DAR File No. 43843

This rule was published in the July 15, 2019, issue (Vol. 2019, No. 14) of the Utah State Bulletin.


Agriculture and Food, Plant Industry

Rule R68-30

Independent Cannabis Testing Laboratory

Notice of Proposed Rule

(New Rule)

DAR File No.: 43843
Filed: 06/30/2019 03:18:07 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This proposed rule sets forth the licensing and operational requirements for an individual seeking to test medical cannabis in accordance with Title 4, Chapter 41a, Cannabis Production Establishments.

Summary of the rule or change:

This proposed rule sets forth the licensing requirements for those interested in competing for an independent cannabis testing laboratory. This rule establishes the facility requirements, as well as the additional requirements for the operation plan. In addition, this proposed rule establishes violation categories with the range of fines that may be assessed for violations.

Statutory or constitutional authorization for this rule:

  • Subsection 4-41a-701(3)
  • Subsection 4-41a-404(3)
  • Subsection 4-41a-405(2)(b)(iv)
  • Subsection 4-41a-103(5)

This rule or change incorporates by reference the following material:

  • Adds OECD Principles of Good Laboratory Practice and Compliance Monitoring, published by Organization for Economic Co-operation and Development, 1997
  • Adds Cannabis Inflorescence: Standards of Identity Analysis, and Quality Control, published by American Herbal Pharmacopoeia, 2014

Anticipated cost or savings to:

the state budget:

As this is a new program, the state will have a significant starting cost for hiring personnel and buying equipment necessary to effectively run the medical cannabis program. The Department of Agriculture and Food (Department) will need to hire and train employees to inspect these facilities. In addition to inspectors, the Department needs to hire administrative staff to help issue the agent registration cards, to do background checks for all employees, and those with 2% or greater financial or voting interest in the independent cannabis testing laboratory. The inspector will need to be out doing inspections of the laboratory and will need the equipment necessary to conduct the inspection. In total the cost of the employees is estimated at $216,000 for the first year. In addition to the cost of the employees, there is $30,000 cost for the equipment and training for these employees to effectively regulate this product. Additionally, the Department will need to help with the purchase and upkeep of the electronic verification system as required by Title 4, Chapter 41a. The Department anticipates contributing at least $13,000 to maintaining the system as it is key to the program. Total cost in the first year is anticipated at $259,000. In the second year, the Department anticipates that cost will stay much the same with a slight increase in the amount of inspections that are necessary as more of the facilities reach their capacity and the laboratories are conducting more tests. It may be necessary to hire more inspectors as the program grows in the third year, but the Department anticipates that the cost for the program will remain similar to the second year in the third year. The Department anticipates an application fee of $500 for each applicant. In addition, the successful independent cannabis testing laboratory will have a $15,000 licensing fee. The Department anticipates there will be at least seven interested parties. Thus, the amount of revenue generated could be at least $108,500 in application and licensing fees for the first year. The licensee will not have to pay the application fee after having successfully received a license. The revenue for years two and three will decrease to $105,000.

local governments:

There are no anticipated costs or benefits to local governments as this rule neither requires action from nor provides benefits to local governments.

small businesses:

This rule allows for the testing of controlled substances for sale in the state of Utah. This is a new and controlled industry in the state. As it has not been allowed, this proposed rule does not place any additional cost to the business aside from the anticipated application fee of $500 and the licensing fee of $15,000.

persons other than small businesses, businesses, or local governmental entities:

This proposed rule allows for the testing of medical cannabis for sale in the state. It will allow for qualified patients to have access to a quality-controlled product. However, due to the nature of the industry, it is impossible for the Department to estimate the costs or benefits to the consumer.

Compliance costs for affected persons:

There is anticipated to be $500 application fee for all those who chose to apply for a license. Those who are awarded the license will then have a $15,000 licensing fee. Due to this being a controlled substance and still federally illegal, there has been no prior legal market in the state. Therefore, the only cost to the affected persons is the application and licensing fees. All other costs are the costs of engaging in the testing of medical cannabis.

