The Missouri Administrative Hearing Commission has upheld the state’s decision to revoke the license of Delta Extraction, a cannabis extraction company at the center of a massive 2023 product recall. In a 137-page ruling issued Tuesday, Commissioner Carole Iles cited the company’s “corporate culture of lax compliance” as a key reason for the decision.
A Major Blow for Delta Extraction
Delta Extraction, based in Robertsville, had its license pulled last year after state regulators found it was bringing in hemp-derived THC concentrate from other states and mixing it with Missouri-grown marijuana products. That practice, the state argued, violated Missouri’s cannabis regulations.
This latest ruling marks the end of the company’s appeal process, dealing a significant setback to Delta and sending a clear message to other cannabis operators in the state.
“The non-compliance was intentional,” Iles wrote in her decision, reinforcing the argument that Delta knowingly disregarded state rules.
Security Failures and Regulatory Breaches
Beyond the THC controversy, the state also pointed to a series of security failures and regulatory missteps that contributed to its decision.
- Delta failed to immediately report a break-in at its Robertsville facility, during which its server containing the only copy of its video surveillance files was stolen.
- The company allowed a contractor with a prior conviction for conspiracy to distribute cocaine to operate the facility on weekends—without a state-issued agent ID.
- That contractor allegedly used another employee’s ID to access the facility and input data into the state’s cannabis tracking system.
These issues, according to the commission, painted a picture of an operation that repeatedly ignored compliance obligations.
Industry Watching Closely
The case has attracted widespread attention in Missouri’s cannabis industry, particularly from businesses that purchased products from Delta Extraction. The recall in August 2023 led to the removal of around 60,000 cannabis products from store shelves. Many companies were forced to destroy their inventory or lock it away, waiting for the legal battle’s outcome.
For those businesses, the commission’s decision means no pathway to recoup their losses. Delta’s challenge also raised a larger question—whether Missouri regulators have the authority to control intoxicating hemp products.
The THC-A Loophole Debate
At the heart of the case was Delta’s argument that the THC concentrate it imported should be treated like any other ingredient in cannabis products. The company had been using large amounts of THC-A, a non-intoxicating compound found in hemp, mixing it with Missouri-grown marijuana-derived THC-A. When heated, THC-A converts into THC, the psychoactive component of cannabis.
Delta argued that since hemp is federally legal, its imported THC-A should not be treated as a controlled substance. The company likened it to adding flavors or CBD, a non-intoxicating cannabinoid, to a cannabis product.
But Commissioner Iles rejected that reasoning. She wrote that regardless of whether THC-A comes from hemp or marijuana, it becomes intoxicating through the same chemical process. Therefore, Missouri regulators were justified in treating it the same as marijuana-derived THC.
What’s Next?
Delta Extraction’s legal options are now dwindling. While the company could attempt to challenge the decision further, the ruling from the commission is a strong signal that Missouri regulators are prepared to crack down on any company trying to push the limits of the law.
For Missouri’s cannabis industry, the case reinforces the need for strict compliance. Businesses that hoped to see Delta’s license reinstated—and their locked-up products freed—will now have to reassess their losses. Meanwhile, state regulators are likely to take an even harder look at how companies handle hemp-derived compounds in cannabis products.
