Calif. Judge “troubled” by how DCC shuttered lab

OG Article created by Alex Halperin Today's LIVE Episode on YouTube,  X and Rumble

June 26. 2025

A judge said she was “troubled” and “concerned” about whether a testing lab received due process before the California Department of Cannabis Control (DCC) shut it down in April.

In a lawsuit filed soon after, BelCosta Labs alleged that its closure resembled other recent shutdowns where the DCC has repeatedly “gamed the system…with the specific intent” of depriving licensees of due process. “The DCC has deployed this strategy before and very likely will again,” BelCosta’s lawyer Robert Finkle of Armada Law Corp. alleged in a court filing.

During a May hearing, Sacramento County Superior Court Judge Jennifer Rockwell said the DCC did not offer BelCosta “what the court would actually deem some semblance of true due process,“ according to a transcript shared with WeedWeek.

“Our country is premised on things not being a star chamber and at least knowing what you’re facing,” Rockwell had said at an earlier hearing. However, she rejected the lab’s argument that she could grant it any relief.

BelCosta says it is losing $40,000 a day. The closure forced the Long Beach-based lab to lay off 72 employees. CEO Myron Ronay said the judge “left it open for us to appeal” and said they are considering their options.

Many questions about product safety remain unanswered after a June 2024 LA Times/WeedWeek investigation found vapes that had cleared their lab tests, despite containing alarming levels of pesticides banned or limited by the DCC. But under scrutiny, the agency has issued more recalls and shut down at least five labs.

• “There was no direct evidence that testing labs were responsible” for the contaminated products,” BelCosta’s lawsuit claimed.

  
  

The DCC ”welcomes the recent legal decision against BelCosta as it reinforces the integrity and legitimacy of the licensed cannabis industry and the products consumers purchase,” agency spokesman David Hafner wrote in an email.

“Patiently waiting”

BelCosta opened in Spring 2018 and for the next seven years it operated under a provisional (temporary) license. Provisional licenses had been intended to get the licensed market moving while operators caught up on environmental and other regulations, and they could qualify for an annual (permanent) license.

Provisional and annual licenses cost the same amount. But provisional license holders are not entitled to legal recourse if regulators shut them down. Years ago, the policy gave DCC’s predecessor agencies an easy way to weed out bad actors.

At first, provisional licenses were expected to convert from provisional to annual licenses after a year. But the process ran into delays even before the pandemic. Finally, after repeated pushbacks, Jan 1, 2025 became the statute-mandated last day to renew a provisional license. Annual licenses become required for all operators on January 1, 2026 (with some exceptions for social equity businesses).

Over the years, BelCosta remained up to date on its provisional licensing, and paid more than $600,000 in license fees “all the while patiently waiting for the state to do its job,” and issue it an annual license, the lawsuit states. For BelCosta and hundreds more California licensees, DCC wouldn’t convert their licenses to annual until this year.

In late October, after BelCosta believed it had submitted all the necessary materials for an annual license, DCC showed up to make a surprise inspection. A month later BelCosta received its first ever fine and citation:

• For an alleged January 2024 (11 months earlier) disparity in testing methodology, it received a $2,000 fine.

• For alleged potency inflation in 10 samples, tested in January and February 2024, it received a $35,000 fine.

  
  

In its lawsuit, BelCosta alleged DCC declined to provide records related to the allegations, and during an informal meeting weeks later, wouldn’t answer BelCosta’s questions or provide feedback.

BelCosta filed a formal complaint. In late December, BelCosta alleges, DCC responded that the causes of the citation were “AFFIRMED” though the agency did not provide any evidence to prove “that they tested BelCosta’s samples correctly, timely or even multiple times to confirm” the results.

“Public health, safety or welfare”

BelCosta needed its annual license by the end of April, when its provisional expired. But despite several update requests, the lab alleged it did not receive a substantive response from the DCC until April 10. That day it learned its provisional license had been suspended, to protect “public health, safety or welfare,” according to a letter from the DCC.

This threat, according to the letter, involved a handful of product samples which had tested positive for the mold aspergillus in July, nine months earlier.

• BelCosta had cleared them several months before the DCC tests, during which time the mold could have plausibly grown on the samples.

BelCosta sued the DCC and soon after learned that its application for an annual license had been denied. BelCosta argues that it was suspended for five of the 18,000 tests it had run in the previous year. All the samples in question had been recalled and/or destroyed.

BelCosta boss Ronay had been aware of the issue. In an August 2024 email, he requested a call with the DCC to discuss aspergillus. A DCC staffer responded that the department would be in touch. Ronay says he didn’t hear about it again.

The six other alleged violations listed on the suspension letter included:

• A Metrc log in issue CEO Ronay says he believed had been resolved to DCC’s satisfaction

• Potency inflation in product samples the DCC also collected the previous July

BelCosta sued DCC and soon after learned that its application for an annual license had been rejected.

In court, the DCC’s lawyer Justin Buller successfully argued that the agency could not provide any relief since BelCosta’s provisional license had expired and, per state law, the agency was no longer issuing new provisional licenses. The case, he argued, was moot.

Despite her apparent doubts about the process, Judge Rockwell rejected BelCosta’s argument that it was her role to stop the legislature or DCC from allegedly taking away the lab’s license without due process.

Buller argued BelCosta could obtain due process by appealing the denial of its annual license. After losing the lawsuit in late May, Ronay notified the DCC that he would seek a formal appeal. The agency told him to expect a response in six weeks.

“On a whim”

Throughout its ordeal, BelCosta claims it has been denied hallmarks of due process, like a chance to see the evidence against it and respond.

It also alleged something broader: That the DCC has weaponized its own slow pace of converting licenses in order to shutter businesses “on a whim.”

• In July, DCC shut down California Cannabis Testing Labs (CCTL) alleging numerous violations, including that it had cleared product containing elevated levels of a banned pesticide. DCC shut down the lab as its five year provisional license expired and hours after it had paid the $112,000 annual licensing fee.

  
  

• Armada Law also represented CCTL and unsuccessfully sued the state, alleging lack of due process. “It appears that DCC is trying to look tough in public by abusing its power,” Armada said in a press release last summer.

  
  

• Pride Analytics and Consulting in Riverside County lost its four-year provisional license in April without a hearing the suit alleges, weeks before its provisional license expired.

Not mentioned in the suit:

• Certified AG labs had its provisional license suspended in November when owner Robert Myers said the DCC was reviewing its validation methods. Myers said the lab had never been cited for clearing contaminated product, only for its testing methodology. He’s now applying for an annual license after losing more than $1M.

Another suit

Separately, labs Anresco and Infinite are suing 13 current and former California labs alleging the defendants “reached an unlawful agreement and understanding with one another that they will out-compete honest labs like plaintiffs” by altering test results, offering prospects higher THC potency and/or overlooking product contamination.

• (The LA Times contracted testing from Anresco for the June 2024 story and Infinite CEO Josh Swider figured prominently in it.)

None of the defendant labs, including BelCosta, CCTL, and Certified Ag responded to requests for comment on the suit. They have collectively moved to dismiss the case.

Of the 13 defendant labs: Four have been shut down; two have received annual licenses and seven have provisional licenses expiring this year.

By Alex Halperin