His cannabis brand, Colorado-based The Clear, has been partnering with a licensed Missouri manufacturer to produce pre-rolled joints. Some were infused with a THC concentrate, or distillate, purchased from a Robertsville-based company called Delta Extraction.

When the state issued a recall last month of all products made with the same distillate — a total of 62,000 products — Batenburg’s company was stuck with 90,000 joints taking up space in a Missouri warehouse that he still can’t do anything with.

But it’s not just the recall that got under his skin.

As Delta Extraction was fighting off their license suspension and the recall by state regulators, the company revealed it had been importing concentrated THC oil made from industrial hemp — which is about four times cheaper to make than marijuana THC concentrate in Missouri.

Batenburg had no idea his team was likely buying what he calls a “synthetic” THC — or THC that had been converted from hemp’s CBD using a heavy chemical process — mixed with a small amount of marijuana, while still paying marijuana prices.

Even more infuriating than overpaying for hemp, Batenburg said, is that he was unknowingly deceiving his own customers who thought they were getting a pure marijuana product.

“They were duping all these compliant operators,” he said. “What they’re doing — from a commerce perspective — it’s criminal. They were probably more surprised than anybody that they weren’t getting caught.”

Delta declined comment for this story, citing ongoing litigation.

But Delta has fiercely denied any wrongdoing, both in the company’s lawsuit to stop the recall and the administrative hearing to appeal their license suspension.

The only reason Batenburg learned about Delta’s hemp process is because the recall sparked litigation, which in turn resulted in dozens of court filings that include emails, testing results, material purchases and a transcript with hours of testimony from the company’s leaders.

That’s also how John Lopez, CEO of Old Route 66 Wellness whose brand Bison Infused was also on the recall list, learned about Delta’s use of hemp. His business only bought a small amount of the distillate in April, when there was a dip in supply after Missouri’s recreational marijuana sales began.

And that decision has cost him $800,000 in products.

While Delta manufactured and sold the distillate, Lopez puts most of the blame on the brand that contracted with Delta to follow a recipe and make the product — Oklahoma-based Conte Enterprise. 

“We would have never bought it” had his team known it was chemically converted THC from hemp, Lopez said.

A spokeswoman for Conte said the company, “stands by the safety and quality of its product. However, it does not comment on pending litigation.”

Rachel Herndon, COO of Delta, also defended the product during an Aug. 14 commission hearing.

“We bolstered this industry, we supported this industry, and we cut costs low for consumers,” she said. “And we did it all while being in constant communication with the state and believing that our processes were allowed and appropriate. All of our product was tested. And we have no consumer complaints.”

Batenburg works with the manufacturer Dark Horse Medicinals to produce his brand. That company is now suing Conte and Delta Extraction to recoup its losses after purchasing nearly $325,000 of distillate in May that went into making about $1 million worth of products.

A Missouri judge has already dismissed Delta’s lawsuit against the state to stop the recall, and a commissioner handling the company’s appeal of its license suspension recently denied its request for a stay. A final decision in the appeal is still pending, and the commission will hold a hearing on Sept. 29.

As the Delta case winds through the legal system, it offers a rare glimpse into Missouri’s burgeoning cannabis industry, which has been shrouded in secrecy since voters approved medical marijuana in 2018.

And the ordeal also brings up a major question for Missouri consumers: