Enforcement and California Cannabis Operators

Enforcement and California Cannabis Operators

There is no doubt we are seeing increased regulatory enforcement across the supply chain.  While the closing of high profile “rogue” dispensaries in Los Angeles is the highest profile example, we are now aware of situations from outdoor grows in Humboldt to questionable distribution operations south of San Diego. In our communications with the regulators, this is simply the tip of the iceberg that they fully intend to move toward the entire industry.

There is no doubt that many in our industry simply view this as a “calculated risk” fully prepared to continue operations in the “gray market” until they are forced to stop. We all understand the possible benefit of such an approach, but it’s also important to understand the risks. While its certainly potentially a criminal risk, we are finding that this is rarely the approach taken by regulators. If you have a record of a civil Cannabis regulatory violation, then regulators have the right to bar you from the industry permanently or for a number of years; there are also civil forfeiture laws that we have seen enforced where rogue operators have literally lost everything they own.

The clear point is that there is a lot to lose, and potentially everything to lose in terms of your assets and your ability to operate in the industry in the future. This does not always occur, but it is critical that we all understand what is at risk.

What we have found is that increasingly regulators are encouraging the creation of licenses to support the industry and even supporting creative ways to provide a licensed environment for operators.  For example, we have had success in securing relationships for small delivery operators that provide licensure protection or “office condo communities” that allow small operators to secure licenses to support their operations.  We have found increasing flexibility in deploying online marketing efforts, again tied to licenses that properly track municipal and state regulatory requirements.

The point is that while we fully understand that in the past there were ways to go about the industry which continue to this very day, those ways are increasingly under attack and place operators in increasingly difficult circumstances to sustain operations. While this pressure increases, there are alternative licensing strategies that allow operators to remain in compliance and properly reporting to regulators.

M7 Compliance also offers a full range of services and products supporting all aspects of legally compliant cannabis operations in California.

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