A California company tested 20 different popular CBD products, and found ‘insanely high’ levels of dangerous chemicals and misleading labels

Courtesy of CannaSafe

CannaSafe, a cannabis testing company, conducted a blind analysis on 20 popular California CBD products.
Just three of them, or 15%, actually contained what the labels said, according to the results of the study exclusively shared with Business Insider.
Some of the products also contained "dangerously high" levels of solvents, Aaron Riley, CannaSafe’s CEO said in an interview.
The test results point to the challenges of meeting the huge demand for a product that was illegal just months ago.

It’s no secret that CBD is booming.

The non-psychoactive component of cannabis has shown up in products from face masks and lotions to cupcakes and infused lattes. And some CBD brands have even inked deals with mainstream pharmacies like CVS and Walgreens to sell CBD topicals on shelves.

Analysts at the investment bank Cowen expect the CBD market to grow from around $1 billion today to upwards of $16 billion by 2025.

There’s just one problem: most CBD products actually contain very little CBD at all, according to a blind analysis conducted by CannaSafe Laboratories, a California cannabis testing company.

On top of that, many of the tested products — which include vape cartridges, beverages, candies, and creams — contained dangerous gases like ethylene oxide and ethanol, which are especially harmful when heated and inhaled, according to the analysis.

The results of the study were shared exclusively with Business Insider. Out of 20 popular products tested, only three actually matched what the labels claim.

The tests on the CBD products were conducted blindly for accuracy. The names of the manufacturers weren’t reported.

Shayanne Gal/Business Insider

"The results were a little bit worse than I expected," Aaron Riley, the CEO of CannaSafe, said in an interview with Business Insider. "I expected to see like 20% to 30% pass, but it wasn’t like a total shocker."

Based in Van Nuys, California CannaSafe uses state-of-the-art chromatographs to test cannabis products for things like potency, pesticides, heavy metals, and assorted microbes on behalf of what Riley said is over 700 clients, mostly smaller cannabis brands.

Some of the tested products had "insanely high levels" of solvents, said Riley, which are particularly dangerous when vaporized and inhaled.

Only around 1/8th of the California market is actually compliant with regulations, according to Riley. Within that subset, however, the failure rate is low, with around 5% or 6% of products failing, said Riley.

Things are steadily improving, however. Riley said that since his company started testing cannabis products in 2017, the failure rate has dropped dramatically, down from around 70% percent.

While California’s Bureau of Cannabis Control rolled out regulations around what is and isn’t allowed in cannabis products earlier this year — and has mandated that products be tested in certified labs — CBD still exists in a legal grey area at the federal level.

"So I’d say the regulations have been very effective in terms of mitigating risk and harm for consumers," said Riley. "I think we’re going to see that kind of across the board. And probably in two or three years, it’s going to be even lower than that."

Courtesy of CannaSafe

‘They just see dollar signs’

The problems with these products highlight the challenges of creating supply chains to meet the huge appetite for a product that was illegal just months ago.

Since California introduced testing regulations earlier this year, a report from the industry website Leafly found that Chinese-made vapes often contain lead, which leaches into the cannabis oil and then into the consumer’s bloodstream. These products simply weren’t being rigorously tested before.

And in other states, like Oregon, audits have shown that laboratory testing standards were often inadequate, exposing both medical and recreational cannabis consumers to harmful pesticides, a risk that’s compounded when the product is combusted and inhaled.

To Riley, the quality of the operators, and thus the product, boils down to experience. "There’s all these people that are running towards this industry, they just see dollar signs or whatever," said Riley. "You have a very, very fast growing economy."

The most successful operators, said Riley, come from "correlating industries" like agricultural management, and have experience growing large amounts of crops safely rather than just "growing weed in their garage."

Illicit, or ‘black market’ cannabis products still use lots of pesticides — it’s cheaper and easier than growing cannabis the safe way, and there’s no incentive to test illegal products.

CBD entrepreneurs welcome more regulation and clarity

Some CBD brands have said they would welcome more regulatory clarity from the federal government.

Since Congress passed the Farm Bill last year, which legalized hemp, many in the industry thought hemp-derived CBD would be legal to infuse in products.

That, however, isn’t yet the case. Some state health departments, including New York, forced retailers and restaurants to pull CBD-containing food products off their shelves earlier this year.

The Food and Drug Administration’s outgoing commissioner, Scott Gottlieb, has formed a working group to "explore potential pathways" for dietary supplements and CBD-infused food products to be "conventionally marketed."

The FDA is holding a public hearing on the issue in May. The core challenge is whether CBD is a drug, and should thus be regulated and sold like a pharmaceutical, or whether it can be considered a food additive or supplement — and sold on store shelves.

CBD existing in a federal gray area "isn’t good for the industry or consumers," said Kerrigan Behrens, a former investment banker and cofounder and chief marketing officer of the Los Angeles-based Sagely Naturals, a CBD company.

"We hold ourselves to the same standards as any other OTC [over-the-counter] product," said Behrens. "Lots of brands aren’t doing that."

Peter Horvath, the CEO of Green Growth Brands, a cannabis company that owns a branded line of CBD products distributed in traditional retailers like DSW and the Simon Property Group, said in a previous interview that more stringent regulation on the FDA part would hurt their competitors.

"If the FDA came down hard, our competitors would be sitting on inventory they couldn’t sell. If I’m being malicious, I hope they come down hard," said Horvath.

NOW WATCH: Elon Musk sent a $100K Tesla Roadster to space a year ago. It has now traveled farther than any other car in history.