Contamination fears drive push to remake state cannabis agency

Growing concerns over pesticide contamination in California's cannabis products have prompted local officials to call for major reforms to the state's regulatory framework, challenging Gov. Gavin Newsom's oversight of the $5 billion legal marijuana market.

Last week, the Santa Cruz County Board of Supervisors approved a resolution asking Newsom and the Legislature to strip the Department of Cannabis Control of key oversight responsibilities and reassign them to agencies with more experience in pesticide regulation and laboratory accreditation.

The resolution, co-sponsored by Supervisor Justin Cummings, who also chairs the California Coastal Commission, cited an investigation by the Los Angeles Times that found widespread pesticide contamination in cannabis products, particularly vapes.

"I cannot think of a much worse way to consume pesticides than to smoke them," said Santa Cruz County Supervisor Manu Koenig, urging passage of the resolution and arguing that seven years into legalization, the state "has clearly failed" in its mandate to protect public health.

The supervisors' resolution asks the state to transfer responsibility for pesticide oversight from the Department of Cannabis Control to the Department of Pesticide Regulation, which already monitors chemicals in food crops. It also calls for the State Water Resources Control Board to handle accreditation of cannabis testing labs, given its existing role of certifying private labs that test food, water, soil, and hazardous waste.

Additionally, the county wants 24 pesticides added to the list of 66 chemicals for which cannabis products must be screened before sale.

The Department of Cannabis Control criticized the resolution, saying it was "passed without meaningful engagement" with the agency and "calls into question its due diligence and grasp of the complexities and progress on these issues."

In a written statement, the agency "shares the County's commitment to product safety and stands ready to support informed policymaking."

Newsom's office did not immediately respond to the Santa Cruz County resolution. Newsom has previously expressed confidence in the agency's actions.

A joint hearing by Senate and Assembly committees is scheduled for March 11 for the Department of Cannabis Control to report on the "condition and health" of the industry it regulates. However, pesticide contamination was not included on the specified agenda.

The Department of Cannabis Control was created in 2021 at Newsom's request, consolidating duties previously handled by separate agencies with expertise in public health, agriculture, and consumer protection. The governor appointed his cannabis advisor, Nicole Elliott, to oversee the new agency. 

The agency has faced mounting criticism, including a whistleblower lawsuit filed by a state lab regulator who claims she was fired after pressing officials to address pesticide-contaminated cannabis products. Two private laboratories have filed civil litigation against 13 competitors, alleging widespread testing fraud.

A previously undisclosed state Department of Justice investigation in 2022 looked into claims that the Department of Cannabis Control had political motives to protect illegal operators.

"I leave this role questioning whether the compliance program was or is meant to be a functional regulatory body that ensures the safety and legitimacy of the licensed cannabis market in California or if the accusations that we are a 'pay to play' system are accurate," a cannabis control special investigator wrote in a November 2021 resignation letter obtained by the Times under California's public records law.

The investigator, who oversaw cannabis control cases in Mendocino County, cited stalled criminal investigations and "rampant unfair competition" in the market. The resignation letter also mentioned an amnesty program that had brought $90 million of illegally grown cannabis into the state sales system by late 2021.

According to the investigator, field staff were told the amnesty program benefited Newsom, who faced a recall vote in September 2021, and could be "expanded even further during the recall election."

Other Cannabis Control employees, speaking anonymously due to fear of reprisal, confirmed hearing similar remarks.

The email chain shows Elliott asked for more details about allegations the agency was protecting Newsom's political interests, writing, "This alleges a potential violation of state law. If you have more information related to this allegation, I would like to request this information so that it is properly addressed."

The Business, Consumer Services and Housing Agency, which oversees the cannabis department, subsequently requested an investigation by the attorney general's office. The review was assigned to the Employment and Administrative Mandate Section rather than the Bureau of Investigations, which handles public corruption cases.

