April 10, 2017

The purpose of this document is to communicate a clear concern within the marijuana industry regarding what
appears to be persistent and ongoing rule violations by certified laboratory Peak Analytics located at 5373 Guide Meridian
Suite. F201, Bellingham, WA 98226.
Specifically, the complaint alleges that Peak Analytics, as they test marijuana products for potency, is not following
the Cannabis Inflorescence and Leaf monograph published by the American Herbal Pharmacopoeia, and the alternative
testing methodology they employ is not equivalent and not scientifically valid, a clear violation of WAC 314-55-102(4).
Evidence for such allegations is multifaceted and has been furnished by a wide variety of distinct businesses and
citizens who have witnessed firsthand and been affected by the bias of Peak Analytics. The evidence is both empirical and
investigative, and leaves little doubt. Not only is motive obvious, the evidence demonstrates they took – and continue to
take – the opportunity to provide conveniently biased results despite having been notified in a documentable way. It is now
up to the LCB and their laboratory accrediting vendor, RJ Lee group, to identify the means.
The harm derived from a laboratory’s willingness to produce favorable results are immense and widespread.
Simple examples include:

• Consumers and patients use potency data to dose their intake, so recklessly inaccurate potency data causes undue harm
to our citizens.
• The marijuana industry uses potency data as a critical element in assessing value, so when potency data from a
laboratory is intentionally inflated it results in buyers – wholesale buyers, retail buyers and consumers – being defrauded
in their purchases.
• When inflated test results are readily available, marijuana manufacturers are pressured into purchasing testing services
from seemingly unethical laboratories, thereby limiting the farmer’s selection of quality testing services.

It is an immeasurably large financial burden to our industry when some labs are allowed to continue even when
the discrepancy is obvious. It leads to a terrible imbalance in the data 502 collectively produces, it disrupts the supply of
quality marijuana, and it creates misperceptions among the public about how to correctly select and dose marijuana products.
Without a doubt, laboratory behavior has an important effect on the marijuana marketplace. The cannabis
laboratories are a tremendous asset to our industry, a tool we should cherish, as they provide us with increasingly detailed
information about the stability, sustainability, and growth of marijuana production and processing. It is only through the
scrutiny of their peers that laboratories can become great sources of innovation, and as a community of businesses we should
be prepared to offer our humble criticism and appreciation to our cannabis labs. After all, science is a collaborative effort.
By no means should we limit our scrutiny to only the laboratory of Peak Analytics, as all of our labs are a resource
we should aim to improve. Currently, the market situation has it such that Peak Analytics – in particular – is the majority of
the problem. Among the short list of labs that test most of the marijuana produced in Washington, Peak Analytics stands out
as the one with the most immediate need for correction.

Evidence #1: Traceability Data

pg. 1 of 3
Evidence #1: Traceability Data

A review of publicly available traceability data reveals that the hear-say grievances about Peak Analytics so often
declared by marijuana businesses are not unfounded, but are in fact supported by the data. Below is a graph illustrating the
frequency distributions for Total THC of the top 6 marijuana testing laboratories in this state for all flower lots tested between
January 1, 2016 and July 1, 2016. These data indicate that Peak Analytics is producing data for flower well outside what
should be considered industry-wide normative outcomes. Traceability data demonstrate that this overreporting is consistent
through time and across grow spaces. The data depicted in the graph represent tens of thousands of samples.

[See graph on the previous page]

Evidence #2: Blind Secret Shopper

A reputable farmer conducted an independent study investigating discrepancies in lab reporting. Demonstrating
that the discrepancy above is not due to inherent bias in client composition, the farmer took samples from a batch of blended
marijuana mix and distributed those samples to each of 8 labs without informing the labs that it was an investigation. Among
the middle six labs, there is a spread of less than five percentage points. Peak Analytics is more than six points higher than
the next highest lab. Peak Analytics is lab H.

[See: http://www.cannabisregulatory.org/images/CFC%20Position%20Paper%20on%20Potency%20TestingLabeling.pdf]

Evidence #3: Retail Buyers

Retailers have noticed that when their marijuana vendors switch testing services to Peak Analytics their potency
values go up by 1.5 x. Some retailers have begun requesting their buyers test at Peak Analytics, knowing that it sells better
with higher numbers, other retailers have begun refusing product tested by Peak Analytics, knowing that selling product
with false certificates and labels is a liability. The following two certificates were provided by a retailer upon request.

[See certificates on the following page]

Evidence #4: Citizen Observation

A blogger who has been frequent to comment on the apparent behaviors of labs has presented graphical evidence
depicting the impact of Peak Analytics testing behavior on traceability datasets over time. His observations also suggest a
lower microbial failure rate from Peak Analytics, which could be indication of results bias in testing methods other than
potency.

[See: http://www.straightlineanalytics.biz/2017/03/peak-potency-lab-friendliness-is-back-with-a-gusto/]

In conclusion, multiple forms of evidence from a wide variety distinct sources all indicate that testing results from
Peak Analytics are inconsistent with outcomes obtained when following the American Herbal Pharmacopoeia, our
industry’s normative framework for potency testing. If Peak Analytics is employing an alternative testing method, they have
not demonstrated equivalency to the method described in the Cannabis Inflorescence and Leaf monograph, and their
proprietary testing methodology defies the logic of internationally reputable science organizations such as the American Oil
Chemist Society. Deviations between Peak Analytics’ testing methods/ calculations the those described in the monograph
should be audited with extreme scrutiny, especially considering that our industry needs standardization toward legitimacy.

pg. 2 of 3
Evidence #3: Retail Buyers provided the following two certificates of analysis from the same lot of marijuana flower.

pg. 3 of 3

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