The California Department of Cannabis Control (DCC) is seeking $128 million in penalties from illegal cannabis businesses that regulators say produced and sold products in the state for more than a year without a license.
Regulators argue that “undisputed evidence” was revealed during the course of litigation and that the four business entities and three individual owners named as defendants in the case admitted to the illegal activity, which occurred for roughly a year and a half, Law360 reported.
“Both the admissions of the defendants and independent evidence gathered by the DCC support that the seven defendants ‘engaged in unlicensed commercial cannabis activity’ in the State of California for 527 days,” the department told the court, according to Law360. “There is no triable issue as to this fact when determining the civil penalty that should be assessed in this case.”
Regulators went on to argue that the department “should be granted summary since there were no contested issues left as to whether the defendants broke the law or what the civil penalties should be,” Law360 reported.
The California Bureau of Cannabis Control, the regulatory body that has since been replaced by the DCC, and the California Department of Public Health filed the lawsuit nearly two years ago, according to Law360. State officials accused the defendants of “flooding the regulated market with $64 million worth of cannabis gummies,” which were manufactured without a state license, the outlet reported.
Investigators ultimately raided the defendants’ factory in October 2019 and discovered cannabis concentrates, gummies, vapes, manufacturing equipment and records showing that the manufacturing operations had been going on for roughly 18 months, Law360 reported.
The DCC is seeking $128,061,000 in total penalties, according to the outlet, which the department calculated as $81,000 in licensing fees multiplied by the 527 days that the defendants produced the illegal products.