The case of Ground Control Michigan, a cannabis processor, is a real, worst-case scenario that illustrates how quickly things can fall apart when compliance slips.

What happened to Ground Control Michigan

In July 2026, Michigan’s Cannabis Regulatory Agency (CRA) ordered Ground Control Michigan, LLC, which operated under the brand name GCM Waypoint, to permanently close and surrender its license. The company agreed to a consent order and didn’t even contest the allegations. Ground Control Michigan, LLC lost its license forever.

So what went wrong? 

Interstate transport. According to the CRA’s investigation, a GCM employee drove 249 cannabis products from Michigan to a cannabis conference in Massachusetts. Transporting cannabis across state lines is illegal, no matter how it’s done or why. Cannabis remains a federally controlled substance. Even if you operate in a state with a medical or recreational cannabis program you still are not allowed to drive cannabis products from state to state. 

Inaccurate inventory records. Investigators found 32,250 vape cartridges that had actually been impounded by state police, but were logged in the company’s system as accepted inventory. They also found 360 cases of vape cartridges that turned out to be empty boxes, and two bottles of distillate that weren’t tagged at all. That is a lot of cannabis products that couldn’t be accounted for!

Missing surveillance footage. Surveillance footage was missing for hours and in some cases, days, at a time. Surveillance cameras are required in any cannabis establishment. Footage should always be stored and made available to regulators. If there were technical issues with the cameras at GCM they could have resolved them. This was a major red flag for investigators.

The CRA’s investigation into GCM’s compliance violations started in March, and by July the company lost its license.

Breaking down what went wrong

Why did GCM lose its license? Was the situation just blown out of proportion over a few small mistakes?

Unfortunately, these were big mistakes. Very big mistakes. Regulators take compliance violations seriously and the consequences can be disastrous for a business. The violations at GCM should be a heads up to any cannabis operator who doesn’t want to get hit with a hefty fine or lose their license:

1. No transporting product across state lines. Every legal cannabis market operates as a closed loop — product that’s grown, processed, and sold under a state’s license has to stay inside that state. Michigan’s rules only authorize cannabis and cannabis products to move between licensed businesses through a licensed secure transporter, following a set route plan and manifest, in sealed containers (Mich. Admin. Code R 420.106 and R 420.206). An employee personally driving product anywhere — let alone to another state — falls outside that authorized chain of custody entirely. On top of the state rule, cannabis remains a Schedule I controlled substance under federal law, and transporting it across state lines is a federal crime under the Controlled Substances Act (21 U.S.C. §§ 812, 841), regardless of how it’s done or why. State regulators treat this as one of the most serious violations a licensee can commit, because it undermines the entire legal framework that lets cannabis businesses operate at all.
2. Every product has to be tracked, tagged, and accounted for — no exceptions. Michigan requires businesses to log every single product in the state’s mandatory seed-to-sale tracking system, Metrc, under the Marihuana Tracking Act (MCL 333.27901 et seq.) and CRA rule R 420.502, which requires every marihuana product to carry the tracking identification assigned by the statewide monitoring system and prohibits selling or transferring product that’s on administrative hold or otherwise improperly documented. In practice, that means a business’s physical inventory has to match what’s logged in the system at all times. When GCM’s books said one thing and the shelves said another — cartridges that were supposedly in inventory but were actually sitting in police evidence, or boxes that were empty — that’s a direct violation of these tracking and recordkeeping requirements.
3. Continuous video surveillance is required, and gaps aren’t allowed. Under R 420.209, licensed cannabis facilities must maintain a functioning video surveillance system covering key areas — including anywhere product is weighed, packed, stored, loaded, or moved — recording continuously, 24 hours a day, with footage securely stored and available to regulators on request. Having “hours and even days” of missing footage isn’t just sloppy — it’s a direct compliance failure that prevents regulators (and the business itself) from verifying what actually happened to the product.

On its own, any one of these violations could lead to fines or a suspension. Taken together — especially with the interstate transport involved — it was enough for regulators to shut the business down entirely.

Ground Control Michigan isn’t an isolated case

Just two months later, the CRA handed down an even steeper penalty to another Michigan processor. In September 2026, the agency revoked Michigan Investment 10 LLC’s license and issued a $2 million fine following a contested case hearing. Among the violations: a camera in the company’s extraction room was found pointed at a wall instead of the activity it was supposed to be monitoring — the same kind of surveillance failure that contributed to how Ground Control Michigan lost their license.

Together, these two cases make the same point from different angles: regulators aren’t just handing out warnings. Between losing a license entirely and a $2 million fine, the financial risk of letting compliance slide can dwarf the cost of getting it right in the first place.

How to protect your business from compliance violations

Implementing the right systems can ensure that you run a compliant, successful cannabis business. The following tips can help you avoid fines, or the worst-case scenario of losing your license. Here’s where it helps to focus:

• Keep your products within state lines. This includes taking samples to conferences, trade shows, or other businesses out of state. If it’s not an authorized in-state transfer, it stays put.
• Frequently check your inventory.  It sounds like a tedious process, but it will go faster if you stay on top of it! Routine audits will empower you to find and resolve discrepancies so that you don’t have any surprises when a regulator shows up.
• Tag your products immediately. Untagged cannabis sitting around, even briefly, is one of the easiest things for an inspector to flag.
• Check the camera system on a regular basis. Confirm footage is actually recording, actually saving, and actually covers the areas regulators require. A camera that looks like it’s working isn’t the same as one that’s storing usable footage.
• Put procedures in writing and train the team on them. Most violations don’t come from bad intentions — they come from unclear expectations, staff turnover, or nobody double-checking the basics.
• Take action. Regulators tend to respond far more favorably to businesses that catch and fix their own mistakes than to ones that let issues sit.

Use technology to your advantage

Manually tracking every regulation, deadline, and inventory check across a growing cannabis operation is genuinely hard — and the Ground Control Michigan case shows how expensive it can be to get it wrong. This is where a dedicated compliance platform like Simplifya Protect can help.

Protect is built specifically for cannabis businesses and offers tools like SOPs, audits, document management, and license tracking — all designed to catch small problems before they turn into the kind of violations that can shut a business down. Subscriptions cost far less than a single fine, and dramatically less than losing your license altogether.

The Bottom Line

Ground Control Michigan’s case — and Michigan Investment 10’s $2 million fine soon after — are reminders that in the cannabis industry, compliance isn’t a box you check once. It’s an ongoing responsibility that touches every part of the business, from where your product physically goes to how carefully you log it and record it on camera. The businesses that survive and grow in this industry are the ones that treat compliance as part of their daily operations, not an afterthought. Stay compliant. Don’t lose your license, grow it!