Comments by the department head on the fiscal impact the rule may have on businesses:

This is a newly created program which will allow the testing of a controlled substance for medical use. It is necessary for the Department to ensure the safe growing, processing, and transportation of this product for the safety of the qualified patients. The application and licensing fees are necessary for the department to run the program effectively to ensure that qualified patients receive a quality product.

Kerry Gibson, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Agriculture and Food
Plant Industry
350 N REDWOOD RD
SALT LAKE CITY, UT 84116-3034

Direct questions regarding this rule to:

  • Melissa Ure at the above address, by phone at 801-538-4978, by FAX at , or by Internet E-mail at mure@utah.gov
  • Kelly Pehrson at the above address, by phone at 801-538-7102, by FAX at , or by Internet E-mail at kwpehrson@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/14/2019

Interested persons may attend a public hearing regarding this rule:

  • 08/08/2019 02:00 PM, Dept. of Agriculture and Food, 350 North Redwood Road, Salt Lake City, UT

This rule may become effective on:

08/21/2019

Authorized by:

Kerry Gibson, Commissioner

RULE TEXT

Appendix: Regulatory Impact Analysis for Small and Non - Small Businesses

Fiscal Costs

FY 2020

FY 2021

FY 2022

State Government

$259,000

$259,000

$259,000

Local Government

$0

$0

$0

Small Businesses

$108,500

$105,000

$105,000

Non-Small Businesses

$0

$0

$0

Other Person

$0

$0

$0

Total Fiscal Costs:

$367,500

$364,000

$364,000





Fiscal Benefits




State Government

$108,500

$105,000

$105,000

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$0

$0

$0

Total Fiscal Benefits:

$108,500

$105,000

$105,000





Net Fiscal Benefits:

- $259,000

- $259,000

- $259,000

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non - Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

Title 4, Chapter 41a,only allows for the issuance of 10 cannabis cultivation facility licenses. This proposed rule will allow for the controlled testing of cannabis to be provide to qualified patients. As the cultivation of cannabis has previously been illegal under state law, the full impact to testing laboratories cannot be estimated as the necessary data is not available to the Department.

 

The Commissioner of the Department of Agriculture and Food, Kerry Gibson, has reviewed and approved this fiscal analysis.

 

 

R68. Agriculture and Food, Plant Industry.

R68-30. Independent Cannabis Testing Laboratory.

R68-30-1. Authority and Purpose.

1) Pursuant to sections 4-41a-103(5), 4-41a-302(3)(b)(ii), 4-41a-404(3), 4-41a-405(2)(b)(iv), 4-41a-701(3), 4-41a-801(1), and 4-2-103(1)(i), this rule establishes the application process, qualifications, and requirements to obtain and maintain an independent cannabis testing laboratory license.

 

R68-30-2. Definitions.

1) "Applicant" means any person or business entity who applies for a cannabis processing facility license.

2) "Batch" means a quantity of:

a) cannabis extract produced on a particular date and time, following clean up until the next clean up during which lots of cannabis are used;

b) cannabis product produced on a particular date and time, following clean up until the next clean up during which cannabis extract is used; or

c) cannabis flower packaged on a particular date and time, following clean up until the next clean up during which lots of cannabis are being used.

3) "Cannabis" means any part of a marijuana plant.

4) "Cannabis cultivation facility" means a person that:

a) possesses cannabis;

b) grows or intends to grow cannabis; and

c) sells or intends to sell cannabis to a cannabis cultivation facility or to a cannabis processing facility.

5) "Cannabis processing facility" means a person that:

a) acquires or intends to acquire cannabis from a cannabis production establishment or a holder of an industrial hemp processor license under title 4 chapter 41, Hemp and Cannabidiol Act;

b) possesses cannabis with the intent to manufacture a cannabis product;

c) manufactures or intends to manufacture a cannabis product from unprocessed cannabis or a cannabis extract; and

d) sells or intends to sell a cannabis product to a medical cannabis pharmacy or the state central fill medical cannabis pharmacy.

