Cannabis Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That.

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Cannabis Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That.
A $1.9 Billion Canadian IPO Could Make LA the 'Center of the Cannabis Universe'

When PSI Labs started testing cannabis for THC levels and pesticides in 2015, it entered into an unregulated industry that would soon grapple with the effects of legalization and—perhaps more troubling—was prone to sloppy testing practices that gave varying results on potency and toxicity levels.

“A client comes to you. They don't like the numbers that they see,” said Ben Rosman, co-founder of the Michigan-based PSI Labs, which expanded into California earlier this year. “And they're like, ‘I can find another lab who's going to give me the numbers I like,' or 'I don't like that you failed me. And I know there's another lab that's going to give me a pass.'

What Rosman is referring to is the potency rating on marijuana. The higher the rating, the more powerful the drug.


“A lot of folks sort of test as marketing, not just quality control, and they want to see the highest potency possible,” Rosman added. “Or they just test purely to drive their product to market alone.

But times are finally changing. Five years after California legalized marijuana in 2018, both the state and industry players are wrestling with standardization and varying regulations that have cost cannabis producers tens of thousands of dollars while endangering consumers and the environment.

A law signed by California Governor Gavin Newsom has ordered the state to develop clear and specific guidelines to test cannabis products.

The bill will require California’s Department of Cannabis Control to create a strict set of standards for testing cannabis products, including pesticides, contaminants, cannabis potency and heavy metals. The standards will be established by 2023 and all cannabis labs in California will have to follow them.

“Testing standards provide consumers with confidence about cannabis product safety and accuracy of cannabinoid content,” the DCC said in an email. “These standards are what distinguish legal, regulated cannabis from illicit cannabis. Cannabis sold through unlicensed sources is not tested, may contain unsafe contaminants or undisclosed ingredients, and is often labeled with higher cannabinoid content than the product actually contains.”

What labs test for, and how they test samples, is often at the discretion of the lab itself. The cannabis buds at the top of the plant are often more potent than the bottom-most buds, and some portions of the plant may contain more microbiological contamination than others. Labs claim to strive to collect a representative sample of the entire batch of cannabis (though how they determine what a representative sample is is also up for grabs).

The process has led to “lab shopping”, by which cannabis processors and growers go to labs that will produce more favorable results, even if they’re less accurate.

Kurvana, a cannabis vape pen company founded in 2014, has lost millions of dollars over the years due to poor regulation. Varied results in sample collection has led to contaminating entire cannabis production facilities. Kurvana employees had to travel to pot farms and observe how it was grown and cultivated to make sure it was up to standard. In 2019, a lab they tested with got shut down for poor practices, endangering the company’s reputation, forcing it to recall their products tested in that facility, and burning around $150,000 in testing fees.

“It got a lot more complex, too, because the different testing labs were using different instruments and different sample prep methods and testing methodologies,” Moghaddam said. “So one testing lab made tests for pesticide and says it'd pass and another testing lab made tests for pesticides in it, [and it might fail]...And that was a big challenge at the time.”

But some wonder if further regulating the legal cannabis market may end up inadvertently bolstering the illicit cannabis market.

“The more expensive you make the product for the end use, so the more you tax it and regulate it, the more expensive it is for the user,” said David Wolf, co-founder of the cannabis testing lab maker Greenbox Builders. “And then that's why a black market can crop up. The black market in California is bigger than the legal cannabis market.”

Despite having some of the most lax cannabis laws in the country, California still has a robust underground cannabis market where growers and sellers are not confined to the increasingly strict rules legal cannabis sellers are. The market is nearly double that of the legal pot market in the state and, between having a cheaper product and lax cannabis penalties, it’s nearly ubiquitous.

Large homes for illegal pot cultivation are tucked away in the Mojave Desert and Antelope Valley, where water (already sparse in those areas) is stolen from local residents and toxic pesticides (a few drops could kill a large bear) are sprayed all over the plants, endangering people and wildlife.

In 2020, the California Department of Public Health tested illicit cannabis vape cartridges seized by the state and found additives and harmful dilutants that lead to E-Cigarette and Vaping Associated Lung Injury (EVALI). Almost all cases of EVALI, according to the DCC, come from unlicensed products.

But Rosman is hopeful standards will fully legitimize his industry.

