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Federal oversight of cannabis industry ramps up

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This is the first in a two-part series that delves into worker safety inspections and fines from federal regulators overseeing the U.S. cannabis industry.

Federal regulators aren’t waiting for nationwide cannabis legalization to ramp up workplace inspections in the industry. In fact, they’ve already levied hundreds of thousands of dollars in fines and investigated at least six additional marijuana worker deaths over the last two years that previously were not reported in the media, an investigation by Green Market Report found.

The Occupational Safety and Health Administration, a wing of the U.S. Department of Labor, has responded regularly to complaints filed against marijuana businesses, according to a review of hundreds of cannabis company inspection records obtained by Green Market Report. The records – dated between October 2022 and November 2024 – show that the agency issued fines in the tens of thousands of dollars to a wide array of businesses for violations ranging from worker deaths to a lack of warning that “ground cannabis dust” can pose a significant workplace hazard.

More complaints, more inspections

Increased OSHA oversight of the growing cannabis trade is “definitely” a major trend that’s been quietly growing for years, according Kim Anzarut, founder of Allay Consulting in Colorado.

“I’ve seen them more and more. We’ve acquired many clients because OSHA has walked in the door and said, ‘Hey, we got a complaint,’” Anzarut, who’s been doing OSHA-related compliance work with cannabis companies since 2017, said. “If somebody calls in even something kind of small, they’ll go in and do an inspection unannounced. So it is happening more and more.”

OSHA still doesn’t have a cannabis-specific division, something it has for many other mainstream industries, according to Anzarut, and all of the agency’s actions thus far have been driven by complaints filed with the office, including those related to workers who have died while on the job.

That included Lorna McMurrey, the first known cannabis industry worker fatality. McMurrey died in 2022 after suffering a severe asthmatic reaction to ground cannabis dust, which she was exposed to while working at a Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) manufacturing plant in Massachusetts.

A second cannabis industry worker death hit the headlines in 2023, when an employee at Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) in Illinois died under similar circumstances. The two incidents combined to persuade OSHA to issue a formal bulletin last fall noting that ground cannabis dust had been classified as a “hazardous chemical.”

That’s not all OSHA has done, by far.

Rather, the agency – which Anzarut said is known in business circles as the “highest fining department in the United States” – has ramped up its inspections for the legal cannabis industry as it ballooned in size over the years.

The oversight has resulted in sizable fines for plenty of high-profile cannabis businesses, including:

  • Ascend Wellness Holdings (CSE: AAWH-U.CN) (OTCQX: AAWH)
  • Ayr Wellness (CSE: AYR.A) (OTCQX: AYRWF)
  • The Cannabist Co. (CBST:CA) (OTCQX: CBSTF)
  • Cansortium (CSE: TIUM.U) (OTCQB: CNTMF)
  • Cresco Labs (CSE: CL) (OTCQX: CRLBF)
  • Curaleaf Holdings (CURA:CA) (TSX: CURA)
  • Gage Cannabis Co.
  • Green Thumb Industries
  • LivWell
  • Lume Cannabis Co.
  • Medicine Man Technologies (OTC: SHWZ) (Cboe CA: SHWZ)
  • PharmaCann
  • Revolutionary Clinics
  • STIIIZY
  • Temescal Wellness
  • Trulieve
  • TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF)

Hundreds of other cannabis companies, both licensed and underground, have also been inspected by the agency, according to OSHA records, with many facing fines ranging from a few hundred dollars to tens of thousands.

More cannabis worker deaths

Following the two earlier worker deaths, at least six more deaths were reported in the two-year span between October 2022 and November 2024, according to OSHA records. And one of them has telltale signs, parallels to McMurrey and Julie Devinney, that suggest ground cannabis dust as a potential factor.

On May 30, 2024, a 24-year-old male employee at a Revolution Cannabis manufacturing facility in Delavan, Illinois, was found “unresponsive” in a bathroom after having only been on the job for two weeks. The unnamed employee “began experiencing breathing difficulty,” according to the OSHA investigation records and “started removing their clothing and ran into a nearby bathroom.”

“Upon entering the bathroom, security personnel found Employee #1 unresponsive on the floor. The employee was transferred to the hospital, where he was pronounced dead,” the OSHA investigation noted, adding that the employee had “recently transferred from the cultivation department to labeling due to respiratory concerns.”

The cause of death is still listed as “unknown,” but autopsy results are “pending,” according to records. Thus far, Revolution Cannabis has not been penalized by OSHA for the incident, and the case is listed as “closed.”

