Lawsuit: Kushy Punch’s illicit marijuana market reach more than first known

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(This story has been updated to correct the amount of fines Kushy Punch faces. The company could be fined up to $498 million.)

Vertical Bliss’ reach into the illegal cannabis market when the company, operating as Kushy Punch, was busted in 2019 was more than three times what was estimated when it first landed in state regulators’ crosshairs.

That’s according to a civil lawsuit filed by the California attorney general on behalf of the state Bureau of Cannabis Control and the Department of Public Health.

Kushy Punch’s two California cannabis business licenses were revoked as a result of last fall’s raid, and the Los Angeles-area company could be fined up to $498 million.

Neither Kushy Punch officials nor the company’s representatives could be reached for comment.

According to the civil lawsuit, a search of Kushy Punch’s internal records show that the company was responsible for roughly $64 million worth of illegally produced cannabis gummies as well as concentrates and other raw marijuana materials used for making edibles and vape cartridges.

That value stands in stark contrast to the estimated $21 million worth of illegal marijuana products seized when authorities raided the company’s facilities in Canoga Park in 2019.

The state subsequently revoked Kushy Punch’s manufacturing and distribution licenses.

The civil lawsuit alleges the company “inverted illegally manufactured product back into the regulated market” for at least 18 months, the BCC said in a news release.

Under California regulations, those found guilty of engaging in commercial marijuana operations without a license can be fined up to three times the amount of the cost of that license for each day of operation.

According to the lawsuit, Kushy Punch’s fine could reach a maximum of $498 million for 527 days of illegal manufacturing and distribution.

This is the second civil suit California authorities have filed against a licensed cannabis business as an enforcement mechanism.

The first such lawsuit, brought against Lowell Farms, was settled out of court in July for $546,000.