As cannabis prices continue to slump and operators struggle to stay in business, we fear there will be more sad headlines like this one. As we're seeing with Catalyst's recent announcement that it will begin randomly testing products on its shelves, voluntary compliance costs to ensure consumers receive safe products could further increase operating expenses and squeeze operators' bottom line. The flourishing black and gray markets, given legal operators' challenges staying in business, only make matters worse. Hopefully, the Department of Cannabis Control will seize the moment to expand testing requirements for harmful pesticides and provide some tax relief to ease the associated cost burden on operators. Creative regulatory solutions, such as easing direct-to-consumer restrictions for legacy organic farms, could also create new pathways to get reliably pesticide-free products to consumers.

Source: Los Angeles Times June 21, 2024 15:04 UTC