Revolution Cannabis also had a second worker fatality investigated by OSHA on Feb. 12 last year, when a 67-year-old female employee died of a methamphetamine overdose at a facility in Barry, Illinois. Revolution was found to not be at fault and was not punished.

A very different scenario played out at Blackwell Grower in Oklahoma on April 12 last year, when a worker at a cannabis farm died from a urinary tract infection “after becoming ill” due to working in the hot sun. According to OSHA records, the unnamed 57-year-old male employee began exhibiting symptoms on April 9. The next day, the employer took the worker to a physician, who prescribed antibiotics.

Two days later, “the employer dropped the employee off outside of the hospital and left. Medical personnel saw him in distress outside and rendered care to him. The employee died from a urinary tract infection (UTI) due to a delay in treatment,” according to OSHA records.

OSHA slapped Blackwell Grower with an initial fine of $11,061, which was later lowered to $7,500, for not properly training the employee who died on “cannabis growing activities using hazardous chemicals such as … carbon dioxide and plant fertilizers.”

The financial penalty was harsher for California-based Humboldt Sanctuary Farms when one of its employees died from carbon monoxide poisoning in November 2022. In that case, a 55-year-old male carpenter “was sleeping in an enclosed area with a heater or generator running,” according to OSHA records.

The agency found that the employer was in the wrong and issued several fines totaling $34,250.

In November 2023, OSHA also investigated the shooting death of a security guard at a Los Angeles cannabis dispensary. The 25-year-old male employee was “shot to death during an attempted robbery,” and the incident was ruled an accident, with no penalties levied against the dispensary.

Then in February last year, OSHA again visited Southern California after an explosion at an “unknown cannabis operation”, which was at the time reported by the Los Angeles Times to be an “illegal honey oil clandestine lab.” The explosion killed one 42-year-old male worker, OSHA found, but the investigation didn’t find anyone to hold accountable. No fines were issued, and the case is marked closed.

Anzarut said it’s unquestionable that the earlier deaths of McMurrey and Devinney contributed to more direct oversight by OSHA of the cannabis industry. She said the widely publicized alleged cause of “ground cannabis dust” has opened a lot of cannabis business owners’ eyes to the issue, and she said the “ripple effects” of those deaths have already been affecting the broader industry.

“Now, with recent deaths, people are looking at their grinding rooms and going, ‘Oh, wait, this might be a problem,’” Anzarut said.

OSHA targets ground cannabis dust

Worker fatalities are far from the only issue that draws the attention of OSHA inspectors. Rather, the vast majority of complaints reviewed by Green Market Report were lesser violations, often linked to “respiratory protection” issues or “hazard communication” failures on the part of employers. (View a list of investigations here.)

Many of the OSHA citations explicitly called out marijuana businesses for not warning their employees that the plant itself can be a danger to their health.

In March 2024, for instance, Curaleaf was fined $10,372 by OSHA because it “did not identify and evaluate the respiratory hazards in the workplace, such as … endotoxins and cannabis while employees were pruning and defoliating the cannabis plants” at a facility in Ravena, New York.

In April 2023, Chicago-based Cresco Labs was fined $11,162 because it “did not evaluate whether ground cannabis dust … was required to be classified as a hazardous chemical” at its facility in Uxbridge, Massachusetts.

In June 2023, Massgrow, a licensed Massachusetts cannabis grower, was slapped with an initial fine of $9,488 for the exact same violation as Cresco.

In November 2022, Missouri-based Focus Partners was hit with a $21,191 fine for several violations, including not developing a proper “respiratory protection program” for employees who were using respirators while working with “pesticides, cannabis dust, and herbicides.”

The list goes on and on.

More safety issues

But it’s not just cannabis dust causing the issues. Several companies were also slapped with even higher fines for more run-of-the-mill industrial safety violations, according to OSHA records.

For instance, Revolutionary Clinics in Massachusetts – a different company from Revolution Cannabis, the company investigated for two worker deaths – was fined $33,482 in April 2023 after one of its employees suffered an “amputation injury” while cleaning out a “depositor machine.” The company was also cited for two other violations.

Revolutionary Clinics was also separately fined $8,840 in May 2023 for violations related to “respiratory protection” for employees.

Blackwell Grower, one of the companies investigated for a worker death, was also separately hit with a $10,141 fine from OSHA on April 18, 2024 – just a week after it was investigated for the worker fatality – for having a work environment “likely to cause death or serious physical harm to employees” due to potential electrocution. The OSHA inspector found that Blackwell had circuit breakers and electrical outlets unprotected and within 10 feet of open surface water barrels with electrical pumps running.