“One of the things that was most exciting about...expanding into California is generally having a bigger platform and having a louder voice in speaking about the importance of data integrity and raising the bar and talking about the importance of standardization of lab tests, cannabis lab testing practices,” he said.

https://twitter.com/KeerthiVedantam
keerthi@dot.la
LA Tech Week 2024: Monday’s Event Lineup
tech-week

LA Tech Week 2024 kicks off on Monday, October 14, with a packed schedule of events spread across Los Angeles. This opening day offers founders, investors, creatives, and tech enthusiasts endless opportunities to connect, learn, and collaborate. From early morning fitness sessions to afternoon workshops and evening socials, Monday’s diverse programming sets the stage for an impactful week. Below is the schedule organized by location, so you can easily find the events that match your goals and availability.

BEVERLY HILLS

7:00 AM

Andrew Yeung, Blindspot

8:00 AM

Scrappy

9:00 AM

TechWalk, Qapita

12:00 PM

VCPE GROUPS, Entrepreneur.VC

2:00 PM

  • Future of Farming: AI and Indigenous Collaboration for a Sustainable Food System : See Details Here

Celebration Nation Inc

7:00 PM

LightDAO, Mission Matters

CENTURY CITY

6:00 PM

  • KOSME-LAVA Demo Day (Invite Only)

Los Angeles Venture Association

CULVER CITY

9:00 AM

Amazon Web Services (AWS)

Intersections LA

1:00 PM

  • Networking for Underrepresented Founders - Optimize your networking savviness, and have fun along the way : See Details Here

AWS Startups

2:30 PM

AWS

3:00 PM

Family Offices Investors Summit, Sandbox, Soulbound, KIKI, Babylon Voice, CryptoHQ Fund

DTLA

7:00 AM

  • Tech Runs (Invite Only)

Crosscourt

EL SEGUNDO

6:00 PM

Stonegardens Advisory, Demand Signal Ventures

HOLLYWOOD

2:00 PM

  • Brand Positioning + Content Strategy Workshop (Invite Only)

Alpha Wolves Media

6:00 PM

LaFamilia Foundation (VCFamilia), Pivotal Ventures

INGLEWOOD

6:30 PM

  • UCLA Anderson Elevating Voices: A Pitch Competition & Networking Opportunity :See Details Here

Westwood

LONG BEACH

11:30 AM

Starburst Aerospace, Ampaire, Auriga Space, Long Beach Accelerator, Rebel Space, Sunset Ventures, Emerging LA

MALIBU

5:00 PM

Sunstone, Pepperdine University

6:00 PM

Wilshire Lane Capital

MAR VISTA

3:30 PM

Uthana

MARINA DEL REY

3:00 PM

USC, Information Sciences Institute

MID CITY

10:00 AM

The Growth Club

PASADENA

1:00 PM

Emerging LA, Sunset Ventures

5:00 PM

AI LA

PLAYA DEL REY

8:00 AM

AI LA

SANTA MONICA

7:00 AM

PitchandRunLA, Global Venture Network

8:00 AM

Fortify Ventures

8:30 AM

Ganas Ventures

9:00 AM

Tech Breakfast Club

A16z

10:00 AM

Clutch Talent

  • Santa Monica Innovation Hub: Technology Street Fair on Ocean Avenue :See Details Here

City of Santa Monica, StartupStarter, Inc., Downtown Santa Monica, Inc. (DTSM)

  • Sip & Scale (Invite Only)

AMP Beauty

10:30 AM

Socialtrait Inc

11:00 AM

Mucker Capital, LeadrPro, JP Morgan, K&L Gates

12:00 PM

Global Venture Network, GS1US, The FutureList, FusionAuth

1:00 PM

Cherry Hill Advisory, Crescent

1:30 PM

Charlie Financial, Aprime Technology

4:00 PM

Nathan Family Office

Artium AI, Freeplay, Silicon Valley Bank

Sidebar Summit, Redwood Collective

4:30 PM

HIRECLOUT

5:00 PM

Los Angeles Fun Events

Orbis86

6:00 PM

ImaginingForward

PowerYou AI

Musa Capital

Hustle Fund

VCPE Groups, Entrepreneur Ventures

Hive

A16z

Tech Pitch Roast Comedy LLC

Human To Human

7:00 PM

Verve, M13, Stifel, WSGR

Frances Mendez, Ryan Edwards

VENICE

7:00 AM

Bankless Ventures

Powerful Stuff, Drybaby

8:00 AM

J.P. Morgan Startup Banking Team - LA

9:00 AM

Google

10:15 AM

Open Venture Capital, Empowered Yoga Venice, Oya Femtech Apparel, Wellness Growth Ventures

