Buffalo Exchange, one of the world’s largest dealers of medicinal cannabis, has become the subject of a US federal investigation for allegedly violating drug trafficking laws. 

The Federal Bureau of Investigation announced that Buffalo Exchange’s Buffalo Exchange Drug Distribution and Manufacturing division had been shut down by the US Department of Justice (DOJ) after receiving a letter from the department last week. 

Buffalo Exchange has been operating for more than 25 years and was a major supplier of medical cannabis in California and Washington state. 

However, the feds allege that Buffalo was involved in a scheme to export large quantities of medicinal marijuana to Mexico and Canada, despite the fact that the DEA has determined that no US-based medicinal cannabis product was imported into the United States.

“Buffalo has been the main supplier of medicinal products to both Mexico and Canadian markets, including California and the US.

The DEA’s actions in this matter have severely damaged Buffalo’s business operations and resulted in the loss of millions of dollars of revenues, according to the letter,” said the DOJ in a statement.”

At the end of March 2018, Buffalo was facing a shortfall of approximately $500,000 in revenues from the sale of its medicinal cannabis products,” it added. 

“The department has also requested additional information regarding the alleged unlawful activities by Buffalo and has requested that Buffalo voluntarily cease and desist from future sales of medicinal and pharmaceutical products to the United Stated.” 

Buffalos refusal to comply with the law, which is called the Controlled Substances Act, was one of several factors cited in the letter. 

According to the DEA, the investigation began in July 2016 when the department received a complaint from the Buffalo Exchange Drugs Enforcement Division. 

It is alleged that in March 2018 the company engaged in an illegal distribution and importation of approximately 400 kilograms (1,500 pounds) of cannabis from Mexico into the US, the DEA added.

In addition, the US Attorney’s Office said it received information that in September 2018, at approximately 1:30am local time, the company’s warehouse was raided by law enforcement. 

Investigators then arrested two Buffalo employees who were also arrested in that raid, according the letter from DOJ. 

In March 2019, the FDA and the DOJ launched an investigation, the letter said. 

Officials at Buffalo, which declined to comment to Al Jazeera, said they had not been served with any notice of charges and would respond as soon as they received it. 

This is a developing story.

Read more about the DEA’s drug investigation into Buffalo’s medical cannabis operations.

More about the US government, drugs, marijuana, US government source Al-Jazeera English title What you need to know about cannabis in the US article US officials have warned US-regulated medical cannabis suppliers to stay away from Mexico because of concerns over the impact of a recent crackdown by the Mexican government on their business. 

Mexican authorities have recently seized more than 1,000 kilograms (2,500lbs) of medicinal pot, and are threatening to seize more if the US does not back off from its cannabis exports.

The DEA said on Monday that it had received a letter informing the company that it has been ordered to cease and stop all medical cannabis sales to the Mexican market, but it did not provide further details on the letter, or its reasons for the seizure.

The letter, which was sent to the company on Tuesday, said it was notified of the seizure by a federal prosecutor in Mexico City, where the DEA is investigating the company over the sale and import of cannabis products to Mexico. 

Mexico has been accused of using its national drug cartel to target cannabis producers, distributors and dispensaries. 

Last month, Mexico’s government announced that it would launch an investigation into a number of dispensaries that are selling medicinal cannabis to patients in Mexico.

The move was part of an effort to stamp out the sale, distribution and cultivation of the drug, according a report by the news agency Agence France-Presse.