18-691-1 Me. Code R. § 10

Current through 2023-3, January 18, 2023
Section 691-1-10 - Enforcement
10.1 - Department Enforcement Authority
10.1.1Inspection of Cannabis Establishments and Premises. A cannabis establishment licensee must provide the Department, or agent thereof, access to inspect a cannabis establishment and premises at any time during the business hours stated on the facility plan of record of the cannabis establishment or during apparent activity. Licensees shall not deny entrance for inspection, upon demand and without notice required, during any business hours and other times of apparent activity, or at any other time upon reasonable notice. In any case, the licensee shall ensure there is an individual identification card holder at the cannabis establishment to accompany the agent of the Department during the inspection. Licensees shall permit staff or agents of the Department and employees or agents of local or state agencies with regulatory authority access to inspect the cannabis establishment and premises in accordance with the statutes, regulations and operating procedures employed by those regulatory bodies. If a licensee denies the agent of the Department access to a licensed premise, the Department may put an administrative hold on the cannabis establishment license and may impose fines, suspensions or revocation of that license.
10.1.2Routine or Random Inspection or Audit of Sample Collection by Licensees. The Department may, with or without suspicion of infractions, conduct inspection or audit of any licensee's sample collection practices in accordance with Section 10.5.2 of this rule.
10.1.3Investigation. The Department may, as a result of a complaint filed with the Department, or as a result of its administration of the program, investigate suspected infractions by licensees to any provision of 28-B MRS or this rule. Infractions that may be investigated include, without limitation:
A. Failure to comply with facility plan of record;
B. Failure to properly report inventory in the inventory tracking system;
C. Unauthorized transfers of cannabis;
D. Failure to disclose or properly report changes to the record of officers, directors, managers, general partners or natural persons or business entities having a direct or indirect financial interest in the licensee or the nature of such direct or indirect financial interests;
E. Failure to comply with any conditions required by a municipality, town, plantation, township or county commission for approval of the license;
F. Use of prohibited pesticides in cultivation of cannabis;
G. Any violation of the rules and regulations as set forth by the Department; or
H. Any conduct by a cannabis establishment licensee not authorized by 28-B MRS or this rule.
10.1.4Enforcement Actions.
A. The Department may take the following actions against licensees, alone or in combination, subject to the requirements of this Section:
(1) Impose monetary penalties;
(2) Restrict a license;
(3) Suspend a license;
(4) Revoke a license;
(5) Accept the voluntary surrender of a license;
(6) Confiscate or seize cannabis plants, cannabis or cannabis products;
(7) Destroy cannabis plants, cannabis or cannabis products;
(8) Recall cannabis or cannabis products; or
(9) Accept the voluntary surrender of cannabis plants, cannabis or cannabis products.
B. The Department may revoke an individual identification card for any violation of 28-B MRS or this rule.
10.1.5Procedures for Enforcement Actions.
A. The Department may, on its own initiative or on complaint and after investigation, initiate enforcement actions, notwithstanding any other criminal, civil or administrative proceedings against the licensee.
B. The Department will initiate an enforcement action with written notice to the licensee, which will include notice to the licensee regarding their right to a hearing pursuant to the Maine Administrative Procedures Act, Title 5, ch. 375, sub-ch. 4.
C. Enforcement actions require a finding of the following:
(1) Any false or misleading statements to the Department;
(2) Other violations by the licensee or by an agent or employee of the licensee of 28-B MRS or this rule;
(3) Violations by the licensee or by an agent or employee of the licensee of the terms, conditions or provisions of the licensee's license, including all licensing criteria required to be granted a conditional or active license; or
(4) Inactivity at the licensed premises for a period of 1 year or more without reasonable justification, including without limitation death or illness of a licensee, fire, natural disaster, or building conditions outside of the licensee's control.
D. Any final agency enforcement action or order by the Department after administrative hearing shall be made only on the basis of relevant evidence and shall be communicated in writing to the licensee, along with a notice of the licensee's right to judicial review in the Maine Superior Court in accordance with Rule 80C of the Maine Rules of Civil Procedure.
