A two-year court battle over the intent and impact of 35,000 mislabeled vials containing THC tonic has been settled. The Oregon Liquor and Cannabis Commission has fined Luminous Botanicals $400 per day per vial for a $100,000 penalty – the maximum allowable fine.
Sally Alworth, the owner of Luminous Botanicals, attempted to dismiss the accusations by referring to the labels as an honest mistake. The OLCC believed otherwise and said the shoddy labeling endangered the health of consumers.
The Commission’s ruling cited the lack of instructions on the cardstock for opening and closing the vial while keeping the cap and cardstock attached. They also found it unlikely that the typical cannabis consumer would understand the importance of keeping the vial attached to the cardstock.
Additionally, in their 48-page final ruling, the Oregon Liquor and Cannabis Commission wrote, “…the average cannabis consumer is unlikely to utilize the vial opening and closing technique demonstrated at hearing by licensee’s counsel and Ms. Alworth.”
Because consumers could remove the poorly attached labels easily and quickly, the OLCC contended that the contents are dangerous to those who may not understand proper dosing. The Commission asserts that the labeling error posed a significant but unmeasurable risk to consumers, children, and the public. While they acknowledge that the $100,000 fine is sizable, they argue that it is also “a ‘measured and reasoned application of the authorizing legislation and applicable rule’.”
“If you can be ruined by an honest mistake, why go legal at all?” said Kevin Jacoby, attorney for Ms. Alworth. “[The] six-figure penalty for what amounts to an unintentional mistake only serves to discourage people in the illegal industry from going legal.”
Alworth and her attorney have insisted the issue is an honest mistake while also arguing that the OLCC’s changes to the labeling requirements left her unaware that she was mislabeling vials at all. Ultimately, their defense boils down to: I didn’t mean to, but also I didn’t know.
Recently, Curaleaf, facing similar issues and several label-related lawsuits, also blamed it on “…unintentional human error.” For failing to disclose additives in its products and knowingly mislabeling 186,000 vape cartridges, Curaleaf was fined $10,000 from the OLCC.
Mr. Jacoby will petition for a judicial review of the ruling within 60 days. Filing an appeal elevates the case to the Oregon Court of Appeals.
Alworth’s company received the stiffest fine for mislabeling that the commission could impose.