Warning Letters Sent to Unlicensed Cannabis Businesses in California

Sales are booming for cannabis businesses after Prop 64 allowed recreational marijuana to become a legitimate industry in the eyes of the state. However, operations are still heavily regulated, and many new marijuana business owners find the task of abiding this onerous list of laws to be a difficult one. Without the help of a marijuana attorney to advise of potential problem points, businesses could easily find themselves under heavy sanctions – or worse, criminal prosecution.

The California Bureau of Cannabis Control recently sent warning letters to several hundred businesses suspected of operating without state marijuana business license, according to Leafly. The letters outline criminal and civil action planned if the businesses refused to either close or become compliant with regulations. Bureau leaders said they are pursing all delivery services and retailers who may not be operating legally.

Some of these businesses slipped into questionable business practice after legalization passed, but as officials ironed out the details of statewide regulation and oversight. In some cases, business owners have been trying to fly under the radar to avoid being taxed (practically out of existence). In many cases, however, these business owners were simply unaware of their obligations or haven’t filed the proper paperwork or gone through all the correct channels. This is where having a marijuana business attorney can be invaluable to protecting your investment.Our Los Angeles cannabis business attorneys know that in cities like Los Angeles and San Diego have taken decisive action. LA Police Department has raided eight businesses without licenses, leading to more than 35 arrests. The department said this is just the tip of the iceberg, estimating 100-200 illegal cannabis businesses are currently operating in Los Angeles alone.

Although shortcuts can be very tempting considering how cumbersome these regulations are, the reality is any illegal business practices – intentional or otherwise – can cost you big time in the long run. Note that just because a cannabis business has been able to evade detection or regulation until this point is no guarantee the status quo will continue.  In fact, these letters and police raids illustrate how serious marijuana business owners and operators should be taking these issues.

According to the bureau’s letter, each violation can cost a business up to three times the license fee in civil penalties. This is beyond any criminal penalties – and a criminal record can often be more detrimental than monetary punishment.

If your business is currently operating without a license or you aren’t sure if you are in compliance with laws and regulations, our attorneys are here to help get you on the right track. With our experience and know-how, we can assist you with licensing and compliance issues. And with regulations and laws varying so greatly from city to city, it is essential you are working with someone knowledgeable in all of the laws that will affect you.

We also can work on a business plan that is best for you to get you set up on the road to success. The best way to succeed is to keep your business open, and the best way to do that is to follow the law.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 949-375-4734.

Additional Resources:

California Sends “Several Hundred” Warning Letters to Unlicensed Cannabis Businesses, Feb. 16, 2018, By Ben Adlin, Leafly

More Blog Entries:

Licensed Pot Shops Take on Illegal Sellers for a Fair Market, March 10, 2017, Cannabis Law Group