The Michigan Cannabis Regulatory Agency (CRA) has filed yet another formal complaint against Sky Labs LLC, an adult-use cannabis processor located in Mt. Morris, for its receipt and handling of more than one million grams (equal to 2,204 pounds) of product identified as “Isolate (hemp concentrate).” The complaint alleges 10 violations that also include missing and mis-time-stamped security footage, lack of required product testing, noncompliant sources for product purchases and transfers, and inaccurately entering product data into the state monitoring system (Metrc).
According to the formal complaint, manifests in the statewide monitoring system show that Sky Labs accepted “more than 20 transfers exceeding a total of more than one million grams of product identified as ‘Isolate (hemp concentrate)’ from a state licensed medical marijuana processor between April 25, 2024, and July 15, 2024.”
The medical marijuana processor identified on the manifest told the CRA that “it does not have a hemp processor-handler license and did not transfer isolate to [Sky Labs] or any other business,” per the CRA complaint.
Sky Labs’ employee, identified in the complaint a “K.S.,” told the CRA “that he thought that the business could obtain and process hemp from a medical marijuana processor despite being told previously that Respondent needed a hemp processor-handler license to do so,” the compliant stated.
During a site visit to Sky Labs in July, CRA discovered that, “according to Metrc, [Sky Labs] received a 220,000-gram package of isolate that morning from the same medical marijuana processor referenced above.” Following the site visit, “a CRA regulation agent spoke to C.W., a manager with [Sky Labs]. C.W. stated that [the company] received a shipment of pure THCA on July 27, 2024, and placed it in the ovens to decarboxylate,” according to the complaint.
As of Jan. 9, Sky Labs has yet to produce the certificates of analysis requested by the CRA on the hemp concentrate products transferred.
The CRA complaint also stated that Sky Labs had combined “the above referenced concentrate with other batches of distillate already in its inventory” and “had not tested any of the packages that were created by combining the isolate with the above referenced distillate.”
Statements in formal complaints are allegations, according to the CRA. The complaint “gives notice of its intent to impose fines and/or other sanctions against Respondent’s license, which may include the suspension, revocation, restriction, and/or refusal to renew Respondent’s license,” according to the CRA announcement of the complaint. Sky Labs could request a hearing in writing within 21 days of the complaint’s issuance.
The CRA had also previously made a formal complaint against Sky Labs in July 2024 for similar infractions involving large amounts of THCA distillate, reportedly received by Sky Labs from Colorado and Michigan businesses, and violating a number of state cannabis regulations.
In addition, on July 6, 2023, Sky Labs surrendered its medical marijuana processor license, was fined $100,000, and had stringent compliance requirements placed on its adult-use processor license after its vape cartridge concentrates failed safety compliance testing for banned chemical residues, including myclobutanil, in May 2021, according to the CRA’s formal complaint and several superseding formal complaints. Myclobutanil is used to prevent and control mildew outbreaks and has been the ongoing cause of product recalls in the U.S. and Canada. When burned, myclobutanil converts into hydrogen cyanide, which is listed as a chemical warfare agent by the Centers for Disease Control and Prevention.
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The complaint also stated that Sky Labs was producing, packaging, and storing vape cartridges in a back trailer without a working video surveillance system.
The company also mislabeled and distributed Chewii Sour Cherry Edibles to employees of the adult-use processor establishment as trade samples, according to a CRA press release. “The labels on the edibles displayed a large sticker showing ‘200 MG CBD’ and Sky Labs did not place a THC amount or modifier anywhere on the packages. An employee provided the edibles to her 4-year-old child. The child consumed two edibles which contained 20 mgs of marijuana. The child became seriously ill and was hospitalized due to adverse reactions to the marijuana edibles. A police report was filed with the Davison City Police Department and an investigation was opened with Child Protective Services.”
Michigan’s Cannabis Regulatory Agency filed a new formal complaint against the adult-use cannabis processor based on infractions involving THCA hemp isolate, missing COAs, and combining untested isolate with distillate, among others. Read More
