The Cannabis Regulatory Agency (CRA) has formally lodged a complaint against Sky Labs, LLC, an adult-use cannabis processor in Michigan, for multiple violations under the Michigan Regulation and Taxation of Marihuana Act (MRTMA). The complaint, filed on July 26th, 2024, details several breaches of regulatory compliance, particularly concerning the tracking and sourcing of tetrahydrocannabinolic acid (THCA) isolate.
Sky Labs, holding license number AU-P-000157, operates at 9421 N. Dort Highway, Mt. Morris, MI. The CRA initiated an investigation on March 20th, 2024, prompted by discrepancies in the statewide monitoring system (Metrc). The investigation revealed that Sky Labs had accepted THCA isolate from unlicensed sources and improperly logged these transactions in Metrc.
Improper Sourcing and Recording: Sky Labs received 30,000 grams of THCA isolate on March 6th and 7th, 2024, incorrectly recorded as sourced from a Michigan medical marijuana processor. The processor denied any such transfer.
Further Irregular Transfers: On March 13th and 14th, 2024, Sky Labs recorded receiving an additional 100,010 grams of THCA isolate from another processor, which also denied the transfer. It was found that these isolates were actually sourced from a Colorado business.
Failure to Tag and Track: Sky Labs admitted to not entering the product into Metrc upon receipt in January 2024, delaying this process until March 2024, well beyond the acceptable period for such entries.
Compliance Testing Issues: During an unannounced visit on April 22nd, 2024, CRA staff found THCA in the lobby of Sky Labs. Further, a compliance test on April 19th, 2024, showed discrepancies in how the product was sampled and recorded.
Surveillance Failures: The company also failed to maintain accurate timestamped surveillance footage as required, with discrepancies noted during the compliance test review.
The CRA has indicated its intent to impose sanctions on Sky Labs, potentially including fines, suspension, revocation, or non-renewal of its license. Sky Labs has the right to request a hearing within 21 days to contest these actions or to seek a compliance conference to address the allegations informally.
Sky Labs must submit hearing or compliance conference requests in writing, either by mail, in person, or by email, to the CRA with a copy to the assistant attorneys general handling the case.
For more information, the full complaint can be accessed through the CRA or the legal representatives listed in the document.
Nature's Remedy Cannabis is set to commemorate its third anniversary with a special event on Saturday, August 3rd, at their Ferndale location. The celebration will feature various activities, food, deals, giveaways, vendors, and entertainment.
Event Details:
Starting at 9:00 AM, the first 50 customers who spend $200 or more will receive a $250 goodie bag. Additionally, from 12:00 PM until close, shoppers can earn double loyalty points on all purchases.
Event Highlights:
Wally Manju, founder and CEO of Nature's Remedy Cannabis, expressed gratitude for the community's support over the past three years. "We are incredibly grateful for the support and trust our customers and community have shown us over the past three years. We look forward to welcoming new faces and supporting our loyal customers in the months and years to come," Manju said. "This anniversary celebration is our way of giving back and showing our appreciation for everyone who has been part of our journey," he added.
House of Kush, a cannabis genetics brand with a history in sports and science, has announced a partnership with Pleasantrees, a vertically integrated cannabis cultivator based in Michigan. This collaboration aims to introduce House of Kush's genetics to the Michigan market.
House of Kush has established its presence in Missouri, Maryland, and Ohio by focusing on preserving legacy strains and maintaining high standards in cannabis genetics. The brand's connections to the sports world and efforts to change the cannabis narrative have garnered attention among cannabis enthusiasts.
“We are excited to partner with Pleasantrees, a company that shares our commitment to quality,” said Reggie Harris, CEO of House of Kush, in a statement to Benzinga. "Michigan has a growing cannabis community, and we look forward to introducing our genetics and products to this market. Pleasantrees' focus on cultivating premium cannabis aligns with our goals."
Harris pointed to Pleasantrees' involvement with Rick Wershe Jr., known as White Boy Rick, who was released from prison in July 2020 after serving 33 years. This connection underscores Pleasantrees' commitment to social justice, education, and community involvement, aligning with House of Kush's approach to the industry. "We need strong partners and recognition in the industry, and Pleasantrees adds credibility to our efforts," Harris noted.
Harris also highlighted Michigan as a significant cannabis market, emphasizing the importance of competing in such a prominent market.
