This story was republished with permission from Crain’s Detroit and written by Dustin Walsh. 

The Michigan Cannabis Regulatory Agency is moving to ban a potentially dangerous oil from use in the state’s cannabis industry.

On Oct. 1, the agency will require testing for medium-chain triglyceride, or MCT oil, on all inhalation products, such as vape pens, after growing evidence suggests the oil may pose health risks when vaporized or aerosolized into the lungs.

MCT oil is most commonly made from coconut oil, and, to a lesser extent, palm kernel oil — both of which are approved for consumption by the U.S. Food and Drug Administration. But new research shows smoking the oils could have adverse effects on lung function, much like Vitamin E acetate, a previous diluting agent the industry was using prior the state banning it in 2019.

“From a public health and safety standpoint, the potential for adverse effects with MCT oil underscore the importance of adherence to safety guidelines in product development,” said CRA Executive Director Brian Hanna, in a statement. “Companies participating in Michigan’s cannabis industry must prioritize respiratory safety when formulating or using inhalable products, opting for ingredients that have been thoroughly evaluated for their compatibility with lung health. I look forward to when our new state reference laboratory is up and running, advancing the health and safety of Michigan cannabis consumers with advanced testing for diluents.”

Michigan follows other cannabis legal states, like Colorado, in banning the use of MCT in distillates for vapes and other inhalable products.

Jonathan Kane, chief scientific officer for Lansing-based processor Lion Labs, said competitors use MCT oil in their distillate to increase margins by lowering the amount of distillate, which is created by dissolving expensively grown cannabis.

“Producers who use MCT oil in their products are essentially creating more oil by combining this non-cannabis additive to distillate, which drives their overall cost down resulting in greater profit.”

The move from the state’s regulatory body comes amid growing concern raised by one of the state’s cannabis testing labs, Infinite Chemical Analysis Labs in Ann Arbor. Josh Swider, CEO of the California-based lab company, has been making noise in the industry for months; alleging many of the state’s top vape pen makers were using MCT oil to “thin” or dilute the cannabis oil to boost their profit margins.

“Studies show you should not be inhaling MCT oil,” Swider told Crain’s. “it’s a public safety issue. As a scientist I came into this industry because I believe in cannabis and public safety is why I am here. Safety testing facilities in Michigan work for the public and not the brands because they are the gatekeepers of the safety of the public. We have been working on this project for two years and no one has taken action. I truly think the public has the right to know what they are putting their bodies through.”

Under rules set forth by the CRA, cannabis companies are required to list the ingredients, including MCT oil, on their packaging but most did not.

Swider’s company has tested more than 120 vape pens that were purchased off of stores shelves by three different organizations in the industry to determine whether some of the best-selling products contained MCT oil. Those organizations, two of which are operators in the industry, asked not to be named. Infinite Chemical ran new tests on the products at Crain’s request earlier this month.

Of the 14 samples from Mt. Morris-based Sky Labs performed by Infinite Labs, two of them tested positive for containing MCT oil.

Denise Pollicella, attorney for Sky Labs, insists Sky Labs did not know their products contained MCT oil because the processor does not cultivate cannabis, but buys cannabis distillate for its vape brand Bossy from other cultivators.

“What I can tell you is that Sky Labs does not produce its own oil, so the distillate containing MCT oil was not produced by Sky Labs and it would have been sourced from elsewhere,” Pollicella wrote in an email to Crain’s. “I am honestly much less concerned about products manufactured in a licensed and regulated facility than I am about all of the out-of-state hemp derived CBD and THCA crap that is on party store and gas station shelves right now.  That stuff is full of pesticides and who knows what else and is not regulated or tested in any way.”

Sky Labs has been on the outs with the state’s regulators before. In July last year, the CRA issued a recall of Sky Labs’ Flight brand vapes for failing compliance testing and potentially using illicit market product. In lab testing, Sky Labs’ recalled vape cartridge concentrates were determined to contain chemical residue of several banned substances, including the insecticide bifenthri and the fungicide myclobutanil. In a negotiated settlement, Sky Labs surrendered its medical marijuana processing license and was fined $100,000.

But Sky Labs isn’t alone, several other processors failed MCT oil testing performed by Infinite Chemical, including Chicago-based, publicly-traded multistate operator Cresco Labs Inc., West Bloomfield-based Pure X, MKX Oil Co., Michigan Investments 10’s Muha Meds brand and a handful of other smaller brands.

None of the other operators responded to inquiries by Crain’s about the use of MCT oil.

Some of the operators are among the top selling vape brands in the state, according to data from cannabis market research firm Headset.

MKX Oil, for instance, sold nearly $14.7 million in vape pens in 2024 through the middle of June, according to headset. Muha Meds sold nearly $8 million worth of vapes. Bossy has only sold $1.64 million.

But those vape brands retail well below the state average price of $18.25 per vape cartridge. Sky Labs’ Bossy brand average $7.44 per cartridge, for instance.

“When you see a gram vape pen for $6, those are the vapes that tend to show up in testing more,” Swider said.