The Massachusetts Cannabis Control Commission (CCC) has issued hundreds of thousands of dollars in fines to three cannabis firms for not complying with agency regulations.
During a July 9 public meeting, conducted and broadcast via video webcast, chairman Steven Hoffman and commissioners Jennifer Flanagan, Britte McBride, and Shaleen Title unanimously voted to fine two companies for using banned pesticides on their cannabis plants. They also unanimously voted in favor of imposing fines against New York-based Acreage Holdings for violating Massachusetts ownership laws.
Healthy Pharms — which does business under the “Mission” brand of dispensaries and is backed by Arizona-based multistate operator 4Front Ventures — was fined $350,000, while Garden Remedies, which has a cultivation and processing plant in Fitchburg, Mass. and three dispensary locations in the state, was fined $200,000.
According to the attorney Rebecca Lopez, who spoke during the meeting, Garden Remedies sprayed pesticides on its crops and falsified three documents in an effort to “conceal the licensees non-complaint use of pesticides.”
Inspectors who visited the company’s cultivation facility also discovered a second non-approved “plant growth regulator” back in early 2019.
In addition to paying a $200,000 fine and ceasing the use of pesticides in its cannabis cultivation, Garden Remedies has agreed to maintain records of all chemicals purchased and used at its facility. It will also conduct annual ethics training sessions with all employees during a two-year probationary period.
In a statement issued to The Boston Globe cannabis reporter Dan Adams, Garden Remedies founder and CEO Karen Munkacy said a “rooting hormone” called Clonex was used at the company’s cultivation facility and is approved by the EPA “for use on all food crops, including medical plants.”
“While the product we used is permitted to be used in cannabis cultivation in many other states and is not an externally applied pesticide that puts anyone in danger, it is not permitted in Massachusetts and the situation was mishandled,” she wrote. “We were also disappointed to learn that in our initial response to the CCC, unbeknownst to the executive team, documents were falsified by a former employee acting in a rogue manner.”
In her statement, Munkacy explained that the experience “had a dramatic effect” on the organization and “emboldened” her to “make sweeping changes” to maintain regulatory compliance.
“The corrective action plan included termination of employees involved, banning purchases from the vendor who supplied the prohibited substance, restructuring of reporting relationships and implementing a thorough training regiment,” she wrote, expressing her desire to “be a model of what a well-run cannabis company can be,”
Meanwhile, 4Front Ventures was fined $350,000 for its use of several banned pesticides and its failure to report that plants tested positive for certain illegal substances. The company also reportedly falsified documents related to its testing practices and neglected to properly register products in a “seed-to-sale” system that tracks cannabis SKUs.
“Taken into account were the type of violations committed, the seriousness of the violations, the applicability of multiple aggregating circumstances, the number of instances of certain violations, and that two of the four violations cited alone constitute grounds for suspension or revocation of licensure,” Lopez said.
Additionally, the company agreed to halt its use of unallowable pesticides and must pay to have its vegetation and flower rooms tested. Going forward, 4Front will be required to employ a “harvest compliance manager” to oversee the company’s operations and seed-to-sale tracking. It must also maintain records of all chemicals used at its facilities.
“Once the company understood the violations, we worked quickly to correct them and have implemented procedures to prevent them from happening again,” 4Front Ventures CEO Leo Gontmakher said in a statement. “We are happy to be through the process and appreciate the CCC’s diligence. Patients were protected and no one was harmed.”
For its part, Acreage Holdings, which owns “The Botanist” dispensary chain, was fined $250,000 for violating “ownership and control disclosures” and Massachusetts license cap rules.
Acreage failed to inform the CCC of updates to its management relationships with Martha’s Vineyard-based Patient Centric and Health Circle, which is planning to open dispensaries in Rockland, Mass., and Marshfield, Mass.
Under current state law, a single company can own or control up to three dispensary licenses. Acreage, however, was in violation of this rule due to its pursuit of licenses for The Botanist while simultaneously inking management agreements with the other companies.
According to the CCC, Acreage “should have known” that its contractual agreements with the other companies “constituted a controlling interest requiring disclosure pursuant to the commissions regulations.”
In a statement, Acreage confirmed that it had terminated its “management services agreements” with Patient Centric and Health Circle, and said it was granted provisional adult-use licenses in Shrewsbury and Worcester, where it already operates a medical dispensary.
“Acreage anticipates beginning retail sales at both locations as quickly as possible following further regulatory inspections and approval,” the company wrote.