One of Alaska’s first marijuana businesses now faces a $500,000 fine and the loss of a license, after investigators found its products had violated numerous regulations governing its sanitation and business practices.

Fairbanks-based Frozen Budz had its marijuana-product manufacturing license, which had been suspended earlier this month, revoked Friday by the state Marijuana Control Board. In addition, the board ordered the seizure of all Frozen Budz products, “both from their product manufacturing facility and from all retail stores that have their products.”

The board found that Frozen Budz had been “regularly and consistently selling edibles that had not been tested for potency, mold, contaminants, e-Coli, or salmonella,” including “cannabanana bread” which tested positive for mold and had THC levels two to three times the state’s legal limit. In addition, it had been selling products without tracking the source of the marijuana.

Among other offenses, the board found that Frozen Budz had been allowing on-site consumption of its products and selling directly to customers, as well as improperly labeling marijuana products it sent to stores, violating waste notification guidelines and refusing to provide some records upon request.

“The board found the acts of this licensee especially egregious,” said Peter Mlynarik, the board’s chair. “The licensee disregarded marijuana industry regulations and put the public at significant risk by selling products that were not safe, tested, or tracked.”

Erika McConnell, director of the state Alcohol and Marijuana Control office, said the state’s investigation of Frozen Budz began with a tip that its “cannabanana” bread might exceed Alaska’s maximum THC levels. Investigators bought three loaves which returned the mold and high-THC testing results and searched for the loaves in Frozen Budz’ product-testing database which the board requires it to maintain.

“When we looked in our inventory tracking system we found that the three loaves of bread we bought had not been tested,” McConnell said. “We found that the vast majority of edible products they were sending to stores for sale had not been tested.”

McConnell said Frozen Budz never offered a defense for its actions to the board.

Regulators asked the state Department of Environmental Conservation about issuing a recall for Frozen Budz products, McConnell said, but DEC refused because it doesn’t recall products solely for mold. She declined to recommend whether anyone who has bought something made by Frozen Budz – which primarily sold THC-infused edibles like bread, cookies and brownies – should discard it.

"The violation of selling products over the (THC) limit and contaminated with mold is very narrow," McConnell said. “I would just tell people to be aware that the information provided on the label may not be accurate, and they need to be an educated consumer and make a decision for themselves what to do."

Frozen Budz has 15 days to appeal the board’s actions, McConnell said, an act which would prompt a review by a state administrative law judge. The judge’s recommendations would then return to the board for a final decision, which Frozen Budz could then appeal in state Superior Court.

Frozen Budz still has their retail license, but the board is recommending that it be revoked, too. 

Heather Hintze contributed information to this story.

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