One of the largest cannabis companies in the United States was just fined by Massachusetts’ Cannabis Control Commission for failing to comply with all state regulations. Despite the fine, all parties agree the mistake was made in good faith. And it looks like there will be no further disciplinary action against the company.
Curaleaf Fined For Breaking Massachusetts Rules
Marijuana company Curaleaf was recently fined $250,000 by the Massachusetts Cannabis Control Commission. The reason for the fine was that Curaleaf did not disclose or get approval from the Commission for a few high-level changes to the company’s structure.
As reported by local news source Mass Live, Curaleaf went through multiple ownership changes last year. This included transitioning from a nonprofit structure to a for-profit structure. Similarly, Curaleaf’s parent company merged with a Canadian company last year. This move was made to give Curaleaf access to Canadian stock markets.
There is nothing wrong with these type of changes. But the problem was that Curaleaf failed to inform the Commission of these changes beforehand. As a result, Curaleaf never got approval from authorities to complete those changes.
Now, in the wake of the confusion, the Cannabis Control Commission decided to levy the $250,000 fine.
According to reports, Commission authorities chose to give Curaleaf the fine for two main reasons. First, to push for better compliance from Curaleaf moving forward. And two, to discourage similar failures from other companies in the legal cannabis industry.
According to Commission Chairman Steven Hoffman, Commission “staff has done exactly right thing, one, to rectify the violation and two, to ensure that it won’t happen again.”
An Honest Mistake
Reports indicate that Curaleaf fully cooperated with the Commission and that the company agreed to pay the fine. Interestingly, it sounds like the entire thing stemmed from a simple misunderstanding. In fact, Commission Chairman Hoffman went on record saying that despite making these mistakes, he believes Curaleaf was genuinely “acting in good faith.”
It appears that Curaleaf was confused about how to proceed with the process of seeking approval for ownership changes because Massachusetts’ system for doing so was not fully set up. Specifically, the state was still developing the documents and procedures for disclosing this type of information.
Because of this, Curaleaf concluded that it did not need to submit information since there was no paperwork available. Ultimately, the company went ahead with the changes without disclosing them to the state.
In addition to agreeing to pay the fine, Curaleaf also submitted their request for approval retroactively. The state Cannabis Control Commission approved the changes. Now, everything related to Curaleaf’s structural and ownership changes is above board and legal.
Currently, Curaleaf runs medical marijuana dispensaries in Hanover and Oxford, Massachusetts. In addition to these shops, the company also has a couple of pending applications to open dispensaries in Ware and Provincetown. And finally, Curaleaf also has provisional licenses in place to begin selling recreational cannabis in Oxford and to begin growing weed and making recreational weed products to sell in Webster, Massachusetts.