10.2 - Administrative Monetary Penalties

A monetary penalty imposed by the Department on a licensee pursuant to this subchapter may not exceed $100,000 per license violation. Penalties to be imposed on a licensee based upon specific categories of unauthorized conduct by the licensee, including major and minor license violations, as follows:

A. Not more than $100,000 per major license violation affecting public safety
B. Not more than $50,000 per other major license violation; and
C. Not more than $10,000 per minor license violation.
10.2.1Major License Violations Affecting Public Safety
A. The Department may impose a fine of up to $100,000 for each major license violation affecting public safety.
B. Such violations include, but are not limited to:
(1) Intentionally or recklessly selling cannabis or cannabis products containing any other federally controlled substance, including but not limited to opioids, stimulants or hallucinogens;
(2) Intentionally or recklessly using prohibited agricultural chemicals that pose a threat to public health and concealing their use from the Department, other licensees or consumers;
(3) Engaging in a deliberate pattern of 2 or more instances of marketing or selling cannabis plants, cannabis or cannabis products to individuals who are younger than 21 years old;
(4) Intentionally destroying, damaging, altering, removing or concealing potential evidence of a violation under this subsection, attempting to do so or asking or encouraging another person to do so;
(5) Misleading the Department for the purposes of involving a person with a disqualifying drug offense in the operation of a cannabis establishment;
(6) Knowingly diverting cannabis or cannabis products to the illicit market;
(7) Three or more instances of a licensee failing to have on the premises, at all times during business hours, as applicable, and periods of apparent activity, an individual identification card holder who is authorized to allow and cooperate with Department requests to inspect the premises;
(8) Two or more instances of a licensee refusing to permit the Department to inspect the premises during business hours, as applicable, or periods of apparent activity;
(9) Intentionally tampering with or interfering with mandatory testing processes, including sample collection, or the auditing thereof; or
(10) Other conduct that shows willful or reckless disregard for health and safety.
10.2.2Major License Violations
A. The Department may impose a fine of up to $50,000 for each other major license violation.
B. Such violations include, but are not limited to:
(1) Deliberately making a false statement to the Department, the Maine Revenue Service, the Maine Land Use Planning Commission, or any law enforcement officer for the purpose of evading responsibility for any requirements of Titles 28-B or 36 of the Maine Revised Statutes, this rule, or the license;
(2) Deliberately purchasing cannabis plants, cannabis or cannabis products from out of state or outside of the licensed and tracked adult use system;
(3) Engaging in a pattern of reporting adult use cannabis plants, cannabis or cannabis products as medical cannabis for the purposes of avoiding taxation or regulation;
(4) Selling cannabis plants, cannabis or cannabis products to anyone under the age of 18 by failing to take all necessary steps to verify age;
(5) Allowing any individual under the age of 21 to engage in any cannabis-related activity.
(6) Engaging in a pattern of selling or transferring cannabis plants, cannabis or cannabis products outside of the tracking system;
(7) Supporting, facilitating or willfully or recklessly ignoring suspicious purchasing patterns that suggest a customer is in possession of illegal amounts of cannabis plants, cannabis or cannabis products or is diverting cannabis or cannabis products them to persons under 21 years of age or out of state;
(8) Engaging in a deliberate pattern of minor license violations;
(9) Intentionally destroying, damaging, altering, removing or concealing potential evidence of a violation that does not threaten public safety, attempting to do so or asking or encouraging another person to do so;
(10) Two instances of a licensee failing to have on the premises, at all times during business hours, as applicable, and periods of apparent activity, an individual identification card holder who is authorized to allow and cooperate with Department requests to inspect the premises;
(11) Refusal to permit the Department to inspect the premises during business hours, as applicable, or periods of apparent activity; and
(12) Other conduct that shows a pattern of willful or reckless disregard for the tracking system requirements, sales tax obligations, excise tax obligations, mandatory testing obligations, facility requirements or other provisions of 28-B MRS,36 MRS, this rule or other laws or rules.
