A recent regulatory alert should remind the industry that when it comes to compliance, “they’re doing it too” isn’t a defense.

The Colorado Marijuana Enforcement Division (“MED”) recently issued a rare Industry-Wide Bulletin [1] to address wide-spread reports of rampant violations of certain core MED rules—rules that every licensee and their partners should be well versed in.  Specifically, the MED warned that it had “became aware of circumstances under which licensed medical and retail marijuana businesses and/or their employees are allegedly providing information on marijuana use to women reporting pregnancy-related morning sickness.”  The MED explained that this advice violated multiple rules, and vowed to investigate licensees and launch appropriate administrative actions.

Prior to the MED’s Bulletin, retailers recommending cannabis for morning sickness had fallen under intense scrutiny.  In a recent study conducted by the University of Colorado Medical School, researchers found that 69% of randomly sampled dispensaries (both medical and recreational) recommended cannabis use to treat the symptoms of a ‘mystery phone caller’ identifying herself as being 8-weeks pregnant and experiencing morning sickness.

The MED Bulletin highlighted the core rules that such recommendations could violate, both those that are specific to pregnancy and more general rules concerning labelling and prohibitions against the making of any health and wellness claims or any false and misleading claims.  An additional reason the MED may be particularly focused on this issue: the Bulletin comes on the heels of another study, also by CU researchers, that found that prenatal cannabis use is associated with lower birthrates.  As a result, anyone in the retail or medical marijuana industry in Colorado, or in any state-legal jurisdiction for that matter, should take the time now to review the applicable rules.  The MED Bulletin should put licensees on notice that such conduct will likely bring swift enforcement action in the future.

In addition, the Bulletin reminds licensees of the importance of training not only their employees, but also their agents and those acting on their behalf to comply with the applicable rules.  Indeed, the MED specifically highlighted that under the Rules, the noncompliant actions of employees and partners—such as providing false (or unsubstantiated) and misleading health and wellness advice over the phone—can be imputed to the licensee that employs them.  And that can lead to enforcement actions against the licensee—regardless of the individual’s precise role.

The MED Bulletin, then, should be seen—in addition to providing a clear warning to investigate and remediate any potential violations related to morning sickness—as a more general reminder that the best compliance is proactive.  Cannabis regulation is complex, and, even with the best of intentions, employees or agents of licensees may take actions that leave the licensee exposed.  And when the MED launches an investigation, “they were doing it too” does not suffice as a defense.

[1] The Division issued the Bulletin in May of 2018 and then reissued an amended version in early June which was substantially similar in most respects.