This spring, WW wrote about Luminous Botanicals, a cannabis tonic company in a nearly two-year battle with the Oregon Liquor and 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 consumers.
On Oct. 22, the commission stamped its final ruling on the case: Luminous Botanicals needs to pay a $100,000 fine—the maximum penalty.
Kevin Jacoby, the attorney representing Alworth, says he plans to petition for a judicial review of the ruling within the 60-day window allowed 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 improperly labeled vials of THC-containing tonic to dispensaries and buyers. The penalty the OLCC imposed amounted to $400 per day per violation per individual vial.
The maximum penalty for improper labeling is capped at $100,000.
The primary issue the commission argued was the danger posed by the vials: Alworth’s tonic labels were not properly wrapped around the vials. Instead, the cardstock labels were attached in a way that consumers would likely take them off before or after use, the OLCC argued—rendering the vials 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 argued the mislabeling was unintentional and that the OLCC had made changes to labeling requirements, leaving her unaware that she was mislabeling vials at all.
Alworth’s case is significant in part because her company received the stiffest fine for mislabeling that the commission could impose.
(In April, WW noted that the same maximum mislabeling fine had been given to weed giant Cura Partners in 2020 after the commission ruled it had knowingly mislabeled 186,000 vape cartridges, failing to disclose additives in its products. The penalty imposed for the intentional misrepresentation? $10,000.)
In its final case ruling shared with WW, the commission acknowledged the severity 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.”