By Ryan T. Kocot, Esq.
IG: @KocotLaw
Facebook: @KocotLaw
A commercial cannabis license is an asset to a licensee that takes a lot of time and money to obtain. Licensees, therefore, should have a firm understanding of California’s Bureau of Cannabis Control’s (BCC) disciplinary guidelines in order to protect that asset. While this is specific to the BCC’s process, cannabis businesses are likely to see similar disciplinary processes in other states as well. Let’s break the process down in plain English.
Administrative Law vs. What you see on TV
Disciplinary proceedings are not held in a courtroom like you see on Law and Order. If a formal hearing ends up being necessary, it’ll be held in front of an Administrative Law Judge (“ALJ”) in an administrative forum where procedure and the rules of evidence differ from the traditional courtroom. Like what you see on TV, however, you will have the opportunity to put up a defense. In other words, you will have the opportunity to produce evidence to support your position in front of the powers that be.
Factors to be Considered in Determining Penalties
The following factors are considered when dishing out any punishment:
- “Nature and severity of the act(s), offenses, or crime(s) under consideration
- Actual or potential harm to the public
- Actual or potential harm to any patient
- Prior disciplinary record
- Number and/or variety of current violations
- Mitigating evidence
- Rehabilitation evidence, including but not limited to, a statement of rehabilitation containing any evidence that demonstrates fitness for licensure, or a certificate of rehabilitation under Penal Code Section 4852.01
- In case of a criminal conviction, compliance with conditions of sentence and/or court-ordered probation
- Overall criminal record
- Time passed since the act(s) or offenses occurred
- If applicable, evidence of expungement proceedings pursuant to Penal Code Section 1203.4”
So what does all does this mean to a license holder? If you have a conviction on your record that occurred prior to obtaining a license, you need to do a couple things:
- If it’s a prior felony, look to see if you can get it reduced to a misdemeanor pursuant to Penal Code Section 17(b). Some felonies are “wobblers,” meaning that they can be charged as either as a felony or misdemeanor.
- If you have a prior felony that can be reduced to a misdemeanor, file a petition in the superior court of the county you received the conviction to both reduce the conviction and have it expunged simultaneously.
- If you have a prior felony that cannot be reduced, look to see if it can be expunged or if a certificate of rehabilitation is an option.
- If you have a prior misdemeanor, petition the court to have it expunged.
Filing reductions and/or expungements is relatively simple process; it’s really a matter of filing paperwork and paying a filing fee. However, it’s usually a good idea to include reference letters and/or a statement explaining what was going on in your life at the time of your conviction, as well as what you’ve been doing since.
Things get more complicated if you get charged with a crime after receiving your cannabis license. Begin by hiring a criminal defense attorney that is familiar with defending against your charges. The attorney needs to be aware of the criminal penalties and the civil/administrative penalties that may be handed down by the BCC. The charges that you plead to could have a dramatic impact on your ability to keep your cannabis license or obtain one in the future. At the very least, if a felony is charged, an attorney needs to do anything and everything they can to at least have the charges reduced to a misdemeanor. The more serious the conviction, the greater the chance it will have negative effects on your status as a cannabis licensee, never mind the enhanced criminal punishment exposure. Any charges relating to illegal commercial cannabis activity are likely fatal to your existing license or prospect of obtaining a license.
Three-Tiered Disciplinary System
There are three levels of discipline; the higher the tier, the more serious the offense:
- “Tier 1 discipline is used for violations which are potentially harmful
- Minimum Punishment: Revocation stayed, 5 to 15-day suspension, a fine as determined by the “Fine Formula,” or a combination of a suspension and fine
- Maximum Punishment: Revocation of license
- Tier 2 discipline is used for violations with a serious potential for harm and/or violations which involve greater risk and disregard for public safety
- Minimum Punishment: Revocation stayed, 15 to 30-day suspension, a fine as determined by the “Fine Formula,” or a combination of a suspension and fine
- Maximum Punishment: Revocation of license
- Tier 3 discipline is used for violations involving knowing or willful violation of laws or regulations pertaining to commercial cannabis activity and/or fraudulent acts relating to the licensee’s commercial cannabis business
- Minimum Punishment: Revocation stayed, 45-day suspension, a fine as determined by the “Fine Formula,” or a combination of a suspension and fine
- Maximum Punishment: Revocation of license”
“Revocation stayed” is basically a fancy way of saying “we won’t take your license now but will take your license if you violate any of the terms we impose in the future.” As you can see from the tiered punishment structure, it’s crucial that you do whatever you can to end up in the lowest punishment tier possible. How do you ensure this? Unfortunately, that question will depend on the facts of your specific situation. At the very least, though, you should gather any and all documentation or other evidence that pertains to the facts of your case. There may also be an opportunity to negotiate lesser punishment without the need for a formal hearing depending on the circumstances.
Do I need an attorney?
In typical lawyer fashion, my answer is: It depends. In a perfect world, anyone facing a disciplinary action would be represented by an attorney, but this is not always feasible. The answer to the question of whether one needs an attorney hinges on the seriousness of the violation that is alleged to have occurred. If a cannabis business is facing a serious violation, particularly one that may result in the loss of a license, they should do anything they can to hire an attorney to represent their interests. To see a list of potential violations and corresponding fines, check out the full text of the BCC overview at http://bcc.ca.gov/law_regs/bcc_disciplinary_guidelines.pdf.
©Kocot Law 2018. This content is strictly educational and does not constitute legal advice. It is not to be reproduced without the author’s express written consent.
