Minnesota sues Zaza Cannabis business, seeking destruction of illegal products

In the first case of its kind in Minnesota, the state is suing Zaza Cannabis Dispensary after finding products in its stores that contained more than 70 times the legal limit of THC.

The Office of Cannabis Management (OCM) is seeking destruction of the products with illegal amounts of THC, the intoxicating substance in marijuana.

The lawsuits filed in Hennepin and Ramsey county courts followed a September inspection of Zaza that was prompted in part by complaints from the public about the potency of the stores’ products.

State inspectors, the lawsuits said, caught employees smuggling illicit products out the back door during the inspections.

Zaza operates stores in both Minneapolis and St. Paul. Employees answering the phone at those locations said they could not comment on the lawsuits.

“The Office of Cannabis Management takes seriously its responsibility to protect the health and safety of Minnesotans and ensure compliance within the hemp-derived cannabinoid marketplace,” said Josh Collins, a spokesman for OCM, said in a statement.

The action marks the first time the state agency has sued a cannabis retailer.

Minnesota legalized hemp-derived THC products in 2019, including low-potency forms of the drug, but kept more intoxicating higher-potency products illegal, including “vape pens” and hemp flower that includes more than 0.3% of any form of THC, the lawsuit says.

“The OCM’s inspections not only confirmed that defendant was selling illegal cannabinoid products, but that defendant attempted to conceal its unlawful sales,” one lawsuit says. “During initial inspections by the OCM of a related cannabinoid retail business, one of the employees would stall the OCM’s inspector while another would remove the illegal products from the store in a backpack through the backdoor.”

On Sept. 6, one inspector waited at the back door of Zaza’s Grand Avenue location while a second inspector went in the front door. A cache of illegally potent products was seized in that inspection, the lawsuit says.

“In this case, despite repeated inspections, both routine and triggered by complaints, Zaza refused to comply with the law. The egregious nature of the violations required the office to escalate our enforcement action,” Collins said.

The state lawsuits indicate the value of products seized and embargoed from Zaza has a retail value of approximately $20,200.

If the court orders the destruction of the property, the state expects Zaza “to pay all expenses associated with destroying the noncompliant cannabinoid products.” That would include court costs, fees, storage and other expenses.

The state identifies Darren Dado as the owner of the Zaza business. Reached by phone Friday morning, Dado said he no longer owns Zaza, but declined to share further details. Public records indicate Dado is a resident of Michigan.