Cannabis Regulatory Agency suspends licenses of Candid Labs

CORUNNA, Mich. (WLUC) - Michigan’s Cannabis Regulatory Agency announced Friday that is has summarily suspended licenses held by Candid Labs, a marijuana processing facility near Lansing.

The Cannabis Regulatory Agency (CRA) issued formal complaints and announced summary suspensions of the medical and adult-use processor licenses held by Candid Labs, LLC dba Layercake Farms 2, LLC, in Corunna.

According to the CRA — based on its investigation of the conduct alleged in formal complaints — the CRA determined that the safety or health of patrons or employees “is jeopardized by Candid Labs’ continued operation and that the public health, safety, or welfare requires emergency action.”

CRA Executive Director Brian Hanna said, “The conduct alleged in the formal complaints is a risk to public health and safety and must not happen in Michigan’s regulated marijuana industry and market. It is important that all licensees realize that strong and consistent enforcement actions are now the norm at the CRA and that we will never stop working to protect the public.”

The CRA’s formal complaints allege that on Oct. 6, 2022, CRA staff visited Candid Labs’ medical grower facility to discuss the malfunctioning of its video surveillance system. When CRA staff entered the video room, they said they observed that 38 cameras were inoperable and showing black screens. According to the CRA, Candid Labs stated that they have a rat problem and that rats had chewed through the video wires.

While on the premises, CRA staff said they also observed Candid Labs’ medical and adult-use processor business that is co-located on the same premises. During this visit, CRA staff reported observing numerous examples of non-compliance with Michigan marijuana regulations.

For example, CRA staff said they reviewed Candid Labs’ submitted floor plan for licensure and discovered that a yellow storage trailer was added to their medical marijuana processor facility, and that they failed to have the yellow storage trailer inspected by the CRA or receive CRA approval prior to bringing it onto the facility grounds.

The CRA said several potential violations were found inside a trailer used by Candid Labs to process marijuana distillate. While inside the processing trailer, CRA staff observed four pots containing what appeared to be marijuana crude and observed nine tall cylindrical jars of what appeared to be marijuana distillate without statewide monitoring system (Metrc) tags.

Because the marijuana crude and distillate lacked Metrc tags and could not be tracked in the statewide monitoring system, the CRA said it asked Candid Labs’ employees to confirm the source of the products, but Candid Labs’ employees maintained that the products were made from biomass kept on the licensed premises.

CRA staff then requested that the marijuana crude, distillate, and biomass undergo testing to determine their chemical profiles. Contrary to Candid Labs’ previous explanation – and as more thoroughly alleged in the formal complaints – the results of the testing revealed that the biomass could not have been used to create the marijuana crude or distillate found in the trailer. When asked by CRA staff, Candid Labs was unable to provide a credible explanation for this discrepancy.

The formal complaints allege 13 regulatory violations against Candid Labs’ medical processor license and 15 regulatory violations against Candid Labs’ adult-use processor license.

Candid Labs may request a hearing to contest the allegations in the formal complaints. State law also provides for a hearing to determine whether the summary suspensions should remain in effect.

In addition to the formal complaints which required emergency action, the CRA has previously served Candid Labs another formal complaint, dated 8/10/22, in which twelve regulatory violations were alleged.