knew what products I wanted to develop, and so I purposely resettled to Oregon because recreational cannabis was legal here, and I quite frankly had a problem with what products were allowed to be used on the crops. I had the same reaction from regulators in Colorado, and Washington. And so, it began about two and a half a years, three years ago. So, I set out to make these products that I in settling here and working with the growers I figured out exactly what the main pest, or difficulties were with the growers and what their practices were. And so, I came up with these products. [00:05:02.26] And in terms of my analytical capabilities I was also a manager of some of the major analytical laboratories in those corporations. So, I set out to encompass both the testing and the products area, as well as the servicing area. You know, in mainstream agriculture there are structures for dealing with crop chemicals, pesticides, etc. It's a whole industry aligned in that, that I felt that I could actually contribute to transporting all of that ecosystem into the marijuana market.

Chris: Fascinating.

Dr. James: So, that's where we're at today.

Chris: Interesting, Dr. James.

So, it sounds like marijuana kind of found you, or you fell into it, it wasn't something you specifically set out to create products for.

Dr. James: Well, I actually have some very interesting stories about my career in marijuana and it goes back way into the early '80s. One day we might want to talk about it because it was one of the instances where the federal government, you might faintly recall the federal government buying agricultural chemicals to destroy marijuana crops in places like Mexico. And they were actually doing it against the will of the companies that produced them. And the drug enforcement agency just kind of said shove it, we're going to spray these crops. And so, I was actually assigned to figure out what the U.S. government was doing spraying this stuff down in Mexico. And actually, it's not a very pretty story. So, it's a very long story, it's very controversial, but it made a lot of people sick in the United States, it did, okay? So, those chemicals got sprayed, they were ingested in people, and it caused a lot of consequences that really hasn't been talked about very much. So, I have a pretty deep history about what pesticides can do when they're applied to marijuana in a bad way. And so therefore I'm really dedicated to making this a clean crop given all my history, so it's not just a casual lately kind of thing, it's been over thirty-five years.

Chris: Absolutely, right, and we can definitely see that in the passion, and the results of your work, Dr. James, so thank you so much for it.

Dr. James: Yeah.

Chris: So, we're in California here and like I said, we're only in our, what? Fifth month now? Of recreational cannabis being legal here. You come from other states, Oregon specifically where they've had recreational cannabis for a few years now, they've had required testing for a few years now, so in the short time that we've had required testing here in California in five months, what kind of changes have you seen in comparing it to Oregon as well?

What changes have you seen in California in the past few months?

Dr. James: Well, to be honest with you, in California there's been virtually no change. You basically have the same unmonitored, and I'll have to say quite frankly, dirty crop. And you know, it's very disconcerting what is going into the dispensaries today, isn't much different then what was going in in December.

Chris: Absolutely.

Dr. James: And it's only because everything is optional.

Chris: Right.

Dr. James: So, the industry from my point of view, has opted not to come clean, and has not really enforced it along the way in terms of making sure that suppliers understand they're not supposed to be using banned pesticides on the crop. And the dispensaries are not enforcing the use of tested laboratories, they prefer to label the products as untested. quite frankly I don't know what they're specifically saying, but as far as I know there's not been a rush to have products tested at accredited laboratories in the last five months.

Chris: Yeah, absolutely, that makes sense from what I heard from potential clients, and from dispensaries as well. So, going back to Oregon, they talk about there being a bottle neck, and you're just talking about it now last, I check there are only twenty-seven accredited testing labs in California, that's not nearly enough to handle the amount of product that needs to be tested in California, Dr. James. So, based on your experience in Oregon, how is California going to handle a bottle neck, and what are some of the results of having the bottle neck?

And what are some of the delays we're going to be seeing as the result of the bottle neck?

