Nevada Cannabis Compliance Board (NCCB)
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Nevada Cannabis Compliance Board (NCCB)
The state of Nevada has created a new department to enforce statutes and regulations related to the cultivation and distribution of cannabis and cannabis products. This department is called the Nevada Cannabis Compliance Board (NCCB). The NCCB is overseen by a chairperson who holds responsibility for conducting and overseeing regular and special meetings. The Nevada Board of Chiropractic is responsible for all legal action governed by NRS 678A.500 to 678A.640, including disciplinary hearings. It has the authority to invalidate cannabis business licenses and cannabis sales agents licenses and impose corrective action orders. The Spartacus Law Firm specializes in professional license defense, if you’re being investigated by the NCCB, contact our office today.
Authority Of The Nevada Cannabis Compliance Board
The NCCB has the power to conduct inspections and investigations under the NCCB’s Regulations. It also has the ability to summon witnesses and issue subpoenas. Permission for entry into and reasonable inspection of a cannabis facility by the NCCB and its agents is granted when a license application is submitted. During an inspection conducted in accordance with NCCB rules, an inspector does not need to be accompanied.
The Executive Director of NCCB has the authority to investigate a cannabis business during its operating hours, with or without notice, into the premises, facilities, personnel qualifications, operations methods, policies, procedures, and records of that business or any other cannabis company that may have information relevant to the complaint. NCCB agents may enter and inspect any building or premises at any time, with or without notice, to ensure that a facility is in compliance with any part of the NCCR or Title 56 of Nevada Revised Statutes. NCCB agents can also do an investigation to see whether a cannabis business is in violation of any provision of the NCCR or Title 56, as well as conducting an unannounced inspection if there’s been a complaint about noncompliance.
Nevada Cannabis Compliance Board Disciplinary Process
The Nevada Cannabis Compliance Board is responsible for overseeing any disciplinary proceedings that fall under NRS 678A.500 to 678A.640 set by the state of Nevada. The following article will discuss specific NCCB regulations in regards to this process.
Right To Investigate
The NCCB has the power to inspect and investigate under the Regulations of the NCCB. Filing an application for a license for a cannabis establishment gives permission to the NCCB and its helpers to enter reasonable inspection of the cannabis establishment, with or without notice. After receiving a complaint against a cannabis establishment, the NCCRB may decide to conduct an investigation during operating hours. NCCB agents may enter and inspect any building or premises at least annually to ensure compliance with the NCCR or Title 56 of Nevada Revised Statutes. In addition, NCCB agents are allowed to inspect any building or premises operated by a cannabis establishment within 72 hours after notification that the establishment is operating without a license.
Complaint
If the NCCB determines that there has been a violation of NCCB rules, a Complaint will be filed and delivered as required by NRS 678A.520(1), which permits personal service or certified mail delivery. The Complaint will contain the date of the alleged violation or when it was discovered, where the violation took place, what regulation was violated, and how the breach occurred.
Representation
If you are party to a proceeding before the NCCB, you may appear in person or through an attorney. Because the potential penalties imposed by the NCCB can be severe, it is highly recommended that you retain an attorney. Even if you do not have an attorney, all parties must attend any hearing unless attendance has been waived by the NCCB.
Case Conference
If the respondent answers the complaint within 10 days and demands a hearing, or if NCCB orders a hearing even if the respondent waives their right to one, then both parties must attend an early case conference presided over by a hearing officer. The earliest possible hearing date will be set by the parties not later than 45 days after the respondent’s answer. All documents must be exchanged, witness lists must be exchanged, prehearing motions and responses filed by set dates, and any other actions that may be necessary shall have foreseeably been completed.
The parties will be required to discuss or attempt to resolve any portion of evidentiary or legal issues involved. The parties are expected to discuss the potential for settlement of the matter on terms agreeable to the parties and discuss any other issues that may facilitate the timely and fair conduct of the matter.
Discovery
Within 20 days after the first answering respondent serves a response, the parties must meet to exchange copies of all documents and other evidence that are currently available to them for the purpose of being used as evidence in support of the party’s case in chief. The parties must submit lists of witnesses and a description of the reason for which each will be called.
The evidence collected during an investigation of a case is not available unless the prosecutor plans to present it as part of their argument. This includes all communications, records, affidavits, or reports related to the case, regardless of how they were obtained. Prior to the hearing,the NCCB counsel will only allow discovery of those documents they intend on using as evidence to support their case. Also, a party is not allowed to request written discovery in the form of interrogatories, requests for production, requests for admissions or depositions by written questions.
However, if a party files a written request with the early case conference, they can take the deposition of a material witness. The need for the deposition must be stated along with a proposed order. Within 5 days, the hearing office or panel must either approve or reject the request.
Hearing
A formal hearing must be held at the time and date set at the early case conference, which may be conducted by either the full Cannabis Compliance Board, a hearing officer, or a panel of three members of said board. If it is held before a hearing officer or panel instead of the whole board, then that officer or panel shall issue findings of fact and conclusions of law for review by the entire board pursuant to NCCR 4.135(1).
The NCCB will decide the outcome of the case. At least three members of the NCCB will go through the full hearing transcript or recording. The attorney for the NCCB will be considered by the NCCB on their findings of fact and conclusions of law, as well as disciplinary recommendations. In addition, the NCCB will review the recommendations of the attorney for the opposing party. The NCCB will deliberate and vote on whether they believe a violation has occurred. If they find that a violation has taken place, they may discipline the offender by majority vote. After 30 days have passed, the order disciplining them as well as the facts and conclusions of the law becomes public record.
