New Crackdown on Illegal Cannabis in Michigan's Regulated Market

CRA suspended Green Culture's licenses for selling untested products.

This story was reprinted with permission from Crain’s Detroit Business news and written by Dustin Walsh

Michigan’s Cannabis Regulatory Agency has begun its crackdown on illicitly grown marijuana entering the regulated market.

The agency announced Tuesday it has suspended the medical and recreational marijuana licenses for dispensary Green Culture in Flint for selling unregulated marijuana joints.

The agency said in a news release that Green Culture 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 Metrc.

“This conduct is a risk to public health and safety and is completely unacceptable,” Brian Hanna, the CRA’s acting executive director, said in a statement. “Today we issued a suspension of their licenses, and it is my intention to pursue revocation of these licenses. Other marijuana licensees should take note — we will not stop investigating until we clear the regulated market of this type of activity.”

The suspension is the first in what Hanna has promised as a major crackdown on the industry for what is increasingly being viewed as having “bad actors” operating within the regulated market.

The state alleges the untested marijuana could contain unacceptable levels of pesticides, heavy metals, mold and bacteria.

The agency was made aware of the illegal marijuana on Aug. 27 from a complaint filed alleging the sale of the product. A month later, investigators from the agency were told by Green Culture staff that the product was derived from cannabidiol (CBD), which doesn’t require entry into the state’s tracking system, despite being labeled as marijuana. After an audit, Green Culture staff admitted the product was in fact marijuana and not CBD.

The audit revealed the dispensary sold 17,947 untested products and of the 51 samples collected by the agency, more than three-quarters contained banned pesticides, nickel, mold, and bacteria that exceeded the state-set limits.

The CRA said it intends to impose fines upon Green Culture as well as permanently suspend its license in a formal process.

Hanna, who was appointed by Gov. Gretchen Whitmer as the successor to to the agency’s founding Director Andrew Brisbo in September, told reporters last month that the agency was working to rid the legal market of oversupply due to illegally grown products entering the market and driving down prices.

Legal marijuana prices have plummeted in the state in the past 18 months, down to $102.65 per ounce of flower in October from $245.99 per ounce in April 2021.

Pressure on the Cannabis Regulatory Agency has been mounting in recent months. After Brisbo’s resignation, the appointment of Hanna, a former Michigan State Police crime analyst, was received as a positive by industry players concerned about illegal cannabis affecting prices.

The number of active marijuana plants being grown in the licensed market increased 120 percent between August 2021 and August 2022, just above sales growth of 103 percent. Yet, licensed market inventory, by pounds, grew more than 400 percent during the same 12 months, suggesting that at least some illicit weed is making its way into the system.

Hanna said last month that more inspections were coming and to expect a ramped up enforcement effort, leading to more license suspensions.

Agrify

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