This spring, WW wrote about Luminous Botanicals, a cannabis tonic company in a nearly two-year battle with the Oregon Liquor Cannabis Commission over a labeling error. Company owner Sally Alworth said it was an honest mistake; the regulatory agency contended it endangered the health of customers.
On Oct. 22, the commission stamped its final ruling on the case: Luminous Botanicals needs to pay a $100,000 fine—the maximum fee.
Kevin Jacoby, the attorney representing Alworth, says he plans to petition for a judicial review of the ruling within the 60-day window to do so. Filing an appeal would elevate the case to the Oregon Court of Appeals.
“Imposing a six-figure penalty for what amounts to an unintentional mistake only serves to discourage people in the illegal industry from going legal. If you can be ruined by an honest mistake, why go legal at all?” Jacoby says.
The commission ruled that Luminous distributed nearly 35,000 vials of THC-containing tonic to dispensaries and buyers that were improperly labelled. The penalty they imposed amounted to $400 per day, per violation, per individual vial.
The maximum penalty is capped at $100,000 for improper labelling.
The primary issue the commission argued was dangerous: Alworth’s tonic labels were not properly wrapped around the vial. Instead the cardstock labels were attached in a way that consumers would likely just take off before or after usage, the OLCC argued—rendering it a danger to new consumers, especially those who were unfamiliar with proper dosing.
“Given the lack of any instructions on the cardstock as to how to open and close the vial while keeping the vial cap attached to the cardstock, and the lack of any language on the cardstock emphasizing the importance of keeping the vial with any remaining product attached to the cardstock, the average cannabis consumer is unlikely to appreciate the importance of keeping the unlabeled vial attached to the cardstock, and is unlikely to utilize the vial opening and closing technique demonstrated at hearing by Licensee’s counsel and Ms. Alworth,” the OLCC argued in the 48-page final ruling.
Alworth and her attorney have defended that the mislabelling was unintentional and the OLCC had made changes to labeling requirements, leaving her unaware that she was mislabelling vials at all.
Alworth’s case is significant in part because her company received the stiffest fine for mislabelling that the commission can impose.
(In April, WW noted that the same maximum mislabelling fine was given to weed-giant Cura Partners in 2020 after the commission ruled it had knowingly mislabelled 186,000 vape cartridges, failing to disclose additives in its products. The price for intentional misrepresentation? $10,000.)
In its final case ruling shared with WW, the commission acknowledged the intensity of the fine, but defended it.
“Commission staff acknowledges that the proposed $100,000 civil penalty is hefty, but argues that it is a ‘measured and reasoned application of the authorizing legislation and applicable rule,’ which takes into account matters of deterrence and the ‘significant but largely unmeasurable risk’ posed by improperly labeled (and potentially completely unlabeled) marijuana products to consumers, children, and the public at large,” the OLCC concluded.
Jacoby says Alworth is reeling from the ruling: “That’s the only correct way to characterize her right now.”
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