THE STATE Cannabis Control Commission on Thursday unanimously approved hefty fines against two marijuana companies for illegally using pesticides on their products, then trying to hide it.
Garden Remedies will pay $200,000 and Healthy Pharms will pay $350,000.
They are not the first marijuana companies to be cited for pesticide use under strict rules that growers have long complained treat cannabis differently than other plants, but they were the largest such sanctions imposed to date.
The “process and outcome are exactly how the commission wants to behave and how we want to interact with industry and promote public health and safety in the most efficient manner possible,” said commission chairman Steven Hoffman.
The issue of pesticide use in the state’s pot industry is something of a regulatory Catch-22, with state officials deferring to federal environmental officials, who offer no guidance on acceptable agents because marijuana is illegal under federal law.
“The pesticides that are being used… they are allowed on the fruit and the food that you and I eat, the berries I had for breakfast this morning, by the EPA,” said Jim Smith, an attorney with Smith, Costello and Crawford who has represented marijuana companies, including Garden Remedies, in pesticide-related investigations.
According to an agreement between Garden Remedies and the Cannabis Control Commission, commission inspectors were at the company’s Fitchburg facility in January 2019 when they found an EPA-registered pesticide, Wood’s Rooting Hormone, in a cultivation area. At the time, the company had received a provisional license but not yet a final license to begin operations. The inspector asked the chief financial officer for various financial documents, including invoices and statements.
Garden Remedies disposed of the pesticide and provided the documents, including invoices from its purchase of cultivation supplies from Green Harvest Hydroponics. The commission gave Garden Remedies its final license.
However, in April 2019, the inspector received a phone call from an anonymous employee saying the invoices were falsified to hide the purchase of another pesticide. An investigation found that the digital invoices given to the commission were manipulated. While the digital invoices listed purchases of “Agrosun bulbs,” paper copies of the same invoices listed “Clonex gel,” which provides hormones to roots and is prohibited.
Documents showed that Garden Remedies had been using Clonex as far back as December 2017.
Garden Remedies fired its director of operations, issued a two-day suspension and a warning to the director’s supervisor, and stopped buying from Green Harvest. The company says it instituted new training and restructured reporting requirements. Karen Munkacy, president and CEO of Garden Remedies, said in an interview that two other employees also lost their jobs.
“In our company you follow the rules or else you get fired,” Munkacy said.
Under the settlement agreement, Garden Remedies will be put on a two-year probationary period where it will have to immediately report any test results that find pesticides. It will have to document every chemical applied to plants. Employees must undergo ethics training.
Munkacy admitted to mistakes regarding the use of Clonex. “While the product we used is permitted to be used in cannabis cultivation in many other states and is not an externally applied pesticide that puts anyone in danger, it is not permitted in Massachusetts and the situation was mishandled,” Munkacy said.
Munkacy said without knowledge of the executive team, “documents were falsified by a former employee acting in a rogue manner.” She said uncovering the issue “had a dramatic effect on me and the whole organization” and “emboldened me to make sweeping changes in our organization.” “We did a lot of soul searching after that, and in every way possible wanted to make certain nothing like that would ever happen again,” Munkacy said.
Rebecca Lopez, an attorney with the Cannabis Control Commission’s enforcement division, said the company accepted responsibility for the violations, cooperated in the investigation, made efforts to remediate the violations, and “affirmatively instituted reforms to improve company culture and operations.”
This is the second time Healthy Pharms faced state action regarding pesticide use. In February 2018, the Department of Public Health, which then controlled the state’s medical marijuana program, ordered Healthy Pharms to temporarily shut down after a lab test detected the pesticide bifenthrin in product samples. The company was allowed to reopen in June 2018, after decontaminating grow rooms in its Georgetown facility.
A year later, in July 2019, lab tests again found bifenthrin in Healthy Pharms flower. Healthy Pharms claimed the pesticide was residue from 2017.