6) "Cannabis production establishment agent registration card" means a registration card that the department issues that:

a) authorizes an individual to act as a cannabis production establishment agent; and

b) designates the type of cannabis production establishment for which an individual is authorized to act as an agent.

7) "Department" means the Utah Department of Agriculture and Food.

8) "Independent cannabis testing laboratory" means a person who:

a) conducts a chemical or other analysis of cannabis or a cannabis product; or

b) acquires, possesses, and transports cannabis or a cannabis product with the intent to conduct a chemical or other analysis of the cannabis or cannabis product.

9) "Independent cannabis testing laboratory agent" means an individual who:

a) is an employee of an independent cannabis testing laboratory; and

b) holds a valid cannabis production establishment agent registration card.

10) "Lot" means the quantity of:

a) flower produced on a particular date and time, following clean up until the next clean up during which the same materials are used; or

b) trim, leaves or other plant matter from cannabis plants produced on a particular date and time, following clean up until the next clean up.

 

R68-30-3. Independent Testing Laboratory License.

1) An independent testing laboratory license allows the licensee to receive cannabis from a licensed cannabis cultivation facility to conduct testing as required by section 4-41a-701(2) and Utah Admin. Code R68-29.

2) An independent testing laboratory license allows the licensee to receive cannabis from a licensed cannabis processing facility to conduct testing as required by section 4-41a-701(2) and Utah Admin. Code R68-29.

3) An independent testing laboratory license allows the licensee to receive cannabis from a licensed cannabis cultivation facility and a cannabis processing facility to conduct the additional test as requested.

4) A complete application shall include the required fee, statements, forms, diagrams, operation plans, and other applicable documents required in the application packet to be accepted and processed by the department.

5) Prior to approving an application, the department may contact any applicant and request additional supporting documentation or information.

6) Prior to issuing a license, the department shall inspect the proposed premises to determine if the applicant complies with state laws and rules.

7) The department may conduct face-to-face interviews with an applicant if needed to determine the best-qualified applicant for the number of licenses needed.

8) The license shall expire on December 31 st of each year.

9) An application for renewals shall be submitted to the department by December 1 st of each year.

10) If the renewal application is not submitted by December 31st the licensee may not continue to operate.

11) A license may not be sold or transferred.

 

R68-30-4. Independent Cannabis Testing Laboratory Requirements.

1) An independent testing laboratory shall employ a scientific director responsible for:

a) ensuring that the laboratory achievement and maintenance of quality standards of practice; and

b) supervising laboratory staff.

2) The scientific director for an independent laboratory shall have:

a) a doctorate in chemical or biological sciences from an accredited college or university and have at least 2 years of post-degree laboratory experience;

b) a master's degree in chemical or biological sciences from an accredited college or university and have at least 4 years of post-degree laboratory experience; or

c) a bachelor's degree in chemical or biological sciences from an accredited college or university and have a least 6 years of post-degree laboratory experience.

3) An independent cannabis testing laboratory shall follow validated analytical methods, such as those published by AOAC, American Herbal Pharmacopoeia, EPA, FDA, or other reputable scientific organizations or notify the department of alternative scientifically valid testing methodology the lab is following for each required test.

4) An independent cannabis testing laboratory may not use an alternative testing method without prior review from the department.

5) The department shall review any monograph or analytical method followed by an independent cannabis testing laboratory to ensure the methodology produces scientifically accurate results prior to the use of alternative testing methods to conduct the required tests.

6) An independent cannabis testing laboratory shall establish written standard operating procedures for each test being conducted.

7) An independent cannabis testing laboratory shall obtain and keep the International Organization for Standardization (ISO) 17025:2017 accreditation.

