Massive Cannabis Recall In Michigan Prompts High-Stakes Lawsuit

The largest-ever recall in Michigan’s legal cannabis market affecting every sector in the industry is being challenged in court by the testing lab that authorities blame for the entire mess.

Lansing-based Viridis Laboratories, Michigan’s largest marijuana lab, alleges the state’s Marijuana Regulatory Agency devised a politically driven recall to weaken the company’s stronghold on the legal market and make the industry more competitive, according to a new lawsuit.

“Competitors have taken issue with Viridis’ organic market share of the cannabis testing industry,” the 202-page complaint said. “Several competitors have openly indicated to Viridis and the MRA that they wanted to see the company put out of business to open more market opportunities for themselves.”

State regulators recalled about 64,000 pounds of cannabis tested by Viridis between Aug. 10 and Nov. 16, claiming the lab results were unreliable. Worth some $229 million, the recalled cannabis covers about 70 percent of the entire commercial market.

The recall has sent dispensaries, growers, producers and customers alike scrambling to dispose of the faulty pot in question and trying to negotiate refunds. Neither the lawsuit nor the MRA complaint outlines how much of the recalled marijuana has already been sold to customers, but a MLive report suggests a meaningful quantity is already in circulation.

Viridis holds two of 19 state licenses for medical cannabis lab testing and another two of 17 state licenses to test recreational cannabis. The company claims to have a whopping 60 to 70 percent market share, but alleges the MRA of weaponizing its bureaucratic power to bring it down.

The MRA is asking any customers who purchased recalled products to return the cannabis to the retailers or stores where they made their purchases. Regulators warned that consumers with weakened immune systems or lung disease face the highest risk of illnesses related to consuming tainted cannabis, which include aspergillosis.

Authorities have not yet said whether any customers have gotten sick from consuming the recalled product, and a department spokeswoman did not immediately respond to request for comment.

Viridis’ founders include former forensics employees with the Michigan state police, according to MLive, and this year’s recall isn’t the first time the company has run into controversy. Viridis had to pay a comparatively modest $2,500 fine last year after the MRA claimed the company improperly tested concentrates in February 2020.