Chart of the Week: 4,500+ Enforcement Actions on WA Marijuana Businesses in 10 Months

By Becky Olson

The Washington State Liquor and Cannabis Board (LCB) engaged in over 4,500 enforcement actions involving licensed recreational marijuana producers, processors and retailers from September 2014 to early July 2015, according to reports from the agency.

The most common types of enforcement efforts were phone calls and premises checks, which together accounted for 65% of all actions during that time period. An additional 13% were for final license inspections, while 12% were related to investigations involving complaints against a business.

All other types of actions each represented 3% or less of the total number of actions.

An enforcement action isn’t necessarily tied to concerns that a company might have violated rules. In some cases it’s simply part of regular businesses outreach conducted by the LCB, such as when the agency conducts a licensing-related inspection.

In other cases, however, an action can stem from a complaint, involve regulatory violations and/or result in penalties.

Based on its enforcement actions, the LCB levied 274 penalties on 143 licensed recreational cannabis businesses in the 10-month period. The most common type of violation – by a wide margin – was a failure to establish and/or maintain traceability of inventory, which accounted for 27% of all violations.

The LCB levied fines in 57% of all cases involving penalties, with dollar amounts ranging anywhere from $500 to $5,000. It issued written warnings in 40% of such cases.

More severe measures such as cancellation/suspension of licenses and destruction of plants were only assessed for 3% of all violations.

“The vast majority of these [cases] are not willful disobedience; people are just trying to figure things out,” said Ryan Agnew, a Seattle-based cannabis attorney. He mentioned that the inventory-tracking software in particular is not exactly intuitive or user-friendly.

In other cases, businesses unknowingly found themselves in violation of laws or rules only after a visit from the LCB. For example, producers and processors discovered they were not only required to test the product once it had been extracted, but again upon infusion into edibles/topicals or conversion to pre-packaged cartridges, Agnew said.

“That particular requirement wasn’t discovered [or understood] until businesses started receiving violations for not testing twice”, he said.

Certainly in some cases, businesses knowingly circumvented the law.

Regardless, the takeaway for law-abiding businesses in Washington State should be that the LCB is taking a very active role in the industry, and while businesses are experiencing challenges with new regulations, the volume of violations caused by confusion or misunderstanding of them will start to decrease.

Additionally, the nature of these violations show it’s also important for businesses to fully understand applicable regulations prior to commencing operations.

“Figuring [things] out as you go in this industry isn’t really healthy to do”, says Jon Hofer, principal at RMMC Consulting, which works with cannabis companies.

He noted that cannabis businesses will not only save themselves headaches down the road by fully complying with regulations from the get-go, but they will also help ongoing efforts to build marijuana up as a professional industry.

 Becky Olson can be reached at [email protected]

6 comments on “Chart of the Week: 4,500+ Enforcement Actions on WA Marijuana Businesses in 10 Months
  1. Eric Ogden on

    Traceability is both essential, and at this time problematic for licensees, especially given the current technology regime. Seattle-based WeedTraQR has dramatically modernized and simplified traceability compliance. Touch base for a solution.

  2. Joe Romano on

    The headline and missing info in this article makes it a great reference piece for the anti-mj crowd. The use of the term “Enforcement Actions” in the headline leads the uninformed to believe that there were 4500 violations by the mj industry, confirming their belief that everyone involved are criminals. The article also does not provide the reader with any real perspective on the scope of the problem. Apparently there were 143 businesses cited. How many exist? If it is 200 then there are some real problems. If it is 2,000 then not so much.

    Perhaps the article can be updated and revised?

  3. Seth Tyrssen on

    The very notion of having legal cannabis operations policed by the same guys who handle liquor, gives me pause right from the jump. Be that as it may, sounds like Eric called it right; essential and problematic. If they carry on as they’ve started, drowning everyone in a morass of rules and regulations and red tape, Washington will manage to kill the goose that lays the golden egg.

  4. Lorraine on

    Part of the problem, as I see it, is the vague wording in a lot of the State regulations. I think that once the state stops “figuring things out as they go along”, producers, processors, and retail shops will do much better complying.

  5. Adam Mintz on

    One issue, I believe, is/was the severe lack of knowledge that most employees/inspectors at the WSLCB possessed. The joke seemed to be, ask 3 LCB inspectors the same question, and you’ll get 3 different answers…

  6. Purly Surly on

    Traceability being the #1 problem, I would look to the source code and developers. Let’s see, BioTrackTHC not only created the data tracking the LCB uses to track businesses, BioTrackTHC also is the leading supplier of 3rd party software the businesses use for their traceability. Maybe check into their Help Desk tickets to see if there is a common issue businesses have when interfacing the commercial with the agency.
    One common problem is not having ability to create an inventory item outside the pre-existing items that come with the commercial BioTrack. The developers did not consider all the different stages useable marijuana can be in when creating inventory items. A work around is to make up a tracking system in excel that uses the LCB_ID# printing to barcode labels for other inventory items.
    Another problem is that inspectors want to see inventory tags on every piece of equipment the useable marijuana Lot is in/on; blenders, cookies sheets, extractors everything. So don’t be afraid to make too many bar code stickers just to protect your inventory Lots from destruction if an inspector makes a drop-in visit and to prevent cost loss of tracking batches. Rumor has it an inspector saw a batch of BHO on a sheet and it didn’t have an inventory tag on it so they made the processor throw away the batch and gave a violation under traceability.
    Figuring things out as we go along is definitely causing problems, people shouldn’t loose their business for honest mistakes during this time. Maybe it’s just part of weeding out the mass.

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