Latest news with #Robertsville-based
Yahoo
14-04-2025
- Business
- Yahoo
Missouri cannabis regulators find another 6,000 products that should have been recalled in 2023
In August 2023, the state suspended Delta Extraction's license after finding the company's distillate was made with untested 'marijuana or converted hemp from outside of a Missouri licensed cultivation facility" (Rebecca Rivas/Missouri Independent). In Missouri's massive marijuana recall two years ago, regulators pulled 62,000 products off the shelves that contained a THC concentrate the state deemed a 'potential threat to health and safety.' Last week, the Missouri Division of Cannabis Regulation added another 6,000 products to that list that should have been pulled in 2023 because they were all made with an ingredient produced by the company at the heart of the recall, Robertsville-based Delta Extraction. The new 'threats' were found after the division was ordered in February by the state's administrative hearing commission to release any Midwest Magic brand products from its 2023 recall list. During that review, the division discovered additional marijuana products containing a THC oil that Delta Extraction made using 'unregulated cannabis,' the division stated in a Thursday press release. 'Regarding risks to the public, the department recalled these products for the same reason it issued the original, related recall: It identified a potential threat to health and safety,' said Amy Moore, the divisions director, in an email to The Independent. However, there have been no adverse reactions reported for any of the product in the original or updated recall, she said. 'The initial recall was a large and complex endeavor requiring expert application of system functionality and program processes,' she said. 'The department has made improvements in both areas since that time and continues to improve in ways that ensure future recalls can better identify all relevant product at initial issuance.' Delta Extraction is a licensed cannabis manufacturing facility that specializes in making THC distillate, a highly potent and pure form of THC used for things like vape pens, infused pre-rolled joints and edibles. About 100 other manufacturers bought the distillate in question in spring 2023 and went on to make thousands of products. In August 2023, the division suspended Delta Extraction's license after finding the company's distillate was made with untested 'marijuana or converted hemp from outside of a Missouri licensed cultivation facility.' The state also issued the product recall. Delta Extraction loses appeal of its revoked license following Missouri cannabis recall A few months later, the state rolled back its recall of nearly 15,000 Midwest Magic products and allowed them to return to the dispensary shelves. Though part owner of the Delta facility, Midwest Magic owners successfully argued that the brand didn't use the distillate in its products. A company called A Joint Operation owns the other 50% of Delta Extraction. In February, Delta Extraction lost its appeal of its license suspension, but it was awarded a renewed search for Midwest Magic products on the recall list. The Thursday update released about 120 Midwest Magic products from dispensaries and manufacturing facilities. The update also allowed testing labs to release samples of several hundred recalled products so they can be destroyed. Ted Maritz, co-owner of Midwest Magic, said the company had already written off the released items as a loss. 'I'm not going to ask any stores for payment or anything,' Maritz said. 'Everyone's gone through hell for this.' While the ordered search had a small impact on Midwest Magic, it is having a big impact on some dispensaries and manufacturers carrying the 6,200 products. The recall list actually represents product tags used by the state's tracing system called Metrc. Each tag in dispensaries typically represents a case of 10 to 12 units. And Metrc tags for manufacturing facilities represent ingredients that could make thousands or millions of units. One Kansas City manufacturer had almost 700 ingredients recalled Thursday. Josh Corson, co-owner of A Joint Operation, said he had not yet heard about the updated recall, in a text message Friday to The Independent and could not immediately comment. Over the last two years, several companies have opted to destroy the products to make more room in their storage areas. Lisa Cox, spokeswoman for the division, said there was a slight increase for destruction requests since February through April, following the commission's decision and totaling about 200 requests. However the division is 'unable to identify whether these requests are specific to the February decision,' she said. The units remaining on hold for the Delta Extraction recall, which have not been destroyed, total nearly 157,000 items. That includes 4,000 THC concentrate items that equal 378,000 grams of oil, along with about 13,000 grams of marijuana flower. It also includes 18,000 infused edibles, more than 40,000 pre-rolled joints and 90,000 vape cartridges. In Delta's appeal, the company argued the process it used to make the distillate was safe and legal. Delta Extraction admitted to importing a large amount of THC-A — a non-psychoactive compound of the cannabis plant that becomes intoxicating when heated — purportedly extracted from hemp plants. The company's contractor would mix it with a smaller amount of THC-A extracted from Missouri-regulated marijuana. Delta argued the hemp-derived THC-A should fall under the same rules as added ingredients, like flavors or the non-intoxicating cannabis compound CBD, because hemp is not a federally controlled substance like marijuana. It was taken off the federal controlled substance list in the 2018 farm bill. But Carole Iles of Missouri's administrative hearing commission, wrote in her 137-page ruling that THC-A becomes intoxicating through the exact same process no matter if it's extracted from hemp or marijuana, so the state is correct in regulating the THC the same as marijuana. That means it must be grown and manufactured in licensed Missouri facilities, Iles concluded, and tracked from the time the seed goes into the soil in the Metrc system. 'THC originating from other sources,' she wrote, 'is prohibited.' Chuck Hatfield, former attorney for Delta Extraction, said licensed facilities have the ability to challenge these new recalls of the products on their shelves. 'They probably should,' Hatfield said. 'Because DCR has had such difficulty figuring out which products should be recalled, no licensee can be sure which products it can sell.'
