Massachusetts Fines Three Cannabis Companies

Law 360 reported that the Massachusetts’ Cannabis Control Commission handed down hefty fines to three cannabis companies doing business in the state. 4Front Ventures Corp. (FFNTF) and Garden remedies were fined for using pesticides on plants, while Acreage Holdings Inc. (OTC:ACRGF) was fined for failing to disclose its relationship with two license holders.

4Front Ventures

4Front Ventures fined $350,000 settlement over pesticides used at its Georgetown, Massachusetts, facility. According to Law360, the settlement included a statement that 4Front Ventures admitted hydrogen peroxide, baking soda, and other pesticides were used at the facility, which is not approved for use on marijuana. The commission reportedly said that the company received test results that showed the plants contained a banned pesticide in June or July 2019 but didn’t alert the commission until August. Company CEO Leo Gontmakher said the company has made changes to ensure the violations do not happen again. “Patients were protected and no one was harmed,” Gontmakher said.

Garden Remedies

A $200,000 settlement was reached with cannabis company Garden Remedies over its Fitchburg, Massachusetts, facility. Like 4Front, Garden Remedies also noted in its settlement that it acknowledged using unapproved pesticides and altering its financial records to hide the purchase.

Company CEO Karen Munkacy said in a statement that the company has fired the employees involved in the falsified documents and ended its relationship with the vendor that provided the pesticides in question.

“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,” Munkacy said. “The company and I will continue to strive to ensure that ethical and regulatory violations never again occur.”

Acreage Holdings

Law360 also reported that The Botanist, an Acreage Holdings subsidiary agreed to pay a $250,000 fine for failing to disclose its parent company’s controlling relationship with two medical marijuana licensees. Massachusetts had passed a law when its program was established that limited license holders to just three so that there would be no monopolies and more companies would share in the industry.

Acreage Holdings came under fire for bragging that it had numerous licenses in the state. The commission’s investigation found that Acreage’s contracts with two affiliate medical marijuana treatment centers in the Bay State gave it a controlling relationship over them. Despite the ruling, the commission can approve two provisional retail licenses for The Botanist Inc.

“We want to express our thanks to the CCC for their professional approach as we worked through today’s resolution,” Acreage general counsel James Doherty said in a statement. “We’re looking forward to focusing all of our energies on what we do best, which is deliver great products to the citizens of Massachusetts.”

It seems the original agreements had been entered into while Massachusetts had a medical-only program and the regulations at the time were not so specific about control and ownership. The commission went on to clarify the rules about ownership limits at which time the commission said Acreage should have realized it had too many.

The commission did state that The Botanist “cooperated with the commission’s investigation into ownership and control interests and engaged in good-faith efforts to comply with the regulations after being notified of possible control issues.”