10.2.3Minor License Violations
A. The Department may impose a fine of up to $10,000 for each minor license violation.
B. Such violations include, but are not limited to:
(1) Knowingly buying, selling, transferring or receiving any cannabis, cannabis plant or cannabis product that was illegally entered into the tracking system;
(2) Allowing anyone without a valid individual identification card to engage in any cannabis-related activity;
(3) Selling cannabis plants, cannabis or cannabis products to anyone under the age of 21, but over the age of 18, by failing to take all necessary steps to verify age;
(4) Misrepresenting any cannabis product to a consumer, licensee or the public, including:
(a) Its contents;
(b) Its testing results; or
(c) Its potency.
(5) Making representations or claims that the cannabis or cannabis product has curative or therapeutic effects;
(6) Treating or otherwise adulterating cannabis with any chemical (excluding a controlled substance or prohibited agricultural chemical but including nicotine) that has the effect or intent of altering the cannabis's color, appearance, weight or smell or that has the effect or intent of increasing potency, toxicity or addictiveness;
(7) Supplying adulterated cannabis or cannabis products;
(8) Failing to report suspicious purchasing patterns that suggest a customer is in possession of illegal amounts of cannabis plants, cannabis or cannabis products or is diverting cannabis or cannabis products to persons under 21 years of age or out of state;
(9) Refusing to give, or failing to promptly give, a Department regulatory specialist, representative of the State Tax Assessor, or law enforcement officer evidence when lawfully requested to do so.
(10) Subletting any portion of the premises;
(11) Except by way of authorized transfer of trade samples or testing samples, giving away or otherwise transferring cannabis in exchange for a monetary sum less than the licensee has paid for the cannabis by way of authorized transfer or less than the value the licensee has invested, in labor and materials, in the cannabis;
(12) Allowing consumption of cannabis on a cannabis establishment premises, except as allowed by this rule;
(13) Failure to have on the premises, at all times during business hours, as applicable, and periods of apparent activity, an individual identification card holder who is authorized to allow and cooperate with Department requests to inspect the premises;
(14) Deliveries to prohibited areas or structures including without limitation drug free safe zones designated by a municipality;
(15) Not operating in accordance with the current operations, cultivation or facility plan of record with the Department; or
(16) Any other violation of 28-B MRS or this rule.
10.3 - License Restriction, Suspension, Revocation and Voluntary Surrender

The Department shall have the authority to suspend or revoke licenses subject to Title 28-B, Section 802.

10.3.1Certain Restrictions. The Department may place certain restrictions on licenses in cases where the restrictions may, in addition to other civil or administrative penalties, prevent recurring violations or conflicts with this rule.
A. The Department will provide written notice to a licensee if a license is to be restricted and a licensee will be given an opportunity to appeal pursuant to the Maine Administrative Procedure Act, 5 MRS, chapter 375.
B. A cannabis establishment with a restricted license may only exercise license privileges in compliance with the restrictions of the license.
C. Failure to comply with restrictions is a violation of this rule.
D. A restriction remains in effect until the Department removes it.
10.3.2Suspension.
A. Upon the finding of any license violation described in subsection 10.2, in addition to any monetary penalties, the Department may suspend for a period of up to one year, any or all cannabis establishment licenses held by the licensee found in violation, including any other licenses with a common officer, director, manager or general partner.
B. The Department may suspend a license based upon the Department's determination that the licensee has failed at least two audits of a licensee's sample collection process.
C. A licensee whose license has been suspended pursuant to this subchapter may not, for the duration of the period of suspension, engage in any activities relating to the operation of the cannabis establishment the licensee is licensed to operate.
D. The Department retains discretion as to whether to allow a transfer of license for a suspended license and shall be permitted but not required to allow new owners to begin some or all operations prior to the end of the suspension.