Yahoo
20-02-2025
- Business
- Yahoo
Delta Extraction loses appeal of its revoked license following Missouri cannabis recall
Delta Extraction argued the hemp-derived THC-A should fall under the same rules as added ingredients, like flavors or the non-intoxicating cannabis compound CBD, because hemp is not a federally controlled substance like marijuana (Rebecca Rivas/Missouri Independent). The company at the center of a massive cannabis product recall in 2023 lost its appeal to get its license back on Tuesday, with Missouri's administrative hearing commission concluding it had a 'corporate culture of lax compliance with regulatory requirements.' The scathing 137-page ruling, issued by Commissioner Carole Iles, comes almost a year after a three-day hearing on the appeal filed by Robertsville-based Delta Extraction. Iles agreed with the Missouri Division of Cannabis Regulation that the company's practice of bringing in hemp-derived THC concentrate from other states and adding it to Missouri-grown marijuana products was a violation of state law. Almost all of the reasons cited for revoking Delta's license and pulling 60,000 marijuana products off the shelves were upheld. That list included failing to notify law enforcement immediately after someone broke into Delta's Robertsville facility and stole the company's server, just days after the state shut down its operation. The server included the only copy of Delta's video surveillance files. It also included allowing a contractor who was previously convicted of conspiracy to distribute cocaine to operate its facility on the weekends when he didn't have a state-issued agent identification card. During that time, regulators say the contractor was using another Delta employee's ID to enter the facility and logging information into the state's system used to track and trace products, Iles wrote. Chuck Hatfield, an attorney for Delta Extraction, said the company has no comment. A spokeswoman for the division said in an email to The Independent that the department is currently reviewing the decision. The case has been widely watched by companies who had to destroy the products they purchased from Delta or have had them locked in vaults since the recall in August 2023. The company's challenge also posed major questions about whether the state has the authority to regulate intoxicating hemp products. Delta Extraction admitted to importing a large amount of THC-A — a non-psychoactive compound of the cannabis plant that becomes intoxicating when heated — purportedly extracted from hemp plants. The company's contractor, Jason Sparks, would mix it with a smaller amount of THC-A extracted from Missouri-regulated marijuana. Delta argued the hemp-derived THC-A should fall under the same rules as added ingredients, like flavors or the non-intoxicating cannabis compound CBD, because hemp is not a federally controlled substance like marijuana. But Iles wrote that THC-A becomes intoxicating through the exact same process no matter if it's extracted from hemp or marijuana, so the state is correct in regulating the THC the same as marijuana. That means it must be grown and manufactured in licensed Missouri facilities, Iles concluded, and tracked from the time the seed goes into the soil. 'THC originating from other sources is prohibited,' her order states. Iles' order outlined the timeline of how Delta came into a 'partnership' with Sparks, who worked with the Oklahoma-based marijuana brand Conte. In December 2021, Rachael Herndon, who was serving as Delta's chief operations and compliance officer, learned that Conte had broken off its relationship with a different manufacturer and might be looking for a new partner. She met with Sparks to discuss Delta partnering with Conte to manufacture and sell its brand. As part of their agreements, Iles' ruling states that Conte licensed its brand to Delta, which at the time was called SLCC, and received a royalty for all products sold under the Conte brand in Missouri. 