The Cannabis Compliance Board of Nevada has endorsed a landmark penalty against a Nevada cannabis company, in what appears to be largest in state history. The board endorsed the penalty during a meeting on Tuesday, July 21.
The largest penalty against a marijuana company
According to the penalty, the Nevada-based cannabis firm CW Nevada will have to pay $1.25 million in fines and have its licenses revoked. The company faces allegations that it had large quantities of marijuana off-the-books, sold untested cannabis, and destroyed evidence.
CW Nevada had 14 licenses for its “Canopi”-branded products and facilities. These included dispensaries, cultivation facilities, and multiple business operations in Las Vegas and Pahrump. The investigation against the company started in 2018 after it failed to remit taxes.
The Nevada cannabis company was further accused of many other violations such as illegal movement and distribution of marijuana. It also failed to maintain video surveillance that would record product movements. Inspectors also witnessed inaccuracies in the company’s records, as shown in Nevada’s seed-to-scale tracking system METRC.
According to the charge sheet, in less than three months in 2019, CW Nevada sold 1,793 marijuana products that allegedly had no certificate of analysis to show they passed through a laboratory test. Besides, it allegedly had more than 4,100 cannabis plants outside the state’s tracking database. The state has since moved to destroy all the “untagged” marijuana and cannabis products.
Out of the 14 licenses belonging to the Nevada cannabis company, six have been revoked while eight remain active. The board also directed a court-appointed receiver to sell the active licenses within the next six months to help offset CW Nevada’s debts. So far, the debts include more than $1 million, which it owes its employees.
By March 2020, CW Nevada owed the state back taxes amounting to more than $1.5 million. Other claims have been made against the company, amounting to more than $207 million. The receiver has resolved that nearly $32 million of those claims are allowable.
Craig Slater is the attorney representing nearly 60 former employees of CW Nevada. Supporting the settlement, he said it was an opportunity for the former workers to recover their wages, which are more than a year overdue.
“CW Nevada’s failure to pay my clients the wages due and owing is wreaking havoc on my clients. Many of my clients fell behind in their bills and have yet to fully recover from the devastation,” Slater wrote.