8) An independent cannabis testing laboratory may be licensed prior to ISO 17025:2017 accreditation provided the independent cannabis testing laboratory:

a) adopt and follow minimum good laboratory practices which satisfy the OECD Principles of Good Laboratory Practice and Compliance Monitoring published by the Organization for Economic Co-operation and development; and

b) becomes ISO 17025:2017 accredited within 18 months.

9) The department incorporates the following materials by reference:

a) Cannabis Inflorescence: Standards of Identity, Analysis, and Quality Control (2014 Revisions) published by the American Herbal Pharmacopoeia; and

b) OECD Principles of Good Laboratory Practice and Compliance Monitoring (1997) published by the Organization for Economic Co-operation and Development.

10) An independent cannabis testing laboratory shall have written emergency procedures to be followed in case of:

a) fire;

b) chemical spill; or

c) other emergencies at the laboratory.

11) An independent cannabis testing laboratory shall compartmentalize all areas in the facility based on function and shall limit access to the compartments to the appropriate authorized agents.

 

R68-30-5. Security Requirements.

1) At a minimum, a licensed independent cannabis testing laboratory shall have a security alarm system on all perimeter entry points and perimeter windows.

2) At a minimum, a licensed independent cannabis testing laboratory shall have complete video surveillance system:

a) with minimum camera resolution of 640 x 470 pixels or pixel equivalent for analog, and

b) that retains footage for at least 45 days;

3) All cameras shall:

a) be fixed and placement shall allow for the clear and certain identification of any person and activities in controlled areas; and

b) record continuously.

4) Controlled areas included:

a) all entrances and exits;

b) all areas where cannabis or cannabis products are stored,

c) all areas where cannabis or cannabis products are being tested, and

d) all areas where cannabis waste is being moved, processed, stored or destroyed.

5) If an independent cannabis testing facility stores footage locally, the surveillance system storage device shall be secured in the facility in a lockbox, cabinet, closet, or secured in another manner to protect from employee tampering or criminal theft.

6) If an independent cannabis testing laboratory stores footage on a remote server, access shall be restricted to protect from employee tampering.

7) Any entry point must be lighted in low-light conditions sufficient to record activity occurring.

8) All visitors to an independent cannabis testing laboratory shall be required to have a properly displayed identification badge issued by the facility at all times while on the premises of the facility.

9) All visitors shall be escorted by an independent cannabis facility agent at all times while in the facility.

10) An independent cannabis testing laboratory shall keep and maintain a visitor's log showing:

a) the full name of each visitor entering the facility;

b) the badge number issued;

c) the time of arrival;

d) the time of departure, and

e) the purpose of the visit.

11) The independent cannabis testing laboratory shall keep the visitors log for a minimum of a year.

12) The independent cannabis testing laboratory shall make the visitor log available to the department upon request.

 

R68-30-6. Inventory Control.

1) Each test sample shall have a unique identification number in the inventory control system.

2) Each test sample shall be traceable to the lot or batch used as the base material from the cannabis production establishment.

3) Unique identification numbers may not be reused.

4) Each test sample that has been issued a unique identification number shall have a physical tag placed on it with:

a) the unique identification number;

b) the license number and name of the lab receiving the test sample;

c) the license number and name of the cannabis production establishment name;

d) the date the test sample was collected; and

e) the weight of the sample.

5) The tag shall be legible and placed in a position that can be clearly read and shall be kept free from dirt and debris.

6) The following shall be reconciled in the inventory control system at the close of business each day:

a) the date and time the test sample was received;

b) all samples used for testing and the test results;

c) the identity of the agent conducting the test;

c) a complete inventory of cannabis test samples;

d) the weight and disposal of cannabis waste materials;

e) the identity of who disposed of the cannabis waste; and

f) the theft or loss or suspected theft or loss of test sample.

7) An independent cannabis testing laboratory shall document in the inventory tracking system any test samples received, and any difference between the quantity specified in the transport and quantities received.