Dr. James: I think that in terms of the technical bottle neck the industry, even though it's small, will respond to that. If every laboratory has to double up, triple up, and get innovative, it will. [00:10:02.19] The problem I have quite frankly at this moment in time is to know what is going to be the real demand, because the state of California is being a little unpredictable in terms of like maybe yielding to the dispensary and grower demands to further delay the implementation. So, that makes it very difficult for those of us who operate in the laboratory space, that you know, should we have three employees, or thirty employees? Well, we can't make those decisions if hanging over us has been a fog of regulatory unknowns that maybe at the last minute they're going to say, "Oh, it's not July 1, it's January 1 of next year." Okay? You're making some very big financial decisions right now, and the thing is you're not going to decide until the state is decisive. Okay? And I'm getting signals of them being very wishy washy about the situation.

Chris: Yeah, absolutely.

Dr. James: I'm feeling, even from my discussions from other laboratories that there's a lot of pressure to reduce the requirements and the deadlines, pushing the deadlines out. Even some of the laboratories are pushing for that and I don't understand that. I mean, let me just tell you what I believe in this situation is that if you look at Colorado, Oregon, and Washington, they set a zero-tolerance situation. They said, "We're not going to tolerate contaminated marijuana." And they stuck to it. And I don't think there was ever a supply shortage, I think that the clean marijuana made it to the market, tested clean, it was definitely clean because the auditing and the procedures they go through in those states are I'm telling you, excellent.

Chris: Really?

Dr. James: Those states have successfully- Yeah, I can tell you right now that the procedures put in place are exactly correct in that when a laboratory says there's no contamination, there is no contamination, and there's nobody able to corrupt the system and sneak things through.

Chris: Wow, interesting.

Dr. James: No, in Colorado, not in Oregon, not in Washington. I know that from both sides of the fence. I know that from the growers, there's a lot of growers that are just out of business, they're doing something different, alright? I don't know what they're doing.

Chris: Yeah.

So Dr. James it sounds like what you're saying is that California has a testing bottle neck because the regulations has allowed it?

Dr. James: I don't know if there really is a bottle neck, the unknown is that the California is sort of fainting, they're sort of like shadowboxing with itself. And therefore, laboratory operators like myself can't formally commit to an investment to a certain level.

Chris: Yeah.

Dr. James: So, it's a big issue. Whether we're going to be as a laboratory handling a hundred samples a day, or ten thousand samples a day. That makes a big difference.

Chris: Right.

Dr. James: To give you an idea, a laboratory with about two, or three people can handle a hundred, two hundred samples, not too difficult with one shift. If you look at the projections for this crop there's probably a need for ten thousand samples to be processed per day, if it averages out. You know, because it's a grown crop, you don't know whether there's going to be a surge in seasonal demands of if it happens to be a lot of outdoor crops. Like for example in Oregon a lot of it is still outdoors. So, you have a huge labor output for a laboratory from like November through January. In Colorado where it's predominantly indoor, it's pretty even throughout the year. California, I can't really estimate what the mix is going to be. I think overtime it's going to be mostly indoor, we can get into why I think that's true. So, the supply and demand seasonally is a problem for a laboratory adjusting to it because there still is a labor need. As I was trying to mention to you, to support a hundred to two hundred some samples analysis a day, that's about one to two people. If you're looking at the state of California requiring tens of thousands per day, then you're talking about a labor force of three hundred to a thousand, and these aren't inexpensive people, these are professional scientist who make a really good salary. So, for us that's the big unknown. [00:15:02.28] We could probably, you know, in order to meet an unexpected high-demand, we could probably ramp up equipment wise fairly quickly within sixty to ninety days. But you know, bringing on the right people, you're basically going to be attracting them from other industries to come in. Nobody goes to school to be a cannabis analysis chemist, you know?

Chris: Right, understand. Okay.

Dr. James: So, that's the challenge we have.

Chris: Okay, thanks for sharing that, Dr. James. Getting into the specifics of the testing, I know that for raw flower the sample size is fifty pounds.

Can you tell me how are the samples taken for concentrates, or edibles? It's obviously not three pounds, so...

