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California initiates enforcement against approximately 500 unlicensed marijuana businesses

Discussion in 'The Black Briefcase' started by vostok, Feb 22, 2018.


    vostok Well-Known Member

    Less than two months after California’s legal cannabis industry launched on New Year’s Day,
    state officials are starting to target hundreds of marijuana companies that are operating

    illegally without a license.

    The state’s Bureau of Cannabis Control has sent out about 500 cease-and-desist

    letters to companies that are doing business but haven’t begun the application

    process, an agency spokesman told Marijuana Business Daily.

    “Just this past week we went from going to licensed operators to do compliance checks

    to now sending out cease-and-desist letters to the unlicensed operators that we’re

    finding advertised on different platforms,” said Alex Traverso,

    chief of communications for the bureau.

    “That’s the first step. We’re getting those letters out, and we will follow up relatively soon

    on the next step, which is not yet available for me to relay.”

    he Bureau of Cannabis Control oversees licensing for marijuana retailers,

    distributors, testing labs and microbusinesses.

    It’s unclear what types of businesses have been targeted.

    The Department of Food and Agriculture licenses growers,

    and the Department of Public Health oversees manufacturers.

    Recipients of the cease-and-desist letters are most likely a mix of illegal businesses that have

    “no intention of getting a license” and companies that want to play by the rules but haven’t

    figured out all the red tape, Traverso said.

    California has a lengthy history of quasi-legal dispensaries that operate in a gray area,

    which could account for many of the letter recipients.

    The Los Angeles police department recently estimated there are still 200-300 illegal

    dispensaries operating in city limits.

    It’s also possible some operators are running their businesses illegally because they haven’t

    received permission from their local authorities to open.

    Such approval is a key threshold in obtaining a state business permit.

    No ultimatums – yet

    The letters, which started going out on Valentine’s Day, do not give the businesses ultimatums

    or specific timelines but encourage them to begin the licensing process.

    “We’re going to give (the letter recipients) a little time to right the ship and hopefully

    come and seek out their license,” Traverso said.

    The letters do include a stern warning:

    “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.

    “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.”

    California license fees range from $500 to $125,000, depending on the size

    and type of business, according to emergency regulations the bureau issued in November.

    It’s not clear if the department of Food and Agriculture has sent any cease-and-desist letters,

    but the Department of Public Health has not.

    Steve Lyle, the Department of Food and Agriculture’s director of public affairs,

    wrote in an email to MJBizDaily that his agency’s “focus is on licensing.”

    However, he said, if the agency “becomes aware of an illegal grow,

    it will inform local agencies for potential law enforcement follow-up.”

    Lyle also noted that CDFA has a tip line for complaints regarding illegal cannabis companies.

    So far, less than 1% of California’s enormous population

    of marijuana farmers have obtained licenses,

    according to a recent report from the California Growers Association.

    A Department of Public Health spokeswoman wrote in an emailed statement that the agency

    “has begun conducting enforcement activities, including site visits.”

    Finding the offenders

    Meanwhile, the Bureau of Cannabis Control’s letters are just the beginning,

    according to Traverso.

    More cease-and-desist letters will be issued on a rolling basis as the bureau identifies more

    companies that may be operating without permits, he said, and enforcement

    actions will ramp up as his department beefs up on staff.

    Traverso said many of the bureau’s letters went to companies that have advertised

    on digital platforms such as Weedmaps because agency staff are cross-referencing

    ads on the site with their license database.

    “There are certainly those online sites – like the Weedmaps of the world – that are advertising

    unlicensed retail locations and giving them something that looks like a license number,

    but it’s not a state license number; it’s something that they generate,” Traverso said.

    “We’ve been going and looking at those folks that are listed there and double-checking

    in our system to see if they have a license, and if they don’t, they’re getting a letter.”

    The agency also has been identifying potential violators through its online complaint system,

    through which a number of licensed companies have been identifying

    unlicensed competitors, Traverso said.

    “Through that system, we’ve received over 300 complaints,” he said,

    “and I’d say the majority are probably about unlicensed activity.

    “We’re taking all these complaints any way we can, and we’re following up on all of them.”

    Traverso said the timeline and next steps for enforcement against

    unlicensed businesses are both up in the air.

    However, he added, state lawmakers have made it clear to the bureau

    “they want to see enforcement.”

    “They don’t want the licensed folks to be adversely affected by the illegal market,” Traverso said.


    757growin Well-Known Member

    Taxman coming to collect ..
    Rob Roy and Colo MMJ like this.
    Rob Roy

    Rob Roy Well-Known Member

    If you give the state money, they won't hurt you. A kinder gentler rapist.

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