 

R68-30-7. Independent Cannabis Testing Laboratory Agents.

1) An independent cannabis testing laboratory shall apply to the department for a cannabis establishment agent on a form provided by the department.

2) An application is not considered complete until the background check has been completed and the independent cannabis testing laboratory has paid the registration fee.

3) The cannabis establishment agent registration card shall contain:

a) the agent's full name;

b) the name of the cannabis processing establishment; and

c) a photograph of the agent.

4) An independent cannabis testing laboratory is responsible to ensure that all agents have received:

a) the department approved training as specified in Utah Code 4-41a-301; and

b) any task-specific training as outlined in the operating plan submitted to the department.

5) An independent cannabis testing agent shall have a properly displayed identification badge which has been issued by the department at all times while on the facility premises or while engaged in the transportation of cannabis.

6) All cannabis production establishment agents shall have their state-issued identification card in their possession to certify the information on their badge is correct.

7) An agent's identification badge shall be returned to the department immediately upon termination of their employment with the independent cannabis testing laboratory.

 

R68-30-8. Transportation.

1) A printed transport manifest shall accompany every transport of cannabis.

2) The manifest shall contain the following information:

a) the cannabis production establishment address and license number of the departure location;

b) physical address and license number of the receiving location;

c) strain name, quantities by weight, and unique identification numbers of each cannabis material to be transported;

d) date and time of departure;

e) estimated date and time of arrival; and

f) name and signature of each agent accompanying the cannabis.

3) The transport manifest may not be voided or changed after departing from the original cannabis production establishment.

4) A copy of the transport manifest shall be given to the independent laboratory.

5) The receiving independent laboratory shall ensure that the cannabis material received is as described in the transport manifest and shall record the amounts received for each strain into the inventory control system.

6) The receiving independent laboratory shall document at the time of receipt any differences between the quantity specified in the transport manifest and the quantities received in the inventory control system.

7) During transport an independent cannabis testing laboratory agent shall ensure the cannabis is:

a) shielded from the public view;

b) secured; and

c) temperature controlled if perishable.

8) An independent cannabis testing laboratory shall contact the department within 24 hours if a vehicle transporting cannabis is involved in an accident that involves product loss.

9) Only the registered agents of the independent cannabis testing laboratory may occupy a transporting vehicle.

 

R68-30-9. Cannabis Waste Disposal.

1) Solid and liquid wastes generated during cannabis testing shall be stored, managed, and disposed of in accordance with applicable state laws and regulations.

2) Waste water generated during cannabis testing shall be disposed of in compliance with applicable state laws and regulations.

3) Cannabis waste generated from the cannabis plant, trim, and leaves are not considered hazardous waste unless it has been treated or contaminated with a solvent, or pesticide.

4) All cannabis waste shall be rendered unusable prior to leaving the independent cannabis testing laboratory.

5) Cannabis waste, which is not designated as hazardous, shall be rendered unusable by grinding and incorporating the cannabis waste with other ground materials so the resulting mixture is at least fifty percent non-cannabis waste by volume or other methods approved by the department before implementation.

6) Materials used to grind and incorporate with cannabis fall into two categories:

a) compostable; or

b) non-compostable.

7) Compostable waste is cannabis waste to be disposed of as compost or in another organic waste method mixed with:

a) food waste;

b) yard waste; or

c) vegetable-based grease or oils.

8) Non-compostable waste is cannabis waste to be disposed of in a landfill or another disposal method, such as incineration, mixed with:

a) paper waste;

b) cardboard waste;

c) plastic waste; or

d) soil.

9) Cannabis waste includes:

a) cannabis plant waste including roots, stalks, leaves, and stems;

b) excess cannabis or cannabis products from any quality assurance testing;

c) cannabis or cannabis products that fail to meet testing requirements; and

d) cannabis or cannabis products subject to a recall.

 

R68-28-10. Change in Operation Plans.