Dr. James: It's a lot of variables involved there, and the way the California rules are setup right now, it's kind of an unknown situation. But to back track a little bit, on a fifty-pound situation that's not, you know, I don't know how California decided fifty pounds, in Oregon it's fifteen pounds, and they go back to ten pounds, that's kind of what they're doing for flower, and probably Colorado. And that's fairly reasonable, you pull a few ounces and you're able to do it. Fifty pounds, you know, one thing we don't know if growers are going to risk fifty pounds at a time, and we don't know if growers actually produce fifty pounds of the same strain of the same harvest. So, we don't know that fifty is a real number that is going to happen. So, there's complications there. When we go to the process materials like the oils- Okay, I'm going to cover that separate from edibles because those are even more difficult, we'll get way uphill with them. But with the oils the situation is that technically we're supposed to only test one batch at a time. So, for example if you are a carbon dioxide extractor and you're able to produce a couple of pounds a day, that's what we're going to test. And we're going to do a sampling of it's a little less than one percent, you know, zero-point three percent. And we'll take little sticks and take samples throughout, and that's not uncommon.

The difficulty becomes when you take that oil, and you put in a product such as a vape pen cartridge then questions arise because with a vape pen cartridge, you're now looking at did the vape pen cartridge stuff come from the same batch? Or did they come from several batches? So, in sampling that you have to consider what it was done for. There are some allowances of if you've established a system, for example in Oregon, Colorado you can use control study that says we know exactly what we're doing in the processing, and we can sample it. And instead of, like for example if you do let's say a thousand vape pen cartridges we have thirty of them, and analyze all thirty. So, you have to do thirty test per thousand, fifty per ten thousand. You can reduce those number of test over time if you demonstrate that there's a consistently in the results, you know where they got it from, but that's kind of unknown. So, I can't give you a real simple answer to that-

Chris: Right.

Dr. James: -because no one’s really stepped through it yet.

Chris: I understand.

So, we're, like they say a lot in this industry, we're building the plane as it's being flown?

Dr. James: Exactly, but you understand though when you step through the processing, you know, your end product retail value skyrockets. So, when you're testing for a thousand vape pen cartridges that might have a value of like fifty bucks a piece, you've now taken what could literally be let's say a thousand, it would be made with basically twelve grams of product, which is like maybe a hundred dollars’ worth, but a thousand vape pen cartridge has a value of like fifty thousand dollars, okay? So, in some ways it's not that difficult, and if are you a vape pen cartridge manufacturer, and you have to pull thirty test which may cause you thirty thousand dollars, it may be okay because you have a value of a thousand times- You know, no it wouldn't be thirty thousand. But you have to look at that value, right? But as you keep going up in the processing chain, your retail upcharge is there to support additional testing. So, that's the things we have to work on in the industry.

Chris: Okay. So, I know that you're saying that the prices are changing day by day and that there's still a lot of factors up in the air, but as of now,

How much does it cost to do all the test for a fifty-pound batch of raw flower?

Dr. James: Well, let's just say as a laboratory operator I would like a certain pricing. [Laugh] Okay, that let's just say that the current market is supporting around a five-hundred-dollar test package. [00:20:29.02]

Chris: Okay.

Dr. James: Okay? That's not, I mean, maybe Oregon is a little bit less, you know, maybe the difficulty is in the state of California when it was unregulated the testing package was pretty low, maybe a few hundred dollars, maybe less. So, a lot of dispensaries, and growers are accustomed to a low price point batch test. But those batch test didn't go through accreditation, didn't go through quality control, and only related to a couple of test, much lower quality, and they weren't actually audited results. And most people would be not surprised that the potency test was really the important thing and those in general were very corrupted test

Chris: Oh yeah, I believe it.

Dr. James: So, in California the habit was for a retailer, producer, I mean, distributer to direct a grower to go to a certain laboratory, which would give you marvelous THC results. And so, I've verified this a lot, when people thought they were getting a flower that had twenty-percent THC it could be five percent for all you know. And so, I tested a few laboratories, that's true, from my results was that there was a lot of conjured up results at a certain low price point. But you know, those retailers delivered a lot of customers to those laboratories that basically I don't know if they ever ran those test, you know? Got paid a couple hundred bucks to do-

Chris: That's certainly a shame to hear about that.

Dr. James: It is.

Chris: I mean, I'm optimistic, Dr. James, I hope you are too, but that's what our goal is, right? To shake out this corruption, to shake out the B.S. eventually, right?