12:00 PM

J.P. Morgan Innovation Economy Team - LA

Crypto Mondays, Continuum, Female Funders Club

4:00 PM

J.P. Morgan, WICIF, MCJ

6:00 PM

Product Manager Association of Los Angeles

6:30 PM

HITMKR Inc., The Bushido Group, Mission Matters

VIRTUAL

8:30 AM

Clutch Talent

WESTLAKE VILLAGE

11:00 AM

Hub 101, Steven Dorfman Center for Innovation & Entrepreneurship, California Lutheran University

WESTSIDE

3:00 PM

MaC Venture Capital

  • Speaker Panel: Leveling the playing field - Removing the barriers to entry for developers :See Details Here

Elemental Computing Inc.

Each session provides unique opportunities to gain insights, network, and explore various fields of tech innovation. For updates or more event information, visit theofficial Tech Week calendar. Enjoy the start of LA Tech Week 2024!


Download the dot.LA App

OpenAI's $6.6B Power Play: The Future of AI Just Got a Massive Boost 💰🚀
Image Source: Open AI - Sam Altman

🔦 Spotlight

OpenAI is making some exciting moves! The company just completed a massive $6.6 billion funding round, pushing its valuation to an impressive $157 billion. Thrive Capital led the charge, with big names like Andreessen Horowitz and Founders Fund also joining in. This investment will allow OpenAI to further scale its operations and advance AI technologies like GPT-4 across various sectors such as healthcare, entertainment, and business.

But that’s not the only exciting news. OpenAI has also secured an additional$1 billion credit facility, giving the company even more financial flexibility to execute its ambitious growth plans. This safety net ensures that OpenAI has the resources to scale safely and effectively while continuing to lead the AI space.

AI is becoming integral to industries worldwide, and OpenAI’s products—like ChatGPT—are seeing rapid adoption. From education to enterprise solutions, the company is driving significant advancements in how AI is integrated into everyday life.

Following Microsoft’s $10 billion investment earlier this year, this latest round underscores the market’s confidence in OpenAI’s potential. With its strong focus on responsible AI deployment and ethical scaling, the company is set to shape the future of AI in a way that benefits a broad range of industries and addresses global challenges.

As AI evolves, OpenAI remains dedicated to pushing boundaries while ensuring that its innovations prioritize safety, scalability, and social impact. Keep an eye on this space—big things are on the horizon!


🤝 Venture Deals

LA Companies

  • Impulse Space, a Redondo Beach-based company specializing in in-space transportation services, raised $150M in Series B funding led by Founders Fund, bringing its total funding to $225M, to expand its team and advance production of its Helios and Mira vehicles. - learn more
  • Nusano has secured over $115M in Series C financing, led by The Wasatch Group, to accelerate the commercialization of its radioisotope production technology, aimed at improving cancer treatment and medical diagnostics. - learn more
  • Future Trash, a multidisciplinary creative studio, has raised a $5M Seed funding round from TIRTA and General Catalyst to develop original intellectual property (IP) within Fortnite, focusing on building unique in-game content and experiences. - learn more
  • XType, the leading software company for multi-instance management on the ServiceNow platform, has raised a $21M Series A funding round led by Norwest Venture Partners to accelerate innovation and expand its platform capabilities on the ServiceNow platform. - learn more
  • 3Laws Robotics, a robotics company focused on building AI-powered platforms to enhance the safety, security, and operational efficiency of robotic systems, has raised a $4.1M Seed funding round led by TenOneTen Ventures. - learn more

LA Venture Funds
  • Watertower Ventures participated in the $8M Series A funding round for DocJuris, a leader in AI-based contract review and negotiation software that automates key tasks to streamline the contract process for enterprise teams and general counsels. - learn more
  • Progression Fund participated in a $3.7M Seed funding round for Permanent, a company focused on advancing sustainable agriculture by developing solutions that improve soil health and productivity. - learn more


LA Exits

  • Loom, an educational community platform that empowers women by providing comprehensive resources on reproductive health, sexual wellness, and parenting education, has been acquired by women's health brand Perelel, marking a significant expansion in the women's health and wellness sector. - learn more

Download the dot.LA App

⚠️📲🌩️ Your Digital Lifeline: Top Tech Apps for Natural Disasters

Living in LA means being ready for anything—quakes, wildfires, crazy weather, you name it. Luckily, there’s a suite of tech apps designed to keep you informed, connected, and safe when disaster strikes. From real-time alerts to staying in touch with loved ones, these apps have you covered. Here’s the ultimate list to help you handle whatever chaos comes your way in LA County.

