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Nevada marijuana dispensary fined $45K for self-reported violation

Updated January 27, 2022 - 12:14 pm

State regulators this week tried to levy a hefty fine on a Southern Nevada marijuana dispensary that self-reported a regulatory violation, a decision that some questioned as being overly harsh.

The fine stemmed from a single sale in May 2021 in which an employee of Nevada Organic Remedies, which owns and operates The Source dispensaries in the valley, sold more than the legally allowable 1 ounce of marijuana. The company discovered the error and reported it to the Cannabis Compliance Board three days after the sale.

While the company took its own corrective action, state regulators still wanted to fine Nevada Organic Remedies $62,500 for the violation, which didn’t sit well with Cannabis Compliance Board member Riana Durrett.

“I think the amount is really, really high, so I would be in favor of a lower amount since it was self-reported,” Durrett said, while the board discussed the penalty during a meeting Tuesday.

The company said it investigated the issue and determined that a safeguard in its sales system, which flags sales exceeding the legal limit, had been turned off.

Deputy Attorney General L. Kristopher Rath said the company made sure the safeguard was turned back on and also further trained its employees to not rely as heavily on the safeguard to catch improper sales.

Amanda Connor, an attorney representing the company, told the board that levying such high fines on a self-reported violation could have a serious chilling effect across the state’s cannabis industry.

“I do think it’s important for the board to remember that such steep penalties on self-reports is going to discourage people in the industry from self-reporting,” Connor said.

Rath said the amount of the proposed fine was that high because the company had a previous violation involving a transfer of interest issue relating to its cannabis license.

Durrett proposed reducing the fine to $45,000 as part of a revised settlement agreement. The board unanimously approved Durrett’s proposal.

Contact Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.

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