A Missouri marijuana manufacturer lost its final appeal over the revocation of its business permit, after it was held responsible for a massive recall in 2023 that also led to a multimillion-dollar lawsuit.
Delta Extraction, which had its manufacturing permit revoked due to the recall of 60,000 products, was notified this week that the state’s administrative hearing commission sided with cannabis regulators and upheld the revocation, the Missouri Independent reported.
Commissioner Carole Iles found that Delta Extraction had a “corporate culture of lax compliance with regulatory requirements,” and its practice of using out-of-state hemp biomass in its cannabis production was illegal. Iles also found that Delta had seriously violated cannabis company protocol by not notifying police following a break-in at one of its facilities, as well as allowing an employee with a checkered history to operate its facility without a mandatory state ID card.
A spokesman for Delta Extraction declined to comment to the Independent, but the outcome also potentially marks the start of a new enforcement era, given that the ruling makes crystal clear that marijuana regulators have the authority to regulate intoxicating hemp products as well.
Although Delta Extraction tried to argue that hemp-based cannabinoids were exempt from state oversight due to the federal legality of hemp itself, Iles disagreed, and ruled that the Missouri Division of Cannabis Regulation does have such authority because hemp-based THCA – which is what Delta was using in its production – can be just as intoxicating as marijuana-based THC.
“THC originating from other sources is prohibited,” Iles wrote in her ruling.
The recall sparked a $20 million lawsuit from SND Equipment Leasing, which had a $13 million bill left unpaid by Delta Extraction for 1,100 liters of cannabis oil produced for Delta. That lawsuit is headed for arbitration, the Independent reported, and a hearing is scheduled for next month.
Since the Delta Extraction recall, there have been at least four more, as cannabis regulators have stepped up their industry oversight in the past two years.
Delta Extraction had appealed the loss of its license, claiming that the regulatory agency didn’t have the authority to oversee hemp-derived products. Read More
