State publishes new penalties for cannabis licensee violations. Is your company ready?


Post by BOBBI MARTINEZ

Bobbi Martinez is the Compliance Program Manager for Weeds.

The Cannabis Control Division (CCD) has recently implemented rules finalizing the process and penalties for applicants and licensees who violate the Cannabis Regulation Act, the Lynn and Erin Compassionate Use Act, and division rules.

Although the CCD began issuing licenses for adult-use premises last September, the division did not begin conducting inspections and violations until earlier this spring. The division has already issued violations to operators for everything from advertising to chain of custody and facility violations but, until now, licensees could not be sure how the state would manage penalties, up to and including when a violation was deemed fairly minor and when licenses could be in jeopardy.

If you have received a Notice of Violation from CCD, you must respond quickly with a compliance action plan in order to avoid automatic sanctions, up to and including suspension or revocation. Weeds. has already helped licensees respond to violations with comprehensive action plans to gain compliance. Have questions? Need help? Contact Weeds.

The new rules published last month by the CCD detail a “three strikes, your out” policy for repeat offenders, while reserving the right to recommend revocation of licenses for serious offenders, even if they have not had prior violations. According to the new rules, the division may impose a civil monetary penalty ranging from $1,000 to $10,000 per violation and or potential suspension or revocation of a license.

Depending on the severity of the violation, as well as documented patterns of license violations by the licensee, will determine final disciplinary actions imposed. 

  • For the first documented violation within a twelve (12) month period, the CCD can propose a fine of $1,000 – $2,000 per violation;
  • For the second documented violation within a twelve (12) month period, the CCD can propose a fine of $2,000 – $3,000 per violation, as well as potentially take action against the license itself;
  • For three or more documented offenses, the CCD can propose up to a $10,000 fine per violation as well as potentially suspend or revoke a license.  
  • CCD reserves the option to recommend suspension or revocation of any license for any violation if the division deems the violation serious enough. That means that serious violations can earn a suspension/revocation, even on a first offense.
  • It should be noted that per rule, any offense involving the sale or distribution of cannabis to a minor can be fined up to $10,000 regardless of prior history related to the violation, as well as have their license potentially suspended or revoked. 

Note that the “three strikes” approach does not require three separate inspections. Non-compliant operators could earn three (or more) violations of different rules during a single inspection. That makes internal compliance even more important than ever.

So how do you avoid a really nasty violation? Building a culture of compliance, of course. That means building a program of regular inspections, audits and staff training opportunities are built in up front. Many operators prefer to have third-party firms like Weeds. conduct these inspections and audits to ensure they get an “extra set of eyes” on their operations and have help staying on top of ever-changing rules.

Building a culture of compliance also means not seeing CCD as the enemy, but cooperating with CCD as a partner building a strong industry. In addition to documented patterns of violations, the CCD will also consider other factors prior to issuing penalties such as the licensees’ willingness to address and remediate the violation(s), how cooperative a licensee is during an investigation of violation(s), as well as the violations potential threat to public health, safety and welfare. These factors will play a key role when the regulatory agency is determining to enhance or lower penalties to be imposed by the division. 

We at Weeds. understand that navigating laws and rules in order to remain compliant can be daunting and a bit overwhelming, but that’s why we are here! The team at Weeds. is dedicated to working with new and existing businesses to address potential violations before they become an issue and cost a company literally thousands of dollars and be put into a position to potentially lose their license all together. If you want to be proactive before state auditors arrive at your licensed premise, contact us for a preventive site visit, where our experts will work with you and your operators to ensure your business is meeting compliant standards. And if you find yourself in a sticky situation with regulators and need assistance working through license violations with corrective action plans, we are here to help with that as well!          

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