CannaSafe CEO Aaron Riley Says Illicit Cannabis Is Market’s Biggest Challenge

As of Feb. 18, 2,807 Americans have been hospitalized for EVALI: e-cigarette, or vaping, product use-associated lung injury. Sixty-eight deaths have been confirmed in 29 states and the District of Columbia, according to the Center for Disease Control and Prevention.

The California-based accredited cannabis testing lab CannaSafe conducted its own research and broke the news about the additive vitamin E acetate potentially being the cause of the outbreak of illness.

Last year, CannaSafe said it tested more than 11 million vape carts and 79,646 pounds of flower — products representing $972.2 million in retail value.

The vaping illness has significantly impacted the industry, and more companies are now seeking the type of services CannSafe offers, CEO Aaron Riley told Benzinga in an interview. 

Testing for the vitamin E acetate additive is only one among many tests the company offers.

The most common contaminants found in cannabis and CBD products are pesticides, followed by heavy metals and microbials, Riley said.

Riley Says Use Of Pesticides On Cannabis A Sign Of Negligence

Some common pesticides were often used on cannabis before testing was required, with myclobutanil being the most well-known, the CannaSafe CEO said.

The trade name for the product is Eagle 20.

"It's used in agriculture industry on grapes for wine and olives and potatoes, but when you combust it, it turns into hydrogen cyanide. So it's not really great. It's not a great one to be smoking,” he said.

Hydrogen cyanide is a systemic chemical asphyxiant and interferes with normal oxygen use by nearly every human organ, according to the CDC: "exposure to hydrogen cyanide can be rapidly fatal."

Another common cannabis contaminant is mold, which can cause various health issues, especially in people who are sick and allergic to it, Riley said.

While the nature of the plant makes cannabis cultivation and the production process challenging — sometimes resulting in cannabis affected by mold — pesticides are just a sign of negligence, he said.

Black Market 'The Biggest Challenge' 

Cannabis testing failure rates have dropped significantly, from 75% in 2017, to 20% when CannaSafe first began testing regulated products and 5% today, Riley said.

“The biggest challenge today is the illicit market. There is a significant more business done in the illegal market than there is in the regulated market. I think it's five or six times as big as the legal market.”

The black market wouldn't be as large if there was better public education about the cannabis industry, the CEO said.

“We did all of our illicit market product testing to really help educate the public on what was in these products. We found that around 90% of them had pesticides that would fail the state regulatory limits. So, almost every single illicit market product was contaminated in some form or another, whether it was pesticides, heavy metals, mold, additives.”

Aside from its safety testing, CannaSafe is also known for placing a heavy focus on social equity, sponsoring expungement clinics, offering a discount program for social equity business, supporting educational and advocacy event  and hiring minorities.

"We’re going to hire the best person," Riley said.

"And when you hire the best person and you have 150 people, that's a very diverse company and team, it's not a bunch of people that all look the same and are from the same area."

CannaSafe's Ambitions

CannaSafe is in the process of expanding to four states and opening five new facilities and aims to become a national leader in cannabis testing, Riley told Benzinga.

In the next 12 to 18 months, the company will focus on the U.S., and it has plans to go international after that, he said.

“Whether we go in Europe or South America is to be determined, but I will say that we will, in the next three or four years, be an international company.”

CannaSafe would like to go public, but only when the market conditions and timing are right, the CEO said.

“It's not going to be something that's rushed or forced.”

Photo courtesy of CannaSafe.