Colorado Shuts Down Three Cannabis Companies After Investigation Finds Products Could Harm Liver

Three cannabis companies will cease operations in Colorado as part of a settlement with state Attorney General Phil Weiser following an investigation that found the companies failed to disclose health risks associated with the products to consumers and misrepresented the products’ health benefits. 

Under the settlement with the manufacturers and distributors of the 1906 brand of cannabis products – Nuka Enterprises LLC, Sima Sciences LLC, and Nuka Properties LLC, along with their co-founder, Peter Barsoom – the companies will shut down and pay $400,000 in fines to the state. The companies may be allowed to resume operations in the state if certain conditions are met. If the companies violate the terms of the settlement, however, they will be required to pay another $600,000.    

According to the attorney general’s office, from 2016 to 2024, Sima Sciences sold edibles called “Drops” in Colorado, but, beginning in 2020, the company started to receive complaints about a product called “Midnight Drops,” which were marketed as a sleep aid, and some customers said were causing liver problems. In 2023, state regulators issued a warning about Midnight Drops products manufactured prior to March 2022 that contained Corydalis rhizome extract. The notice said that the extract “could be connected with liver injury but the exact cause remains unknown.” 

The attorney general’s office’s investigation found that Sima was aware the products might be causing health problems for consumers as early as 2020 but continued to manufacture and distribute them. Investigators also learned the companies did not perform adequate research on Corydalis and Stephania – another extract used in the products – and failed to properly notify retailers of the problems so the products could be removed from shelves.