The Michigan Cannabis Regulatory Agency (CRA) has officially filed a formal complaint against Exclusive Brands LLC, a licensed cannabis processor operating out of Ann Arbor, Michigan. The complaint, tied to violations under Michigan's Medical Marihuana Facilities Licensing Act (MMFLA), highlights several concerning issues that came to light following a routine, unannounced inspection.
The CRA's complaint, filed on September 4th, 2024, outlines several serious allegations against Exclusive Brands LLC, including violations related to untracked cannabis product, improper surveillance system functionality, and failure to maintain accurate records.
Untracked Cannabis Distillate:
During a site inspection conducted by CRA staff on June 26th, 2024, two packages of cannabis distillate, totaling over 4,770 grams (more than 10 pounds), were unaccounted for in Exclusive Brands' physical inventory. Despite the company's claim that the products were destroyed, they were unable to provide sufficient documentation to confirm the destruction, violating the state's requirements for accurate inventory tracking and waste management.
Surveillance System Failures:
CRA investigators also found multiple issues with the company's surveillance system during the inspection. Exclusive Brands was unable to provide immediate access to the system when requested. A follow-up virtual inspection revealed that the company failed to maintain the required 30 days of surveillance footage, a critical requirement under state law. This inability to produce footage raised concerns about the company's compliance with surveillance protocols mandated by the state.
Recordkeeping Violations:
The company failed to maintain accurate records concerning product waste, further violating MMFLA regulations. State law requires businesses to maintain comprehensive records of all marijuana products, ensuring that any waste or disposal is properly tracked and reconciled with inventory systems.
The CRA's formal complaint details five specific violations:
As a result of these alleged violations, the CRA has announced its intention to impose penalties that could include fines, suspension, revocation, or restrictions on the company's licenses. Exclusive Brands LLC holds an active processor license under the MMFLA, which is now at risk depending on the outcome of the case.
The formal complaint has triggered a regulatory process, and Exclusive Brands has several options to respond. The company can request a compliance conference, an informal meeting to address the allegations, or it can request a formal hearing to dispute the charges. If the company does not respond to the complaint within 21 days, a contested case hearing will be scheduled automatically.
This case underscores the strict regulatory environment Michigan cannabis businesses operate within. The CRA has been diligent in enforcing rules surrounding inventory management, surveillance, and recordkeeping, aiming to ensure that businesses comply with the state's legal framework for cannabis operations. Companies that fail to adhere to these standards risk severe penalties, including the potential loss of their licenses.
As the Michigan cannabis industry continues to expand, cases like this highlight the importance of compliance and the significant consequences of regulatory violations.
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