1) An independent cannabis testing laboratory shall submit a notice, on a form provided by the department, prior to making any changes to:

a) ownership or financial backing of the facility;

b) the facility's name;

c) a change in location;

d) change in testing methods, equipment, remodeling, expansion, reduction or physical, non-cosmetic alteration of the lab; or

e) change in written operating procedures.

2) An independent cannabis testing laboratory may not implement changes to the approved operation plan without department approval.

3) The department shall respond to the request for changes within 15 business days.

4) The department shall approve of requested changes unless approval would lead to a violation of the applicable laws and rules of the state.

5) The department shall specify the reason for the denial of approval for a change to the operation plan.

 

R68-30-11. Renewals.

1) An independent cannabis testing laboratory shall submit a notice of intent to renew and the licensing fee to the department by December 31st of each year.

2) If the licensing fee and intent to renew are not submitted on or before December 31st the licensee may not continue to operate.

3) The department shall renew a license unless renewal would lead to a violation of the applicable laws and rules of the state.

 

R68-30-12. Proficiency Testing.

1) The department shall establish a proficiency testing program for independent cannabis testing laboratories.

2) Each independent cannabis testing laboratory shall participate in the designated proficiency testing program with satisfactory performance as determined by the Department.

 

R68-30-13. Violation Categories.

1) Public Safety Violations: $3,000- $5,000 per violation. This category is for violations which present a direct threat to public health or safety including, but not limited to:

a) cannabis sold to an unlicensed source;

b) cannabis purchased from an unlicensed source;

c) refusal to allow inspection;

d) refusal to participate in proficiency testing;

e) failure to comply with testing requirements;

f) failure to report testing results;

g) unauthorized personnel on the premises;

h) permitting criminal conduct on the premises;

i) engaging in or permitting a violation of the Utah Code 4-41a which amounts to a public safety violation as described in this subsection.

2) Regulatory Violations: $1,000-$5,000 per violation. This category is for violations involving this rule and other applicable state rules including, but not limited to:

a) failure to maintain alarm and security systems;

b)failure to keep and maintain records;

c) failure to maintain traceability;

d) failure to follow transportation requirements;

e) failure to follow the waste and disposal requirements; or

f) engaging in or permitting a violation of Utah Code 4-41a or this rule which amounts to a regulatory violation as described in this subsection.

3) Licensing Violations: $500- $5,000 per violation. This category is for violations involving licensing requirements including, but not limited to:

a) an unauthorized change to the operating plan;

b) failure to notify the department of changes to the operating plan;

c) failure to notify the department of changes to financial or voting interests of greater than 2%;

d) failure to follow the operating plan as approved by the department;

e) engaging in or permitting a violation of this rule or Utah Code 4-41a which amounts to a licensing violation as described in this subsection; or

f) failure to respond to violations.

4) The department shall calculate penalties based on the level of violation and the adverse effect or potential adverse effect at the time of the incidents giving rise to the violation.

 

KEY: cannabis laboratory, cannabis testing

Date of Enactment or Last Substantive Amendment: 2019

Authorizing, and Implemented or Interpreted Law: 4-41a-701(3); 4-41a-404(3); 4-41a-405(2)(b)(iv); 4-41a-103(5)


Additional Information

More information about a Notice of Proposed Rule is available online.

The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull_pdf/2019/b20190715.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.

Text to be deleted is struck through and surrounded by brackets ([example]). Text to be added is underlined (example).  Older browsers may not depict some or any of these attributes on the screen or when the document is printed.

For questions regarding the content or application of this rule, please contact Melissa Ure at the above address, by phone at 801-538-4978, by FAX at , or by Internet E-mail at mure@utah.gov; Kelly Pehrson at the above address, by phone at 801-538-7102, by FAX at , or by Internet E-mail at kwpehrson@utah.gov.  For questions about the rulemaking process, please contact the Office of Administrative Rules.