A licensed California cannabis company is accused of manufacturing products for the illicit market after the Department of Consumer Affairs served a search warrant last week at Kushy Punch’s Los Angeles facility, according to a Leafly report. Authorities seized gummies and disposable vapes in the company’s packaging in the enforcement action.
Bureau of Cannabis Control spokesperson Alex Traverso told Leafly that the agency confiscated “thousands of illegal vape carts worth millions of dollars.” The seizure comes amid a nationwide breakout in pulmonary illnesses that have been linked to cannabis and nicotine vape products.
A source told Leafly that the company had two manufacturing facilities – one for legal, and one for illegal products. The source claims that the illicit market products are manufactured using “untested black market oil that is heavy in pesticide.” The BCC was informed of the illegal facility based on a tip that “checked out 100 percent.”
“Based on the tip, there is a legal side of things and an illegal side of things. We’re still investigating both sides of the equation. If this is something we’re seeing linked back to someone who has a license I would be surprised if they had a license much longer.” – Traverso, to Leafly
Ruben Cross, CEO for Kushy Punch, said that the allegations are “completely false” in an email to Ganjapreneur. “BCC went into an old storage warehouse and found two-year-old disposable vapes with dead batteries than have been off the market even before regulations came around and they assumed we are selling vapes to the black market,” Cross said.
Kushy Punch provides products in both the medical and recreational markets.
NORML co-director Ellen Komp told Leafly that the trend of companies selling products illegally “started happening … when California’s pesticide regulations kicked in.”
“It stands to reason that not everyone might have destroyed all their expensive products [that wouldn’t have passed testing],” she told Leafly.
There has been a long-standing rumor in California about licensed operators who deal in the state’s unregulated cannabis industry. The investigation is ongoing.
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