California Threatens Hundreds of Unlicensed Cannabis Businesses

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California’s Bureau of Cannabis Control (BCC) has sent out more than 500 warning letters threatening legal action to unlicensed businesses. The letters were sent last week to retail dispensaries and delivery services who have not yet received licenses to operate under the state’s cannabis regulations that went into effect on January 1. In the letters, California threatens hundreds of unlicensed cannabis businesses.

A Formal Warning

The letters, from Assistant Chief of Enforcement Paul Tupy, warn the businesses that the BCC believes they are participating in commercial cannabis activity contrary to provisions of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The letters also demand that all such activity immediately cease. Criminal and civil penalties are threatened if violations continue.

MAUCRSA was passed by the legislature in 2017 to reconcile differences in the state’s medical marijuana laws and Prop 64, which legalized marijuana for adult-use in California when it was passed by voters in 2016.

The BCC had previously indicated that enforcement of the new regulations would not begin immediately in 2018. But nearly two months into the new year, the agency and law enforcement have been receiving complaints about businesses who have not yet received licenses but are still operating. Many of those complaints are coming from the more than 3,000 companies who are operating legally after already completing the costly and laborious process of obtaining a license.

Natalia Thurston, a cannabis law attorney with a practice in Oakland, California, told High Times that one of her clients received warning emails from the BCC on February 14 and 20. The anonymous client operated a medical cannabis delivery service in the Bay Area but ceased operations January 1 when the new regulations went into effect.

Thurston noted that the emails did not indicate what her client has been accused of. “There was no evidence or specific factual information provided in the email notices regarding the activity alleged in the emails,” she said.

Powerful Message

It appears advertising by the targeted businesses may have instigated some of the warning letters. At a legislative hearing in Sacramento this week, Assemblymember Evan Low asked BCC Chair Lori Ajax about advertising appearing in a weekly newspaper. The ads, Low said, had missing or falsified license numbers.

“This is a complete disregard and gross negligence of the law,” he said.

According to Ajax, her agency was already aware of the issue, mentioning the warnings that had been recently sent out.

“We are already dedicating a lot of our enforcement staff just on advertising because it is that important,” Ajax said. “It is prevalent, not just in Sacramento but across the state and it is jeopardizing the regulated market. We want to get this right.”

Ajax also said the letters sent a “powerful message” to unlicensed commercial cannabis operators.

Final Hit: California Threatens Hundreds of Unlicensed Cannabis Businesses

It’s not yet clear how many businesses plan to heed the warnings. Attorney Thurston’s delivery service client won’t be back on the road until it obtains local and state licenses.

Here’s the text of the warning letter sent to hundreds of California cannabis businesses suspected of operating without a license.

2/14/2018

RE: Unlicensed Commercial Cannabis Activity

Dear :

The Bureau of Cannabis Control (Bureau) has reason to believe that you may be engaging in unlicensed commercial cannabis activity. Pursuant to the provisions of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), a valid state license from a state licensing authority is required to legally operate a commercial cannabis business within the State of California. If you are in fact engaging in unlicensed commercial cannabis activity, you must cease all commercial cannabis operations until you obtain a valid state license to avoid further violations of state law. Please be aware that such violations may result in criminal and administrative penalties, as well as civil penalties totaling up to three times the amount of the license fee for each violation.

To apply for a license, please visit the Bureau’s website, www.bcc.ca.gov, or contact the Bureau at (833) 768-5880.

Sincerely,

 

Paul Tupy

Assistant Chief of Enforcement

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