Commissioners cite concerns over inconsistent penalties and payment timelines for Holyoke operator
Last October, Cannabis Control Commission members voted unanimously against signing a stipulated agreement to execute a proposed enforcement action against a Western Mass pot shop.
Last week, they delayed a sealing vote for a second time.
Neither decision was made because commissioners didn’t want to hold the business accountable for the findings of CCC investigators. In short, the licensee was found to have used weed for promo in a noncompliant fashion and subsequently lied to inspectors about it. Rather, commissioners initially passed up the chance to cap the action out of concern about who the penalties would impact. More recently, they requested another two weeks to make some additional tweaks to the agreement language.
The proposed Final Order and Stipulated Agreement is between the CCC and the Holyoke-based Boston Bud Factory (BBF), as well as that company’s proprietor Franklyn Dailey. The agreement was “offered for the purposes of settlement and in lieu of further administrative action.” As the document that’s currently in limbo states: “The Parties stipulate to the Facts of Record and Applicable Law … but Respondent Licensee and Respondent Daily neither admit nor deny the Commission’s Findings.”
What investigators found: pre-rolls at the arcade bar
The CCC’s investigation into these matters “involved a facility called ‘The Joint,’ an ‘arcade bar and event space,’” which is a “separate business entity and operates independently from BBF.”
On March 18, 2022, “Commission Investigators located BBF-branded Marijuana pre-rolls in an arcade machine” at The Joint. The pre-roll was “sold at BBF’s retail store by Dailey on February 8, 2022.” “Staff at The Joint informed Commission Investigators that the arcade machine was restocked weekly.”
Meanwhile, back at Boston Bud Factory, in the licensee’s vault, investigators “discovered a box of 0.3g Durban Thai/Cindy 99 Marijuana pre-roll blends” that was labeled “Not for Retail,” and placed “behind other boxes out of direct view.”
Asked about the products, Dailey, the majority owner, “told Commission Investigators, ‘We don’t sell 0.3g pre-rolls’.” At the time, investigators had already observed Dailey at a “Marijuana social event” at The Joint, where he was “approaching tables and conversing with vendors” and showing a “rosin press, bearing BBF branding,” which he said he would “rent out to anyone who wished to use it.”
During a subsequent inspection, when asked about the pre-rolls labeled “Not for Retail,” Dailey said they were his “personal stash” and that he “do[es] not give them out to people.” When asked how the pre-rolls ended up in the arcade machine, he reportedly added that a minority owner “had purchased the pre-rolls and filled the arcade machine.” Dailey also stated he knew about the arcade machine containing the pre-rolls “a couple weeks ago” after being contacted by the Holyoke Chamber of Commerce, and had told the Chamber the pre-rolls were “leftover from a private party.”
A rosin press and a block party
During a subsequent unannounced inspection, investigators noted BBF’s menu “had 0.5g pre-rolls… available for sale, but not the 0.3g pre-rolls found in the arcade machine at The Joint.” They also found that BBF was “advertising and promoting a Marijuana themed social event”—a block party sponsored by BBF—at The Joint’s parking lot.
Regarding the block party, investigators “did not observe BBF staff controlling access to the block party or verifying the age of attendees or participants on entry.” During an inspection on the day of the event, investigators “observed Marijuana Product packaging and a rosin press located in an open area on the sales floor” near a sign that said “limited access” but where “there was no barrier preventing access to the area.”
These actions constitute multiple alleged violations of state regulations, including that which prohibits “Brand Name Sponsorship” of an event unless “Advertising is targeted to entrants or participants reasonably expected to be 21 years of age or older.” Dailey was found to have “made statements to Commission Investigators… that were deceptive, misleading, or tended to create misleading impressions.”
Concerns with the initial draft
In discussion about the initial draft agreement with the violating business in October, the proposed 14-day suspension of the BBF retail and manufacturing licenses became a sticking point for commissioners. In her first meeting back as CCC chair following two years away from the job, Chair Shannon O’Brien noted the apparent uneven enforcement actions against different companies. Referring to a scathing assessment of agency operations by Auditor of the Commonwealth Diana DiZoglio, she asked, “How are we saying to the licensees, based on what the auditor said, that we are having consistent penalties across the board?”
O’Brien also asked commission attorneys about some details of the proposed agreement. Does it allow for owners and executives to receive pay during that two-week suspension period? How about the lower-paid manufacturing workers and budtenders? Less than satisfied with the responses offered by some colleagues to her questions, O’Brien posited that the proposal was inadequate enough to reject.
Her fellow commissioners, Kimberly Roy and Bruce Stebbins, agreed, with the former also questioning the commensurate nature of punishments doled out. The three voted unanimously against signing the stipulated agreement.
It was the first time members have ever sent an enforcement action back for edits.
A revised proposal
With a slightly revised stipulated agreement to execute the proposed enforcement action before the CCC last week, commissioners still had unanswered questions. Chair O’Brien suggested they go into an executive session (out of view from the public and press) to discuss potential litigation regarding the matter.
“At this point in time, we have certain decisions that we can and should make, but we want to understand how we can best act,” O’Brien said.
Commissioner Carrie Benedon said she didn’t think the matter met the threshold needed to go behind closed doors. Her colleagues ultimately agreed, and so they hashed it out in public.
The chair focused on her hope that the licensee would pay up as soon as possible. The proposed agreement includes agent suspensions, additional compliance measures, and a $25,000 monetary penalty.
“The fact is they’ve had four years; we’ve had four years to contemplate, four years to set aside a little jar,” O’Brien said. The chair asked supporting staffers if the penalty is “consistent” with those in other enforcement actions, and was told that’s not how it works—these agreements are done on a “case-by-case basis.”
O’Brien also took issue with the proposed payment timeline: “I don’t like the 12 months, because we have so many businesses that are … near closure. I have no idea the financial health of this company. … If we kick this down the road for another 12 months to be made whole, I’m not sure they’ll ever pay it.”
Commissioner Roy added that she wants to see the licensee in question tend to youth diversion as part of the penalty since their offense involved “arcade machines.” Commissioner Benedon similarly said that she would like to see a remedy that “directly addresses” the underlying violation. “For some,” she said, “a financial penalty is just the cost of doing business.”
Benedon expressed concern that the licensee and CCC staff had already been through the compromise process, ostensibly done what they were asked to do, and would again be told that it remains unsigned. Despite the long delays already, though, commissioners tabled the vote on the stipulated agreement with Boston Bud Factory until the tentatively scheduled April 7 public meeting.