Curaleaf was also hit with a $22,321 fine by Massachusetts OSHA inspectors in December 2022 after the agency found that one of its facilities in the town of Ware “did not furnish employment and a place of employment which were free from recognized hazards that were causing or likely to cause death or serious physical harm to employees” because there were “deteriorating drawer slides” that could cause “musculoskeletal injuries.”

Curaleaf was also fined $24,108 in April 2023 after inspectors found that its facility in Litchfield, Illinois, had not performed medical evaluations on employees who were using respirators, ensured that respirators fit correctly, or trained the employees properly on how to effectively use the respirators.

Many other cannabis companies had multiple violations on record with OSHA as well.

Toronto-based TerrAscend Corp. was fined $37,948 in July 2023 for seven citations at one of its New Jersey facilities, including “occupational noise exposure,” “operational features for exit routes,” and for not properly safeguarding industrial machines used in cannabis manufacturing.

The MSO was also fined twice by OSHA for violations at a facility in Bay City, Michigan. In January 2023, the company was cited for 11 violations and fined $22,900 for issues related to “respiratory protection,” “flammable liquids” and “hazard communication.” Then in May, inspectors found more violations and hit the company with another $7,000 in fines.

Trulieve also has not escaped further OSHA scrutiny, even after settling with the agency over McMurrey’s death in 2022. In December that same year, inspectors visited one of the company’s facilities in Tampa, Florida and issued $26,788 in additional fines for exposing “employees to a slipping hazard.”

Chicago-based Green Thumb Industries has also had its share of OSHA violations to handle; aside from the 2023 death of Devinney at a facility in Rock Island, Illinois, the company was hit with $34,042 in fines in May that year at the same facility for issues primarily related to “respiratory protection.”

GTI’s Pennsylvania division was also hit with an $8,643 fine in November 2023 after inspectors found employees were “exposed to fire hazards,” and a GTI facility in Maryland was fined $1,500 in September that year for issues related to “flammable liquids.” The Maryland citation was deleted, along with all original fines.

Another major penalty was levied upon Illinois-based In Grown Farms, which was hit with a $50,227 fine in February of 2023 after “an employee was injured while using portable extinguishers to put out fires that resulted from an explosion,” according to OSHA records.

The explosion resulted from the improper use of a portable space heater next to an electrical outlet box that was not properly rated for industrial purposes and was situated next to “plant waste that had been saturated in butane.” A spark from the heater “ignited flammable vapors and resulted in an explosion and fires,” and “the employee was hospitalized with burns to the hands and face,” according to OSHA records.

Other violations for cannabis operators cited by OSHA include:

  • Lack of hazardous chemical handling training
  • Improper fire suppression systems
  • Lack of industrial protections
  • Fire and entrapment hazards



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Nebraska medical cannabis regulations stall in legislative committee

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A Nebraska legislative committee voted 5-3 against advancing a bill designed to implement and regulate the state’s medical cannabis program, leaving legislators and advocates searching for alternative paths forward, according to the Nebraska Examiner.

The General Affairs Committee rejected Legislative Bill 677, sponsored by State Sen. Ben Hansen of Blair, during a Thursday vote where committee members declined to offer amendments to the legislation, the publication reported.

“I don’t want to shut all the doors right now, but some doors are closing, and they’re closing fast, and so we have to act,” Hansen told reporters after the vote, according to the Examiner.

Nebraska voters approved medical cannabis in November 2024, with residents legally permitted to possess up to 5 ounces with a healthcare practitioner’s recommendation since mid-December. However, the regulatory commission created by the ballot initiative lacks effective power and funding to regulate the industry.

Hansen described his legislation as “a must” for 2025 to prevent a “Wild West” scenario in the state’s cannabis market. The bill would have expanded regulatory structure through the Nebraska Medical Cannabis Commission and extended deadlines for regulations and licensing to allow more time for implementation, the Examiner noted.

Committee disagreements centered on proposed restrictions. A committee amendment would have prohibited smoking cannabis and the sale of flower or bud products while limiting qualified healthcare practitioners to physicians, osteopathic physicians, physician assistants or nurse practitioners who had treated patients for at least six months.

The amendment also would have limited qualifying conditions to 15 specific ailments including cancer, epilepsy, HIV/AIDS, and chronic pain lasting longer than six months.

