Homes once used to grow illegal cannabis are increasingly shifting into Maine’s little-regulated medical market as law enforcement cracks down on the alleged organized crime groups that run them. But state data and investigative reports show they had already been enmeshed in Maine’s legal markets for years.

State officials confirmed in February that several illegal grows raided by police in recent months have since been issued medical caregiver licenses. But illegal operations had already been selling toxic weed to the medical market for years, a problem the Office of Cannabis Policy acknowledged for the first time last year.

Illegal weed has been sold to the medical market since at least 2021, when the OCP revoked licenses from three New York men who were found cultivating hundreds of plants at an illegal grow house in Auburn and selling the crop at an unlicensed dispensary in Turner.

As federal and state law enforcement crack down on Maine’s illegal grow houses, their operators are increasingly seeking and being issued medical caregiver licenses. Their presence in the market is adding to growing political pressure to regulate Maine’s medical marijuana industry, which has some of the loosest guidelines in the country.

A February spreadsheet of licensed caregivers shows at least 182 of Maine’s roughly 1,700 medical growers now exhibit hallmarks of the more than 50 illegal grows raided across the state, the vast majority of which are linked to Chinese criminal groups, police say.

SECRETIVE INDUSTRY

As grow house operators look to shield themselves from law enforcement’s crackdown, a secretive industry is establishing itself around helping illicit growers navigate the legal gray area between the black market and Maine’s medical cannabis industry.

Many of the suspect caregivers obtained their licenses in the last five years, are of Chinese descent and did not have a presence in Maine before then. Most moved from major metropolitan suburbs with large Chinese immigrant communities like Flushing, New York, and Quincy, Massachusetts, as have the owners of the illegal grow houses busted by police.

Most own or live in warehouses, single-family homes or houses with detached garages in rural communities within driving distance from Interstate 95 or a regional airport. Many list residences in their home states, as Maine does not require medical marijuana license holders to be residents.

Nine illegal grows raided by police have since been issued licenses to grow and sell medical cannabis, OCP confirmed. Eight have applications pending and six have been denied, according to OCP media relations director Alexis Soucy.

“There is evidence that individuals have sought to enter Maine’s medical cannabis program using addresses at which search warrants had previously been executed for illicit cannabis operations,” Soucy said in an email, adding that simply operating out of a location that previously housed an illegal grow is not a basis for denying an application.

The estimated number of illegal grows in Maine has fallen from over 200 last year to “well below” 100 now, said Assistant U.S. Attorney Andrew Lizotte, who is leading the federal investigation into the grows, adding “that figure does not include premises licensed by OCP.”

Safety concerns are mounting as illegal growers increasingly transition to the legal side. Potentially fatal levels of acutely toxic fertilizers and insecticides have been found in chemical tests of cannabis from several such growers that appear on OCP reports.

Maine is the only legal state that doesn’t require chemical and mold testing for medical caregivers or dispensaries. Product testing is mandatory for the state’s recreational cannabis.

Police have found mold infestations, black market fumigants and the fungicide myclobutanil, or Eagle 20EW, which creates cyanide gas when ignited and inhaled, in the majority of grow houses busted so far.

Two 2023 studies found close to half of Maine’s medical cannabis was contaminated with pesticides, chemicals or mold. Eagle 20EW was the most commonly found contaminant.

A ‘PROHIBITED COLLECTIVE’ EMERGES

A man from Flushing, New York, named Jung Yen Tsai was among the first illegal growers allegedly tied to Chinese organized crime to enter Maine’s legal market.

Tsai had been a licensed caregiver since at least February 2021, when Auburn police began investigating his involvement in an illicit grow house in Auburn and an unlicensed dispensary in Turner.

In an operation that mirrored the dozens of grow houses federal and local police would later raid across Maine, Tsai illegally cultivated 150 cannabis plants with unlicensed laborers at the single-family home in Auburn.

Tsai did have a state license to grow 60 cannabis plants at a former mechanic’s warehouse in Turner, but that facility was found to be the site of a “prohibited collective,” according OCP’s investigative report, where multiple licensed caregivers and illegal growers grew, processed and sold cannabis in the same space.