10.3.3Summary Suspension.
A. The Department may order summary suspension of a cannabis establishment license for up to 30 days under the following circumstances:
(1) The Department concludes, based upon a physical test, inspection or examination conducted by a state-certified inspector, that allowing the licensee to continue operations would not adequately protect public health or public safety; or
(2) The Department has other objective and reasonable grounds to believe that public health, public safety or significant natural resources are in immediate jeopardy.
B. The Department may order summary suspension of a cannabis establishment license if a court issues a ruling that indicates the licensee has committed a major license violation.
10.3.4Revocation.
A. Upon the finding of any license violation described in subsection 10.2, in addition to any monetary penalties, the Department may permanently revoke, any or all cannabis establishment licenses held by the licensee found in violation, including any other licenses with a common officer, director, manager or general partner.
B. The Department may permanently revoke a license based upon the Department's determination that the licensee has failed at least two audits of a licensee's sample collection process.
C. The Department may also permanently revoke for inactivity, a cannabis establishment license, when it determines that the licensed premises have been inactive for a period of one year or more without reasonable justification.
D. A licensee whose license has been revoked pursuant to this subchapter shall cease all activities relating to the operation of the cannabis establishment, following the procedure described in subsection 10.3.6 of this rule.
E. A license that is revoked may not be transferred or renewed.
10.3.5Voluntary Surrender of License.
A. A licensee facing penalties under this Section may offer to voluntarily surrender its license, meaning that the licensee must cease operations and may not renew or transfer the license. In such cases, the Department has the discretion:
(1) To reject voluntary surrender of license and pursue penalties under this Section;
(2) To accept the voluntary surrender of license made without conditions; or
(3) To negotiate conditions of a voluntary surrender, including but not limited to the following:
(a) The amount of monetary penalties, if any are to be imposed;
(b) The effect of the voluntary surrender on any other adult use cannabis licenses or medical cannabis registrations with which the licensee is associated;
(c) The amount of time before which the licensee or any principal of the licensee may apply for an adult use cannabis license or medical cannabis registration; and
(d) The waiver of appeal.
B. A licensee who voluntarily surrenders its license must follow the procedure described in subsection 10.3.5 of this rule.
10.3.6.Procedure for Termination of License. Licensees who permanently abandon the licensed premises or otherwise permanently cease all activities relating to the operation of the cannabis establishment under its license, whether a result of revocation, voluntary surrender or other reasons, must follow the procedures for terminating a license prescribed by 28-B MRS §212. The licensee must:
A. Provide written notice of abandoning the licensed premises or ceasing operations at least 48 hours in advance to the Department and the municipality in which the licensed premises are located, which shall mean notifying:
(1) The county commissioners of the county in which the township is located, for licensed premises located in townships;
(2) The Maine Land Use Planning Commission and the town or plantation, for licensed premises located in unorganized areas; or
(3) The city, town or plantation in which the licensed premises are located;
B. Provide the department and the municipality in which the licensed premises are located with a full accounting of all adult use cannabis and adult use cannabis products located within the licensed premises; and
C. Forfeit the cannabis and cannabis products to the department for destruction in accordance with 28-B MRS §803.
10.4 - Destruction and Voluntary Surrender of Cannabis Plants, Cannabis and Cannabis Products
10.4.1Order by the Department.
A. If the Department issues a final order imposing a monetary penalty on or a license suspension or revocation against a licensee pursuant to this subchapter, the Department may specify in the order, in addition to any other penalties imposed in the order, that all or a portion of the cannabis or cannabis products in the possession of the licensee are not authorized under this rule and are subject to destruction. A licensee subject to a final order directing the destruction of cannabis or cannabis products in its possession shall forfeit the cannabis or cannabis products to the Department or destroy the cannabis and cannabis products at the time and place and in the manner required by the Department in writing.
