Viridis Laboratories' Lawsuits Dismissed in Michigan Marijuana Recall Dispute

January 12th, 2024 Legal & Crime
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In Michigan, a judge from the Court of Claims recently dismissed two lawsuits related to a significant marijuana recall in 2021, which involved approximately 64,000 pounds of cannabis products valued at $229 million. This recall, one of the largest in the state's history, affected about 60% of all marijuana products in Michigan.

The issue originated from the Michigan Cannabis Regulatory Agency's (CRA) decision on November 17th, 2021, to recall marijuana tested by Viridis Laboratories between October 10th and November 16th, 2021. Viridis Laboratories, a licensed safety lab, is responsible for ensuring the safety of cannabis products for public consumption. The CRA's action was prompted by discrepancies in testing results for aspergillus, a potentially harmful mold, in cannabis products.

Claire Patterson, MRA Scientific and Legal Section Manager, testified that they observed failures in aspergillus testing in the state's monitoring system, which were subsequently reported as passing by Viridis Laboratories without any remediation by growers. Aspergillus, if detected in cannabis, must be eradicated and the product retested before sale. Further investigations by other licensed labs confirmed the presence of aspergillus in products passed by Viridis, leading the CRA to question the reliability of the lab's results for various marijuana products. The extensive recall caused considerable market disruption and additional costs, as all recalled products needed retesting before sale.

Viridis Laboratories, in response, filed lawsuits against the CRA and several employees, alleging that the recall was motivated by a "vendetta" due to Viridis's substantial market share in lab testing. The company argued that its due process rights were violated as the recall prevented sales without allowing Viridis to contest the allegations.

A previous ruling by a Court of Claims judge partially sided with Viridis, distinguishing between marijuana tested in their Lansing lab, which was the source of the contaminated product, and their Bay City lab. The recall was subsequently revised to exclude products tested in Bay City.

However, the recent dismissals in the Court of Claims signal a significant development, marking the end of most of the related lawsuits. Despite this, the dispute between Viridis and the CRA continues in Michigan's Office of Administrative Hearings and Rules court, with hearings scheduled to resume soon. Additionally, Viridis is pursuing financial compensation through the courts for sales losses and costs incurred due to the recall. One lawsuit remains unresolved in Ingham County Circuit Court.

Viridis's attorney, David R. Russell from Foster Swift Collins & Smith law firm, expressed confidence in revealing the truth through the court process and holding the CRA accountable. CRA spokesman David Harns commented on respecting the judiciary's rulings while the agency continues its regulatory duties.

Furthermore, the CRA has separately accused Viridis of manipulating THC potency results in cannabis products, a claim which Viridis denies and is currently contesting in the state administrative courts. The level of THC in marijuana products is a crucial factor affecting their value, as higher THC levels typically command higher prices due to their increased psychoactive effects.

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