TerrAscend challenges CRC’s six-figure fine

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After being hit with a six-figure fine over complaints it violated patient access at its New Jersey dispensaries, cannabis giant TerrAscend is challenging state regulators.

During the New Jersey Cannabis Regulatory Commission’s Sept. 8 meeting, the multistate operator – which has storefronts in Lodi, Maplewood and Philipsburg – was sanctioned and issued a $100,000 penalty for five infractions related to medicinal cannabis patient access.

According to the CRC, the state received complaints from patients who said they were told to make their purchases off the adult-use menu, which are more expense and taxed at higher rates than medicinal use products.

Though the penalty carries a fine of up to $5,000 per violation, the CRC voted 3-1 to slap TerrAscend with four times the maximum penalty as outlined in the state law, with Board Chair Dianna Houenou saying the amount should “reflect the serious nature that the board considers prioritizing patients.”

The heavier fine also went against the recommendation of CRC Executive Director Jeff Brown, who said during the meeting that the MSO submitted a corrective action plan and has taken several steps already, including new standard operating procedures and retraining staff.

“Additionally, this is all relatively new still, not only for businesses, but for consumers. And so, we certainly don’t recommend going above the maximum penalty there and would ask the board to consider other factors in the entity’s compliance at this time,” Brown said at the meeting.

In an Oct. 2 statement to NJBIZ, TerrAscend CEO and President Ziad Ghanem said, “We strongly deny the allegations which we believe were based on substantial inaccuracies and have appealed the CRC’s ruling.”

Ghanem went on note the company’s “deep history of compliance in New Jersey that is free of any previous violations” and that he believes the CRC’s decision “called into question the company’s commitment to our medical patients.”

“TerrAscend shares in the CRC’s commitment to ensuring New Jersey’s medical patients are prioritized and will continue to work alongside the CRC in its pursuit of providing New Jersey patients with world-class cannabis products and retail experiences,” he continued.

It is not immediately clear when TerrAscend filed its appeal, but in a statement made following the CRC’s September meeting, the company acknowledged the five complaints, saying, “While these patients were still able to purchase these products, it violated a CRC requirement that all products available on our adult-use menu must also be listed on our medical menu.”

After being made aware of the situation, TerrAscend said it “took immediate action to refine product listing procedures, including IT improvements and further employee training to ensure full compliance with these requirements.”

A CRC spokesperson told NJBIZ, “On TerrAscend, we cannot comment on potential or ongoing legal action.”

TerrAscend isn’t the only MSO recently hit with a big fine. During the same meeting, Columbia Care, which manages The Cannabist in Deptford and Vineland, was levied a $50,000 fine for a 13-day lapse in its labor peace agreement.

After being issued a notice of violation in July, Columbia Care has since provided a corrective action plan to the CRC stating it has implemented “new process controls that will enable it to better track its labor peace agreement, as well as other agreements” going forward, according to the CRC.