B. If the Department is notified by a criminal justice agency that there is a pending investigation of a licensee subject to an order imposed under subsection A, as set forth in 28-B MRS §803, the Department may not destroy any cannabis or cannabis products of that licensee until the destruction is approved by the criminal justice agency.
10.4.2Voluntary Surrender of Cannabis Plants, Cannabis or Cannabis Products
A. A licensee may elect, upon mutual agreement with the Department, to voluntarily surrender any cannabis plants, cannabis or cannabis products to the Department. Such voluntary surrender:
(1) Must be made on a form supplied by the Department;
(2) Must be signed by an individual who certifies that he or she has authority to represent and bind the licensee; and
(3) May require destruction of any cannabis plants, cannabis or cannabis products in the presence of a Department employee or agent and at the licensee's expense; except that no cannabis plants, cannabis or cannabis products may be destroyed until the Department confirms with law enforcement that the cannabis plants, cannabis or cannabis products to be destroyed are not necessary to any ongoing investigation or prosecution.
B. Such a voluntary surrender may be made:
(1) Prior to a final order and upon mutual agreement with the Department;
(2) In connection with a stipulated order through which the licensee waives the right to hearing and any associated rights;
(3) In conjunction with a pending action even if the licensee does not waive the right to hearing and any associated rights, with the understanding that the outcome of the hearing does not impact the validity of the voluntary surrender; or
(4) After a final order.
C. If a voluntary surrender is made in conjunction with a final order, including a stipulated order, the licensee must complete and return the Department's voluntary surrender form within 15 calendar days of the date of the final order.
10.5 - Audit, Compliance and Random Testing
10.5.1Department May Require Audits and Random Testing. The Department may require a cannabis establishment licensee to submit samples identified by the Department to a testing facility of the licensee's choosing to be tested in order to determine whether a licensee is in compliance with mandatory testing standards and may require additional testing that is conducted at a testing facility of the Department's choosing.
A. A testing facility doing audit testing must comply with applicable provisions of this rule, and if conducting testing not required by this rule, may only use Department approved methods.
B. The Department may require a licensee to submit samples to the Department for any mandatory or additional testing to be conducted by a testing facility.
C. The Department may order the removal from retail sale of any cannabis or cannabis products for which a licensee has intentionally misrepresented testing results.
D. The Department may exempt a product at its sole discretion.
10.5.2Routine or Random Audits of Sampling by Licensees. The Department may, with or without suspicion of infractions, conduct routine audits of any licensee's sample collection practices, including without limitation:
A. Reviewing video footage;
B. Reviewing sample collection and chain-of-custody forms;
C. Inspecting any samples, including sample collection containers, for compliance with all packaging and labeling requirements of this rule;
D. Reviewing tracking system data and transportation manifests;
E. Requiring a demonstration of the licensee's sample collection practices; and
F. Requiring testing of batches, at the licensee's expense. Samples collected for testing pursuant to this paragraph must be collected by or in the presence of Department employees.
10.5.3Routine or Random Sampling and Testing of Cannabis and Cannabis Products by the Department. In accordance with 28-B MRS §512, the Department may require a licensee to submit to sampling and testing of any cannabis or cannabis product within the licensee's possession during all business hours listed on the licensee's facility plan for the purpose of product quality control.
A. The Department may require the licensee to collect samples or may require that the licensee permit Department employees to collect samples in accordance with the Department-required sampling standard operating procedure.
B. The Department may require a licensee to pay for any testing required pursuant to this section at a cannabis testing facility that is licensed by the Department.
10.6 - Seizure or Confiscation of Cannabis, Cannabis Concentrate or Cannabis Products
10.6.1.Authority. The Department may seize, destroy, confiscate or place an administrative hold on any cannabis or cannabis products under, but not limited to, the following circumstances:
A. Any cannabis or cannabis products not properly logged in inventory records or the tracking system;
B. Any cannabis or cannabis products that are altered or not properly packaged and labeled in accordance with this rule in general and Section 9 specifically;
C. Any cannabis or cannabis products that has been cultivated, harvested, manufactured or transferred in a manner, or otherwise in a form, not compliant with 28-B MRS, this rule or rules governing the Maine Medical Use of Cannabis Program; or
D. Improper use, handling, storage, transport, transfer or other possession of samples of cannabis, cannabis concentrate or cannabis products.

