Nevada Cannabis Brand Fined $1.2M for Selling Untested Products, Destroying Evidence

CW Nevada has received a $1.25 million fine from the Nevada Cannabis Compliance Board following multiple alleged violations, including selling untested and unregistered cannabis products.

Full story after the jump.

Nevada’s Cannabis Compliance Board has issued $1.25 million in penalties and revoked some licenses of CW Nevada following a slew of violations, including selling cannabis off-the-books, destroying evidence, and selling untested products, the Nevada Independent reports.

The penalty is the largest in state history against a cannabis company.

CW had 14 licenses for “Canopi”-branded dispensaries, cultivation facilities, and other operations. The state began investigating the company in 2018 after it fell behind on its taxes, the report says. As of March, the firm owes $1.5 million in back taxes.

In 2019, CW sold 1,793 products in less than three months that were not laboratory-tested along with another unregistered 4,100 plants. Regulators have destroyed all of the “untagged” products.

Additionally, the company was accused of illegally moving products, failing to maintain video surveillance, and inaccuracies in METRC, the state’s seed-to-sale tracking system.

Regulators revoked six of CW’s licenses and its eight remaining active licenses will be sold within the next six months to help pay the company’s debts. In a public comment, court-appointed receiver Dotan Melech estimated the revoked licenses are worth a total amount of $4.5 to $6.75 million.

In addition to its tax burden, the company owes more than $1 million to its employees, and has claims against it totaling $207 million; however, Melech determined that about $32 million of those claims are allowable.

The agreement allows the state to continue to pursue civil penalties and fines against owner and manager Brian Padgett individually. The state will also revoke his marijuana agent card.

Editor’s note: A previous version of this article incorrectly reported that the revoked CW licenses were worth $4.5 to $6.75 million each. That range actually represents the revoked licenses’ total, not individual, value.

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