Marijuana business faces fines, penalties after 4-year-old ate mislabeled gummies

The Michigan Cannabis Regulatory Agency on Wednesday, July 5, punished a Mount Morris marijuana business over 30-plus rules violations that included giving employees mislabeled THC gummies, resulting in the hospitalization of a 4-year-old.

Sky Labs, 9421 North Dort Highway, agreed to “surrender” its medical marijuana processing license, although the business retains a recreational marijuana license, the CRA said. The CRA also issued a $100,000 fine and imposed stringent oversight requirements for the ongoing business.

Sky Labs, a processor that makes marijuana edibles, admitted to violating some rules, including keeping dozens of pounds of illicit, untracked marijuana at its business that may not have underwent required safety testing.

Additionally, the business in June 2022 gave 10 employees Chewii Sour Cherry gummies that were mislabeled as CBD, a non-psychoactive compound found in cannabis, according to the CRA.

“An employee provided the edibles to her 4-year-old child, the child consumed two edibles which contained 20 mgs of marijuana,” and “the child became seriously ill and was hospitalized due to adverse reactions to the marijuana edibles,” the CRA said. “A police report was filed with the Davison City Police Department and an investigation was opened with Child Protective Services.”

MLive requested and is awaiting a copy of the referenced police report.

“In September 2021, during an inspection, the CRA observed eleven employees actively working in the production of marijuana products who were not trained on safe food handling and were not in the possession of food handling training certificates,” the licensing agency said in a statement. “The CRA also observed Sky Labs producing, packaging and storing vape cartridges in a back trailer without a working video surveillance system.”

As part of a consent agreement entered on June 14, Sky Labs agreed to undergo a full onsite audit conducted by the CRA and submit various requested monthly reports for a year.

This isn’t the first time Sky Labs has faced fines for violations.

Sky Lab was fined $20,000 in 2021 for underreporting vaping cartridges it manufactured, which led to product being sold to consumers without undergoing full safety testing. Sky Labs claimed the underreporting was due to a data entry error.

The latest consent agreement and associated complaints help reveal why CRA may have mysteriously placed on hold in excess of $5 million of marijuana products from Sky Labs without explanation in April 2022.

The holds were later lifted and an initial complaint was filed in December 2022.

Here are some of the violations contained in CRA complaints filed against Sky Labs:

During a Sept. 21, 2021 inspection, the business was in possession of pre-rolled marijuana that didn’t contain required tracking numbers. “This marijuana product could not be identified on any manifest or in the statewide monitoring system as being sourced from a licensed grower, indicating that it originated in the regulated market,” the complaint said.
On Nov. 9, 2021, Sky Labs products tested positive for Bifenthrin, a banned insecticide. The Michigan Department of Agriculture and Rural Development (MDARD) followed up by inspecting the marijuana grower said to have supplied the cannabis for the products, but there was no contamination found at the grower’s facility.
On Jan. 26, 2022, CRA employees conducting a compliance check found untagged marijuana trim in a “large plastic bag” and multiple bins.
On March 27, 2022, CRA employees conducting a compliance check found a trailer with marijuana documented as weighing 778 pounds. The weight listed on delivery paperwork was listed as 900 pounds.
On multiple occasions, Sky Labs failed to provide or delayed release of surveillance videos requested by the CRA, in one instance telling the CRA video was unavailable due to a malfunction.
CRA investigators identified products that violated rules prohibiting products marketed in a way that would make them desirable to children. Some of the products in question were named THC Fruity Crispy, THC Strawberry Crispy, Cocoa Crispy, THC Snickerdoodle Cookie, THC Cherry Brownie, and THC Walnut Brownie, marketed under the Motor City Cannabites brand.

Read the full second superseding formal complaint filed against Sky Labs.

“When businesses don’t follow the laws and rules that govern the cannabis industry, it is important that they be held accountable for their actions,” CRA Director Brian Hanna said. “It is vital to the health and safety of the public that all licensees in Michigan’s cannabis industry abide by the rules and laws that are in place to protect the public.”

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