'The parameters of the arrangements were not entirely clear, but there were oral arrangements' between Delta and Sparks' company SND Equipment Leasing LLC and Conte, Iles wrote. Sparks became responsible for providing the unregulated THC-A oil to be used in the Conte products, Iles wrote, along with extracting and distilling the final THC distillate that would be incorporated into the Conte products. In a separate agreement, Sparks and Delta agreed that he'd manufacture a bulk distillate that was later sold to about 100 other Missouri manufacturers. This operation at Delta's facility took place on the weekends. Sparks, Conte owner Tania Conte and Conte employees would drive up from Oklahoma, Iles wrote, and up to 20 temporary workers were brought in by Sparks from the St. Louis area. In August 2022, Sparks applied for an agent ID and submitted an offer of employment from Delta, signed by Herndon, in support of his application. It was denied because he had a disqualifying felony conviction. However, he was later issued an agent ID in June 2023, according to the division, because of a moratorium on FBI criminal background checks after recreational marijuana was legalized in December 2022. Sparks was in the facility on a regular basis between February through July 2023 and never properly signed in or out of the visitor log, Iles wrote. 'Because Delta had to sponsor Sparks by making a written offer of employment for him to apply for the facility agent card, Delta knew that Sparks' application for an agent card had been denied and the reason for it,' Iles wrote. 'Because Sparks was central to the efforts of Delta to create the bulk distillate and Conte products, we conclude Sparks and Delta intentionally kept his name from appearing on the visitor log.' The temporary workers Sparks hired also only wrote their first names in the log and didn't include the purpose for being in the facility or times they were there. 'As with Sparks' failure to sign the visitor log, we conclude this non-compliance was intentional,' Iles wrote. 'Neither Sparks nor Tania Conte could identify the individuals who were doing the work. They were paid in cash and Sparks was vague on how or where he found the workers. For its part, Delta simply turned its facility over to SND and Conte for the weekends and did nothing to identify who was in the facility or monitor their compliance with the security requirements.' Before May 2023, the unregulated THC-A oil Sparks was bringing into the Delta facility came from Sparks' network of personal associates. 'Sparks believed it was derived from hemp,' Iles wrote. Illes focused on what was produced between Feb. 3, 2023 — when the initial recreational marijuana rules were in place — and August 2023. To understand Delta's alleged violation, Iles said it is necessary to first understand 'the basics.' The psychoactive chemical that produces the high consumers look for in marijuana products is tetrahydrocannabinol, otherwise known as THC. 'THC does not occur naturally in either the marijuana plant or the hemp plant,' she states. 'THC-A does.' THC-A is found in large amounts in marijuana plants and smaller amounts in hemp plants. By itself, it's not intoxicating. For example, if you eat a raw cannabis bud, you shouldn't get high because the THC-A has not been heated yet, through a process called decarboxylation. That happens when you light a joint or bake pot brownies. The THC-A oil used at Delta was extracted from hemp plants by sources outside Missouri, Iles wrote, not by Delta or Sparks in the Delta facility. The oil was converted into THC before products were sold, she said. And that's a major reason it violates state rules. 'It was not resold as THC-A,' she states. Delta believed the company was compliant as long as 'a single gram of THC sourced from a marijuana plant obtained from a licensed Missouri cultivator is included in a batch of product that might contain hundreds or thousands of grams of psychoactive THC' that come from hemp plants. 'This interpretation is unreasonable,' Iles wrote. In a lawsuit filed last year, Sparks' group SND claimed Delta owes the company more than $13 million for producing about 1,100 liters of THC concentrate oil, or distillate, and other products. A liter of 80% concentrated THC can make more than 70,000 individual gummies at 10mg THC a piece, industry experts say. That's almost 80 million doses — or twice that amount if they're 5mg THC gummies. The company is also asking for $5 million in loss of revenue, after the state confiscated its extraction equipment that was inside Delta's facility for five months. SND has agreed to enter into arbitration, and a hearing is scheduled for that case next month in Franklin County Circuit Court.