If the Department seizes cannabis, the Department shall not cultivate nor preserve any seized cannabis, cannabis plants or cannabis products. Unless notified by a criminal justice agency of pending investigation of the licensee, the Department may, in its final order, specify the destruction of the seized cannabis, cannabis plants or cannabis products.

10.6.2.Administrative Holds. Department officers may order an administrative hold of cannabis or cannabis products to prevent destruction of evidence, diversion or other threats to public safety, while permitting a licensee to retain its inventory pending further investigation, pursuant to the following procedure:
A. If during an investigation or inspection of a licensee, an employee or agent of the Department develops reasonable grounds to believe certain cannabis plants, cannabis or cannabis products constitute evidence of acts in violation of 28-B MRS or this rule or constitute a threat to the public health or safety, the employee or agent may issue a notice of administrative hold of any such cannabis plants, cannabis or cannabis products. The notice of administrative hold shall provide a documented description of the cannabis plants, cannabis or cannabis products to be subject to the administrative hold and a concise statement that is promptly issued and approved by the director of the Office of Cannabis Policy or a designee regarding the reasons for issuing the administrative hold.
B. Following the issuance of a notice of administrative hold, the Department will identify the cannabis plants, cannabis or cannabis products subject to the administrative hold in the tracking system. The licensee shall continue to comply with all tracking requirements.
C. The licensee shall completely and physically segregate the cannabis plants, cannabis or cannabis products subject to the administrative hold in a limited access area of the licensed premises under investigation, where it shall be safeguarded by the licensee.
D. While the administrative hold is in effect, the licensee is prohibited from selling, giving away, transferring, transporting or destroying the cannabis plants, cannabis or cannabis products subject to the administrative hold, except as otherwise authorized by this rule.
E. While the administrative hold is in effect, the licensee must safeguard the cannabis plants, cannabis or cannabis products subject to the administrative hold, must maintain the licensed premises in reasonable condition according to health, safety and sanitary standards, and must fully comply with all security requirements, including but not limited to all surveillance, lock and alarm requirements detailed in the security plans, 28-B MRS or this rule.
F. Nothing herein shall prevent a licensee from voluntarily surrendering cannabis plants, cannabis or cannabis products that is subject to an administrative hold, except that the licensee must follow the procedures set forth in Section 10.4.
G. Nothing herein shall prevent a licensee from the continued possession, cultivation or harvesting of the cannabis plants, cannabis or cannabis products subject to the administrative hold.
H. At any time within 30 days after the initiation of the administrative hold, the Department may lift the administrative hold or seek other appropriate relief.
10.7 - Cannabis Recalls

The Department may require a licensee to recall any cannabis and cannabis product that the licensee has sold or transferred upon a finding that circumstances exist that pose a risk to public health and safety.

A. A recall may be based on, without limitation, evidence that:
(1) Cannabis or cannabis product contains an unauthorized pesticide(s);
(2) Cannabis or cannabis product failed a mandatory test and was not mitigated pursuant to testing protocols;
(3) Cannabis or cannabis product is contaminated or otherwise unfit for human use, consumption or application;
(4) Cannabis or cannabis product is not properly packaged or labeled; or
(5) Cannabis or cannabis product was not cultivated or manufactured by a cannabis establishment.
B. If the Department finds that a recall is required, the Department:
(1) Must notify the public and licensees of the recall;
(2) Must administratively hold all affected cannabis or cannabis products in the tracking system;
(3) May require a licensee to notify an individual to whom cannabis or a cannabis product was sold; and
(4) May require that the licensee destroy the recalled product.

18-691 C.M.R. ch. 1, § 10