UPDATE: Suspended marijuana Sparks lab calls advisory appalling, baseless

Jenny Kane | Reno Gazette Journal

Show Caption Hide Caption $1 billion worth of illegal cannabis destroyed in California The joint operation searched more than 459 acres of land and discovered 10 million illegally grown plants.

Editor's note: This story was updated on Nov. 20 to include comments from Certified Ag Labs LLC, which is located in Sparks.

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State officials busted a Sparks lab for altering THC levels during the testing of marijuana products and suspended its marijuana license until further notice.

The Nevada Department of Taxation on Monday advised the public that the lab had misrepresented THC potency levels during a routine inspection at Certified Ag Labs, LLC in Sparks.

The lab -- which said its license potentially could be revoked -- called the suspension "as baseless as it is appalling," in a statement Tuesday.

The lab was previously closed in Dec. 2017, and it reopened in January 2018.

The department did not indicate in a Monday public advisory that it was suspending the license of the lab, nor did it indicate in its notice that it was closing it, but a notice on the facility door indicated that the lab license in fact had been suspended.

"Products tested by Certified Ag Labs, LLC may be labeled incorrectly and could contain a different level of THC than what is listed on product packaging," state officials said in an email advisory.

"The Department advises all legal cannabis users to take caution when using product tested by Certified Ag Labs, LLC and when comparing any similar products of the same potency, as those effects may be greater and/or less than that of the product tested by Certified Ag Labs, LLC," the notice read.

A call to the state Department of Taxation was not returned.

Will Adler, a marijuana policy lobbyist and executive director of Scientists for Consumer Safety, said the violation must be more serious than he initially had guessed since Gardner said the business's license might get entirely revoked.

"This would indicate a violation of the most severe kind and I do not believe the marijuana enforcement division would issue a violation of that severity baselessly or without cause," Adler said.

'Baseless as it is appalling'

Randy Gardner, a managing member of the lab, issued a statement regarding the license suspension Tuesday afternoon to the Reno Gazette Journal saying that the suspension came without warning.

"We take particular issue with the allegation that we made misrepresentations to the Department. This accusation is as baseless as it is appalling, as we have been completely transparent with the State at all times," Gardner said.

Gardner called the allegations "unconscionable" at best.

"We hope the State appreciates that a business and its employees' livelihoods and reputations are at stake. We are pursuing our options and all legal and equitable redress will be on the table," Gardner said.

He added in a phone call with the Reno Gazette Journal that the first time the taxation suspended the lab's license, in 2017, was due to the lab's misunderstanding of new regulations at the time.

This time, he said the lab did nothing wrong and he "stands behind the data 100 percent," and it's state officials that are confused this time.

He could not elaborate on the suspension, but he said that the lab's products in no way endangered consumers.

He did not expand on whether there were issues beyond misrepresented THC levels, as state officials alleged, but he did say that he still feels the state is doing its best.

"As a whole, Nevada’s done a great job. The state is getting in front of it," said Gardner, who insists Nevada's legal marijuana market is the most regulated of any state. "They regulate everybody."

He also said that there's going to be imperfections in product from time to time, but, just like at the grocery store -- which he thinks is less regulated than the marijuana market -- there are blemishes.

"If you ever bought grapes at the store, sometimes there’s a little mold," Gardner said.

More: Former taxation director who led Nevada's marijuana program resigns from state job

More: Reno marijuana cultivator allowed to reopen; reason for suspension disclosed

More: Reno developer fired from role as CEO and president at marijuana dispensary

Pot under pressure

A month ago, state officials briefly suspended the license of a marijuana cultivation facility in Reno, Helios. The license was reinstated within a week.

The industry has been on edge in recent months amidst an embattled lawsuit and an announcement that the Department of Taxation was going to investigate marijuana testing labs because they were doctoring THC levels and hiding high levels of yeast and mold on store shelves.

The atmosphere in the industry only worsened since early October when national headlines threw Nevada's recreational marijuana industry into the limelight, and not in a good way. A foreign national allegedly tried to impact Nevada's state elections and buy his way into the state's marijuana market.

Gov. Steve Sisolak vowed to take action, calling a special task force to "root out potential corruption or criminal influences in Nevada's marijuana marketplace, effective immediately," he said in a statement earlier this month.

"Any marijuana entity – licensed or unlicensed – that violates the law will see swift and severe criminal and regulatory action," his statement said.

The Nevada Department of Taxation also halted the transfer of any marijuana licenses, as recommended by the governor's task force. The department is not currently processing any new or current license transfers.

There are a number of marijuana establishments in Northern Nevada whose licenses currently are in the process of being transferred, but they are in limbo for the foreseeable future.

Jenny Kane covers arts and culture in Northern Nevada, as well as the dynamic relationship between the state and the growing Burning Man community. She also covers the state's burgeoning cannabis industry (Check out her podcast, the Potcast, on iTunes.) Support her work in Reno by subscribing to RGJ.com right here.