Delta Extraction founders speak out on DCR investigation and battle over THCa
For months, Missouri marijuana regulators and a suspended operator have battled in the court of public opinion as well as in actual courtrooms.
Greenway recently spoke to Delta Extraction co-owners and co-founders, Jack Maritz and Ted Maritz about the series of events that led to the suspension of the company’s manufacturing license, the battle with DCR, a recall of more than 64,000 product SKUs, and the impact that the process has had on Missouri’s marijuana industry at the peak of its success.
For Ted Maritz, the key to the story is a question that he feels DCR has still not clearly answered.
“What have we done wrong?” Maritz asked.
Maritz and brother Jack are the founders of Delta Extraction a company that was, up until August of this year, one of the fastest-growing and most successful independent manufacturing facilities in Missouri marijuana.
Delta’s in-house brand, Midwest Magic was successful, thriving, and carving a place for itself in the concentrates space. Additionally, Delta had a brand and services agreement with Oklahoma-based Conte and had allowed the company to come in to produce its wildly successful vapes out of the Delta Lab. Conte had previously been produced in a partnership with Heya before dissolving that partnership and moving the brand to Delta.
But the biggest part of Delta’s success was in its production of distillate. In just a few short months, Delta produced more than one thousand liters of distillate for white labeling purposes, supplying a bulk of Missouri operators with distillate at a time when biomass and flower were scarce and distillate prices soared to over $45,000 per liter. Delta offered Missouri operators the ability to purchase distillate at just over a quarter of that price.
Central to the conflict between Delta and the Department of Cannabis Regulation (DCR) is the company’s use of tetrahydrocannabinolic acid (THCa) and the legal intricacies surrounding it.
“The root cause of the issue is within the Department of Cannabis Regulation,” explained Jack Maritz. “They knew we were using THCa, and have admitted that other manufacturers in the state have done the exact same process at the same time we were doing it, and decided to retroactively enforce their changed rules on us.”
In response to the suspension and the accusations by DCR, Delta reached out to Dr. Kevin Spelman, PhD of Health Education & Research, LLC to review the company’s practices, test results, and the allegations facing Delta. Dr. Spelman is a cannabis industry expert with a three-decade track record of experience holding degrees in biochemistry and a doctorate in molecular biology. His resume includes the National Institutes of Health and advising the White House Commission on Complementary and Alternative Medicine.
Delta’s THCa Use: Legal and Compliant?
According to documentation, prior to the implementation of emergency rules on February 2, 2023, Delta used CBD in the production of Delta-9 THC distillate, a process that was allowable under the rules at that time. But following the implementation of the emergency rules, Delta was forced to pivot.
In May, Delta submitted SOPs to their compliance officer that included and outlined the use of THCa, Those SOPs were reviewed and accepted according to sworn testimony. On or about May 10, Delta began the process of adding hemp-derived THCa to Missouri-sourced marijuana to create THC distillate.
Emergency Rules text: (E) Any tetrahydrocannabinol in a marijuana product manufactured by a manufacturing licensee shall only be derived from marijuana cultivated in Missouri by a licensed cultivator; (F) Manufactured product may not contain chemical modification, conversion, or synthetic derivation of cannabinoids to produce intoxicating cannabinoid isomers, and all cannabinoids acquired from entities other than marijuana facilities for purpose of inclusion in marijuana product must be accompanied by a Certificate of Analysis at time of acquisition that identifies the testing lab that tested the product and lists the product’s ingredients; and (G) Manufacturing licensees shall track all ingredients used in any given manufactured product.
This emergency rule was filed January 20, 2023, becomes effective February 3, 2023, and was originally set to expire on August 1, 2023.
Delta’s decision to use THCa was deeply rooted in legal and regulatory compliance, according to Ted Maritz.
Maritz, emphasized, “Delta made a point of writing SOPs to use THCa as an additive because it was safe. And we did so with great expense and trouble, with our third-party contractor procuring the THCa from a licensed hemp producer ensuring compliance and safety while trying to fill a gap. We did it compliantly and provided a safe, reasonable, economical product for the Missouri market when no one else was able or willing to do that.”
It wasn’t until a final version of the rules regulating Missouri marijuana licenses became effective on July 30, 2023, that THCa was specified as being restricted from inclusion in any Missouri regulation.
Final rule text: (E) Any tetrahydrocannabinol, such as THC-A, Delta8, or Delta-10, in a marijuana product manufactured by a manufacturing licensee shall only be derived from marijuana cultivated in Missouri by a licensed cultivator; and (F) Manufactured product may not contain chemical modification, conversion, or synthetic derivation of cannabinoids to produce intoxicating cannabinoid isomers, including those created by heat or other process during use by a patient or consumer, and all cannabinoids acquired from entities other than marijuana facilities for purpose of inclusion in marijuana product must be accompanied by a Certificate of Analysis at time of acquisition that identifies the testing lab that tested the product and lists the product’s ingredients.