Dr. James: I'm very impressed with the California rules so far. I think that they will result in that, and any California regulator hearing me, I think they've done a great job. I'll just say stick to your guns, it'll happen. Just like these rules aren't much different then what you see in Oregon, and Colorado, and Washington. And they've done a good job, and it can be done. It's just that the- And I'm pretty sure the folks in Sacramento are not going to yield, and it's going to happen. So, eighty percent of the current producers are not going to make it. They're either going to keep going illegal, or I don't know what they're going to do, but they're not going to make it in this legal crowd. And that's fine, because what does make it through, the five, ten, fifteen percent is going to be clean. And that's what the industry needs is a clean crop.

Chris: Absolutely.

Dr. James: Yeah, you know, there are people who have come up to Oregon and checked out the products with me and the people who use the product they can just tell there's a big difference.

Chris: Oh yeah, absolutely.

Dr. James: When a product up here in Oregon says it's twenty-five percent THC, it is twenty-five percent THC. You can tell.

Chris: Yeah, okay.

Dr. James: And not only that, but you'll get some let's say that's an object we can achieve.

Chris: That's great, I'm glad to hear how optimistic you are.

Dr. James: And the rules have been established that can clearly do it. I don't see anything- It's just that I'm saying that it seemed to me, my little impression is a lot of overwhelming lobbying to relax the rules and keep them relaxed a little longer.

Chris: I understand.

Dr. James: I don't think that's good.

Chris: I agree, I completely agree with you Dr. James. Great. So, Dr. James, getting to the actual licensing procedure for getting your lab, because I know that you have a couple labs throughout California, and in Oregon. And then when you apply there's obviously some requirements that the state has specifically for distances from a school, from daycare centers, from youth centers, this obviously, it's at that state level to be six hundred feet, but then at the city level they can make it even further, they can make the buffer bigger.

So, they can require you to be two-thousand feet from a school, have you encountered these kinds of restrictions when applying for your license?

Dr. James: Well, it kind of goes both ways. [00:25:11.14] To be honest with you, at this point in time the state of California does not specifically any kind of location preference, alright? They're not the ones doing it. What the state did, and I actually thought it was pretty kind of brillant, they said you can get a California state license if you have a local license, okay? First. So, you have to have a local license first, and localities differ in terms of all those specifications that you set, alright? For example, the city of Palm Springs requires you, you cannot have any cannabis business within two hundred fifty feet of any residential property. Other cities don't have that requirement, and in fact, I don't want to get too into it, but one of my laboratories in southern California is right up against a residential property. Both- Well, I haven't got a Palm Springs license yet, but the southern California license are acceptable by the state because the state says we'll do whatever the city says, whatever the legality, could be city of county, okay? So, it's not quite that both of them are regulating those specifics at this time, so the state has kind of relied upon the localities to say whether or not any kind of operation is allowed. And so, therefore you find that's the kind of thing you have to find to locate a laboratory is just how difficult it is to locate at a certain place.

Chris: Yeah, of course.

Have you ran into any opposition in the local community like any schools, or churches, or family groups specifically saying we don't want a cannabis testing lab here, we don't want any commercial cannabis activity here?

Dr. James: I don't think the testing laboratories have been a focus of anybody's, you know, negativity. There are some localities that- I don't know, there's not that many that are like vocal in their- They tend to be more focused on dispensaries and manufacturing and growing.

Chris: Yeah, that makes sense. I think there's definitely more prejudice against the retailers. For example, in the city of Irvine, the city of Irvine recently only approved testing labs, they have a ban on all the other types of licenses, but only approved testing labs, which just shows you how testing labs are perceived differently by the general public.

Dr. James: Correct, and there's other cities, and those are the cities we've actually chosen to put our first laboratories in. And so, exactly right, there are some cities where that's the only allowed marijuana activity is the testing laboratory.

Chris: Okay.

Dr. James: How they decided that I don't know, but they did, and we found them, they didn't advertise it so that's my preferred location.

