Just a few weeks in the past, we wrote in regards to the lawsuit filed by the California Bureau of Hashish Management (BCC) in opposition to Vertical Bliss, Inc., an organization which the BCC alleged had manufactured hashish merchandise and bought them unlawfully within the illicit market. The BCC is searching for mind-blowingly excessive civil penalties in opposition to Vertical Bliss based mostly on these allegations. Whether it is profitable and recovers solely a part of what it’s searching for, the damages may nonetheless be large.
The Vertical Bliss case is likely one of the first large enforcement actions because the implementation of licensing below the Medical and Grownup-Use Hashish Regulation and Security Act–late final yr, the California Division of Meals and Agriculture sued one other operator, however not a lot public enforcement has occurred since then.
That mentioned, we absolutely anticipate that over the following yr, the businesses will ramp up enforcement. And we additionally anticipate that they’ll come after firms who’re alleged to have engaged in way more mundane rule violations. From the businesses’ perspective, they must finally begin severely implementing their guidelines, in any other case firms will simply ignore them.
The inevitability of enforcement actions, civil penalties, lack of licensure, and even doubtlessly felony legal responsibility (relying on the character of the violation) imply that hashish companies should get within the mindset of compliance. Failure to take action can, and finally will, result in devastating penalties.
It’s not merely sufficient for firms to take the place that not overtly violating legislation is adequate to keep away from enforcement actions. The BCC’s Disciplinary Guidelines, for instance, make very clear that the company is empowered to take drastic actions in opposition to licensees who violate even minor and seemingly inconsequential guidelines. The purpose is that compliance means extra than simply not partaking in felony or overtly illegal conduct.
Firms with good compliance programs want to think about each single rule relevant to them (and there are a number of guidelines relevant to hashish companies) and work out methods to not run afoul of these guidelines. These firms will undertake proactive mindsets on the subject of compliance as a substitute of appearing first and altering issues up if the businesses come knocking–as a result of they finally will.
One factor we hear on a regular basis is how costly compliance may be. For smaller hashish companies, hiring a compliance workforce or devoting infinite monetary sources to compliance is probably not an possibility. That mentioned, the hashish guidelines apply equally to large and small companies with out exception, that means all companies should discover methods to study and comply with the principles.
One other essential level on compliance with state legislation is that it reduces (although nothing can utterly eradicate) the danger of federal enforcement. As we wrote just a few months in the past, the BCC lately was pressured to show over data to the DEA of hashish companies who allegedly have been unlawfully importing hashish from Mexico. Companies that have interaction in illicit conduct are due to this fact susceptible to double penalties from state and federal governments.
The purpose is that compliance is vital and non-compliant companies could finally study that the laborious manner. We absolutely anticipate an increasing number of enforcement actions to be filed within the coming months and years, so keep tuned for extra particulars.