Maine’s illegal marijuana “grow houses” are shifting from the black market to the legal market, officials warn, after state records show dozens of suspected illicit growers have obtained legal caregiver licenses to grow and sell cannabis in Maine’s medical market.

Officials are warning of an influx in Maine of tainted “gray market weed,” or cannabis produced illegally that finds its way to the legal market, as dozens of grow houses transition to Maine’s medical industry.

Because of the lack of testing and tracking in Maine’s medical market, officials warn both the sale of gray market weed and possible chemical contaminants in it are nearly impossible to detect.

The Office of Cannabis Policy confirmed that several suspected grow houses have received licenses to enter Maine’s medical market after agency records showed more than 120 suspected illicit growers receiving legal caregiver licenses in the last year.

Maine cannabis regulators say state statute limits the OCP’s ability to deny suspected illicit growers’ applications and regulate grows that have been approved.

“Cannabis operations in facilities that were recently the site of an illicit operation is a significant concern to OCP,” the agency’s media relations director, Alexis Soucy, said in a statement. “But simply growing at a location that was formerly an illicit facility is not sufficient to deny an application.”

Authorities estimate there may be anywhere from 100 to 700 single-family homes gutted and converted into clandestine cannabis grow houses, each harvesting anywhere from 500 to 3,000 cannabis plants at a time.

This year, authorities have raided about 50 of the operations, which they say are linked to Chinese transnational criminal groups. Some officials say the groups often employ forced labor and human trafficking to harvest the crop.

The grow houses are often full of carcinogenic pesticides, corrosive fertilizers and extensive black mold infestations — contaminants that officials worry could be invisibly seeping into Maine’s medical market entirely legally.

Law enforcement has said the operations largely sell their cannabis into out-of-state markets where cannabis is either illegal or tightly regulated. The dozens of caregiver licenses indicate an operational shift from the black to the medical market, authorities warn.

‘GRAY MARKET WEED’

Cannabis officials and law enforcement are concerned that Maine’s medical market is seeing an influx of “gray market” weed, after OCP records showed dozens of suspected illicit growers receiving legal caregiver licenses over the last year.

A spreadsheet of individual caregivers licensed to grow, transport and sell medical marijuana in Maine shows a sudden uptick in suspected grow house operators receiving licenses in the last year.

At least 115 properties throughout rural Maine bearing the markers of illicit growing operations have become licensed caregiver facilities since the first applications appear to have been approved around October 2023.

“OCP remains concerned about illicit actors and illicit behaviors taking refuge in the medical cannabis program,” Soucy said. “A lot of the challenge comes from an outdated, piecemeal medical cannabis statute that needs significant structural reform so that it aligns with what the medical cannabis program looks like today.”

Dozens of medical marijuana caregiver licenses have been awarded to new cannabis farms registered to rural Maine applicants of Chinese descent with addresses listed in Boston, New York City and their respective suburbs, mirroring many of those arrested at illegal growing operations so far.

Unlike most other legal states, licensed individual caregivers in Maine can create businesses and sell cannabis to anyone with a medical card. About 80 suspected illicit growers have established such businesses, according to OCP records.

Illegal growers throughout rural Maine appear to be receiving licenses to sell their cannabis in bulk to the state’s medical dispensaries.

That trend is being reflected in law enforcement’s raids of the grow houses, according to Somerset County Sheriff Dale Lancaster, whose office has raided more than 20 grow houses so far.

“What we’re seeing is that on a few of the homes that we have executed our search warrants on, that they then go to the Office of Cannabis (Policy) to try to obtain a license,” said Lancaster. “It morphs from illegal to legal activity, it adds a few more steps, but it doesn’t preclude our investigation.”

State statute limits the OCP’s authority when it comes to denying caregiver applications, the office says. The agency cannot deny applicants just because law enforcement suspects a home is an illegal grow site, OCP says.

The OCP can largely only deny applicants who have been imprisoned for one year or longer on drug-related charges, Soucy said. A federal court also ruled in 2022 it is unconstitutional for Maine to deny applicants for having out-of-state residences, as many illegal grow house operators do.

If the OCP rejects an application, another can be filed after 30 days. Caregivers can also only have their licenses revoked for one year under current regulations, leaving the door open for grow house operators to quietly reenter the legal market even if they’re caught breaking the law.

Soucy says that OCP’s practice is to conduct a pre-inspection of all non-Maine resident caregiver applicants before issuing a license, saying “those pre-inspections have resulted in numerous denials of licenses.”

OCP records show about 25 suspected grow house owners with out-of-state residences, largely in New York and Massachusetts, with individual caregiver licenses.

Maine is not the first state to deal with the dilemma of gray market weed. In the roughly 20 other states where nearly identical grow house operations have proliferated from Oklahoma to Oregon, a surge of gray market weed has often followed, said Andrew Lizotte, the assistant U.S. attorney who is leading the federal investigation into Maine’s illegal cannabis grow houses.

“That’s a through line through this whole phenomenon nationwide,” Lizotte said. “These illegal grows exist under the cover of states that have passed some sort of legal regime — Maine included.”

Maine has become a particular hotspot for the illegal grows largely due to the relatively cheap cost of rural land, the privacy afforded by the state’s small and rural communities and the loose regulatory structures in the state’s marijuana markets, officials say.