Chris: Well, I think it makes sense- I was just going to say I think it makes sense giving like the character of Irvine, and Orange County in general, it's more science based it's near a university. And then, even with the testing lab requirements themselves they're different. So, you already know this, Dr. James, but in order to be a testing lab director you need to have at least a bachelor’s degree in science, and you need to have professional experience in a research environment.

Dr. James: Correct.

Chris: No other cannabis licenses have those requirements, so that kind of makes sense there would be a different kind of expectation, and cities will have a different attitude towards testing labs as opposed to dispensaries or growers.

Dr. James: Right, those professional requirements actually extend all the way to the state level. So, you can actually successfully get a local license that may have skipped those professional requirements.

Chris: Absolutely.

Dr. James: But when you get to the state level that's not going to flow. So, but every locality there's written up rules, they're very similar, they wrote them by the same book.

Chris: Yeah.

Dr. James: Alright, so most of them have exactly the same thing that you're talking about that you have to have a bachelor’s degree in science, you have to have eight years of experience, you have a masters with two years, and if you have a doctorate you can get in right away. So, those are kind of things that I see the same kind of language, and then I think it's because they're kind of looking over each other’s previous stuff and not re-inventing the wheel.

Chris: Yeah, absolutely. So, Dr. James, I'm glad that you were talking a little bit about how much the test cost, and that these cost are going to be changing over the years [inaudible 00:30:06] And also you were talking about how you have your, what you would like to be paid for test, and what you're actually being paid. [00:30:13.18] So, when it comes to fees and cost in general, I was looking over the regulations for testing lab applications, and it's kind of interesting because for testing labs and for manufacturers when you are calculating your annual fee for your application you have to base it off of your expected value of your first year’s operations.

Dr. James: Yeah.

Chris: Which is an open interpretation obviously, but the way I interpreted it is okay well I don't know how much money I'm going to make, I'm just going to say I'm going to make zero and then I'm going to pay those fees for the year. Does that make sense Dr. James that people can do that?

Dr. James: Yep, that's what you have to do because there's like- No one’s been beating down our door saying throwing money at us to do test things so far. So, you can only assume zero, and I think that's a very defensible position.

Chris: Great, I'm glad to hear that. I'm glad to have that confirmed by an expert in the field.

Dr. James: [Chuckle]

Chris: Okay, great, and then the last question I have for closing, Dr. James, is that we're talking about July 1st being like the day of regulation, that's supposed to be the due date, right? When the bureau says we're enforcing now, you're in trouble for not having these tested. And you're saying B.S. you're hearing people talking about pushing back the deadline further and further. So, let me just put it out there, July 1st is when we're supposed to be regulating everything, that's when the bureau says okay, no more fooling around, we're going to start fining you and we're enforcing these regulations trying to generate July 1st. What in your opinion, let's assume that that's going to be enforced during July 1st:

What in your opinion can testing labs and the other licensees that work with them, how can they prepare for this July 1st deadline and being ready and making sure they're not getting dinged with the fines from the bureau?

Dr. James: Well, you know, the way we can only operate business wise is we have a list associated with certain growers and distributors that we feel that will give us a baseline of business. And so, we're directing our business activities toward them, and they are directing their business focus to become compliant by July 1. So, just those alone is enough business to kind of give us a heartbeat on our laboratory operations to give us a number of guaranteed number of slots of things, and these are growers that already have significant business, all the way to retail and they want to be able to say that they're in compliance I think that they're fortunate that we have those business arrangements where we can work with distributors who have retail assignments that want to be compliant on July 1.

Chris: Absolutely.

Dr. James: How others in the industry deal with the situation, I'm not sure. There are other aspects of it as they become licensed that in the regulations as a grower/distributor, you're supposed to identify who your laboratory quality assurance is, that's in the regulations. And so, no one’s been writing us, except for the ones we work with to document that we're contracted to do the testing.

Chris: Absolutely.

Dr. James: So, I can't really- This being the middle of May, you basically have about six weeks to go and I can't really take a whole statewide approach one this.

