SC Labs
Cover Stories

The Not-So-Clear Future of Legalized Pot

The business of cannabis is changing rapidly in a post-Prop. 64 landscape where not all of the rules are entirely clear

SC Labs recently upgraded its chromatography machines with two state-of-the-art models, which business development director Ian Rice compares to "Ferraris." While the company's older models could detect parts per million of pesticide chemicals, the new machines can detect up to parts per billion.

Inside SC Labs on Santa Cruz’s Pioneer Street, technicians in lab coats and safety goggles test various strains of cannabis for potency, pesticides, gender and nearly a dozen different cannabinoids, as a soundtrack of reggae and indie rock blares in the background.

Down the hall, entrepreneur Ian Rice sits in his office, where he helps to oversee five dozen employees in a 10,000-square-foot operation that uses advanced scientific techniques to analyze cannabis. Professional and serious, a smile seldom flashes across his face as he talks about the accreditations SC Labs is working toward and each meticulous step his company takes in studying each plant that comes through the door. Some people might even have a hard time believing that he works in the marijuana industry at all—but then, those are exactly the kind of outdated stereotypes he has no time for.

“The idea that cannabis is bad for our community is done,” says Rice.

Rice is proud that he and three fellow co-founders at SC Labs hire droves of UCSC’s chemistry and biology grads right out of college. And after the passage of Prop. 64 in November, legalizing marijuana usage for recreational use, the business looks poised to grow more quickly than ever.

“It’s time to impress upon those naysayers that this is a real business. This isn’t a smoke shop, right? I happen to have some custom bongs,” he says, gesturing to vase-like glass pieces in the corner. “Those have never been used. They happen to be marketing items. We’re here to run not just a good cannabis business, but also a good business for the community.”

SC Labs cannabis test

TEST OF BOTH WORLDS SC Labs technicians start by photographing each sample that comes in before running a range of tests.

Rice remembers the time his father, renowned local marijuana attorney Ben Rice, first found out he had been smoking pot. He sat his son down and talked to him about setting “a good example for cannabis users.”

“Some people will smoke cannabis and lie on the couch all day, playing video games. For me, I use cannabis medicinally, and it helps me focus,” Rice explains. “It helps me have conversations and has helped me develop relationships, whether it’s on the personal side or business.”

Rice helped start SC Labs six years ago, after dropping out of Humboldt State University, which he calls the “Harvard of weed schools.”

And in the spring, he helped created Envirocann, a third-party certification company inspecting the farming practices of cannabis farmers. Mendocino County has already approved the group to inspect and help certify operations up there.

The fledgling company rates the integrity and sustainability of their clients’ grows under the guidance of president April Crittenden, who also works as the farm certification programs director for California Certified Organic Farmers.

The first step in that process is making sure that each grower is licensable, something that often comes down to composting and pesticide-free farming practices, as well local zoning laws, like the ones in Santa Cruz County, which have been in limbo—especially since the board of supervisors approved a moratorium on non-medical grows this month. Advocates like Ben Rice have pleaded with the county to loosen those rules enough to ease the burden on responsible cannabis farmers.

That land-use concern is one of many unanswered questions about how legalization will alter the face of marijuana locally and across the state.

“Some people will smoke cannabis and lie on the couch all day, playing video games. For me, I use cannabis medicinally, and it helps me focus. It helps me have conversations and has helped me develop relationships, whether it’s on the personal side or business.” — Ian Rice, Co-Founder of SC Labs

In the coming years, California will have mandatory testing for marijuana, and SC Labs appears poised to blossom. The company is also expanding to Washington, where the owners have a facility they have been waiting to open, and Oregon, where they just signed a lease.

As of now, most of their clients are submitting their weed voluntarily.

Sometimes, Rice says, one of them will doubt the test results that come out of the lab. That’s why technicians take painstaking efforts to keep track of each step in the process.

“If they have a question, which occasionally will happen, we can audit that system and see—is it a human error, an instrument error, or just a disgruntled client? Which happens, right? Some people think they have the best weed in the world, and unfortunately, we prove differently.”

 

Pot of Money

Even in the aftermath of a resounding victory, with 57 percent of voters backing Prop. 64, legal pot does have its bounds.

Employers can still test for cannabis in drug screenings, and employees can be fired for smoking. Noncitizens can be deported for using the drug, which is still listed as a Schedule I narcotic by the federal government, and landlords have the authority to kick tenants out of their homes for lighting up.

The feds have slowly shown a decreasing interest in cracking down, though, and President Barack Obama recently compared the changing culture of cannabis to the loosening of gay marriage laws around the country a few years ago. “There’s something to this whole states-being-laboratories-of-democracy and an evolutionary approach,” he told Rolling Stone, explaining that he thinks substance abuse of marijuana can be handled like officials do for alcohol and cigarettes. “You now have about a fifth of the country where this is legal.”

President-elect Donald Trump has also shown little interest in getting in the way of states that vote to let people get high, although some worry that the anti-drug Jeff Sessions, Trump’s appointment for attorney general, could prove to be a major buzzkill.

But the biggest unanswered question around cannabis may revolve around what to do when someone is caught driving under the influence. Unlike for alcohol, there isn’t a simple breathalyzer, or similar device, to clearly measure how inebriated someone is.

“Since there is no quantitative analysis, it’s going to require that the officer be able to prove in court that the person was under the influence,” Santa Cruz Police Chief Kevin Vogel told GT at the City Hall to You event at the Elks Lodge. “That’s going to be proven by driving, by objective symptoms. It becomes a little more complicated, not impossible. But I think over time, someone will come up with a test for marijuana that will provide an actual quantitative analysis. Right now, I’m not aware that that exists.”

