After Allegedly Operating Without License, California Officials Sue Lowell Herb Co.

By Melissa Hutsell

 

This December, the nation’s first cannabis restaurant released a statement notifying the public that it was changing its name from Lowell Cafe to the Original Cannabis Cafe.

The restaurant attributed the change to an ongoing effort to be a part of the larger cannabis community, instead of operating under the umbrella of one corporation. 

The Raid:

But, less than two weeks after the announcement, the California Department of Food and Agriculture (CDFA) filed a lawsuit in the San Luis Obispo Superior Court against Lowell Herb Co. and “associated entities.” The complaint alleges the company was processing cannabis products without a license. 

The lawsuit comes after an investigation by the CDFA, and the California Department of Fish and Wildlife (CDFW). The  CDFA and CDFW claim that Lowell Herb Co.—a California-based organic cannabis company—processed products illegally between Dec. 2018, and March 2019. 

The suit was spurred by a raid. The raid occurred at one of the company’s processing and storage facilities in San Luis Obispo County in March.

More Than 17,000 pre-rolls, 7,162 jars of flower, 677 pounds of untrimmed flower, and hundreds of pounds of byproduct including kief and shake, were seized. 

Lowell Farms’ owners don’t seem to deny the charges. For example, one owner admitted to processing cannabis without a license for a shot period to investigators during the raid, according to the official complaint

The Suit:

Without a license, the CDFW and CDFA report that the company violated the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA):

“By engaging in unlicensed commercial cannabis activity, [the] defendants placed unregulated cannabis into the cannabis market, thereby causing economic harm to California’s legal commercial cannabis industry and supporting the illegal cannabis market.”

According to Cannabis Law Report, Lowell was working through a licensed third-party operator. The operator had a lapse in their license. 

Subsequently, Lowell Farms and its associates could be responsible for paying up to three times the cost of a license for every day in operation without one. The processing license is $9,370, reports the San Luis Obispo Tribune

If the company loses the case, they will also be liable for the disposal of the cannabis products, too. 

However, the company assured that during the time without a license, all products were, “still tested in a state-licensed facility.” 

Now, Lowell Herb Co. packages and distributes all products from a licensed facility, located in Los Angeles County. They began doing so in April 2019. 

Reps from the Original Cannabis Cafe told the Emerald that they will have no affiliation with Lowell Farms moving forward. That’s due in part, “to their dispute with the State of California over their alleged unlicensed cannabis activities.”

“For business reasons our Cannabis Cafe launched with a corporate sponsor,” said Executive Chef, Andrea Drummer. “But, now we are excited to focus on our goal of presenting our diners with as diverse a range as possible of cannabis from small independent growers and entrepreneurs.”

The case is, appropriately, set for April 20, 2020. In the meantime, a the company is cooperating with California regulators. 

 

*Editor’s note: The article was updated to add the Original Cannabis Cafe’s response. 

Emerald contributor since February 2016

Comments

Your email address will not be published.