Chris: Absolutely. And then also I want to reiterate that in the regulations when you are applying, and you get your license, you are also signing a declaration saying that you're only going to be doing business with other licensees. And if the bureau catches you doing business with non-licensees, they will take away your license. So, it's kind of like it's built into the regulations itself that we want to have a closed system only actual licensees who are licensed, and we're going to punish you for sneaking around and going to the illicit market that we're trying to avoid.

Dr. James: Yeah, that's the way you've got to do it. That's the way they did it in the other states. And I'd have to say that there's very little, they might exist, but they cleanly can only operate in the illegal market and have no touching the legal stuff in other places like Colorado and Oregon. The illegal guys, they still exist, they do.

Chris: Yeah, but their days are limited. Hopefully, their days are limited.

Dr. James: Yeah, as more and more compliance occurs, and I think California they love compliance in California, I'm pretty sure it's going to happen.

Chris: Yeah, they do.

Dr. James: And so, I think that they just have to stick to their guns and it will happen. [00:35:15.17] I'm pleased to report that I have very close associates in one of the major growing counties in northern California, and they did a terrific job of doing an aerial survey of their entire county. They know exactly where the marijuana is grown, and what they did is they sent out cease and desist order to every parcel where they detected marijuana being grown outdoors. And they basically said you either get a license, or you will stop doing that. They got a good response of the parcels, they're up to about twenty percent of the parcels complying.

Chris: That's pretty good.

Dr. James: And they will enforce the other- They know where the other eighty percent is. So, I think it's pretty clear that this can happen, and in terms of outdoor growing marijuana people should know it's a very detectable thing. You know, there's this technology called infrared sensing from satellites, or drone planes. You can pick off marijuana, it sticks out like a sore thumb on an infrared photograph. So, I'm encouraged by that, I think that there's going to be compliance, enforcement and a good clean crop, and I'm hopeful for that.

Chris: I am too Dr. James.

Dr. James: Yeah.

Chris: Okay, well thank you so much for talking to us today. It was really interesting talking to you and picking your brain.

Do you have any thoughts, or pearls of wisdom you want to share with us as we enter into our second half of the year?

Dr. James: Just a little bit of words of advertising the laboratories in southern California that I'm a director, it's called E-Labs E dash L-a-b-s in Monrovia, and in Cathay, there'll be more of them. As far as events are concerned I don't want to advertise it too much, but I'll be speaking at the Cannawest conference in Redondo Beach first week of June.

Chris: Okay.

Dr. James: And I'll go over some details. I've done a lot of pesticide tuning our instruments here. We've gotten lots of samples of California flower and processed stuff, so I'm going to talk about the results there. You would be amazed what's going on presently.

Chris: Absolutely.

Dr. James: And we can only hope it's going to be a lot better, because as a chemist and as a pesticide scientist I can just say the results are astounding. Okay?

Chris:[Chuckle] That's exciting then.

Dr. James: Yeah, so I'll be there talking about that. The California both the bureau of cannabis control and department of pesticide regulations have asked me to present in their headquarters as to what I've been finding. And I'm encouraging to enforce things they can get there because it's a clean crop in other states now. And that's my message.

Chris: Excellent. Thank you so much Dr. James for speaking on this subject tonight.

Dr. James: Yeah, have a good one buddy.

Chris: Okay, have a good night.


Well, that wraps up another episode of Cannalaw Connections. Thank you so much for joining me, Chris Hoo. And again, we are here every month, we have a monthly recording at Cannalaw Connections. Next month we'll be talking about manufacturing.

And we also have in-person meet up every month at the We Work off of La Brea in Hollywood, that's the first Tuesday of every month. This next month it will be June 5th from 6:30 to 8:00. And this June 5th we actually have a very special guest from the employment development department. They'll be speaking about taxes and payroll taxes and how to get your cannabis business off the ground. So, it won't be me talking about regulations this time, it will be the EDD department talking. And same thing, we'll be having questions and answers, we'll be having nice discussion networking and some good food. So, come check us out. Thanks again for listening to Cannalaw Connections. Okay, and don't forget to follow us on Instagram at evergreen_law.

Thank you for listening to Cannalaw Connections. To hear more and read the show notes from this episode head over to evergreenlaw.co/podcast.

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