I use the cypress mulch from Home Depot and haven't had a mold problem. Maybe it's because I bake it pretty much all day at very high temps until it is completely dry. It should be baked anyway to get rid of any travelers living in the mulch.

Some of the mulch that is still in the bag from when I bought it is still slightly damp, and still no signs of mold. I would know, I sift through it and inspect it making sure there are no abnormally large chunks, sharp pieces, etc. It still smells fine, not overpowering at all, and doesn't have a moldy smell. I don't know how yours is molding...