I cannot see what is in the bag but it sounds like you had it identified.  If it is Nostoc, this is a bacteria that looks like algae.  It is called a cyanobacteria.  An Ohio State University publication discusses control, by making sure there is good soil drainage, eliminate phosphorus use which encourages it, and they note, very limited control with chemicals, though they do mention one product Scythe, which can only be used on the Nostoc since it will damage plants.  It also has to be used when the Nostoc is active and not in its dried stage.  See the following publication for more information: https://bygl.osu.edu/node/1258