The case was closed in February 2022 after five people were interviewed. None of the three state agencies involved would provide records of the investigation, citing reasons including the confidentiality of records concerning the governor's office. The Business, Consumer Services, and Housing Agency did not specify which allegations were referred to the Justice Department but said the Justice Department "found the allegation to be unsubstantiated."

Similar concerns about licensing were raised in an August 2024 state audit criticizing the Department of Cannabis Control for poor management of $100 million in licensing grants. A February update noted the program appeared to be back on track in most communities, but the cannabis agency remained slow in approving project changes.

Speaking anonymously out of concern for retribution from cannabis regulators, three individuals involved in the legislative process claimed they were informed that bringing contamination issues to the public's attention would harm the state's cannabis sector as well as their political aspirations.

"Word on the street is Newsom will veto any legislation if anyone tied to any bill is critical of DCC," said the sponsor of one cannabis bill.

Elliott's spokesperson denied these allegations. "Director Elliott has not told any individual to refrain from speaking about contamination issues or discussing these issues with the Los Angeles Times," Hafner said.

In previous conversations, Elliott has described her task as creating a "thoughtfully regulated space" from a massive illegal market, emphasizing decriminalization. She acknowledged the difficulty, telling the Times in 2022, "To do so in a few years might be impossible."

A Times investigation later revealed that as the $5 million promotional campaign launched, Elliott's agency knew pesticide-tainted products were being sold in state-licensed stores with safety certifications from state-licensed labs. Records obtained by the Times show by late 2023, Elliott had been copied on whistleblower complaints documenting contamination in tens of thousands of products, which remained on shelves for months. The agency's testing lab could not check for pesticides.

Additional independent testing commissioned by the Times found an even larger issue: half of cannabis vaping products contained chemicals that regulators did not monitor.

In January, the agency revoked the licenses of a Mendocino County cannabis distributor and nursery, Clone Wizards, for a March 2023 criminal traffic stop involving more than 3,000 pounds of illegal cannabis and licensed crops that disappeared after allegedly failing safety testing.

More than eight months after its inspectors discovered evidence of untracked cannabis or fabricated inventory records, the agency also sanctioned two operators in L.A. It took over five months to shut down a distributor in Van Nuys whose whole taxable inventory vanished.

According to Santa Cruz County Cannabis Director Sam LoForti, the county has aggressively policed its cannabis industry to support those holding 96 licenses in the coastal county. The county ranked among the top 10 in the state for cannabis cultivation last year.

The board's resolution seeks to recruit other counties to join its call for changes in pesticide monitoring and asks the California State Association of Counties and the League of California Cities to help "grow collective action." During a recent meeting, LoForti said he discussed the campaign with counterparts in other counties.

For over a year, the Department of Cannabis Control has stated it is collaborating with the Department of Pesticide Regulations to develop new screening standards. On Dec. 18, recommendations were made to add 13 chemicals to the screening list based on state data on pesticides discovered on imported fruit and vegetables, police raids, whistleblower tests, and Times investigations.

"I think the expansion of the testing list is a great idea, but I have serious doubts as to whether a rollout from [California regulators] would be well thought out enough to avoid killing businesses," said Jason Cooley, lab director of L.A.-based SQRD Lab, one of the state's large cannabis testing laboratories.

Without state action, pesticide concerns have boosted private sector safety programs such as the nonprofit Environmental and Consumer Compliance Organization (ECCO) and generated public discussion about cannabis safety and pesticide exposure. This has also created markets for pesticide-free cannabis distillate as brands seek cleaner supply sources. Several state laboratories have voluntarily expanded testing beyond state requirements.

The push for regulatory reform in California's cannabis industry hinges on widespread pesticide contamination revealed by media investigations and whistleblower reports. While the state agency defends its actions and has increased enforcement efforts, critics argue structural changes are necessary to ensure consumer safety and create a truly trustworthy regulated cannabis market.