Ohio fines Marijuana companies hyping Recreational sales
Ohio Cannabis Control Division Imposes Fines on Dispensaries for Violating Advertising Rules.
In the days leading up to the start of recreational marijuana sales, five cannabis licensees posted signs and messages on social media, sent emails and one even brought an ice cream truck to the dispensary to promote adult-use sales.
But none of those promotions were pre-approved by the Ohio Division of Cannabis Control, which must OK all marketing and advertising under state rules. The division fined the businesses $212,500.
The fines underscore how seriously the Division of Cannabis Control is taking its role regulating the marijuana businesses. The division is closely monitoring offenses — large and small.
While some violations — such as the ice cream truck — were in direct violation of guidance that the division sent dispensaries this summer, others may be considered more trivial. For instance, the division noted that one dispensary used the word “recreational” in communications, which it said was inappropriate. The division uses the words “non-medical” or “adult-use” cannabis.
Recreational marijuana sales began Aug. 6.
The state law voters approved last November legalizing recreational marijuana states that the Division of Cannabis Control can adopt rules regarding advertising to prevent false and misleading ads, or ads targeting minors, excessive use or other illegal activity.
The rules “shall not overly burden the legitimate commercial speech of adult use cannabis operators in communicating with adult use consumers,” the law states.
At this point, the Division of Cannabis Control hasn’t proposed any advertising rules for recreational marijuana. Marijuana businesses must follow the advertising rules already in place for medical marijuana businesses, said division spokesman James Crawford.
“The Division has initiated enforcement actions against several licensees who have violated program advertising rules,” he said in an email. “All licensees fully understand they are required to adhere to the medical rules for advertising, and violations of this directive are being taken seriously. The Division continues to monitor licensees for compliance with all program rules to ensure a level playing field for all licensees.”
The following penalties were assessed by the division:
Greenleaf Apothecaries, doing business as The Botanist: $150,000 penalty
The Botanist, which owns five dispensaries, received the largest fine of all the businesses for bringing in an ice cream truck on the first day of recreational sales, according to an Aug. 9 letter sent to the business. The letter says the business can request a hearing to argue its case about the violations and fine.
Also that day, a Botanist employee posted on the retailer’s social media page a photo of the ice cream truck and a caption, “Free Ice Cream,” the division’s letter states. All marketing and advertising materials have to be pre-approved by the division before they can be posted, according to the rules.
The Botanist displayed a sign outside on Aug. 6 that was larger than 16 inches by 18 inches that was not attached to the dispensary’s permanent structure. That also was a violation.
The Botanist invited the ice cream truck despite July 18 guidance from the state describing permissible activities at dispensaries, The division sent a follow-up reminder Aug. 5, a day before dispensaries began selling marijuana to Ohioans aged 21 and older.
The July 18 guidance said “food trucks/other food offered for sale or complimentary” was prohibited. Additionally, the guidance said “unapproved signage outside the dispensary was prohibited.” It said violators face a civil penalty of up to $50,000 per violation.
On July 22, Botanist managers met with the Division of Cannabis Control officials, who specifically outlined the requirements to follow the media rules as a condition of receiving an adult-use license. Botanist managers signed an agreement that it would adhere to the rules.
The Botanist’s fines totaled $150,000 because it violated rules on food, an unapproved social media post and a noncompliant sign, the division states.
It’s unclear which Botanist store the ice cream truck parked at. The social media post appears to have been removed.
The Botanist has retail locations in Akron, Canton, Cleveland, Columbus and Wickliffe.
New York-based Acreage Holdings, which owns Greenleaf Apothecaries and the Botanist, is seeking a resolution with the state, a spokesperson said in an email.
“We also value our close working relationship with the Division of Cannabis Control and take seriously our commitment to operate in compliance with state regulations,” the spokesperson said.
The company has the option to try to negotiate the fine.
Greenleaf Apothecaries DBA The Botanist: $12,500 penalty
The Botanist also was dinged for a separate violation for text on its website. It negotiated a deal with the state and waived its right to an appeal.
From June 1-30, the Botanist’s website featured promotions and menus with the header, “Can you take me higher?” according to the consent agreement signed by the state and company Aug. 1.
The Botanist didn’t submit the marketing statement to the division for preapproval.
The website also contained the company name or logo without state preapproval in violation of state advertising rules. The consent agreement outlined other problems as well.
Standard Farms: $12,500 penalty
Standard Farms is a processor in Garfield Heights. Processors have machinery that puts marijuana leaves through extreme pressure, temperature, water or chemical solvents to produce a THC liquid extract from which it makes gummies, drinks, oils, waxes and other products.
According to an Aug. 6 consent agreement it signed with the Division of Cannabis Control, Standard Farms sent an email on July 8 saying it had received “our Dual-Use License Approval for Adult Use/Recreational Sales!” The email contained “some HIGHlights below!”
But the Division of Cannabis Control had not granted a dual-use license to Standard Farms at that time. (The company is now listed as having a dual-use license.) The company didn’t submit the content to the division for preapproval.
Bloom Medicinals: $12,500 penalty
Someone at the company’s dispensary in the community of Seven Mile, in Butler County, erected a billboard sign that wasn’t attached to its building and was larger than 18 inches by 16 inches – the state’s maximum size for external signage – that said “Bloom Medical Marijuana.”
The company didn’t get the sign preapproved. The state discovered the sign on June 19.
Bloom took the sign down and signed a consent agreement with the state on July 23.
William Hollander, director of operations of the Boca Raton, Florida-based company, said the company made a mistake.
“We were supposed to have an approval process for the sign, and it slipped through,” he said. “We take responsibility for that.”
Guaranteed Dispensary: $12,500 penalty
On June 17, the Hamilton County dispensary said on its website that it was a recreational and medical dispensary, even though the state hadn’t given out any dual-use licenses yet.
It didn’t submit the online marketing and advertising to the state for pre-approval.
The company updated its website and signed a July 23 consent degree with the Division of Cannabis Control.
Green Thumb Industries, also known as Rise: $12,500 penalty
On June 6, the company sent an email to some medical marijuana patients saying: Rise Ohio locations will be open to service recreational and medical guests during the following hours: June 10th & onwards: 7 a.m. to 8:30 p.m.”
The company hadn’t yet been given a dual-use license. The email was not preapproved by the Division of Cannabis Control, according to a June 20 consent agreement.
Within three hours of sending the email, the company realized the mistake; 3.5 hours later it emailed a correction.
The division learned of the email two days later. The state said using the word “recreational” was inappropriate “to refer to adult use marijuana,” pointing to a state medical marijuana rule that says Ohio has a compelling interest in ensuring that advertising and marketing campaigns involving medical marijuana do not create any impression “that recreational marijuana use has any potential health or therapeutic benefits.”
The Rise doesn’t admit to the allegation, according to the consent agreement, but it signed the agreement in lieu of further litigation and agreed to pay the fine. After the fine is paid, the matter will not be recorded as discipline against the company, the agreement states.
The company had to post a sign on its door clarifying that adult-use sales hadn’t begun and the earlier email was incorrect. That sign remained in place until its dispensaries were approved to open for recreational sales.
Rise has two locations in Lakewood and one in Lorain, Cleveland and Toledo.
