Friends,
McAllister Garfield is a leading regulatory enforcement law firm in both CO and CA. Each year, the Firm inventories the regulatory enforcement cases brought in the past year. 2018 was an eventful year for the Colorado Marijuana Enforcement Division (the “MED”) and industry participants regarding enforcement actions.
From January 1 until December 31, the MED closed 45 enforcement cases against rule violators in the state. Four of these violators were charged with more than one category of violation, subjecting themselves to heftier fines and license relinquishment.
The most common infraction during 2018 was the sale of marijuana to underage customers, under 18 for Medical sales and under 21 for Retail sales. There was a total of 18 such infractions during the year, 15 of which resulted in relatively small fine to the license holder, typically $7,500, and a seven-day license suspension. The MED also required that many of these businesses install ID scanners on the store premises.
Three violators were fined larger amounts, and in one case forced to surrender all MED licenses, because the underage sale violation also involved an additional violation. The largest fine imposed by the MED for an underage sale during the year was $40,000.
Operational violations were the second most common category of infraction. An operational violation includes, but is not limited to, the following categories:
- Failure to operate with a local or MED license;
- Failure to notify the MED of changes in use of licensed premises;
- Failure to use or maintain the required surveillance systems;
- Failure to maintain appropriate business records;
- Failure to render waste unrecognizable;
- Dispensing retail/medical marijuana for an unauthorized purpose;
- Failure to accurately input data and track inventory;
- Cultivating and possessing more than the permitted plant count.
The punishments for operational violations vary greatly depending on severity with fines ranging from $3,000 to $5,000. Along with a fine, violators that were allowed to retain their licenses were required to complete a Responsible Vendor Training course.
The most serious violations resulting in license forfeiture involved purchasing untracked plants, operating at an unlicensed facility, and exceeding the medical plant count.
Other violations of interest during 2018 include criminal violations and violations during license applications. In the Sweet Leaf “looping” case, the MED required all licenses involved transfer ownership and the former holders were jointly and severally liable for $550,000.
Submitting false information on MED application formers results in substantial punishment as well, including, but not limited to, admissions of perjury, fines up to $50,000, and prohibition from the Colorado cannabis industry for 10 years.
The attorneys at McAllister Garfield provide services at both the state and local levels regarding licensing and enforcement actions.
If you wish to discuss an issue with a licensing or enforcement agency in Colorado, please contact Sean McAllister.