Last November cannabis operators across Michigan were jolted by a surprise product recall from the state’s Marijuana Regulatory Agency (MRA) impacting product valuing hundreds of millions of dollars. The recall, which centered on product tested by Viridis Laboratories’ Lansing facility, spurred Viridis to file a still on-going suit against MRA to rescind the recall, and for operators to broadly reconsider their operating procedures when it comes to testing.
“It was a bad day for everyone involved because we didn’t know what we knew,” said Dave Seman, CEO of Midori Products in Benzonia, a cultivator, processor and dispensary operator. “The day shifted so much.”
Now that some of the dust has settled from the recall, Grown In asked operators to reflect on their experience and lessons learned.
“It was very easily seven figures of product [for us]. All of our wholesale flower was tested by Viridis,” said Micah Siegal, Chief Administrative Officer of Pure Options in Lansing, a cultivator and processor with six dispensaries. “You look at that, and that’s as much as nine figures of product that was ripped out of the market at once. We still have some flower pending testing at our main cultivation facility.”
“We were hit very hard with it, we ended up having over 300 packages on hold,” said Chase Marx, COO of Hype Cannabis, a processor in Jackson that processes 700 to 1,000 pounds of flower a day. “We’d take biomass from a grower that had been tested with Viridis, and then sent to us to extract. We’d turn it into end product, do our own testing with a different company, and when Viridis’ recall came down, our product was still put on hold.”
Marx says every processor he knows of had product put on hold, even if the original biomass was tested by Viridis, even if the end product was tested by a different laboratory.
“I’m not sure what they found at Viridis that made them think it was necessary,” he said.
Operators complain that the only way they found out about the recall was through the MRA bulletin distributed through the agency’s public email list.
“The whole basis for the recall was consumer health and safety. I take them at their word,” said Siegal. If it was, “something MRA knew about in August, and didn’t announce until November, it seems to me that if consumer health and safety was the primary driver behind that recall, it seems to me that a heads up should have been put into the market earlier.”
Siegal has special reason to be frustrated with MRA notification, since his Lansing office shares a parking lot with the agency.
“It seems to me you get more buy-in from the public if you’re transparent about what you’re doing. To the extent that MRA was investigating this lab, it would have been nice to know that. There are a lot of people that would have diversified their testing providers.”
“For us, we didn’t get any communication,” said Marx. “It was all through bulletins and then we had to reach out to the MRA. We had to have our lawyers and our lobbyist reach out. It wasn’t like they were proactively trying to fix it themselves.”
Seman was more charitable in his assessment.
“We have to remember that these are professionals doing it for the first time. While they’re learning how to do a recall, they’re at a bandwidth issue, with off site workers who don’t have an office to go to,” he said. “I was content with how they handled it.”
But every operator we spoke to says they’ve changed how they manage their testing.
“Diversify your testing. Make sure you have multiple options out there so that if one lab gets a recall, you’re not pushed back on your heels,” said Pure Option’s Siegal.
“Don’t put all your eggs in one basket. We test with multiple labs now,” said Hype’s Marx. “We were totally blindsided. we had no way to prepare as a processor. We had passed testing and it was still put on hold.”
“Always have a back up plan. Double check your due diligence on your current testing lab, and have another one because this could happen to anyone,” said Seman from Midori Products.
While the recall impacted the bottom line of Michigan’s cannabis industry, operators don’t think the MRA’s efforts to ensure product health and safety impacted consumer opinion.
“We’ve noticed no change in the customer reaction following the recall,” said Seman.
“If you have a recall on flower in November and a lot of [that product] hit the shelves in August, a lot of the stuff impacted by the recall literally went up in smoke a long time before. We had maybe one or two eighths get returned by customers in our shops. It was certainly less than 5,” said Siegal, whose company has six dispensaries across the state.
“It doesn’t really feel like we’ve seen any consumer education or outreach on this. All through our social media and patient outreach, most of what we’ve heard [is] it’s been more outrage at the MRA and the testing facility that they allowed this to happen for so long,” said Marx. “Why did they wait so long to act if this had such a big health implication?”
The MRA did not respond to multiple requests for comment.