Legal Cannabis Retailer Fined $200K For Alleged Inducement Program

Legal Canadian Cannabis Retailer Fined $200K For Alleged Inducement Program

Canadian Cannabis Retailer Slapped With $200,000 Fine for Alleged Regulatory Violations.

Licensed Canadian marijuana operator of the Cannabis Xpress chain of retail shops was fined $200,000 by the Alcohol Gaming Commission of Ontario (AGCO). Allegedly, the company violated Onatrio's regulatory standards related to provincial anti-inducement laws. 

"Provincial law and AGCO standards include anti-inducement regulations to protect consumer choice and maintain a level playing field for small businesses in the cannabis retail industry," stated Dr. Karin Schnarr, Registrar and CEO at AGCO. "The AGCO monitors the sector's compliance with these requirements and will take strong action against any licensee found to be engaging in illegal behavior."

Regulatory requirements and compliance difficulties across various cannabis markets will be thoroughly discussed by industry experts at the upcoming Benzinga Cannabis Capital Conference next week, among many other important topics.

The provincial Cannabis Licence Act, 2018 and the AGCO's Registrar's Standards for Cannabis Retail Stores (the Standards) prohibit Ontario cannabis retailers from asking for or accepting inducements from cannabis producers as a condition of selling or giving preferential treatment to products in their stores.

The AGCO obtained information on inducement activity, after which it tool compliance inspections of Cannabis Xpress, which included a review of more than 82,000 documents only to confirm an inducement program, reads the press release.

The commission added that it found the licensee attempted to disguise these illegal payments for preferential treatment to products from licensed producers that signed these deals as agreements for the sale of data for business intelligence purposes, which are permissible under the Standards.

The retailer served with an Order of Monetary Penalty by the AGCO has the right to appeal the Registrar's action to the Licence Appeal Tribunal (LAT), an adjudicative tribunal independent of the AGCO and part of Tribunals Ontario.

by Nina Zdinjak

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