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Saturday, Jun 15, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Alberta’s regulator leads country in enforcement transparency

Canopy was fined $36K for sending ‘well-intentioned’ care packages to retailers in April that stayed open during early days of the pandemic

Alberta's cannabis regulator leads country in enforcement transparency

Cannabis businesses in Alberta have the unique privilege of knowing how hard their wrists are likely to be slapped if they step out of line. 

Their weed regulator — Alberta Gaming, Liquor and Cannabis — is one of the only provincial agencies to publicly list both infractions and punishments for businesses that break the local Gaming, Liquor and Cannabis Act. Manitoba technically also lists cannabis infractions, but no related businesses have been charged to date. 

Since legalization in 2018, the AGLC has fined some 20 businesses over $94,000 for everything from drunk employees to sending goodie bags to retail stores. 

Retailers are the most likely to be hit by fines, and usually for failing to ID a customer who looks 25 years or younger. Seven retailers have been fined $750 for failing to check ID since legalization. 

But that’s far from the heftiest fine, which Canopy Growth Corp. (TSX: WEED) was hit with earlier this year. 

In April, as the first round of Covid-19 lockdowns were shuttering businesses across the country, Canopy sent care packages to cannabis retailers who were allowed to stay open. The care packages were a “well-intentioned” way to say thank you for staying open during this turbulent time, explains company spokesperson Jennifer White in an email. 

Shortly after sending out the non-cannabis goodie bags the company was notified it was being investigated by the AGLC, and in May was slapped with a $36,282.40 fine. Suppliers aren’t allowed to send any form of gifts to licensees under the province’s cannabis laws. 

“The size of the sanction correlates to the value and volume of care packages distributed,” White explains.

Lesson learned. White says Canopy is committed to working with the AGLC to ensure ongoing compliance in the future. 

Compliance appears to already be a benchmark for the industry. For the few fees and sanctions handed out, Alberta’s cannabis industry has a 99 per cent overall compliance rate — comparable to the province’s liquor and gaming industries, AGLC manager of communications Heather Holmen tells Mugglehead in an email. 

“That is an impressive level of compliance for a new industry,” she says. 

Alberta committed to transparency

Holman says the AGLC’s practice of posting its administrative sanctions dates back to 2013 when it committed to being transparent to its stakeholders and Albertans. Its website also lists possible infractions and resulting fines or sanctions.

Publicly posting sanctions isn’t unique to Alberta. Almost all provinces post liquor and gaming sanctions when something goes awry. But British Columbia is not currently posting details on cannabis enforcement hearings, according to a spokesperson for the Ministry of Public Safety. An Alcohol and Gaming Commission of Ontario spokesperson similarly says the province posts liquor licence infractions, but a page to post cannabis infractions is a “work in progress.” 

Read more: Alberta announces property tax for cannabis producers

The second-heftiest fine handed out by the AGLC was to three different companies who gave a minor cannabis. Any company that sells, gives, or lets someone else give weed to a minor in a licensed area gets to choose between a fine up to $10,000 or a 40-day licence suspension. All three companies chose to pay the fine, bringing in $27,500 to the AGLC. 

An equally steep penalty of $10,000 was also enforced on a licensed producer, but only once. Tantalus Labs, based in Maple Ridge, B.C., was fined in September for breaking cannabis advertising and promotional rules. 

When asked why his company chose to pay the fee rather than consider an alternative 40-day licence suspension, CEO Dan Sutton says he isn’t able to comment. 

“Tantalus worked through the process of identifying and eliminating potential content perceived to be at risk by the AGLC, and are confident that such an error will not happen again,” he wrote in an email. 

To date all cannabis businesses have chosen to pay a fine in place of a licence suspension, when offered.

Fees and suspensions are used as a last resort by AGLC officers, Holman says. 

“AGLC has a strong focus on education with licensees. In many cases, inspectors will provide education to a licensee prior to resorting to a caution or reporting a violation,” she says. “With AGLC offices located across the province, AGLC inspectors maintain ongoing communication with licensees and will provide staff training seminars free of charge to any licensee.”

Officers have given warnings to businesses for employees not wearing proper ID tags, or for not storing cannabis and related accessories in secure display cases. 

The smallest fine was $100 for when a retailer in Stony Plain had or sold weed they hadn’t first bought from the province. Another fine of $1,000 was given to a retailer in Edmonton for allowing someone to be drunk at work. 

The AGLC planned for the exponential growth of Alberta’s cannabis industry and made sure enough resources and training were in place to properly regulate it, Holman says. 

Covid-19 has shifted but not derailed enforcement. 

“Our inspectors continue to conduct compliance checks of licensed premises; however, they now include ensuring Covid-19 health and safety measures are in place for our staff,” she says. “AGLC is also assisting Alberta Health and Alberta Health Services in ensuring licensee compliance with public health orders.”

Top image of the Alberta legislature in Edmonton. Photo by WinterE229 via Wikimedia Commons


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