SC Labs new machines

CHECKING LEVELS The new machines at SC Labs can measure the difference between dangerous levels of chemicals and allowable ones.

If the state agrees on a legal limit in a driver’s bloodstream, officers might be able to give suspects a urine or blood test, should they be arrested and taken back to the station, but experts haven’t been able to agree on what the legal limit should be because, for starters, cannabis affects different users differently. On top of that, there are hundreds of unique strains—some of which create distinct highs, especially because there’s a wide range of lesser-known cannabinoids in addition to THC, the high-profile one that testers typically use to measure intoxication.

And whereas alcohol is water-soluble, THC is fat-soluble, meaning that it fluctuates in people’s bloodstreams differently. The states of Colorado and Washington, which both legalized pot in 2012, have each passed a limit of 5 nanograms of THC per one milliliter blood. But critics have derided that number as arbitrary, and Ben Rice says many medical patients are walking around with that much THC in their bodies all the time—even when they’re stone-cold sober.

Lastly, there’s the issue of combining substances. Some studies have found that a connection between bad driving and marijuana is far less clear than the correlation between bad driving and alcohol, but research also shows that combining the two is much more intoxicating than using either on its own.

The day after the election, Vogel sent a memo out to his officers, explaining the breakdown of what legal cannabis means for them, and Sheriff Jim Hart did the same for his deputies. Both tell GT that their officers will keep using the same cues they always do to tell how inebriated someone is—factoring in how they are driving, their interactions with officers, how recently they say they smoked, and maybe how dank their car smells.

Although Ben Rice proudly supported Prop. 64, he worries that some of the coming changes could put law enforcement in a difficult situation. For instance, the proposition, also known as the Adult Use of Marijuana Act (AUMA), will establish a 15 percent tax on non-medical cannabis. In order for the law to work properly and generate revenue, the state will need people to buy from approved vendors. Of course, if that tax proves too high, it could send people back to the dealers and under-the-table growers that people have been relying on for years.

SC Labs Ian Rice

DESK JOB Ian Rice, co-founder of SC Labs, learned from a young age the importance of setting a good example as a cannabis user.

And although it’s no longer a crime to possess pot, buying legal recreational weed isn’t slated to be legal until 2018, unless the state legislature tweaks the law. That means that, although cannabis is legal, it’s still against the law to buy or sell it without a medical marijuana card. At the same time, though, marijuana crimes that used to be felonies, like cultivation, have now been reduced to misdemeanors, notes Abel Hung, a narcotics prosecutor with the district attorney’s office.

He worries that the AUMA will send demand soaring, and—especially now that the penalties have diminished—many illicit growers will be happier than ever to try and meet it, before selling legal recreational pot even becomes a thing.

“Being caught up in criminal activity has always been a cost of doing business,” Hung says. “Is this change going to make them stop doing that? Or is it going to make them more brazen?”

 

In the Weeds

As the dawn of a new era for marijuana approaches, Ben Rice says he remembers when Santa Cruz County was a leader in “smart” and generally laid-back cannabis policy—a period best exemplified by the community reaction to an infamous 2002 DEA raid of the Wo/Men’s Alliance for Medical Marijuana (WAMM).

In the years since, he concedes, some “idiots” moved to the county, perhaps drawn by that reputation. Some of those growers ignored all rules whatsoever, clear-cutting trees, diverting streams, flouting permit laws, and causing serious environmental degradation.  

SC Labs Travis Ruthenburg

GETTING INPUT SC Labs science director Travis Ruthenburg studies test results in the instrument room of the company’s Santa Cruz location.

But he fears the county government has reacted too strongly to those issues and might be missing out on a big opportunity to support the cannabis farmers who want to play by the rules.

“I think it’s a shame that Santa Cruz, which was one of the leaders in the country in this industry, has taken a big U-turn. And now a county like Monterey, which is one of the worst places I had to go to defend people—they were sending people to prison left and right just a couple years ago—now they’re embracing this industry, and they’re going to make a lot of money that we’re leaving on the table,” Rice says. “That seems foolish to me. And it’s going to leave out a lot of people who are trying to do it right.”

Rice has been asking the county to reverse course on a few land-use decisions—namely a limit keeping one grower permit to each licensable parcel of land, no matter how large it is. That change, he says, would provide a place in the county for growers, like ones in Bonny Doon that the county no longer allows to farm commercially at their own homes, due to recent changes.

As county staff work on an environmental cannabis review, District 1 County Supervisor John Leopold has asked planning officials to consider allowing multiple permits on large approved pieces of land and letting farmers share, just like Rice has called for.

Leopold, who still thinks of the county as being on the cutting edge of cannabis, notes that the county strongly encouraged all established growers to register with the county last month, with an email address. The idea is that county leaders can help move any farmers who live outside the permitted areas but want to keep harvesting. The county was also one of the first to hire a cannabis licensing official in October.

“We had nine months of analysis from the Cannabis Choice Cultivation Choices Committee,” says Leopold, who represents Live Oak and Soquel. “Then we had a very balanced community dialogue about it. Now we’re doing the highest levels of environmental review. So, we’re trying to have an informed discussion.”

News Editor at |

Jacob, the news editor at Good Times, won the 2014 award for best local government coverage from the California Newspaper Publishers Association. A longtime basketball and football fanatic, Jacob has evolved into a shameless fair weather fan and band wagoner for hot West Coast sports teams. He also enjoys arguing with others about where to find the best burrito in town.

To Top