The barrier to becoming a licensed medical cannabis caregiver is low in Maine. By filling out an online form and paying a fee as little as $240, caregivers can grow cannabis plants, manufacture marijuana products, and sell them to both dispensaries and individual medical patients. All that’s needed is a facility to grow and process cannabis.

Many caregivers grow as individuals on small scales for themselves or close friends and patients. But individuals can also set up companies and LLCs to grow or sell cannabis to licensed medical dispensaries and individual patients. At least 104 suspect growers have established such businesses, the OCP spreadsheet shows, with names like “All Purpose Plant LLC,” “Zhao Farm” and “Galaxy Brotherhood 88 LLC.”

While illegal grows are increasingly “taking advantage of the law,” obtaining caregiver licenses does not prevent law enforcement’s investigations, according to Somerset County Sheriff Dale Lancaster.

Legal grow houses can also be illegally financed or used as hubs to traffic people and drugs, law enforcement officials said.

“We’re aware of the avenues they’re taking to continue their activity. We have several active investigations going on now,” Lancaster said. “I do not believe the Office of Cannabis Policy’s purpose was to support transnational criminal organizations.”

The warehouse in Turner had been converted into an illegal dispensary on the first floor and an illegal grow on the second by Tsai and a group of both licensed caregivers and illegal growers, an OCP investigator wrote in a March 2022 report.

“Harvested marijuana was collected by people who were not your registered employees and pooled with harvested marijuana from other caregivers at this location and sold by other persons, beyond your control or keeping any records of the sale,” then-OCP Director of Compliance Michael Field wrote in the report.

Tsai and another caregiver, Benguang Huang, had their licenses revoked in December 2021 as a result of the investigation into the Auburn home. Another man, Shunwang Ding, had his license revoked in March 2022 after the warehouse inspection.

Other suspect caregivers have had their licenses revoked for employing unlicensed workers at grow sites, housing laborers inside grow houses, and transporting plants illegally from Massachusetts to Maine — practices employed at many illegal grows.

CALLS FOR CHANGE

Caregiver revocation reports written by OCP inspectors note cannabis flower and trimmings being stored in trash bags at several sites but do not mention mold or chemicals. Neither contaminated cannabis nor unsafe growing environments are disqualifying for Maine caregivers under current regulations.

Most grow house license revocations were issued for growing more plants than licensed, not keeping transaction records, employing unlicensed workers or growing at a site they weren’t licensed to.

About a quarter of the nearly 200 suspected grow houses currently licensed — 45 of them — have listed residences outside Maine, all split between New York, Massachusetts, New Jersey and California. Many are from Flushing, Boston and Quincy.

Officials inspect all out-of-state applicants’ facilities before issuing them licenses, OCP said, but state statute and federal court rulings prevent caregivers from being rejected solely for living out of state.

The agency can largely only deny applicants who were imprisoned for a year or longer on drug-related charges. Rejected applicants can file another application after waiting 30 days under state statute.

“OCP does not establish the requirements that determine eligibility for participation in the medical cannabis program. Those requirements are set by the Legislature,” Soucy said. “OCP is obligated to administer the law as it is written.”

Some legislators are pushing to change those laws. Gov. Janet Mills urged lawmakers to rein in “the wild, wild west of medical cannabis” in her State of the Budget speech.

A bipartisan coalition of legislators and public health advocates formed this month to push for a suite of bills that would mandate seed-to-sale inventory tracking, contaminant and purity testing and other requirements in medical cannabis. Industry groups are lobbying against the bill.

The political discussions and influx of grow house caregivers come amid a “mass exodus” of medical caregivers in recent years as the market becomes oversaturated with “far more cannabis than there is demand for it,” according to OCP Director John Hudak.

The extent to which now-legal grow houses have impacted Maine’s supply and demand for medical weed remains unclear. The OCP has previously raised concerns that the operations are quietly seeding the market with cheap, tainted weed.

With Maine’s lack of testing and its medical market in free fall, some industry insiders warn unscrupulous budtenders may be more inclined to put grow house weed on their shelves.

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