California marijuana lab sues state to recover suspended license

A prominent California marijuana testing lab is suing state regulators in a bid to get its suspended license reinstated.

In a petition filed April 18 in Sacramento County Superior Court, Long Beach-based BelCosta Labs alleges the state Department of Cannabis Control harmed its business by revoking its license without any formal hearing and without any means for the lab to appeal or contest the process.

“As a result of the suspension without due process, BelCosta’s multi-million-dollar business is now shuttered and in danger of being closed forever,” according to the petition.

A spokesperson for the Department of Cannabis Control (DCC) said the agency would have no comment on the litigation.

The DCC has yet to respond to the petition in court, according to records.

The DCC suspended BelCosta’s state license to test cannabis on April 10 for activity the agency claimed “poses harm to public health, safety, or welfare.”

The suspension came only 20 days before BelCosta’s provisional license was set to expire on April 30.

‘Costing $40,000 a day of lost money’

Until the suspension notice hit, BelCosta CEO Myron Ronay told MJBizDaily on Thursday, the DCC had taken no action on a renewal application the lab filed in November.

Ronay believes the DCC “purposefully” waited until the weeks before the license was due to expire – when the lab was most vulnerable – to suspend BelCosta’s permit.

“This is costing us $40,000 a day of lost money,” he said.

“They took everything away from us overnight, with no due process, and with only 20 days to fight.”

Like many other state licensees, BelCosta had been operating under a provisional permit.

With the exception of some social equity license holders, provisional permits are being phased out by the end of this year.

According to the DCC’s April 10 suspension notice, BelCosta allegedly committed seven violations over the past year.

The alleged infractions include potency inflation, releasing allegedly moldy cannabis for sale and failing to keep proper records.

But most of the alleged activity occurred last summer or fall.

Further, according to BelCosta’s April 18 filing, the “only basis for the suspension that references public safety involves tests results of 5 batches of cannabis that had been embargoed on or before July 2024, all of which was ultimately either recalled and/or destroyed.”

“For context, the DCC has not taken issue with any of the other 18,000 tests BelCosta has processed in the 12 months preceding this complaint,” the filing adds.

California’s ongoing testing lab crackdown

BelCosta is the latest laboratory in the past year to lose its California license for alleged violations as accusations of lab misbehavior swirl around the regulated U.S. marijuana industry.

Observers note that regulatory agencies might be feeling pressure to take decisive action after years of what many critics say was lax oversight.

That’s partially what allowed a THC potency arms race and other market factors to tempt labs to offer friendly results to clients.

BelCosta’s petition also alleges that two competing labs, San Francisco-based Anresco Laboratories and San Diego-based Infinite Chemical Analysis, are “colluding to manipulate the media and the DCC to put their competition out of business.”

“(A)nd it seems to be working,” the petition adds.

Those two labs, the petition notes, also have brought litigation against BelCosta and other labs that they accused of test manipulating results.

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.