Oregon regulators are proposing to revoke the cannabis-industry work permits of five lab employees, the latest fallout from an investigation that already threatens to shut down three labs.

The employees are accused of doctoring samples with a concentrate, among various violations that could lead to inaccurate test results, according to charge letters sent out in late October and obtained by the Business Journal through a public records request.

The probe by the Oregon Liquor and Cannabis Commission comes after years of talk in the industry that reported levels of THC, an intoxicating compound in cannabis, are often inflated to boost prices.

The workers who face permit revocation are from three labs the OLCC proposed shutting down in charge letters sent out in late September — Pree Laboratories in Corvallis, 3B Analytical in Portland and Reference Labs in Tigard.

Scope of the Oregon cannabis testing probe

Several other labs that are accused of violations but not adding the concentrate kief to samples face less severe penalties.

The round of worker charge letters includes a dozen to permit holders who face suspensions, fines or warnings, but not permit loss. As with the labs themselves, these workers aren't accused of adding kief to samples.

The workers are field employees dispatched to growers to gather samples for testing back at labs. Reports from OLCC investigators obtained by the Business Journal suggest those who face losing their work permits allegedly committed the violations with the knowledge or at the behest of producer employees.

The OLCC has declined to comment on any aspect of the investigation, including whether growers involved could also be targeted with regulatory action.

Before the letters to workers were revealed, however, Portland cannabis lawyer Vince Sliwoski, who had represented one of the labs involved, said he was told by an OLCC investigator that the agency planned to start its crackdown with the labs, move onto employees, and then target wholesalers and growers.

Field techs are the only individuals so far charged in the probe. No internal lab employees, supervisors or executives were named in the OLCC charging documents. The cancelation notices to the labs all state that "the licensee was not personally involved in or aware of these violations occurring."

'Shocked to see just how bad it was'

The basis for that conclusion isn't entirely clear. One investigator's report, however, describes an interview with Pree owner Manny Cruz and a supervisor at the lab, and says that after being shown surveillance video that allegedly indicated violations by their field workers, they "stated that they were shocked to see just how bad it was."

"Cruz stated near the end of our meeting that he needs to be stricter with staff and make sure they slow down and do a better job no matter what the client says," the investigator said.

Pree and the other two labs that face cancellation have requested hearings with the OLCC over the charges. Cruz earlier told the Business Journal that he hoped compliance reforms the lab recently instituted can allow his business to retain its license under a negotiated settlement.

Testing is a vital feature of the regulated market, most importantly to ensure products don't contain pesticides or other dangerous contaminants. Eleven labs in the state are accredited to do required potency testing, so a move to shutter more than a quarter of them raises the possibility of a testing bottleneck for an Oregon industry that's already struggling with slack demand, depressed prices and numerous challenges that flow from federal prohibition.

The coming months could be a busy time for producers and labs, as well, with a record crop coming in.

Like the labs, the workers have one month from when their letters were sent out to accept their penalties or request a hearing, a deadline of Dec. 2 in most of the workers' cases.