Get Real-Time Alerts

Image Source: MyRadar

FEMA App
  • What it does: Provides real-time alerts from the National Weather Service, along with shelter and disaster recovery info.
  • Key features: Weather alerts, shelter locator, and preparedness resources.
  • Available on:iOS | Android
MyRadar Weather Radar
  • What it does: Offers real-time, animated radar for tracking severe weather and storms.
  • Key features: Live radar, storm tracking, and severe weather alerts.
  • Available on:iOS | Android
Clime: NOAA Weather Radar
  • What it does: Delivers real-time radar and weather updates, with wildfire and flood tracking.
  • Key features: Customizable weather alerts, disaster tracking.
  • Available on:iOS | Android
American Red Cross Emergency App
  • What it does: Provides real-time alerts for over 35 types of emergencies, plus disaster preparedness tips.
  • Key features: Alerts, safety check-ins, and emergency tips.
  • Available on:iOS | Android
My Earthquake Alerts & Feed
  • What it does: Sends real-time earthquake alerts, with maps and detailed data.
  • Key features: Earthquake alerts, customizable notifications, detailed maps.
  • Available on:iOS | Android
Citizen
  • What it does: Delivers real-time alerts for emergencies, including natural disasters and crime near your location.
  • Key features: Safety alerts, live incident reports, and community updates.
  • Available on:iOS | Android

Stay Connected with Loved Ones

Image Source: Life360

While social media apps like Facebook and X provide real-time updates, additional tools can help with communication and location sharing, ensuring you stay connected and safe.

Nextdoor
  • What it does: Connects neighbors with real-time local updates on emergencies and community events.
  • Key features: Neighborhood alerts, local info, resource sharing.
  • Available on:iOS | Android
WhatsApp
  • What it does: Enables secure messaging, location sharing, and video/voice calls with family and friends.
  • Key features: End-to-end encryption, location sharing, voice/video calls.
  • Available on:iOS | Android
Zello Walkie Talkie
  • What it does: Turns your phone into a push-to-talk walkie-talkie for communication in low-signal areas.
  • Key features: Push-to-talk, works over Wi-Fi/data, group communication.
  • Available on:iOS | Android
Glympse – Share Your Location
  • What it does: Lets users share real-time locations with family and friends without needing an account.
  • Key features: Location sharing, ETA updates, private tracking.
  • Available on:iOS | Android
Life360
  • What it does: Tracks real-time location of family members and provides emergency SOS alerts.
  • Key features: Family location tracking, emergency alerts, crash detection.
  • Available on:iOS | Android

Stay Mobile

Image Source: PlugShare

For navigating road closures and traffic during disasters, Google Maps and Waze are essential tools that offer real-time updates and alternate routes. Along with these go-to options, there are additional apps that can help you stay mobile when it matters most.

GasBuddy
  • What it does: Locates nearby gas stations and provides real-time updates on fuel availability and prices.
  • Key features: Gas station locator, fuel prices, availability checks.
  • Available on:iOS | Android
PlugShare
  • What it does: Provides a comprehensive map of public EV charging stations worldwide. It offers real-time availability, pricing, user reviews, and photos of charging stations, helping you find the best nearby options.
  • Key features: Real-time station availability, detailed station info, user reviews, and trip planning.
  • Available on:iOS | Android

Traditional Preparedness Tips

In addition to these tech apps, it’s crucial to prepare for natural disasters with traditional methods:

  • Build a disaster kit: Gather essential supplies like food, water, first aid supplies, and a flashlight.
  • Develop an evacuation plan: Determine where you will go and how you will get there in case of an emergency.
  • Keep emergency contacts handy: Make a list of important phone numbers.

Maximize Battery Life and Data During Emergencies

During disasters, power outages and increased network traffic can affect your device's battery life and data usage. Consider the following:

  • Keep your devices charged: Use portable or solar-powered chargers to extend battery life.
  • Conserve data: Use Wi-Fi hotspots when available to avoid excessive data charges.

These apps are your go-to tools for staying informed, connected, and ready for anything in Los Angeles County. Whether you need real-time alerts, navigation assistance, or ways to keep in touch with loved ones, having these apps on hand can make all the difference when it matters most.

Download the dot.LA App

RELATEDEDITOR'S PICKS
Trending