The state Liquor and Cannabis Board set allowable levels for unapproved pesticides on pot and approved new procedures for recalling products considered risky to consumers.

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Washington’s legal pot system took a belated but significant step toward maturity and consumer protection Wednesday.

Almost two years after the first legal retail sales, the state Liquor and Cannabis Board (LCB) set allowable levels for unapproved pesticides on pot and procedures for recalling products considered risky to consumers.

“Customers need to have faith that cannabis products are not tainted by nonapproved pesticides, mold or other inappropriate substances. Clear product-recall regulations benefit both industry members and the public at large,” said Emily Harris Gant, a Seattle lawyer who represents pot businesses.

The LCB also voted to allow out-of-state financiers in the industry, a proposal met with mixed reactions by licensed businesses.

The actions come after several growers were penalized for using pesticides not on the state’s lengthy list of approved chemicals, and one pot-testing lab lost its state certification for “blatant disregard of good laboratory practices.” They’re part of an effort to tighten quality assurance, one of the key selling points of legal marijuana.

The pesticide challenge for regulators is that research that’s abundant for pesticides on foods is lacking when it comes to heating and inhaling such chemicals. It’s a gap caused by the federal prohibition of marijuana, which keeps the Environmental Protection Agency (EPA) from setting allowable levels, or “tolerances,” for pesticides in pot the way it does for crops such as apples and hops.

The state has a list of approved pesticides believed to pose the lowest risks. But its zero-tolerance policy did not allow for any levels of unapproved pesticides.

“It’s not workable,” said Joanna Eide, LCB policy and rules coordinator. Labs can’t test to zero, Eide said, and low levels of pesticides can drift on to pot plants from neighboring food-crop farms. And those trace residues may not be hazardous.

The LCB set thresholds for unapproved pesticides that mirror levels adopted by Oregon.

Anything below the levels is considered safe. Myclobutanil, for instance, is a common pesticide in food crops. But when heated to a certain point, it releases cyanide gas.

The Oregon Health Authority recommended a tolerance of .2 parts per million of myclobutanil residue per sample. The LCB adopted the same standard.

Anything above that level would fail quality-assurance testing and could trigger a recall.

Washington does not require pesticide testing, though. It relies on spot inspections and complaints.

“I believe it behooves the LCB to get some sort of testing implemented” in the recreational and medical markets, said Jason Zitzer, chief operating officer at Trace Analytics, a Spokane lab certified by the state to test pesticides.

“I know I have bias and it sounds self-serving given our testing capabilities in the market, but a very high percentage of samples we are testing are lighting up with residues way above the Oregon proposed action levels,” Zitzer said.

The LCB approved the pesticide levels as an emergency rule, effective Wednesday.

On recalls, the board adopted rules that mirror the process used by the state Department of Agriculture.

They allow businesses to initiate recalls that are not related to safety but are done for aesthetic reasons or similar deficiencies in packaging. In such cases, the merchants must notify the LCB and withdraw products.

They also allow for the LCB to issue a recall when there’s risk to health and safety. In those cases, a business must isolate and prevent distribution of product. All licensees are also required to create a recall plan in 60 days. They may have to destroy products under the LCB’s supervision.

Recall rules will incorporate the allowable pesticide levels set by the board.

The LCB has also created an advisory group to improve lab practices.

Analyses by Woodinville data scientist Jim MacRae found that some state labs appear more friendly to growers in their potency and purity tests than others. A recent follow-up report by MacRae found that labs friendliest to the industry dominate in market share.

MacRae said the lab oversight group “is a big thing worthy of applause, if not a standing ovation.”

For financiers, state regulators had allowed only those who’ve resided in Washington for six months to be in the legal pot industry. But that residency requirement was dropped Wednesday. Financiers would still have to undergo criminal-background checks, could only loan money to business owners and couldn’t own stakes or control in Washington companies.

Several smaller growers testified Wednesday that the out-of-state financing gave large growers an advantage.

With the state’s cap on total farm area, they said the only way for growers to expand is by buying or partnering with failing farms. Large growers would have an advantage attracting investors in those cases, they said.

Others had argued that out-of-state financing could help small farms that now can’t get loans from family members outside Washington.

“Many cannabis businesses struggle with access to capital, particularly since traditional banks won’t lend money,” said Gant, the lawyer. “Allowing out-of-state financiers to gift or lend money is a positive change for both large and small cannabis businesses.”