Missouri Cannabis Manufacturer Faces $20M Lawsuit Filed By Contractor After Massive Product Recall

Delta Extraction, a Missouri-based cannabis oil manufacturer, is facing a near $20 million lawsuit following last year’s massive product recall. Filed by former contractor SND Equipment Leasing, the lawsuit claims Delta Extraction owes over $13 million for producing THC concentrate oil and an additional $5 million for lost revenue due to confiscated equipment.

The Recall

Over 60,000 Delta Extraction products were pulled from shelves in August 2023. As a consequence of non compliant sales of hemp-derivates, Delta Extraction's manufacturing license was also cancelled. The products were recalled because they contained THC distillate, which the state argued included unregulated hemp-derived THC, which Missouri considers a health risk.

SND Equipment Leasing, a contractor for the manufacturer and producer of the THC distillate, now argues that it was Delta’s responsibility to ensure compliance with state regulations. "It doesn't matter what the state says or if it was within compliance or not, they still contracted with SND to produce a product," said SND's attorney, Joy Primoli, reported Rebecca Rivas for The Missouri Independent.

Read Also: Missouri’s $2B Marijuana Market Hits Record Sales In March, Eyes Future Growth With Microbusiness Licenses

Lawsuit

SND’s lawsuit reveals the extent of the financial damages incurred, claiming Delta Extraction failed to pay for approximately 1,100 liters of THC concentrate oil. This quantity of distillate could produce nearly 80 million doses of THC gummies.

The lawsuit also seeks compensation for lost revenue due to the state's confiscation of SND's extraction equipment, which was held inside Delta Extraction's facility for five months. Primoli compared the situation to a homeowner being penalized for a contractor’s work that doesn’t meet association regulations, insisting that SND fulfilled its contractual obligations, regardless of Delta Extraction failure to comply with the Missouri Division of Cannabis Regulation (DCR).

While SND’s lawsuit is focused on financial compensation from Delta Extraction, Delta’s appeal is centered on challenging the state’s regulatory actions.

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