A marijuana testing facility is suing state regulators after its work became the subject of one of the largest recalls in the nascent marijuana industry’s three-year history.
Viridis Laboratories said the recalls of about 60% to 70% of cannabis products in the state were “unjustified, biased and retaliatory,” according to a more than 200-page complaint filed Monday in Michigan Claims Court. The lawsuit said the recall caused an estimated $229 million disruption to the industry.
Testing Facility CEO Greg Michaud has worked with the Michigan State Police for 25 years and retired from the agency as Director of the Forensic Science Division in 2016. The company’s research and development leader is Michelle Glenn, a toxicologist and former program coordinator at Michigan State Police Crime Laboratories.
The Marijuana Regulatory Agency said it was unable to comment on the pending lawsuits.
Attorney David Russell said the government agency’s action was part of a “protracted campaign of harassment targeting Veridis”. Another lawyer working for the firm, Kevin Blair, said the agency had held up the industry while ignoring “industry experts” and “widely accepted scientific practices”.
“There are absolutely no public health or safety risks to warrant the subpoena, and we respectfully ask the Court to provide relief to Veridis and to provide accountability and oversight to an agency that has far exceeded its authority,” Blair said in a statement.
The suit calls for injunctions against the summons, citing procedural and substantive due process violations of due process rights and equal protection rights. It also calls for a ruling that finds civil conspiracy, abuse of procedure, and the agency’s paucity of power to “briefly restrict licenses.”
At about the same time that Virides announced the lawsuit on Tuesday, Senator Eric Nesbitt said he was requesting information from the Marijuana Regulatory Agency about the summons, including what led to the decision, data used to justify the summons, and the timeline for completing the investigation and reporting the issue to the agency to licensees.
Nesbitt, R-Lawton, pegged the amount of the product recalled at £65,000, but government regulators were reluctant to say how much.
“Anytime a government agency takes action like this, it is important that the public understands the basis for these decisions and knows how your agency reached its conclusions,” said Nesbitt, chair of the Senate Regulatory Reform Committee. . “With a highly regulated industry like this, your agency has significant power to influence Michigan companies’ business operations and the choices available to consumers.”
The Michigan Marijuana Regulatory Agency last week recalled the product at about 403 medical and recreational sales locations after an alleged testing problem at Viridis and Viridis North labs.
The agency said the recall was prompted by “inaccurate and/or unreliable results of products tested” by safety compliance facilities. The recall does not include concentrated products that can be inhaled from marijuana, such as live resin, distillates, or e-cigarette carts.
Affected products were tested between August 10 and November 16. The state advised that products should be disposed of properly or retested.
The government agency said potential harm from the products includes health-related effects such as aspergillosis, an infection caused by a type of mold, among those with compromised immune systems.
Last week, Michaud said the company “strongly” rejected the decision and maintained the validity of its test results, noting that the company is “the highest certified cannabis testing facility in the state.” But Michaud said, “We cooperate fully with the Ministry of Trade and Industry and work closely with our customers to reduce outages and retest affected products at no cost.”
In its lawsuit, Viridis alleged that the recall was implemented in an attempt to “level the playing field” by curtailing Viridis’ ability to provide testing to 60% to 70% of Michigan growers and producers. The company claimed that the recall was a means of achieving a “desirable political outcome which it cannot achieve through its powers under Michigan law”.
But this fall, the marijuana regulatory agency told Viridis that it had received complaints about the company inflating potency level testing and allegedly guaranteeing approvals for retesting.
“The plaintiffs did not commit such conduct,” the lawsuit said.
In October, as part of the audit, the government agency emailed other testing facilities asking them to retest samples that had been tested by Viridis to determine the reliability of the microbial test for Viridis. The lawsuit said those tests by competitors at Veridis “ultimately failed”.
Three weeks later, the state released the results to Viridis, and on the same day, the company informed that all cannabis products tested would be recalled between August 10 and November 16.
The lawsuit alleges that Viridis should have been able to argue her case before an administrative law judge before government regulators closed her labs. Virides argued that the Department of Foreign Relations also used “competitors” to audit the company and “moved goal posts” when the company attempted to fix the situation.
The lawsuit said the recall was excessively extensive and included products that had not been tested for Aspergillus, including products at the company’s Bay City site.
“Plaintiffs have explicitly told the MRA several times that its regulated campaign to retain the product and disregard take-back rules appears to be a deliberate choice to effectively close Viridis without following established procedures to do so by way of summary comment (which may involve some oversight and require the MRA to explain its rationale to the ALJ). )”.
“This left the plaintiffs with no choice but to file this action against the Marijuana Regulatory Agency.”