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Hemp-derived THC is not regulated in Michigan.

The Michigan Cannabis Regulatory Agency has accused Pure Roots, a licensed marijuana business in Harrison Township, of illegally acquiring and selling high-THC concentrate from an unlicensed hemp processor.

In a formal complaint on April 23, the CRA alleges that Pure Roots, which does business as Forte Cannabis, obtained 2,000 grams of THCA isolate from Michigan-based AG Marvels, a company licensed to handle hemp but not marijuana. Although marketed as hemp, lab results later confirmed the product exceeded the 0.3% THC threshold, which qualifies it as marijuana under state law.

During a September 2024 inspection, CRA agents said Pure Roots managers acknowledged using THCA isolate to produce inhalable concentrates. Independent lab tests showed THC levels as high as 87%, and regulators said thousands of units were sold at licensed dispensaries despite warnings to halt distribution.

The complaint also alleges Pure Roots violated state rules by receiving the concentrate via private vehicle rather than through a secure transporter, as required by law. AG Marvels delivered the product to Pure Roots’ Lansing property and to a manager’s personal residence, according to the CRA.

In response to regulators’ concerns, Pure Roots said it believed the product was compliant because it came from a licensed hemp business and was considered non-psychoactive. The company told the CRA it had quarantined the remaining product in September while seeking clarification.

The case comes as regulators and industry insiders warn that unregulated hemp-derived THC products are causing serious issues in Michigan’s legal cannabis market. These products, which often contain chemically synthesized compounds, are sold in gas stations, smoke shops, and grocery stores without state oversight.

“People are creating new chemicals that we have not seen before in human history,” CRA Director Brian Hanna told lawmakers during a Senate committee hearing last week. “They are making things that weren’t intoxicating before, and now they are.”

Robin Schneider, executive director of the Michigan Cannabis Industry Association, warned the products are often mislabeled and sold without age verification.

“These products are completely unregulated, often containing pesticides and chemical residue,” she told lawmakers.

In addition, the use of hemp-derived THC products is hurting licensed growers in Michigan that are following the law, Schneider said.

Hanna called on lawmakers to receive a stalled bill that would require sellers of hemp-derived intoxicants to obtain a state license, calling it a “reasonable response to a serious issue.”

The CRA alleges Pure Roots committed two violations – purchasing from an unlicensed source and transferring the product without a secure transporter. The agency is seeking fines and possible sanctions, including suspension and revocation of Pure Roots’ license.

The company has 21 days to request a hearing or compliance conference. If no response is submitted, the case will proceed to a contested hearing.