According to the agreement, Healthy Pharms growers applied hydrogen peroxide and baking soda to plants as pesticides, which was not allowed, multiple times in 2018 and 2019. Inspectors in May 2019 found multiple pesticide-related products, including an EPA-registered pesticide, an insecticide, and a compound not approved for use on food. Tests of various rooms and equipment in the facility identified multiple types of pesticides.
The agreement also flagged problems with the company’s response. Healthy Pharms delayed reporting lab test results to the Cannabis Control Commission. A sample taken from a power washer that was supposed to be sent for testing was never sent, but a result was still reported. Healthy Pharms’ lead cultivator told inspectors incorrectly that the company had not used off-label pesticides. The company incorrectly entered 50 strains of cannabis into a tracking system.
In addition to paying a fine and no longer using pesticides, the company will have to hire a harvest compliance manager, test several rooms, maintain a list of all applied chemicals, and undergo a two-year probationary period.
Leo Gontmakher, CEO of 4Front Ventures, which bought Healthy Pharms in February 2019 and rebranded it under the name Mission, said in a statement, “Once the company understood the violations, we worked quickly to correct them and have implemented procedures to prevent them from happening again.”
There was little discussion of the settlements by members of the commission during the meeting. Kay Doyle, who had been the commission’s expert on environmental issues, left the commission in May.
Typically, the commission has favored negotiated settlements over unilateral actions like pulling a license. “We’re not in the business of maximizing the fines we get, of shutting people down,” said Hoffman, the commission chairman. “What we’re in the process of doing is building an industry that operates safely and in adherence of our regulations.”
The size of the fines was based on several factors, including the number and seriousness of the violations and the size of the company.
Garden Remedies and Healthy Pharms are not the first companies cited for pesticide use. The Massachusetts Department of Agricultural Resources has conducted 10 investigations into pesticide use by marijuana companies, and eight of those discovered violations.
In August 2019, the cannabis commission fined Plymouth marijuana company M3 Ventures $50,000 after an employee lied about using pesticides. The Department of Public Health temporarily shut down two M3 Ventures medical marijuana dispensaries in December 2018 due to pesticide use.
In September 2018, the public health department ordered Good Chemistry to temporarily shut down its Worcester dispensary over the company’s use of pesticides.
Pesticide use on all crops is governed by the state Department of Agricultural Resources. The department has said it relies on the US Environmental Protection Agency to determine which pesticides are safe for what use. However, because marijuana remains federally illegal, the EPA has not approved any pesticides for use on cannabis plants, so the state does not allow them either.
Several states that legalized marijuana – like Colorado and Washington – do allow some pesticides. Marijuana industry advocates have asked the state agricultural resources department to develop a list of approved pesticides.
Smith, speaking for himself and not Garden Remedies, said the pesticides that growers often use are “incredibly mild and legal in other states.”
Among those involved in the recent settlements, Wood’s Rooting Hormone is approved by the EPA for use in nurseries. Bifenthrin is commonly used on food products. Clonex is EPA-approved for use on food crops, including medical plants.
Smith said he has had some clients where growers come from another state and do not realize the products are illegal here.
Peter Bernard, president of the Massachusetts Grower Advocacy Council, called the state’s rules “overly strict.” Bernard said they particularly hurt outdoor growers, whose plants are exposed to the elements, but even indoors, “No matter how careful you are, you can bring in mold or fungus. It only takes one accident to cause a $1 million problem.”
Bernard said there is no reason to be stricter on rules governing marijuana than tobacco or fruit. “If I can put it on my tobacco or I can put it on my tomatoes, I should be able to put it on my cannabis,” he said.
Bernard said the federal government did recently approve some pesticides for use on hemp, and he hopes those rules will ultimately extend to marijuana crops.
Hoffman, speaking to reporters after the meeting, declined to offer an opinion on whether state agricultural officials should allow more pesticides, saying he did not have enough technical knowledge.
Asked how widespread pesticide use is among growers, Hoffman said regulators “do a pretty good job uncovering it” and he is “quite confident” in the commission’s enforcement capabilities. But, he said, “I can’t tell you we catch everything.”