In an exclusive interview with Cannabis Equipment News (watch above), Lezli Engelking, president and founder of cannabis health and safety organization, FOCUS, and Rachael Herndon, chief operating officer of Delta Extraction, the company at the center of the recall controversy in Missouri, discuss the current state of the industry quagmire.
In August, the Missouri Division of Cannabis Regulation (DCR) issued a mandatory recall for products manufactured by Delta Extraction.
After some 12 weeks of suspended operations, Herndon is looking for answers. The company expects the state to revoke its license, but they haven't received confirmation and remain in the dark regarding new developments.
According to Herndon, the entire situation was set off by an anonymous tip that was later confirmed to come from a competitor.
Much of the situation is a result of the state trying to stop hemp-derived cannabinoids from coming into the state’s cannabis program, Engelking says. She adds that the cannabis industry as a whole is unique from every other industry in that regulators don't regulate the entire process. She says the situation in Missouri is a clear example that testing can't be the only way we ensure safety in products.
While Herndon is forced to wait to hear from regulators, she says other Missouri cannabis operators are frustrated and afraid after learning that DCR can essentially walk into any cannabis business and suspend it for any reason.
Delta Extraction is less than five years old. Still, Herndon says it was growing exponentially, doing $20 million in sales within 18 months. Some 63,000 products worth up to $30 million remain in limbo and the approximately 200 dispensaries in the state remain confused over which products are on hold.
Herndon vows that Delta's doors will open again one day, but the company will certainly be different.
Engelking notes that one of the greatest takeaways for everyone in the industry is the importance of documenting everything you do.
Timestamps:
- Delta Extraction expects to lose its license in Missouri. (1:18)
- The anonymous tip came from a competitor. (2:42)
- DCR had approved Delta's SOPs. (3:15)
- Delta's experience is a “symptom” of a larger problem. (7:46)
- Regulators don't monitor the entire process in cannabis. (8:20)
- Testing can't be the only way we ensure safety in products. (9:22)
- Delta Extraction and the industry was “duped.”(10:03)
- Engelking: I haven't seen this in any other state. (13:54)
- Missouri operators are frustrated and scared. (15:56)
- Engelking: These products have been tested and passed. (21:06)
- Herndon: DCR is setting our partners and peers up for failure. (25:18)
- Delta will open its doors again one day. (29:38)
- The importance of documentation. (30:43)
- Engelking: Hemp-derived cannabinoids are a national problem. (38:20)