DCR revokes manufacturing license of Delta Extraction amid ongoing legal battle
Yesterday, roughly four months after Missouri marijuana regulators first levied an administrative hold and a following recall against marijuana products manufactured by Delta Extraction, Division of Cannabis Regulation officials announced the revocation of the company’s license.
Delta Extraction, a Missouri-based marijuana manufacturer, has been embroiled in a significant legal dispute with DCR for several months, a battle marked by regulatory actions, a massive product recall, and ongoing courtroom challenges.
DCR revoked Delta Extraction’s marijuana manufacturing license, effective December 2, 2023, following allegations of importing marijuana product from outside the state and combining it with Missouri-grown marijuana to create marijuana products. This action was preceded by an immediate suspension and subsequent recall in August, due to concerns about product tracking and testing compliance, according to DCR.
“The Department’s actions are illegal and unfounded,” explained Chuck Hatfield, lead counsel in Delta’s litigation against the state. “The issue stems from Delta using legal hemp products in its legal Marijuana products, which passed state testing before it was sold to consumers. Delta’s compliance officer at the Department knew about this process and Delta specifically asked if it should stop the process. She did not instruct them to stop. Internal department documents show that same compliance officer told her supervisors she believed Delta’s process to be legal. We are perplexed as to why they ignored her and are taking this action.”
As Hatfield explained, central to the controversy is Delta’s use of tetrahydrocannabinolic acid (THCa), a non-psychoactive compound. Delta asserts that their use of hemp-derived THCa, converted to THC in Missouri, was compliant with state rules before the final regulations took effect on July 30, 2023.
In August, DCR issued a recall of more than 63,000 product SKUs including marijuana product produced by Delta Extraction. Delta contested this recall, claiming no adverse effects or safety concerns had been reported from the products, and that allegations of cause for concern were unfounded. In turn, Delta Extraction filed for a Temporary Restraining Order against both the Department of Health and Senior Services and DCR, challenging the legality of DCR’s actions. Their legal team argued that the recall and hold were “defective and unlawful,” too broad, and in conflict with the Department’s own rules. For its part, the State argued that the circuit court was the improper venue for a hearing, stating that Delta was required to pursue action through the Administrative Hearing Commission. The court dismissed the case, ruling that Delta had not exhausted its remedies under the AHC.
In a notable turn, DCR announced in October 2023 that it had removed more than 14,000 of the more than 63,000 product SKUs from the recall, following an internal review.
On Wednesday, a day before DCR issued the revocation, Delta founders Ted Maritz and Jack Maritz addressed the ongoing battle and the company’s position publicly for the first time, in an interview with Greenway.
Delta’s day before the AHC has yet to come, as the case was continued in October at the request of DCR, with a new hearing date set for December.
As Delta Extraction continues to challenge the actions of DCR, the outcome of this dispute is poised to have significant implications for the state’s cannabis regulatory practices and the industry at large.
On Friday afternoon, Jennifer Zamkus, Director of the Section for Compliance & Enforcement at DCR, sent a letter to licensees regarding the status of a mandatory recall of marijuana products from Delta Extraction. In the letter, Zamkus advises operators of two options available to them regarding recalled product: voluntary destruction or transfer to another licensee for storage or destruction. Licensees must use specific DCR documents to request approval for these actions and follow stringent procedures, including notifying DCR of actions taken.
Read the full text of the letter below:
On August 14, 2023, the Division of Cannabis Regulation (DCR) issued a recall on manufactured products sold to dispensaries and manufacturers by infused product manufacturer, Delta Extraction, LLC, MAN000022.
On October 20, 2023, DCR removed some marijuana product from the recall list and lifted the associated administrative hold only for marijuana product that was verified in the statewide track and trace system (Metrc) to contain THC solely sourced from marijuana grown in the Missouri regulated market. Please see “08.14.23 NOTICE OF MANDATORY RECALL – Updated” for additional information.
Marijuana product that could not be verified as containing THC solely sourced from marijuana grown in the Missouri regulated market remains on administrative hold. DCR is aware of the strain on licensees that have product on hold in their facilities. To assist with this issue, DCR will allow licensees to voluntarily destroy recalled product or transfer recalled product to another licensee for storage or destruction. Licensees must request and be granted approval before completing these actions.
To assist licensees seeking to voluntarily destroy recalled marijuana product, DCR has created a “Recalled Product Voluntary Destruction Request” document. Licensees will use this document to make their request for voluntary destruction. If approved, DCR will work to lift the applicable administrative holds and will notify the licensee of approval for destruction after the administrative holds have been released. The licensee may then proceed with any approved destruction and shall notify DCR within two (2) days of the destruction with the actual date and time of destruction as well as a completed waste log.
To assist Licensees seeking to transfer product to another licensee for storage or destruction, DCR has created a “Recalled Product Transfer Request” document. Licensees will use this document to make their request to transfer. If approved, DCR will work to lift the applicable administrative holds and will notify the licensee of the approval for transfer after the administrative holds have been released. The licensee may then proceed with the approved transfer and shall notify DCR immediately after the transfer has been completed so the lifted administrative hold may be reestablished. If the transferee wants to destroy the recalled product, the licensee will submit a Recalled Product Voluntary Destruction Request prior to taking that action.
For both actions listed above, it is important licensees ensure that marijuana product remain in the designated quarantine location and that staff are aware that the marijuana product shall not be sold to consumers or further processed after the administrative hold is lifted. Licensees will be required to attest to this in the request. Licensees that complete unauthorized actions with recalled product will be subject to penalties, including fines, suspension, or revocation.
Requests to destroy or transfer product must be submitted to CannabisCompliance@health.mo.gov. Licensees may submit separate requests to allow for staged destruction or transfers. Licensees shall not destroy or transfer recalled marijuana product until DCR lifts the administrative hold for this purpose.
Licensees are encouraged to reach out to their compliance officer or CannabisCompliance@health.mo.gov if they have any questions.”