How CSQ helps operators identify — and avoid — the cannabis industry’s bad actors
Fraud has become a fact of life in the cannabis industry. While many people equate fraud with financial impropriety, more common is the wide range of frauds related to the products themselves. It could be a cannabis product claiming to be “organic.” It could be flower labeled at 39% THC. It could be a company that fudges pesticide information, microbial data, solvents used in extraction or anything in between.
Marijuana Venture recently spoke with two experts in quality assurance about ways operators can insulate themselves from fraud: Tyler Williams is the CEO of ASI Food Safety, which created the CSQ standards and certification program specifically for the cannabis industry; Darwin Millard is a mechanical engineer by training and the technical director for CSQ, which is in the process of launching CSQ 2.0, the program’s first major renovation in more than five years.
Marijuana Venture: It seems a wide variety of fraud is prevalent in the industry today. How can CSQ help weed out some of the bad actors?
Darwin Millard: There’s certainly a lot of fraud in the industry on both sides of the cannabis coin, marijuana and hemp. And by canna-fraud, what I mean is purposely misrepresenting a cannabinoid product for financial gain. That could include selling distillate and terpenes as live resin or live rosin, inverting delta-9 THC made from hemp-derived CBD, deflating your contaminant levels, or inflating or even deflating your delta-9 THC levels.
CSQ can help weed out some of the bad actors committing this fraud by helping the market identify traits of good actors and providing a mechanism for establishing trust.
I recently responded to a LinkedIn post talking about how good actors in the hemp-cannabinoid products market will be hurt if the THC loophole is closed. I asked them: “How do we know who is doing it right? Who are the good actors?”
People responded with the following: Brands that operate with integrity and transparency; show behind the scenes of their operation; are open about any agricultural or processing inputs used; disclose who their suppliers are; answer questions directly.
Those are basic business practices for any company that wants to stay in business long term. But they also happen to be elements of good manufacturing practices. A CSQ certification is validation that a business incorporates all of these traits and more. Does it stop bad actors from doing bad things? No, of course not. That’s human nature. But it does provide a system of accountability when our regulatory systems seem to be failing us right now.
MV: Are there concerns operators should be aware of in terms of mislabeling products — such as “vegan,” “gluten-free,” or “sugar-free”? Is this something CSQ can help with?
Tyler Williams: Yes, operators need to be very careful when making label claims like “vegan,” “gluten-free” or “organic.” Some of these claims require formal certification, while others require validated testing or process verification. It depends on the claim.
While CSQ doesn’t currently certify specific product label claims, our audits do evaluate whether those claims are substantiated and whether appropriate segregation controls are in place. For example, if you claim your CBD product is organic and you hold organic certification, we’ll verify that your organic and non-organic products are properly segregated to prevent cross-contamination. Overall, I always recommend consulting food labeling experts or attorneys before making any product claims.
MV: How can CSQ help operators assess laboratories and cannabinoid content claims, particularly in states where lab shopping is prevalent?
Millard: CSQ can actually help operators assess laboratories in two ways.
One, through helping them establish firm vendor qualifications that they can include in contractual agreements with laboratories to make sure that those laboratories are operating in compliance and that they meet whatever internal stipulations that that operator wants to put on those labs.
And secondly, through our new laboratory assessment program that’s being developed, which is designed to identify instances of lab fraud and testing manipulation and make those instances known to the public. We hope, through public opinion and shaming, that we can dissuade laboratories from committing fraud. And CSQ is actively looking to partner with states who are most impacted by lab shopping to pilot such a program in 2026 or 2027.
MV: With edibles in particular, how does the cannabis space mirror the traditional food industry, in terms of the importance of proper quality assurance?
Williams: What makes cannabis unique is that finished product testing is mandatory. This is great, but it creates an illusion that all products are safe because they are tested. In the traditional food and beverage industry, this is not the norm. They focus entirely on preventing contamination instead of hoping that nothing was contaminated during the entire production cycle of that product and relying on finished product testing to catch it afterward. In this regard, I think both industries could truly learn from each other. The cannabis industry needs to focus so much more on prevention, leaning on GMPs, while the food industry could benefit from occasionally validating safety through finished product testing.
Another major difference between the two industries is traceability. In cannabis, some states’ tracking systems can trace a product all the way to the specific customer who purchased it. In a recall, that means you can directly contact those consumers to warn them. In food, that’s nearly impossible because the manufacturer’s customers are typically retailers, not end consumers. So, when recalls occur, food manufacturers rely on public announcements or retailer outreach, which are less direct and often less effective, causing more people to get sick in the meantime.
MV: You mentioned there are good actors in the industry. How can you tell them apart from the bad actors?
Millard: I would say good actors get GMP certified by accredited third parties even when the current regulatory landscape doesn’t require it.
These operators prove their commitment to maintaining product safety and quality and continuously improving their business operations by going above and beyond regulatory requirements. It doesn’t have to be certified by CSQ. It could be any GMP program. As long as it comes from an accredited third party, that’s when you know that operator has really taken it upon themselves to go above and beyond.
MV: While we’re on that subject, for people who aren’t familiar with cGMP, can you give us a rundown of what that means and why cannabis companies should be thinking about certification?
