Confusion still reigns for many Michigan cannabis operators as a result of last November’s recall. Seemingly conflicting explanations for a split decision on which locations the recall impacts, a strong PR campaign from Viridis Labs, the company targeted by the recall, and a recent exposé published by mLive finding that some cannabis products that failed testing were allowed to be sold anyway, has frustrated and befuddled cannabis operators across the state trying to navigate some of the strictest testing rules in the nation.
“I find that smaller operators like me are spending a tremendous amount on compliance testing,” complained Nick Agro, from High Level Health, a cultivator with six dispensaries in Michigan and Colorado. “The question comes down to the accuracy in testing and if there are issues. How is it recalled? When is it recalled? It seems like those processes need to be spelled out with the state of Michigan.”
Two weeks ago a Michigan Court of Claims judge affirmed a December court order to maintain a Marijuana Regulatory Agency (MRA) recall on products tested at Viridis Laboratories LLCs’ Lansing facility, but also affirmed lifting the recall on products tested at a lab owned by Viridis North LLC in Bay City. While both companies have similar ownership, because they are separate companies, and MRA initially found contaminated product in Lansing but not Bay City, the judge found that a recall could not be automatically extended to another, legally separate company in Bay CIty.
[Read the February decision upholding Viridis recall and staying Viridis North recall.]
Since the judge’s decision, Viridis has waged an intense PR campaign, distributing press releases to cannabis lobbyists and attorneys across the state, claiming that the judge ruled that MRA “erred” and the “entire recall was out of line”, statements that are not entirely true.
“They are kind of talking out both sides of their mouth, because Viridis is saying these are two different companies and Viridis North had nothing to do with different testing. Okay. But it was their own fault for naming it with the same name – and [with] similar owners,” said Matt Abel, an attorney from Cannabis Counsel who called MRA’s decision to recall Viridis North’s product “a knee jerk” reaction that didn’t pan out well for the agency.
Adding confusion to the November MRA recall was that much of the product recalled was tested, and often sold, as early as last August.
“I’m pretty sure I have some stuff that was tested by Viridis,” said Abel. “But that stuff was sold in August. I smoked that a long time ago.”
And the final layer of befuddlement for operators: mLive’s report last week that some products that were first tested at Viridis North, then failed retesting by MRA, were forced to be released back to market for sale because the judge determined that the Viridis North recall was improper.
“There’s product on the market right now that’s knowingly contaminated,” criticized Agro. “How is it fair for me as a manufacturer that I should pay hundreds of thousands of dollars a year knowing that the accuracy is suspect at times and when we know there is dirty material that’s still on the shelves?”
For smaller operators like Dave Murray, owner of Redbud Roots, a cultivator and dispensary, the unclear contamination status of product from last November’s recall has made them question whether MRA has the ability to actually enforce the expensive testing their company is required to pay for.
“The way I read it, the MRA does not have the capacity, or the governor or the attorney general’s blessing to spend any of the state resources to go after people. They have all these laws and rules to follow, but there’s no police to follow this thing. So the nice guys, like us, lose,” said Murray.
But it’s still the responsibility of dispensary operators to ensure quality product goes on their shelves, says Cassin Coleman, director of quality for the Carbidex companies, a cultivator and operator of The Botanical Company dispensaries.
“It’s not that people who own these materials don’t know. The information is readily available in [seed-to-sale tracker] Metric. You can see that they are failing test results even if it says ‘pass,’” said Coleman. “It isn’t that you can’t trust test results, they speak for themselves. The bigger question is: Are people doing the right thing, even when the court says they don’t have to?”
For their part, Viridis Labs leadership argues that the state’s recall process was flawed from the very beginning, because in order to confirm their suspicions of contamination at Viridis, state regulators sent product for retesting to competitor labs.
“The state needs to have a trusted laboratory within their own ranks or contracted out that acts as the judge and jury for other laboratories so they can get unbiased test results. That was one of the issues for us, they took our test results and went to our competitors and got those results,” Viridis CEO Greg Michaud told Grown In. “The market share is what it is. You garner a large share of it, and other laboratories are forced to consider their business plans and do things unethically.”
Cultivators interviewed by Grown In agree that test results are likely to change from lab to lab. Some labs even tout likely test results when looking for new cultivator and processor customers, said multiple operators who wished to remain anonymous.
For flower, high THC test results are especially desired, since retail customers often think of high THC content as a signifier of quality.
“When it comes to cannabis in Michigan, people are shopping for just potency as an indicator of quality. And THC potency is a poor indicator of quality. But my top selling strains are my top testing strains. And that is the reality of being a grower and dispensary owner in Michigan,” said Agro.
Without actually falsifying results, some testers know how to game the system, says Agro, something regulatory oversight has not been able to stop.
“They come in, sometimes they’re picking top cols, or little bitty buds, but there’s a big difference between potency in those flowers. I’ve had stuff that has tested 30 to 40% lower depending upon what testing batch you came out of,” said Agro.
For its part, Michigan’s regulators are not talking much about future plans. Asked for comment multiple times over a week, an MRA spokesperson finally replied, “Once the matter has been fully resolved, the MRA intends to conduct a review, as we do with all agency actions and processes, in order to focus on opportunities for improvement.”