State Sen. Bob Andersen of Sarpy County opposed allowing vaping due to concerns about youth drug use, while committee chair Rick Holdcroft suggested selling cannabis flower would be “a gateway toward recreational marijuana,” a claim Hansen “heavily disputed,” according to the Examiner.

Hansen now faces a difficult path forward, requiring at least 25 votes to pull the bill from committee and then needing 33 senators to advance it across three rounds of debate, regardless of filibuster attempts.

Crista Eggers, executive director of Nebraskans for Medical Marijuana, remained optimistic despite the setback.

“This will not be the end,” Eggers said, according to the outlet. “Giving up has never been an option. Being silenced has never been an option. It’s not over. It’s not done.”

The legislative impasse is further complicated by ongoing litigation. Former state senator John Kuehn has filed two lawsuits challenging the voter-approved provisions, with one appeal pending before the Nebraska Supreme Court. The state’s Attorney General is also trying to do something about the hemp question, akin to other states across the country.



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One of Las Vegas’ cannabis lounges closes its doors

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Nevada’s cannabis lounge experiment faces some expected growing pains, with one of just two state-licensed venues closing its doors after barely a year in business, according to the Las Vegas Weekly.

“The regulatory framework, compliance costs and product limitations just don’t support a sustainable business model,” said Thrive Cannabis managing partner Mitch Britten, who plans to convert the space into an event venue until regulations loosen up.

The closure leaves Planet 13’s Dazed Consumption Lounge as the only operational state-regulated cannabis lounge in Nevada. Dazed manager Blake Anderson estimates the venue attracts around 250 customers daily, primarily tourists. One other establishment, Sky High Lounge, has operated since 2019 on sovereign Las Vegas Paiute Tribe land exempt from state regulations.

Even with Nevada regulators conditionally approving 21 more lounge licenses, potential owners are struggling to meet the $200,000 liquid assets requirement – particularly social equity applicants from communities hit hardest by prohibition.

Recreational marijuana has been legal statewide since 2017, but public consumption remains prohibited. That’s created an obvious disconnect for the millions of tourists who visit Las Vegas annually but have nowhere legal to use the products they purchase. The state recorded roughly $829 million in taxable sales during the 2024 fiscal year.

“It always comes down to money, and it’s difficult to get a space if you can’t afford to buy a building. On top of that, getting insurance and finding a landowner who’s willing to lease to a cannabis business is a challenge in and of itself,” said Christopher LaPorte, whose consulting firm Reset Las Vegas helped launch Smoke and Mirrors, told Las Vegas Weekly.

Many think the key to future success lies in legislative changes that would allow lounges to integrate with food service and entertainment – playing to Las Vegas’s strengths as a hospitality innovator. In the meantime, the industry will continue to adapt and push forward.

“Things take time,” LaPorte said. “There’s a culture that we have to continue to embrace and a lot of education that we still have to do. But at the end of the day, tourists need a place to smoke, and that’s what these places are.”



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Psyence Group consolidates its shares

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Psyence Group Inc. (CSE: PSYG) told investors that it will be consolidating all of its issued and outstanding share capital on the basis of every 15 existing common shares into one new common share effective April 23, 2025 with a record date of April 23, 2025. As a result of the consolidation, the issued and outstanding shares will be reduced to approximately 9,387,695 on the effective date.

This is the second time a Psyence company has consolidated shares recently. In November, its Nasdaq-listed associate, Psyence Biomedical Ltd. (Nasdaq: PBM), implemented a 1-for-75 share consolidation as the psychedelics company worked to maintain its Nasdaq listing.

Psyence Group reported earnings in February when the company delivered a net loss of C$3 million and was reporting as a going concern. At the end of 2024, the company said it had not yet achieved profitable operations, has accumulated losses of C$48,982,320 since its inception.

Total assets at the end of 2024 were C$11,944,478 and comprised predominantly of: cash and cash equivalents of C$10,611,113, other receivables of C$159,808, investment in PsyLabs of C$1,071,981 and prepaids of C$68,243.

Still, the company is pushing ahead. Psyence told investors that it has historically secured financing through share issuances and convertible debentures, and it continues to explore funding opportunities to support its operations and strategic initiatives. “Based on these actions and
management’s expectations regarding future funding and operational developments, the company believes it will have sufficient resources to meet its obligations as they become due for at least the next twelve months,” it said in its last financial filing.

The company said it believes that the consolidation will position it with greater flexibility for the development of its business and the growth of the company.

 



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