Nevada Cannabis Compliance Board Fines and Strips Marijuana Company of 14 Licenses

CWNevada have also been appointed a receiver to ensure the company remains solvent until its assets can be distributed to creditors.

The vertically integrated cannabis company, CWNevada—which operates the Canopi dispensary network in Las Vegas, along with cultivation and production facilities—has received a USD $1.25 million fine and had 14 licenses stripped from it, in response to 21 alleged violations of Nevada's state regulations.

The company has been accused of selling untested cannabis products, failure to comply with the state's cannabis inventory track-and-trace program, failure to pay taxes, and attempting to hide or destroy evidence.

This is an evolving industry and, on some level, a very new industry. I recognize that we are going to be constantly looking at these regulations and how they're regulated and we'll make changes as necessary. Nevada Cannabis Compliance Board Member, Dennis Neilander

A statement from the company revealed that CWNevada has agreed to a settlement concerning its 21 violations of the state's cannabis product regulations, including:

  •  The cancellation of six business permits.
  • The mandated sale of a further eight licenses.
  • USD $1.25 million in fines.

The decision to do so was made by the newly-formed Cannabis Compliance Board—which took over marijuana enforcement duties in Nevada on 1 July—during its inaugural meeting.

The announcement was also accompanied by news that the board had elected to lift the freeze on the sale or transfer of cannabis licenses in Nevada, along with introducing a new set of permanent regulations for the state's marijuana industry.

This is the latest in a series of blows for the beleaguered cannabis producer, the most painful of which was 2019 ruling that saw an arbitration panel order the company to compensate Arizona-based multistate marijuana firm, 4Front Holdings, for $4.99 million, as a result of the CWNevada's failure to pay for services rendered and various breaches of contract.

According to the co-founder and president of 4Front Holdings, Kris Krane, the dispute stemmed in part from a former business model that the company no longer uses, which involved helping smaller clients secure cannabis licenses and become operational in exchange for a moderate fee and a percentage of future revenue.

 "It met the needs of clients at the time," Krane said.

"But we don't do it that way anymore because we found collection a real problem."

A receiver was also appointed by the courts in June to ensure that CWNevada remains operational until its assets can be distributed to creditors, following the shuttering of multiple dispensaries due to the company's failure to pay taxes.  


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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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