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Cannabis Lab Testing Is the Same as The Financial Crisis of 2008

Greg Silverstein | December 11, 2020 | 5 1
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If you have been paying attention to the cannabis industry lately you may have seen some interesting news about Canna Safe. According to the images received and posted, The California Bureau of Cannabis Control has posted that Cannasafe had their testing license suspended. We are still waiting to hear more about this developing story and it is still unclear if the license was in fact suspended or if it was some kind of error. We have heard a lot of rumors about this company but I am still unable to find other news outlets reporting on this story. Until there is more concrete information from the BCC or another trusted source it is unclear what exactly happened. Please post your stories anonymously to our website. If you have any information about the company or management and business practices please share your story. If you need clean and reliable Lab Tests please reach out to our friends at Cannalysis.

The Financial Crisis of 2008

However, the situation true or false gave me an Idea; in a way the cannabis industry today is a lot like the financial industry in 2006-2007 in that testing facilities may be helping their clients in unethical and counterproductive ways for the purpose of profit and survival. For arguments sake assume that there are testing facilities falsifying fraudulent tests. If there are companies passing dirty tests it is directly connected to their fears of losing major business. I assume these companies are all terrible and compromised but maybe they are just fighting to survive. 

During the Financial Crisis of 2008 the ratings agencies were one of primary parties to blame. The media has made the argument to blame the poorly run banks, sketchy real estate brokers, and scum bag mortgage brokers but the credit ratings for bonds were totally manipulated and falsified to drive business. 

If you are unfamiliar with Credit Ratings or the ratings agencies it is pretty simple. Bonds are given different ratings to tell investors what is in them in terms of good or bad loans. For a better understanding of the ratings agencies and their impact on 2008 check out this Investopedia article

There are three major agencies, Standard & Poor’s Global Ratings, Moody’s. and Fitch Ratings. Together these firms make up about 95% of collective global market share for rating financial instruments. In the last 20 years these ratings companies have become more corporate and more focused on business instead of the protection of the investors. It's important to note that some of these firms are now publicly traded or subsidiaries of public companies. 

When a ratings agency rates a security, they are picked and paid by the company issuing the security. Under this paradigm the rating agency is giving a good or bad rating to their repeat customers. This is a difficult and dangerous situation. The regulators are now trusting these customers to accept the bad rating and come back next time. What this did was it created situations where the party either receives the less risky rating they want or go to another firm. 

This becomes simple, S&P customers going to Moody’s to seek better rates forced firms like Moody’s to give out better rates in order to grow. 

Tying Back to Cannabis 

If you think about testing labs there are plenty who are safe and licensed facilities that always give correct information. But I am also sure there are others who are facing cash flow issues or maybe they are trying to grow the business while cutting costs. In these cases, you can assume some of them might cut corners to save their business. The testing operator needs to save the month or quarter or maybe stop the biggest customers from leaving and they pass some dirty tests. This is a huge problem for both the cannabis industry and the banking industry. 

Safe lab tests are so important to the survival of a brand, a company might fail a test and they don’t even know because the lab decided for them. This is a dangerous cycle if left unchecked. We are talking about all of the nastiest things you have ever seen on the website, mold, bud rot, infestations, and other disgusting issues that good testing can prevent. If some dishonest operators were knowing their testing site is Fugazzi they will possibly use that to take advantage and capitalize. 

I expect most good brands and companies to think of the customer and operate in a long-term business mindset but we know that’s not true. We have so much evidence to refute that statement that I expect most operators to try and steal as much value from their customers. Some operators have price gouged while others try to compete with bad products. In some cases, we know it has been both

To all of the testing businesses who are doing the right things we support you. We support our partners at Cannalysis who can provide operators with safe and reliable testing. We support all operators in the cannabis industry that focus on the customer and strive for the best quality products for patients and customers. Cannabis products are consumed and selling someone a dirty product is exactly like poisoning someone.

Comments(5)

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    Dec 16, 2020, 12:27 PM  Reply

    Ask any lab professional in cannabis about the automation and robotics that Cannaysis uses. Cannabis products and matrices are far too complex to use blanket prep methods. Their claim to fame is that they cut most of their staff prior to the pandemic and utilize robotics to increased efficiency and improve turnarounds. Then they claimed during the pandemic that they would not fire or furlough any employees but they just fired all of them a month prior. They call their samplers 'field service managers' to trick clients into thinking they're talking to someone with decision making power. Their samplers also double as account managers. Seems like a clear conflict of interest. If your success as a sampler/account manager is measured by how your accounts grow, one could only assume their samplers are working hand-in-hand with their clients to make sure they pass testing. They also promise unrealistic turnaround times that they incapable of upholding. Shady lab practices are nothing new to this space. Do your own research and come to your own conclusions. I have little familiarity with CannaSafe, but I'm very interested to see what the state digs up in, what seems like an investigation.

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    Dec 13, 2020, 02:14 AM  Reply

    “Buzz” Scharringhausen and Amalgamated Growers are two well known scammers on this website and they often used this service to get their bunk licenses. I’m not surprised.

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    Dec 12, 2020, 09:33 AM  Reply

    Cannalysis is a investor driven lab and a cheater like Cannasafe, neither of these labs look after the end user medical patient or recreational. How much did Cannalysis pay to get the promo.

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    Dec 12, 2020, 10:02 AM  Reply

    Cannasafe and Cannalysis are both investor driven cheating labs, why would you recommend a lab that was taken over by NY investors. They are being sued for stealing the company through fraud and doctoring the books to get more investor money. Why would you trust cheaters for lab results? Both companies dry lab and protect the mega companies with fake inflated results to take your money. They will shut down the little guy, if you are a craft farmer don’t trust the Walmarts of the industry. They are trying to take over, these labs and companies like FlowKana will control your moves and business. Don’t trust the Tyson chickens of the industry.

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    Dec 12, 2020, 10:02 AM  Reply

    Cannasafe and Cannalysis are both investor driven cheating labs, why would you recommend a lab that was taken over by NY investors. They are being sued for stealing the company through fraud and doctoring the books to get more investor money. Why would you trust cheaters for lab results? Both companies dry lab and protect the mega companies with fake inflated results to take your money. They will shut down the little guy, if you are a craft farmer don’t trust the Walmarts of the industry. They are trying to take over, these labs and companies like FlowKana will control your moves and business. Don’t trust the Tyson chickens of the industry.

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