Bryan Wickersham, President of Pleasantrees, expressed anticipation about the partnership, noting the potential for Michigan consumers to experience the genetics curated by House of Kush. "The product innovation from the HOK team will be noteworthy," Wickersham stated.
A Michigan cannabis retailer is contesting Los Angeles' social equity licensing program, asserting that it unfairly favors California residents. Variscite Inc. and its owner, Kenneth Gay, argue that the program violates the Constitution's dormant commerce clause by discriminating against out-of-state applicants.
In a response brief filed recently, Variscite contends that the city's motion to dismiss the case is based on erroneous arguments. The brief critiques the city's attempt to distinguish a First Circuit decision, which applies the dormant commerce clause to cannabis markets, and questions the relevance of a repealed 2013 memorandum from then-Deputy Attorney General James M. Cole of the U.S. Department of Justice.
Variscite's brief highlights that the First Circuit correctly recognized that Congress, through the Rohrabacher-Farr Amendment, has significantly decriminalized medical cannabis by prohibiting federal prosecution of state-legal cannabis operations. The company argues that this decision does not misconstrue federal law but rather affirms that the dormant commerce clause applies regardless of the federal legality of the interstate market.
The First Circuit's opinion, according to Variscite, only addressed medical cannabis because Maine conceded it was unlikely to succeed in defending its residency requirements for recreational use licenses. Variscite maintains that Congress did not exclude cannabis markets from the dormant commerce clause through the Controlled Substances Act (CSA). While the CSA allows Congress to criminalize the interstate cannabis market, the dormant commerce clause restricts states from favoring their residents over those from other states.
Variscite further argues that Congress, by passing the Rohrabacher-Farr Amendment and provisions allowing the rescheduling or removal of cannabis from Schedule I, has implicitly supported an interstate cannabis market free from federal intervention. Therefore, the dormant commerce clause should apply, regardless of cannabis's federal legal status.
The lawsuit claims that Los Angeles' social equity criteria, which prioritize applicants from specific Southern California areas or those with California cannabis convictions, unconstitutionally favor state residents. Jeffrey Mark Jensen, Gay's attorney, has contested similar residency requirements nationwide.
In May, Los Angeles renewed its motion to dismiss the case after the Ninth Circuit allowed one of Gay's businesses to challenge Sacramento's residency requirements. The Ninth Circuit found that abstention was not warranted since the ordinance clearly mandated residency for equity program participation.
The Central District of California paused Variscite's case during the Sacramento litigation.
Variscite's recent brief asserts that residency requirements do not advance the CSA's goals, as they do not prevent cannabis sales but rather ensure state residents benefit financially. The brief also criticizes the state's justification for excluding out-of-state owners, noting that Los Angeles permits up to 49% out-of-state ownership of licenses and allows nonresidents with a California cannabis conviction and residency in a disproportionately impacted area to fully own a license.
Moreover, Variscite disputes the city's reliance on the 2013 Cole memorandum, which advised against cannabis diversion enforcement. The memorandum, repealed in 2018, does not pertain to Variscite's lawsuit, which focuses on interstate commerce rather than cross-state cannabis movement.
Lastly, Variscite urges the court not to dismiss its damages claims, emphasizing that it seeks compensation for constitutional violations, not lost cannabis sales profits. Variscite argues that the city's lottery, held while the case was pending, constitutes a redressable constitutional breach.
Cannabash, a once-promising concert series in Michigan, has recently descended into turmoil, leaving a trail of unpaid debts and disappointed stakeholders in its wake. The event, organized by Grams & Jams and managed by CMS Consulting LLC, has issued over a dozen bad checks, ranging from $500 to $50,000. These checks have resulted in more than $100,000 in unpaid dues to artists, stage crew, and various vendors. The total amount owed, including unpaid staff, security, marketing costs, talent buyers, and sponsorship refunds, continues to grow as more claims are reported.
Former staff members have come forward to share their experiences of financial betrayal. One former employee recounted how Daniel & Connie Sparrow (the organization's leadership) had jokingly mentioned the possibility of going bankrupt after the event as early as April, but assured everyone that the show would go on. Many staff members, some of whom had known the organizers for over two decades, initially saw no reason for concern. However, within a month and a half, paychecks stopped arriving. By the time the event occurred, some staff members found their final paychecks being withheld. One individual disclosed that they were owed just under $5,000, while acknowledging that others were owed even larger amounts.
