A marijuana safety lab is suing the Michigan Marijuana Regulatory Agency (MRA) over a recall that impacted nearly $230 million worth and 64,000 pounds of marijuana products in the state, mostly flower.
Michigan Court of Claims Judge Christopher M. Murray on Monday seemed to scold MRA for its lack of clear communication related to the matter.The marijuana recall, issued on Nov. 17, was so vast that more than 400 retail shops, and their customers, were impacted in some way.
Viridis Laboratories, which operates two separately licensed labs under similar ownership -- one in Bay City and another in Lansing -- claims the recall is politically motivated. Because Viridis is so successful, handling up to 70% of all marijuana testing in the state, the MRA wants to “level the playing field,” according to the Viridis lawsuit filed in the Michigan Court of Claims on Nov. 22. The lawsuit also alleged the recall may be retribution for a formal administrative complaint Viridis filed Oct. 25 against the MRA, in part, for questions Viridis faced over its testing methods that regularly produce THC potency results in excess of 30%. Marijuana with higher potency generally fetches higher prices from retail customers.
The Viridis complaint was filed a day before MRA inspectors were expected to begin on-site audits at the Viridis lab locations.
Viridis founders include three former Michigan State Police Forensic Division employees: Greg Michaud, Todd Welch and Michele Glinn.
The MRA issued a recall on most marijuana products Viridis labs tested between Aug. 10 and Nov. 16, calling the labs results “inaccurate” or “unreliable,” but provided no reasoning for the determination. It said the products must undergo new microbial testing, which looks for pathogens, yeast and mold. Not included in the recall were product made from THC extracts, which are not required to undergo microbial testing.
Glinn, who is also Viridis’ chief science officer, testified Wednesday and said there was mass confusion after the recall. Her office was initially told they were cleared to retest recalled product, but the MRA was telling customers the opposite. Glinn said her staff later worked through Thanksgiving weekend to comply with a checklist of demands from the MRA to improve the lab testing methods and get full clearance to continue operations.
Exhibits filed in the Court of Claims by Viridis, including emails exchanges with the MRA and results of on-site audits, identified significant procedural flaws in past testing methods. Viridis failed to keep logs necessary to validate test procedures, passed moldy samples that auditors identified as contaminated, failed to calibrate equipment as regularly as required and possessed untagged samples.
In order to test for the presence or growth of certain yeast, molds or pathogens, samples are placed in incubators for various lengths of time, usually between 24 and 72 hours, within designated temperature ranges.
The MRA audit found that Viridis labs weren’t using logs to track when samples were placed into and removed from incubators. It also found incubators weren’t keeping samples at the proper temperatures.
The lab personnel confirmed there were no logs, which Viridis argues are not required. Without logs, it’s impossible to tell when a sample was placed in the incubator, and a sample is more likely to pass testing if it is not stored for the full incubation period.
The recall occurred three weeks after the audits were conducted.
The MRA provided three options to retailers, growers and processors with recalled marijuana, none of them cheap: Destroy the product, have the product retested or send the product back to the license source so they may destroy or retest the marijuana. In the meantime, all of the recalled marijuana was placed on hold and unable to be sold.
Companies scrambled to get product retested and back on shelves. At the time, it wasn’t clear if the MRA was allowing Viridis to continue testing, or allowing the labs to conduct retests on the recalled products. MLive asked about Viridis’ status multiple times since the Nov. 17 recall announcement.
MRA spokesman David Harns cited an ongoing investigation and, -- after Viridis filed its lawsuit -- litigation, as reasons he could not disclose details. The MRA would not reveal how much of the recalled product was sold to customers, the full scope of the recalled product or how much has since been destroyed or retested and cleared for sale.
As of Wednesday’s Court of Claims hearing, Viridis attorney Kevin Blair said the company’s ability to conduct all marijuana safety testing has been fully restored.
“We were told in a very unclear way and it took three or four days to get confirmation that they were saying we could retest,” Blair said in his opening statements.
Judge Murray questioned what benefit Viridis would receive if he were to order the recall be retracted.
The MRA recall and the testing holds that followed equated to a “de facto summary suspension” without due process, Blair, a Viridis attorney, argued Wednesday. He said the judge’s order would stop the MRA from further deviating from their own rules.
“Their recall notice says: Investigation still ongoing, all marijuana products are being recalled and, blah, blah, blah, all in written form that was for the public view, and now what we have, as far as I know, is emails telling (Viridis) it’s A-OK now,” Judge Murray said, speaking candidly after the first witness left the stand.
He wondered why the MRA hasn’t issued a follow-up notice letting the public know that Viridis is currently in compliance and cleared for all testing.
“The evidence and common sense tells you that when a state agency in charge of this issues a recall like that, customers are going to say, ‘Hey, what’s going on?’” Murray said. “And if the state tells them on Thanksgiving morning -- credit to the state for working Thanksgiving morning -- that it’s A-OK, why don’t they broadcast it.
“It’s just like the newspapers. You know, Chris Murray commits a felony is on the front page and then when they find out Chris Murray hasn’t committed a felony, it’s on the third page.”
Murray said his concern is “more of a practicality as to what the state should be doing to tell the truth now.”
The motion hearing didn’t conclude Wednesday. It’s scheduled to resume with a MRA witness at 10 a.m. Thursday. The hearing may be viewed live on the Court of Claims YouTube page, and past recordings are archived.
It’s not clear when Murray may issue his written opinion. If he sides with Viridis, it could mean that unknown amounts of marijuana currently being held pending retesting or destruction could be released back into stores for sale.