Michigan cannabis regulators this week ordered the manufacturer of a popular brand of vaporizer products to close Sept. 24 after finding repeated serious compliance violations, including evidence of possible inversion and diversion.
The producer of Muha Meds, a company called Michigan Investments 10, must also pay a record $2 million fine, the Michigan Cannabis Regulatory Agency said in a statement Wednesday.
According to CRA Executive Director Brian Hanna, regulators first noted multiple “egregious violations” at Michigan Investments 10 beginning in 2023, including:
- Failing to test product
- Failing to adequately log product in seed-to-sale tracking
- Missing or dysfunctional surveillance cameras
Why did Michigan cannabis regulators revoke the permit of Muha Meds’ parent company?
“Michigan’s cannabis laws and rules are designed to protect public health and safety and ensure accountability throughout the regulated market,” Hanna said in a statement.
“When a licensee disregards those requirements to this extent, the CRA will take appropriate action.”
According to investigators, Michigan Investments had made an abnormally high number of changes to entries in their Metrc log.
During an unannounced site visit, the business’ general manager told investigators that the company could not “physically locate” 16 packages containing “105.7 pounds of marijuana product,” according to the CRA’s closure order.
Missing product is sometimes a sign of diversion, in which legally grown cannabis ends up on illicit markets. Problems around track-and-trace also raise questions of inversion, or when illicit product enters the legal supply chain without verified testing or other product controls.
According to the CRA, investigators also found “packages of distillate without a Metrc tag.”
Is Michigan cracking down on marijuana diversion?
The CRA had suspended Michigan Investment 10’s permit in November 2023. However, the suspension was lifted by an administrative law judge in January 2024.
In June 2026, a state administrative law judge then upheld the CRA’s findings that Michigan Investment committed multiple violations and that its permit be revoked, according to a copy of the final order.
It’s not clear why it took more than two years for the state to take final action. Stil, it’s the biggest fine ever imposed on a licensed Michigan cannabis business, according to MLive.
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Is Michigan cannabis struggling?
Michigan remains the country’s second-biggest legal cannabis market behind only California, but operators have struggled mightily over the past two years amid tax and pricing woes.
Legal sales fell to $3.17 billion last year despite cannabis retailers reporting selling more products than ever as continued oversupply led to price compression.
More recently, Michigan operators are feeling squeezed by a new 24% wholesale tax that took effect Jan. 1. Several retailers have closed in direct response to the tax hike, which so far has brought in only a fraction of the promised revenue.
Regulators have taken severe action against Michigan cannabis businesses accused of misconduct before.