Attempts to contact Grams & Jams or CMS Consulting LLC for comments have been unsuccessful. In a text message to former employees, the organizer suggested removing negative posts on social media in exchange for payment. An email to talent buyers revealed the organizer's frustration, stating, "I was willing to discuss payouts, but after the abusive, threatening, and traumatic behavior, I'm not vested in ensuring anything." No concrete evidence of the alleged threats or abusive behavior has been presented at this time.
In another email to a vendor, the organizer stated, "After consulting with my corporate counsel, there is nothing more required at this time. I will send you the dissolution certificate when I receive it tomorrow. There is no need to contact my attorney. The company is no longer operational."
While some vendors have received a certificate of dissolution, the only evidence of a formal bankruptcy filing consists of emails and text messages from the owner of CMS Consulting to artists and former staff. One such message read, "I'm filing for bankruptcy and receivership. If you could please back off, I would appreciate it."
Victims are currently reporting their cases to the Muskegon County Sheriff's Department and the Department of Licensing and Regulatory Affairs (LARA). Additional reports are anticipated as more individuals come forward with their experiences and claims.
The community's reaction to the Cannabash fallout has been one of disappointment, frustration, and anger. One vendor reflected on their financial losses over the years, noting that while the first year was profitable, subsequent years resulted in significant losses due to poor event management and placement. This year, the vendor decided against participating and, upon seeing the current situation, felt validated in their decision.
Another community member highlighted the potential for criminal charges, stating that writing bad checks in Michigan over $500 is a felony. They emphasized that if the allegations prove true, the bankruptcy court may offer little relief for those owed money.
The broader impact on the cannabis event management sector has also been a topic of discussion. Some community members expressed their hesitance to re-enter the formal cannabis industry due to similar negative experiences. There is a call for greater accountability and transparency to prevent such incidents in the future.
The Cannabash incident serves as a stark reminder of the importance of financial integrity and ethical management within the cannabis industry. As the community grapples with the fallout, it is clear that there is a need for stricter oversight and better practices to protect all stakeholders involved in cannabis-related events.
The scandal has also prompted a broader conversation about the overall state of the cannabis industry in Michigan. Many believe that the industry is plagued by unscrupulous actors who take advantage of the community's passion and commitment. There is a growing demand for more rigorous vetting processes and legal protections to ensure that such financial disasters do not recur.
Moving forward, the Cannabash fallout highlights the critical need for event organizers to maintain transparent and honest financial practices. It also underscores the necessity for regulatory bodies to enforce stricter compliance measures to protect vendors, artists, and employees from financial harm.
The community's response suggests a collective desire to rebuild trust and establish a more secure and reliable industry framework. As legal proceedings unfold and more information comes to light, stakeholders hope that this incident will serve as a catalyst for positive change within the cannabis event management sector.
Pure Options, a cannabis chain in Michigan, has announced that rapper 2 Chainz will headline its Back 2 School Block Party on September 7th. This event, celebrating cannabis, culture, and community, will take place in the parking lot of Pure Options' location at 203 N. Clippert St. in Lansing.
The Block Party promises a day filled with music, food, games, and various activities. Alongside 2 Chainz, local artists will perform live music, creating a vibrant atmosphere for attendees. Additionally, the Michigan State vs. Maryland college football game will be broadcasted on a big screen, catering to sports enthusiasts.
Cannabis enthusiasts will have the chance to explore a variety of products from different vendors, with exclusive deals and promotions available only at the event. On-site cannabis consumption will be permitted for those aged 21 and older, making it a unique experience for attendees.
To satisfy appetites, local food trucks will offer a range of culinary options, ensuring that everyone can find something to enjoy. Various games and activities will be available throughout the day to keep attendees entertained.
Past events hosted by Pure Options, such as the 420 Block Party in April, have drawn large crowds and featured performances by artists like Sean Kingston. The success of these events has inspired the Back 2 School Block Party, which aims to be the first in a series of festival-style events designed to foster community spirit.
General admission tickets are priced at $20 and will provide access to all event areas, including the vendor showcase, live performances, and food trucks. A limited number of VIP tickets are available for $200, offering extra perks such as access to private seating areas and a premium goody bag containing cannabis products from various vendors.
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