Penalties For NCCB Violations
The Nevada Cannabis Compliance Board (NCCB) is responsible for all disciplinary proceedings stated in Nevada Revised Statutes 678A.500 to 678A.640 and has the power to suspend or revoke cannabis establishment licenses and agent registration cards associated with cannabis use. The NCCB also has the authority to impose a civil penalty of up to $90,000 per violation on any individual who fails to follow or violates any provision of the new regulations introduced by the NCCB. There are five distinct categories of possible infractions, each involving particular actions and resulting in various degrees of fines.
Category I Violations
Category I violations are the most severe and result in a loss of eligibility to receive, renew, or hold a license. These acts include:
- Possession of cannabis with intent to assist a minor in purchase or possession of marijuana
- Engaging in the business, banking, or finance without first obtaining a license from the Department of Financial Services
- Unauthorized use or possession on federal property
The maximum penalty for a first-time offense under Category I violations is believed to be a fine of not more than $90,000 and a suspension of the license for not more than 30 days. If there is a second or subsequent violation within three years, the punishment is the revocation of a cannabis business agent registration card or license.
Category II Violations
Category II violations present a public health or safety threat and include:
- Making an inadvertent false statement to the board or agents
- Unintentionally destroying or hiding evidence
- Failing to verify age or selling cannabis to a person under the age of 21
- Allowing a person under the age of 21 to work or volunteer in the cannabis business
- Purchasing, cultivating, producing, or otherwise using cannabis from an unlicensed source
- Not properly separating medical patient retail sales from adult use retails sales
- Selling and quantities of marijuana in excess of transaction limits, as well as failing to renew the cannabis business license on time
There is also a presumption by the NCCB that the minimum penalty for the first category II violation should be no more than $25,000 and a license or cannabis establishment agent registration card suspension of not more than 20 days. A fine of not more than $75,000 and a suspension for not more than 30 days are possibilities for the second category II violation within 3 years. A revoked license or cannabis establishment agent registration card will result from a third occurrence within 3 years.
Category III Violations
Category III violations are of a severity that creates a potential threat to public health or safety, such as:
- Failing to keep track of the required records
- Not tagging plants as needed
- Continuing any activity that goes against state law
- Not letting the NCCB or agent know within 24 hours after finding out about a serious incident or criminal activity on-site
- Going against packaging or labeling requirements
- Failing to meet the requirement of the disposal of cannabis waste
- Exceeding the maximum serving requirement for cannabis products
- Picking up, unloading, or delivering cannabis at an unauthorized location
- Failing to properly update the licensee’s point of contact with the Board
- Failure to maintain standard operating procedures
The statutory penalties for a category III violation are a fine of up to $10,000 for the first offense. The penalty for a second violation within three years is a fine of no more than $30,000 and a suspension of not more than 10 days. If there is a third violation within 3 years, the penalty is a fine of not more than $90,000 and/or a suspension for not more than 20 days. If there is a fourth violation within 3 years, the penalty is a fine of not more than $90,000 and/or suspension for not more than 60 days. Finally, if there is fifth violation within three years the revocation of license or registration card will result.
Category IV Violations
Violations under Category IV are violations that create a climate that is conducive to abuses associated with the sale or production of cannabis or cannabis products, including:
- Failing to display a cannabis establishment agent registration card or proof of temporary registration
- Violating advertising requirements
- Failing to respond to an administrative notice of violation or failing to pay fines
- Failing to maintain a standardized scale
- Improper storing of cannabis, cannabis products, or other foods
- Failing to properly wash, rinse and sanitize product contact surfaces
- Infestation by pests that are not multigenerational or on contact surfaces
- Failing to properly use sanitizer as required
There are six potential penalties for a category IV infraction. The penalty for the first violation is not more than $5,000. For a second violation within three years, the fine is not more than $10,000, and/or a suspension of not more than seven days may be imposed. A third violation within 3 years results in a fine of not more than $20,000 and/or a 10-day suspension of a license. After the fourth offense in three years, the penalty is increased to $40,000 and/or a 20-day suspension. The fifth violation results in a fine of up to $80,000 and a 30-day suspension. If there are six offenses within three years, this will result in a revocation of either the license or cannabis establishment agent registration card.
Category V Violations
Category V violations are the least severe violations and include:
- Failing to submit monthly tax or sales reports or payments
- Failing to notify the board or Board Agents of a temporary closure
- Failing to post any required signs
- Making a payment with a check returned for insufficient funds
- Failing to comply with any other requirements not described in another category of violations.
The final category appears to be a type of “catch-all” category, in which the NCCB can sue a licensee for any violation of laws or regulations that the NCCB considers to be illegal, even if it is not listed in categories I through IV.
Contact Our Las Vegas Cannabis License Defense Attorney Today
The Cannabis Compliance Regulations are difficult to understand, and even the most minor infractions can result in hefty fines and professional consequences. The Spartacus Law Firm has extensive experience defending licensees of Las Vegas professionals in administrative proceedings and is well-equipped to assist you with your case. If you are facing allegations from the NCCB, contact our Las Vegas professional license defense attorney for a consultation and to learn more about how we can help.