Colorado’s largest marijuana cultivator filed a lawsuit against Bonanza Cannabis Co., claiming the licensed operator knowingly infused products with hemp-derived THC, manufactured gummies and vapes using harmful chemicals and sold them to consumers.
According to court documents obtained by MJBizDaily, Mammoth Management and its affiliates – Mammoth Farms and Mammoth Manufacturing – allege Bonanza “engaged in deceptive trade practices by possessing, distributing and selling illicit hemp-derived synthetic THC in its vape cartridge products” and failed to properly disclose their contents.
Under Colorado statutes, it is unlawful for any individual or entity to “distribute, dispense, manufacture, display for sale, offer for sale, attempt to sell, or sell” any product containing synthetic cannabinoids.
The complaint, filed in the District Court of Saguache County, further claims Centennial-headquartered Bonanza purchased and infused products with distillate from other parties and failed to disclose that information.
Mammoth, a vertically integrated marijuana operator based in Denver, is seeking financial restitution from Bonanza for lost sales, court fees and related legal expenses, according to the lawsuit.
The allegations in Colorado of creating illicit THC distillate from hemp is the latest scandal in the regulated marijuana industry, which is facing a mounting crisis over the validity of product composition, certificates of analysis (COAs) from testing labs and seed-to-sale tracking.
Marijuana operator responds
Mammoth partnered with a third-party independent lab to run tests on several Bonanza products.
According to court documents, Mammoth purchased gummies and vape cartridges on June 2 at a Denver store operated by Bonanza.
A COA confirmed the THC in those products was derived from hemp and produced through chemical conversion, Mammoth claims.
“These labels are false, misleading, and contain material misrepresentations,” Mammoth said in the lawsuit.
“Bonanza knowingly and/or recklessly engaged in deceptive trade practices by possessing, distributing, and selling illicit hemp-derived synthetic THC.”
In a counterclaim filed July 26, C2CC – which operates as Bonanza – denied the allegations.
According to documents obtained by MJBizDaily, Englewood-based C2CC said it does not manufacture THC distillate and hasn’t purchased hemp materials.
Bonanza said in its counterclaim that it only sources distillate from third parties and added that its claims are supported through its records with Metrc, the state-required tracking software.
“It buys THC oil from quality growers/extractors and then uses these materials to create its vape and gummy products,” the brand said in a statement sent to MJBizDaily.
The company also told MJBizDaily that Mammoth offered to dismiss Bonanza from the complaint if Bonanza agreed to use Mammoth as its exclusive provider of wholesale oil for two years.
“Bonanza rejected this outrageous offer and subsequently was served with an Amended Complaint,” the company said in a statement.
Testing crisis emerging
A series of recent incidents in regulated marijuana markets across the United States has eroded confidence in certified COAs and conversion processes used for THC distillate, while products continue to evade track-and-trace requirements.
Last week, Oklahoma regulators suspended a major medical cannabis processor in the state for public health and safety violations, including failing to accurately track products.
In Michigan, regulators in early August filed a complaint against a marijuana processing company they allege purchased vast quantities of unregulated THCA concentrate from outside the market and misidentified the product in state-mandated tracking records, among numerous charges.
That breach followed an emerging pesticide scandal in the California market that continues to damage consumer confidence in the regulated market.
And in July, lab operators told MJBizDaily that some cannabis samples submitted for testing contain dozens of unknown compounds.
H/T: mjbizdaily.com