Toxic pesticides, chemical fertilizers and black market fumigants are also used to cultivate and process marijuana in nearly all of the grow houses, law enforcement says.

Without any guidance around chemical use, required chemical testing or mandatory inventory tracking in Maine’s medical market, industry officials warn tainted cannabis could be seeping into legal dispensaries across the state.

‘CONTAMINATED CANNABIS’

Chemical fertilizers, toxic imported fumigants and large black mold infestations have been found in nearly all of the grow houses so far, law enforcement says. Imported Chinese fumigants “not able to be obtained domestically” have also been uncovered in many grow houses, prosecutors say.

“These grow houses, they’re cookie-cutter,” Lancaster said. “We usually find the same chemicals, they’re all basically built the same, use the same irrigation system, same ventilation system, same procedures of doing growth. It’s a very factory-type production.”

Because medical cannabis in Maine has no required chemical testing or inventory tracking, officials warn licensed grow houses could be silently selling toxic cannabis to legal dispensaries.

An OCP report last year found nearly half of Maine’s medical cannabis contained unsafe levels of chemicals, mold and yeast, raising questions about consumer safety and the efficacy of Maine’s tracking and testing requirements — or the lack thereof.

“Maine’s Medical Use of Cannabis Program lacks the inventory tracking and testing safeguards present in Maine’s Adult Use Cannabis Program,” Soucy said. “Tracking and testing effectively prevent the introduction of illicit and potentially contaminated cannabis into the regulated market’s supply chain.”

The most commonly found contaminant in Maine’s medical market, the study found, was Eagle-20: A chemical fungicide cleared for general application on everything from tomatoes to rose bushes. When ignited and inhaled, the chemical creates cyanide.

Eagle-20 has been found at nearly every illegal grow house busted so far, authorities say.

Even for licensed Maine growers, pesticide, fertilizer and chemical use remains in a dangerous legal gray area.

States do not have the authority to issue their own guidance about pesticide use, instead relying on guidance from the federal Food and Drug Administration.

The FDA does not label chemicals for use on marijuana because the plant is still a Schedule 1 illegal drug federally. This does not mean that no pesticides are cleared for use on cannabis, this means no pesticides are regulated for use on cannabis.

As a result, Maine’s Board of Pesticides Control “does not maintain a list of pesticides that are permitted or not permitted for use on cannabis,” according to the Maine Department of Agriculture, Conservation & Forestry. Instead, the agency has cleared all chemical products deemed safe for use on food as safe for use on cannabis.

Under current guidelines, Eagle-20 can be applied entirely legally to medical cannabis in Maine in any amount, along with hundreds of other general use chemicals that can pose unique dangers when lit and smoked, according to Nick Chamberlain, spokesperson for Portland cannabis testing facility Nova Labs.

Applying any kind of chemical to cannabis is a risky endeavor because cannabis absorbs the chemicals in its environment, accumulates them throughout its growing process and maintains them when harvested and processed, Chamberlain said.

“Not only are we talking about the health effects of the chemicals themselves but also any breakdown products that are formed when these compounds are vaporized or combusted,” Chamberlain said. “Cannabis can absorb, internally transport, and hold onto these kinds of chemicals.”

In addition to common fertilizers, pesticides and fungicides, federal prosecutors say they often find imported Chinese fumigants “not able to be obtained domestically” that are sprayed throughout the grow houses in either a gas or vapor.

“There has, in some instances, been found in grow houses Chinese-labeled fumigants, which are essentially to kill mites and insects,” Lizotte said in October. “Those are also potentially dangerous for the people who are working inside the grow houses.”

Without any regulatory structures in Maine’s medical cannabis industry to detect either the grow houses or the contaminants in the marijuana they produce, industry officials and law enforcement alike worry that gray market weed is seeping into Maine’s medical market.

The Medical Marijuana Caregivers of Maine is a nonprofit advocacy group that represents medical cannabis patients, growers and manufacturers and has previously pushed back against proposals for stricter testing and tracking requirements in Maine’s medical cannabis industry.

In a statement, MMCM board chair Tammy Smith said the organization encourages illicit growers to receive legal caregiver licenses so that the organization can teach them “best practices” to grow cannabis safely.

“We, as a trade organization, welcome new caregivers to the industry; those emerging from the illicit market are no exception,” Smith said. “The association will provide them with the same guidance for the use of best practices, cultivation of clean, safe medicine and adherence to rules and regulations.”

The MMCM remains opposed to having the same chemical testing and inventory tracking that are required in the recreational market. Smith said that she “takes exception” with the notion that tainted weed is entering the medical market, saying she believes caregivers “calling out” illicit growers is enough to stem the spread of gray market weed.

“We actively work to eliminate tainted products from the market by educating caregivers and our patients, knowing our growers, voluntary testing and calling out those bad actors by alerting other industry stakeholders,” Smith said.

The OCP, however, worries that grow house operators are selling cheap, tainted weed entirely legally and avoiding law enforcement in the process.

The only governing body that can detect or shut down those sales, it says, are the budtenders behind the counter.

“OCP is especially concerned with the health risks that contaminated products pose to medically compromised patients,” Soucy said. “The office encourages medical program registrants to continue to refuse such transactions.”

COMING FRIDAY: Toxic cannabis linked to illicit grow houses is being shopped to Maine dispensaries

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