Michigan Regulator Suspends Cannabis Processor’s License

The Michigan Cannabis Regulatory Agency this week suspended the license of one of the state’s licensed marijuana processors, alleging that the company used illicit cannabis extract to manufacture some of its products. In an announcement from the Michigan Cannabis Regulatory Agency (CRA) released on Tuesday, the regulator announced that it has issued formal complaints against TAS Asset Holdings, LLC in Lansing and placed a summary suspension on the firm’s license to process medical marijuana and adult-use cannabis.

The CRA said that the processor’s marijuana flower coated with cannabis concentrates known as space rocks was manufactured with illicit isolate that had not been tested for purity and safety and had not been entered in Metrc, the seed-to-sale cannabis tracking system used to monitor the movement of licensed cannabis throughout the state. The agency also issued a marijuana consumer advisory bulletin warning the company’s customers that the products, which were marketed under the Fwaygo Extracts brand name and manufactured between November 10, 2022, and November 17, 2022, were not produced in compliance with state statutes and administrative regulations and may be unsafe. CRA advised consumers who have experienced adverse reactions after using the products to report their symptoms and product use to their healthcare providers.

“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 statement from the agency. “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 noted that in September, two packages of vape cartridges handled by TAS had tested positive for the presence of bifenthrin, a chemical insecticide that is banned from use in Michigan’s regulated cannabis market. Before they were transferred to and processed by TAS Asset Holdings, both packages of cartridges had passed full safety compliance testing with no bifenthrin detected.

The agency then began an investigation to determine the cause of the safety compliance failure. A review of surveillance footage recorded at the TAS facility showed that the cannabis product used to make the vape cartridges was not the same product recorded in Metrc that had passed compliance testing. The product used to make the vape cartridges had not been properly processed as part of the regulated market or entered into Metrc.  

“During the investigation, CRA staff noted that the business had many areas that were dirty and cluttered and had leaking containers of various process stages of marijuana and waste,” the regulator maintains. “The CRA investigators observed an unapproved, unlicensed warehouse being utilized as a part of the licensed business. The CRA investigators also observed various untagged marijuana products including flower, distillate, concentrates, and THCa powder in the unapproved warehouse.”

Regulators discovered several mason jars filled with oil and three barrels and two black totes that were filled with an unknown substance in the unapproved warehouse. The unlicensed area did not have surveillance cameras, and none of the marijuana products in the room had Metrc tags as required by state regulations, the CRA alleged in its announcement.

“A TAS representative admitted that the business’s signature product, “Space Rocks,” is produced using the untagged THCa powder,” the CRA wrote. “The investigation also showed that TAS was storing and interchanging illicit marijuana products with regulated product found at the business. A safe on the premises contained three jars of distillate and five jars of marijuana concentrate that did not have Metrc tags affixed.”

Video surveillance also showed that TAS employees had brought unlicensed cannabis product into the manufacturing from a personal vehicle. The product did not have a Metrc tag and could not be traced back to a licensed business.

The formal complaint from the CRA alleges 23 regulatory violations against each of TAS Asset Holdings’ cannabis processor licenses. The company is permitted to request a hearing to contest the allegations in the complaint. State law also provides for a hearing to determine whether the summary suspensions ordered by the regulator should remain in effect.

The CRA’s action against TAS is the second time this month the regulator has suspended a cannabis processor’s license. On February 3, the CRA suspended the licenses held by Candid Labs, a processor in Corunna, Michigan operating under the name Layercake Farms. During an investigation, the CRA discovered jars of cannabis distillate that did not have required Metrc tags.

“Based on its investigation of the conduct alleged in the formal complaints, the CRA determined that the safety or health of patrons or employees is jeopardized by Candid Labs’ continued operation and that the public health, safety, or welfare requires emergency action,” the CRA said in a statement at the time.