Ian Mulgrew: Illicit retail pot sales trigger staggering fine for B.C. man
Credit to Author: Ian Mulgrew| Date: Fri, 14 Feb 2020 01:13:48 +0000
A Victoria man says he was handed one of the first tickets issued by B.C.’s pot police for violating the Cannabis Control and Licensing Act and he was stunned when he looked at the fine — $1.5 million!
Alex Robb, general manager of eight marijuana stores in three cities, said he was overwhelmed to be held personally responsible for sales by the nascent Community Safety Unit (CSU), formed to enforce the new law on retailing cannabis.
Robb was given a choice of waiving his rights and getting a 50-per-cent discount on the ticket or contesting the staggering penalty in an administrative process presided over by the CSU director, but he must make the decision without any disclosure and within 30 days of receiving the Jan. 20 notice.
“They’re putting me through this rigged, administrative-monetary-penalty hearing process and this could essentially cause my financial ruin and follow me for the rest of my life,” he complained. “I think if I am unable to pay the $1.5 million, they’ll be able to garnishee my wages for the rest of my life.”
He insisted his rights were being trampled by a patently unfair process and he was angry the CSU charged him though a numbered company (BC0996078), which operated the stores in Vancouver, Victoria and Nanaimo that employed more than 100 people.
“I never sold the cannabis,” Robb maintained. “I am actually an employee of the company. Going after me personally is a major issue, and the other major issue that I have with this is just the process itself. I’m given 30 days to make a potentially life-changing decision. And, at the end of the day, it’s the director of the Community Safety Unit himself who decides whether or not I successfully disputed it or not.”
Vancouver lawyer Allan Macdonald said there was no statutory support for the CSU’s targeting Robb as an individual: “I think they are trying to make an example of my client.”
Robb said he was named as the sole director of the numbered company that operated the stores that ceased operation last summer but are still under lease because the firm has been waiting for months on a decision on its application for a licence to legally sell cannabis.
“I’m the registered owner and the beneficial owner of about two per cent of the company. We don’t have $1.5 million, I can tell you that.”
He said Victoria restaurant owner Ahmad Naimi was the majority investor.
The Ministry of Public Safety and Solicitor General, responsible for the CSU, was reluctant to comment.
“We can confirm that the Community Safety Unit (CSU) has begun handing out its first notices of administrative penalties to illegal cannabis retail operations that have been visited by CSU officers and had their product and sales records seized,” public affairs officer Hope Latham said in an email response to questions.
“It is too early at this stage to comment on the number of penalties issued, the value of penalties issued, or the results of hearings. Penalties issued are expected to be significant with some in the hundreds of thousands of dollars.”
Latham explained under the act the CSU director may issue a Notice of Administrative Monetary Penalty to those who have sold or produced cannabis without a licence equal to twice the retail value of the product sold, produced, or possessed.
“The use of Administrative Monetary Penalties serves as an effective and swift civil deterrent directed at those involved in these illegal operations that will encourage other illegal operators to close their doors,” she added.
The recipient of a notice can sign a waiver admitting guilt and waiving their right to a hearing, or submit an application for an administrative “hearing.”
The actual cost of a penalty and terms of payment are determined later through a concession order issued upon receipt of a signed waiver or a compliance order issued after a hearing.
“Hearings” will generally occur by written submissions, Latham said.
Based on business records seized during a raid on July 31, the notice said a forensic accountant determined the store had sold $576,510.60 worth of cannabis during those two months and had stock worth $195,046.90, for a total of $771,557.50.
“The proposed administrative penalty is: $1,543,115,” Lipp wrote in boldface in the notice to Robb.
“You have the option of signing a waiver. A waiver is provided with this notice. By signing the waiver, you agree to pay a reduced monetary penalty, equal to the retail value of the cannabis that you, in contravention of the Act, sold, possessed for the purpose of sale, or produced.
“The administrative monetary penalty if a waiver is signed is $771,557.50.”
If the CSU receives no answer after 30 days, Lipp said the unit “will proceed with reviewing the matter and may proceed with imposing the monetary penalty proposed in this notice.”
Robb asked for an extension and disclosure, but was rebuffed.
Macdonald, who was still reviewing options, said the CSU was overstepping its authority.
“There is a section that empowers the CPU director to impose a penalty against a company director, but first it must be determined under this section that a corporation is liable to this penalty,” he argued.
“In this case, the CSU is basically circumventing all of that and just going after my client personally. They are actually denying him procedural fairness — you can’t threaten to impose huge fines on a person without providing them with any disclosure for the basis of the fines. What I’m saying is the procedural rights you have are extremely limited and it’s all geared to railroading the person who is named in this notice.”