California cannabis company settles enforcement case for $546,000

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

(This story has been updated with more details about the settlement and comment from Lowell Farms and to clarify that the company’s $500,000 payment was not a penalty.)

A first-of-its kind enforcement case in California ended in a settlement in which a licensed marijuana company agreed to pay the state nearly $550,000 but avoided any loss of its business permits.

The lawsuit, filed by the state attorney general’s office in 2019, charged Lowell Farms with operating without a license at its facility in Nipomo between December 2018 and March 2019.

The case marked the first time California regulators brought a civil enforcement suit against a state-licensed marijuana business.

The suit was dismissed on July 31 after the parties reached a settlement, according to court records.

Under terms of the settlement, Lowell Farms agreed to pay just over $546,000, including:

  • $500,000 to the state as part of the overall settlement.
  • $33,560 to the California Department of Food and Agriculture as reimbursement for attorney fees and investigation costs.
  • $12,852 to the state Department of Fish and Wildlife for attorney fees, investigation expenses and the cost of destroying illegal cannabis that was seized during a raid on Lowell’s facility in March 2019.

An attorney representing Lowell Farms described the settlement in an email to Marijuana Business Daily as a “quick, amicable and forward-looking resolution.”

The attorney, Sean Walsh, emphasized the company did not admit to any wrongdoing.

“Because we sat at the table and thoughtfully worked with our regulators, we were able to resolve all outstanding issues and, as part of the settlement, the state’s claims were dismissed with prejudice,” Walsh wrote.