It is of note that while hemp-derived THCa was not forbidden from inclusion previously, the Department did separate and specify the inclusion of THCa in packaging and labeling requirements in the original medical marijuana rules language, and defined the term tetrahydrocannabinol specifically as “THC” in its definitions: “‘Dried, unprocessed marijuana or its equivalent’ means the marijuana flower after it has been cured and trimmed or its equivalent amount of marijuana concentrate or tetrahydrocannabinol (THC). For purposes of purchase and possession limitations, one (1) ounce of dried, unprocessed marijuana is equivalent to eight (8) grams of medical marijuana concentrate or eight hundred (800) milligrams of THC in infused products.
That differentiation and the terminology explicitly used by the DCR predecessor, the Section for Medical Marijuana Regulation, in clearly defining the term tetrahydrocannabinol as THC in rule is paramount to Delta’s understanding of compliant operation and has seemingly been echoed by testimony from DCR staff including Director Amy Moore who defined THCa during a deposition saying, “THCa is precursor to THC. Apply heat and it becomes THC.”
State’s Awareness and Implied Approval
Key to Delta’s defense is the assertion of the state’s awareness and tacit approval of the company’s operations. “The state was fully aware of our operations and methods,” Maritz stated, referring to various communications with state officials that suggest a degree of approval.
Jack Maritz explained further, “Conte (operating under the Delta license) used hemp-derived THCA as an additive to distillate, only after Delta had SOPs reviewed and received by our Compliance Officer at DCR. This was during a time right after recreational marijuana passed, when flower was virtually unavailable to independent processors, and the prices of distillate were being driven to astronomical prices due to supply shortage.”
“We supplied a large amount of distillate to processors all over the state, which was turned into a variety of products, tens of thousands of SKUs, and none of these products, to our knowledge, ever failed testing or caused any health issues,” Jack continued. “Subsequently, the state changed its rules to close this process down. We told the state of our intent to discontinue the process when the new rules went into effect, two days later they came into our building and suspended our license and operations, saying it was because of the use of THCa.”
This understanding was critical to Delta’s operations, implying a state-level endorsement of their methodology and correspondence between DCR and Delta representatives, as well as documents disclosed in court proceedings showing that DCR employees were aware of Delta’s use of hemp-derived THCa in manufacturing distillate. Additional documentation nd testimony show that DCR employees had information that other Missouri licensees were actively using hemp-derived THCa in distillate production, but none of those licenses were suspended and there are no reports of additional investigations regarding the inclusion of THCa.
Safety and Quality Assurance
Perhaps the most significant aspect of Delta’s argument against the recall is the safety and quality of its products.
“We have adhered to all state-mandated testing protocols, ensuring no safety issues with our products,” Maritz affirmed. This defense counters DCR’s concerns regarding public health and safety.
“According to their own rules (DCR), in order to shut us down without giving us a chance to remediate the issue with us it must be a public health issue,” Jack Maritz said. “(Following the suspension) They tested all of the products in our lab, but only for potency, not even attempting to test products for anything safety related. They used public safety as an excuse to shut us down, discrediting the state’s testing labs in the process, and doubled down that our product was unsafe, but they refused to run any safety-related tests.”
In the recall notice, DCR writes, “Pursuant to 19 CSR 100-1.100(4)(P), the DCR may issue a public notice of recall where marijuana product presents a potential threat to health and safety.” Delta’s contention that all final product was compliantly tested and passed demonstrates that product was safe for sale and consumption.
However, the report prepared by Dr. Spelman and Health Education & Research, LLC seems to negate any cause for concern regarding public safety. The dossier reads, “Based on the evidence reviewed, which includes SOPs, COAs, literature research and Green Precisions Analytics method validation document ‘Validation of Cannabinoid Analysis by UPLC-UV in Cannabis species plants and their derivative products”, this safety dossier demonstrates that there is nothing detected that is harmful in Delta Extraction’s distillate. Moreover, this safety dossier finds no cause for a public safety concern, and no breach of ethical or regulatory guidelines in the making and analysis of their products. It is safe to release all products on recall/hold that contain the distillate produced at Delta Extraction, LLC.”
The recall notice goes on to say, “The recalled products were not compliantly tracked in the statewide track and trace system, METRC, to allow the DCR to verify that the products came from marijuana grown in Missouri or that the product passed required testing prior to being sold at dispensaries.” However, that assertion stems from Metrc data reviewed by DCR employees that showed a higher output of THC than input and a fundamental misunderstanding and interpretation of the data as it was shown that Delta employees compliantly used Metrc software and included the addition of THCa under ingredients when entering information into the track and trace system, according to Ted Maritz.
No adverse reactions from any Delta product related to the recall have ever been reported.
In the ever-changing landscape of Missouri’s marijuana industry, the case of Delta Extraction stands out as both a cautionary tale and a rallying point for cannabis operators concerned with what Delta representatives call an inconsistent and uneven administration of regulation for licensees in the state. Delta Extraction’s ongoing legal battle with Missouri’s DCR is emblematic of the growing pains in the cannabis industry. It highlights the necessity for unambiguous regulations, consistent enforcement, and clear, definitive dialogue between businesses and regulators. The outcome of this case is poised to influence the legal landscape for cannabis derivatives and shape future regulatory practices in Missouri and potentially beyond. For Delta, the immediate future remains unclear as litigation continues and operations have been brought to a halt, forcing layoffs for the facility’s 18 employees.
The full safety dossier prepared by Dr. Spelman and presented to DCR can be found below: