Replies to post #29637 on EVIO Inc (EVIO)

[tothe]

Do the labs still have to destroy the 30 pound batch after testing?
Rules are so stringent the Farmers cannot use public drinking water because of high levels of cadmium and lead.

[Fivespeedchatter]

Ok can we at least agree on one thing?? we both need q2 to convince the other why this regulation stuff is important but not a game changer.. so in the mean time here is where you are both right and wrong...

right:

YES it hurts revenue that 100% of weed is not tested..that is basic math.. but there is nothing SBGY Can do except lobby for a higher percentage of testing..(PUBLIC will help as more problems with tainted weed enter news stream..)

Wrong:

1)

Yeah, the 8k discusses current temporary rules putting a downward pressure on revenues.

No they don't READ WHAT WW SAID:

No, the temporary testing rules have not negatively impacted our revenues. These “temporary” rules have allowed for additional smaller producers and processors to participate in the market off-setting any reduction in testing volumes enacted by these rules


2)your timeline of regulation implementation ...

from:

https://www.oregon.gov/olcc/marijuana/Documents/Rules/OAR_845_025_5700_MetrcGuide.pdf

we get that in October, when it was supposed to be 100% testing conducted there were like three weeks of maybe 100% mandatory testing going on. Even then the DD says not really... 100% testing mandate caused a gigantic cluster f in the market right out of the gate...backlogs, staff issues, etc... this is why they implemented a temporary regulation... to get flower that was sitting awaiting testing getting all moldy and shiz through to shelves...


This means that most q1 was most likely not reflective of 100% mandatory testing for EVIO but more like the 33.3 % mentioned in the state regs...

backed up From that same link above:

Effective September 30, 2016 until March 1, 2017, the Oregon Liquor Control Commission, under OAR
845-025-5700, may issue an order to limit pesticide testing of usable marijuana meant for retail sale to
consumers if OLCC staff finds there is insufficient lab capacity for 100% batch testing for pesticides.On
October 3, 2016, the OLCC issued such an order that lifts the requirement for universal testing of
pesticides and instead requires a minimum of 33.3% of batches per harvest lot to be tested. If one batch
fails pesticide testing, it triggers pesticide testing for all batches in the harvest lot.

From this you need to keep in mind that SGBY HAS NEVER SEEN WHAT 100% TESTING LOOKS LIKE...

3)what you have posted about the 20% proposition is speculation and not correct...(the latest i'm guessing is this:)

http://public.health.oregon.gov/DiseasesConditions/ChronicDisease/MedicalMarijuanaProgram/Documents/333-007,%20008,%20064%20Need%20and%20Fiscal%20Impact.pdf

in it we see:

Current testing costs for a grower or producer to test one 10 pound batch of usable marijuana is approximately $300. Potency testing costs for
an edible processor for a 10,000 unit process lot is approximately $1000. Testing costs for a two pound process lot of cannabinoid extract is
about $500. Rule revisions to testing requirements for registered and licensed marijuana processors, allowing for the option of randomized
testing and removing testing requirements for certain solvents would reduce costs associated with testing cannabinoid concentrates, extracts
and other items. Allowing for OLCC to set frequency of testing for batches of usable marijuana above a minimum of 20% of batches within a
harvest lot may lead to reduced testing costs for licensed producers. Reducing the amount of samples to be tested once a product has passed
a control study would also reduce testing costs for processors. Rule revisions that reduce the frequency of required testing of usable
marijuana and marijuana items would reduce testing costs for marijuana processors and producers, reduce wholesale prices for marijuana
retailers and reduce the ultimate cost to the consumer purchasing cannabinoid products. However, requiring producers and growers to test
usable marijuana intended for use in cannabinoid products to be tested for pesticides would increase the testing costs to producers and
growers for those usable marijuana batches that are affected and may slightly increase the cost of those products to the consumer. Reducing
required testing for marijuana processors could have a negative economic impact on accredited and licensed laboratories.

really read that one. Yes ( in bold) revenue down... but A) 20% is a minimum, B) 20% of a harvest lot only kicks in after a random sample passes the control study, and C) what you are missing is why the regs are being debated and put in place. They are there to GROW THE PRODUCTION OF WEED. less cost for producers means more cash flow to expand grow operations which = more weed grown, it also means growers can sell to dispensary with cheaper prices, and will eventually, result in a cheaper price for consumer... This will cause more sales (more people buying cheaper weed). Growers will have to grow more weed to fill orders... but they will still have to get their buds tested. NOT 100% OF THEM. but that doesn't matter if they are already increasing their harvest outputs...Do you see that?

Key to my side of the argument is two fold one: definition of HARVEST LOT:

“a specifically identified quantity of marijuana that is cultivated utilizing the same growing
practices, harvested within a 48-hour period at the same location and cured under uniform
conditions.”

AND

WHAT that means...

Under OHA’s testing rules, batches for some tests can be combined for purposes of sampling and testing
while other samples must be batch-specific. The figure below lays out the various permutations of how
samples can be tested and sampled. In this example, Acme Producer has three harvest lots.
? The first harvest lot is comprised of OG Kush plants that were harvested within 48 hours of each
other (October 1st to 2nd). This harvest lot is a total of 3 lbs of finished (dried/cured) product.
? The second harvest lot is comprised of Sour Diesel and Blue Dream plants that were harvested
within 48 hours of each other (October 15th to 16th). This harvest lot is a total of 6 lbs of finished
(dried/cured) product.
? The third harvest lot is comprised of Blue Dream and Jack Herer plants that were harvested
within 48 hours of each other (October 28th to 29th). This harvest lot is a total of 30 lbs of finished
(dried/cured) product.
Although harvest lots, and therefore Metrc harvests, may be multi-strain, packages created out of these
harvests should be of a single strain. OLCC must be able to verify that testing is conducted in line with
rule – therefore, samples tested for potency must be drawn from single-strain packages.

Both from:
https://www.oregon.gov/olcc/marijuana/Documents/CTS/SamplingandTestingGuide.pdf

what this means for my argument is that lax testing means producers can produce more plants with extra cash they save from having to test...more plants equal more harvest lots...more harvest lots equal more tests... eventually what was lost in revenue is caught up with new accounts...


and two: The magical realm where SGBY (and all labs) get to test 100%
of MJ was NEVER realized to begin with so claiming that we went from 100% testing for q1 to 33% percent for q2/3 to maybe 20% for future is just wrong...for all intents and purposes Oregon Testing numbers are and have been 33.3%..since the system went live.


Bottom line: yes it hurts revenue (temporarily and only in the very short term), But ask yourself which labs are going to go down because of the regs.. a spoke and hub multi state company THAT Tests alot of flower (ONLY LAB SERVICING JACKSON AND JOSEPHINE COUNTIES is ours...) or a mom and pop lab that will sell its testing equip to EVIO to pay the lease on their space that EVIO is about to buy... WW isn't kidding... Branding is paramount...you have a quote from a single lab... my quote about regs comes from WW who has Five... in the end who are you gonna listen to?

Dissect it enough for you?