Michigan Suspends Licenses of Cannabis Processor over Illicit Product, Pesticides

TAS Asset Holdings' licenses were suspended for sourcing product from an alleged unregulated, illegal warehouse.

This story was republished with permission from Crain’s Detroit and written by Dustin Walsh

The medical and adult-use recreational licenses held by Lansing-based marijuana processor TAS Asset Holdings LLC have been suspended by state regulators for sourcing product from an alleged unregulated, illegal warehouse, according to the state.

The Cannabis Regulatory Agency alleges TAS, which processes product under a licensing agreement with Ferndale-based Fwaygo Extracts, stored and interchanged legally regulated marijuana flower, distillate, concentrates and THCa powder with the illegally produced product.

The CRA first became aware of the issue in September last year when two vape cartridges, marketed under the product name Space Rocks, produced by TAS failed a spot a safety compliance check despite the product passing the preliminary safety check before the raw marijuana product was shipped to TAS from the grower. Both products tested positive for Bifenthrin, a synthetic insecticide banned for use on marijuana products in Michigan.

After investigation, the CRA discovered the product used to make the Space Rocks product was not the product processed and entered into the state tracking system earmarked for the vape cartridges.

Investigators noted the “business had many areas that were dirty and cluttered and had leaking containers of various process stages of marijuana and waste” among unregulated marijuana product, according to the state. Investigators also observed “three barrels of an unknown substance that were wrapped in plastic, two black totes of an unknown substance, and several mason jars of oil.”

A representative from TAS admitted to using unregulated THCa powder, a nonpsychoactive cannabinoid, in the Space Rocks product.

“The conduct alleged in the formal complaints is a significant risk to the public health and safety of marijuana consumers in Michigan,” CRA Executive Director Brian Hanna, said in a press release. “While we work through the process to seek revocation of these licenses, it is vital that all licensees throughout the state realize that the CRA will continue to do what it takes to protect the public from bad actors in the regulated market.”

The CRA urges consumers to discard the Space Rocks product produced between Nov. 10-17 last year. Consumers are also encouraged to report any adverse reactions to the product to the CRA.

The investigation ended with 23 formal complaints against TAS’ medical and adult-use licenses issued by the state. A hearing will follow to determine whether the suspensions of the licenses will be permanent.

The license suspensions are one of several under Hanna, who promised to “crack down” on illegal marijuana entering the regulated market when he took over the job last fall.

In November, the CRA suspended the medical and recreational marijuana licenses for dispensary Green Culture in Flint for selling unregulated marijuana joints.

The agency alleged the dispensary was selling pre-roll joints of the strain ACF Moonrock Acai Haze that were not tested by a regulated lab or entered into the state’s marijuana tracking system. The state alleged the untested marijuana could contain unacceptable levels of pesticides, heavy metals, mold and bacteria.

The new crackdown on illicit market product comes amid plunging marijuana prices in the state.

The average retail price of an ounce of adult-use marijuana flower was $80.16 in January, compared to $323.68 per ounce in January 2021.

The more than 75 percent drop in prices is cutting hard into margins for growers, processors and retailers.

The industry blames, among other things, illegal marijuana getting into the regulated market, exacerbating an oversupply problem that’s pushing down prices. Pressure from the industry led to the hiring of Hanna, a former Michigan State Police crime analyst, with the task of enforcing the regulations on the market.

The owners for TAS Asset Holdings are listed on CRA documents as Noble Road LLC, its operating partner and former registered nurse Travis Wilson, Southern Investment Capital LLC; and several other names Crain’s could not immediately verify.

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