Millard: Current Good Manufacturing Practices are simply a set of tools that producers of cannabinoid products can use to ensure their products are fit for purpose. These are just common business practices that most businesses in the U.S. and elsewhere follow because they improve their operations and mitigate risks. CGMPs are really the bare minimum standards for ensuring product quality and protecting consumer environmental health and safety.
Licensed operators should be thinking about them now because designing your facility and processes to meet cGMP requirements now is the most effective way to avoid expensive overhauls or a worst-case scenario of being forced to shut down in the future.
It’s a lot cheaper to install a floor drain during the planning stages of the build than it is while operations are ongoing.
MV: With a lot of talk about federal rescheduling or the potential for federal legalization to happen someday, do you think that cGMP standards will become a basic requirement for cannabis companies to operate in the future?
Millard: Yes, absolutely, 100%. We’re already seeing this. States like Florida and New York currently require licensed operators to be GMP certified. And it’s not just in marijuana markets. In fact, because hemp is federally legal, it’s already a reality for hemp cannabinoid products.
MV: Can you talk a little bit about CSQ 2.0 and some of the aspects that are being introduced in this revamp? What are some of the things you’re excited about?
Millard: CSQ 2.0 is a whole new beast. It now provides three levels of certification which allow licensed operators to conform with progressively more stringent safety and quality standards over time and better fit their business needs and regulatory requirements. We’re also launching two new standards, which we’re really excited about, CSQ Retail and Deli Style Retail, and CSQ Warehousing and Distribution.
These new standards round out our certification program. So CSQ now covers the global cannabinoid product supply chain from seed to sale and gives licensed retailers and distributors the ability to better protect product safety and quality and mitigate risk while in possession of cannabinoid products.
MV: What does this entail specifically for retailers using the deli-style approach to cannabis sales?
Millard: Deli-style retail operators are a type of retail license where, at the point of sale, exposed flower is getting packaged in front of the consumer. And in fact, in a lot of cases, the consumer can not only look at the product that they want to potentially buy, they can even smell it. They can put their face up to the bulk jar that maybe every customer ahead of them also put their face up to. So CSQ Deli Style Retail really helps elevate the safety and quality of those deli-style retail operations that are packing or weighing flower out right at the point of sale, allowing flower to be smelled or sniff tested. It helps bring good manufacturing practices to those retail operators to help ensure the safety and quality of their handling, storage and retail operations. It’s a risk mitigation factor for when those retailers are in possession of those products to help ensure that the products that they carry meet Good Manufacturing Practices and are safe for them to sell.
MV: Aside from launching CSQ 2.0, what’s on the horizon for CSQ?
Williams: We have several exciting initiatives in development, based on industry feedback and emerging needs. One that we believe resonates most is a solution to address lab shopping, a growing issue impacting credibility across the market.
We’re also exploring certifications for cannabinoid content claims, certifying products as “solventless,” certifying the safety and quality of LPG/LNG gases used in extraction and certifying organic cultivation operations.
Ultimately, our roadmap depends on what the industry values most. If operators and consumers care about these certifications, we’ll build them. For now, our main focus is the launch of CSQ 2.0, but there’s a lot more in the pipeline, and I’m genuinely excited about where we’re headed.
MV: Why is it so important for companies to be proactive with certifications or third-party audits, before they have a problem rather than after?
Williams: The simple answer is that being proactive helps prevent problems before they happen, or at least catch potential issues before they reach consumers. A lot of cannabis operations rely solely on finished product testing, which gives a false sense of security that their product is safe, when in reality, it only means that specific sample was safe from the specific hazards they tested for. Finished product testing should be your last line of defense, not your first.
This is why CSQ looks at best practices such as GMPs and Good Agricultural Practices, as this should be every organization’s first line of defense. Once those systems are in place, third-party audits provide an independent “health check” of how well those systems are working. A qualified auditor can evaluate your facility, policies and employee practices to identify gaps before they turn into problems.
This is similar to what we see in every heavily regulated industry, not just cannabis. Think about it: would you eat a burger from a restaurant that wasn’t inspected by the health department? Probably not.
MV: Can third-party audits help prevent a recall or another crisis that can impact a brand’s bottom line and reputation?
Williams: Absolutely. The ultimate goal is to prevent recalls and protect consumers, but the benefits go well beyond that. Third-party audits help protect your brand and reputation, reduce operational costs, and increase consistency. They also reduce product waste from failed test results by identifying root causes before the products are sent to the lab.
Audits can also strengthen employee training and accountability, improve supplier management and enhance traceability, which all play a role in a brand’s long-term success and reputation.
MV: Many operators see certifications and audits as just another expense in an industry already operating on thin margins. What’s your response to that?
Williams: At the end of the day, anyone producing consumable products needs to ask themselves: What’s the value of a human life? When you make something people consume, whether it’s food, supplements or cannabis, you are risking someone’s life every time you try to cut a corner or a cost that relates to product safety.
Beyond the moral obligation, there’s a very real ROI to implementing robust quality systems. Audits like CSQ’s help reduce downtime from equipment failures, minimize failed test results that lead to wasted products, and create a high quality and consistent product that’s easier to sell. All things considered, the cost of an annual audit is a drop in the bucket compared to the improvements you will see in your processes.
This interview has been edited for length and clarity.