The Missouri cannabis company that had its license revoked last year following the recall of 63,000 products it manufactured in 2023 has lost its appeal to reinstate its license, the Missouri Independent reports. In the ruling, Administrative Hearing Commission of Missouri Commissioner Carole Iles said Delta Extraction had a “corporate culture of lax compliance with regulatory requirements” and agreed with the state Division of Cannabis Regulation (DCR) that the company’s practice of importing hemp-derived THC concentrate from other states and adding it to Missouri-grown cannabis products violated state law.
Iles agreed with the DCR’s reasons for the original recall and subsequent reasons for Delta’s license revocation.
Delta admitted to bringing in THC-A purportedly extracted from hemp plants in other states which was then mixed in with a smaller amount of THC-A extracted from hemp plants grown in Missouri. The company argued that hemp-derived THC-A should fall under the same rules as added ingredients, like flavors, because hemp is not a federally controlled substance like THC-rich cannabis.
Delta also argued that it should be allowed to “cure” its regulatory violations – as allowed under state law – but Iles ruled that prior regulatory cases have determined that “not all violations are ‘curable.’”
“Delta’s proposed interpretation of the right to cure would produce an absurd result and one that is contrary to the constitutional mandate that the Department protect the public health and safety through its regulation of marijuana facility licenses.” — Iles in the decision
Moreover, Iles found that Delta converted the THC-A to THC before the products were sold which was a major violation of the state’s rules.
Delta is being sued by Oklahoma-based SND – the company from which it sourced some of the concentrates at the heart of the violations – for more than $13 million for producing about 1,100 liters of THC concentrate oil, or distillate, and other products. SND has agreed to enter into arbitration, and a hearing for that case is scheduled for next month.
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