The Maryland Medical Cannabis Commission ruled on Tuesday that a politically connected marijuana grower violated state regulations by using prohibited crop-protection pesticides and ordered the company to pay a $125,000 fine, issue refunds on certain products and operate under a two-year probationary period.
The commission also determined after a five-month investigation that ForwardGro LLC had failed to ensure employees used adequate personal protective equipment when using pesticides and did not deploy video surveillance of its crop as required by state regulations. In addition, the commission imposed staff changes at the company, which is co-owned by Gary L. Mangum, a prominent supporter of Larry Hogan who served on the governor’s inaugural committee and transition team.
After a Nov. 8 settlement meeting between ForwardGro and the cannabis commission, ForwardGro CEO Michael F. McCarthy resigned and Mangum took over as the company’s acting top officer, according to the consent order. The commission has also required McCarthy to “divest all of his ownership interest” in the company within 30 days.
Mangum, who had not previously participated in the firm’s day-to-day activities, signed the commission’s order, formally acknowledging “the validity of this Consent Order” and the company’s cooperation.
State regulators are investigating allegations that a politically connected medical marijuana grower in Maryland illegally used pesticides in growing cannabis plants that were later harvested for sale to patients.
In a statement Tuesday, Mangum said: “We understand that we fell short of the expectations that we placed on ourselves related to compliance and that are set forth in state regulations.”
“We must and will do better — for our customers, patients, industry, and our employees,” he added. “We are deeply committed to instituting the changes necessary to grow consistent, high-quality medical cannabis in Maryland. We have learned from this experience and are using the lessons learned to build a stronger company for the future.”
The investigation into ForwardGro began in July when a complaint was filed with the commission that included sworn statements from three former employees at the company’s Anne Arundel County growing center. The complaint was submitted by the Maryland Ethical Cannabis Association, a newly formed group of cannabis companies that oppose pesticide use in growing plants.
Ashley Colen, association president and the holder of a dispensary license, said she stopped selling products from ForwardGro’s plants after learning of the allegations. Colen, co-owner of the Ash+Ember dispensary in Centreville on the Eastern Shore, said some of her customers reported side effects such as burning eyes and throats.
In October, the commission issued an order to block the sale of ForwardGro products by telling all cannabis dispensaries to “please quarantine these products.”
The commission’s hold on sales of ForwardGro product has been lifted.
“From the beginning, all ForwardGro product available for sale at dispensaries and to processors has passed rigorous pesticide testing,” the company said in its statement. “Although no ForwardGro products were found to pose any known threat to patient safety, ForwardGro is offering refunds for the return” of the company’s “flower and pre-roll products produced before July 1 that remain in the inventories of cannabis stores. Patients can also get a refund if their products are “still in their unopened, original packaging,” the company said.
The investigation — which included interviews with 17 current and former ForwardGro employees — revealed that “powdery mildew and unwanted insects were problems” at ForwardGro’s facility and that the company used “certain unauthorized crop protection agents to treat medical cannabis plants,” according to the consent order.
The commission’s investigators found that 15 pesticides may have been used on ForwardGro products. Six of those chemical agents were subsequently allowed by the state’s Department of Agriculture but were prohibited at the time the company was using them.
The company must dispose of all of its cannabis product produced before May 31 and announce that it will accept any returns and will make refunds within 10 days. The order also requires ForwardGro to attach a notice on all of its products produced prior to July 1 that states they “may have been exposed to certain unauthorized crop protection agents, the health effects of which are not known.”
The commission also issued a public safety statement about unauthorized pesticides.
“The possible health impact of consuming cannabis products containing unapproved pesticide residues is unknown,” according to the statement. “Short- and long-term health impacts resulting from inhalation exposure to such contaminants may exist depending on the duration, frequency, level of exposure, route of exposure, and health condition of the consumer. Consumers should contact their physician or registered provider with related questions and concerns.”
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The company’s statement said it is committed to its “integrated pest management program, which incorporates beneficial insects to maintain control of harmful insects” and to “using only those crop protection agents approved for use in Maryland.” ForwardGro is posting online all of its certificates of analysis produced by independent testing laboratories.
Investigators found that in August 2017 several cannabis plants at ForwardGro’s facility were taken outside of its secured area. “At the time there were no security measures to prevent unauthorized access to these plants” as required by regulations, according to the order’s findings of fact. The company “failed” to monitor the relocated plants by video as required.
ForwardGro will now be subject to more stringent and frequent inspections during its probationary period and is not allowed to obtain any new licenses from the state. It must implement new security, employee safety and pesticide spraying procedures.
In addition to forcing McCarthy to divest from the company, the commission has required ForwardGro to hire a new head grower who must be pre-approved by the commission and to expand the role of the company’s compliance officer.
The company said it would also conduct “frequent internal audits led by a compliance team” and would enhance staff training on state regulations and improve tools to allow employees to report “non-compliant activities,” according to ForwardGro’s statement.