Cannabis Company Basics: Compliance is Key

A few weeks ago, we wrote about the lawsuit filed by the California Bureau of Cannabis Control (BCC) against Vertical Bliss, Inc., a company which the BCC alleged had manufactured cannabis products and sold them unlawfully in the illicit market. The BCC is seeking mind-blowingly high civil penalties against Vertical Bliss based on these allegations. If it is successful and recovers only part of what it is seeking, the damages could still be massive.

The Vertical Bliss case is one of the first massive enforcement actions since the implementation of licensing under the Medical and Adult-Use Cannabis Regulation and Safety Act–late last year, the California Department of Food and Agriculture sued another operator, but not much public enforcement has happened since then.

That said, we fully expect that over the next year, the agencies will ramp up enforcement. And we also expect that they will come after companies who are alleged to have engaged in much more mundane rule violations. From the agencies’ perspective, they will have to eventually start seriously enforcing their rules, otherwise companies will just ignore them.

The inevitability of enforcement actions, civil penalties, loss of licensure, and even potentially criminal liability (depending on the nature

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