The environmental concerns related to the cannabis industry are rising, and so, too, are the regulations.
This week, two members of Vicente Sederberg’s Environment, Health and Safety practice, Michelle Bodian and Marc Ross, hosted a discussion with Jeff Lawrence, director of the Division of Environmental Health and Sustainability for the Colorado Department of Public Health & Environment, and Louis Dundin, a senior enforcement counsel for the Massachusetts Office of the Attorney General.
The moderators and panelists covered a wide range of cannabis-related environmental issues, including types of violations that cannabis and hemp growers have faced, how cannabis operators can stay compliant with shifting rules, and what cannabis operators should do if they hear that knock on the door, physically or in letter form, from federal or environmental officials.
Ross laid out a wide range of environmental laws that apply to state-legal cannabis operators, including: the Clean Water Act; the Safe Drinking Water Act; the Clean Air Act; the Resource Conservation and Recovery Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Toxic Substances Control Act; the Emergency Planning and Community Right to Know Act; and the oversight of the Occupational Safety and Health Administration.
Some of these acts, Ross said, also have a “citizen suit provision,” meaning that enforcement actions might not come from the expected sources and agencies, but from, perhaps, neighbors.
“If there are citizens in your community that do not like your operation and you are not in compliance, i.e. you don’t have the necessary permits or they get wind of shenanigans going on in your facility, they can also bring a lawsuit with the same penalty provisions in those acts, which are quite significant,” Ross said.
Specific enforcing agencies often react to each violation. For example, a state-legal cannabis operator might hear from people from the federal or state Environmental Protection Agency regarding concerns about streams, or from the Fish and Wildlife Service regarding a contaminated animal habitat, or from the Food and Drug Administration with regard to issues around food safety, Ross said.
When it comes to unlicensed, illicit market growers, though, the enforcing agencies might be different and include the National Forest Service or the Bureau of Land Management, especially if this cultivation is occurring on public lands.
“The number one thing you want to be with regulators is transparent. If you have a spill on your property or if you’ve got some waste that’s been piling up beyond the regulatory limit in terms of quantity or date, you want to reach out to your regulators, you want to be transparent with them for a number of reasons,” Ross said, because it could be a mitigating factor if violations are found, and also because that could remove criminal intent.
In some cases, state-legal cannabis operators have blatantly flouted the law. Ross gave several examples of the types of fines that legal operators have incurred in recent months. In June, one extractor that dumped a 55-gallon drum of ethanol waste off-site had to pay a $45,000 fine plus $26,500 in restitution for cleanup. Some members of this cannabis team are also facing jail time as well as other fines.
A legal hemp operator in Oregon, Ross said, is in the process of being sued by 17 “migrant workers” related to health and safety violations, including working without breaks and “unreasonable lodging” that didn’t have running water, Ross said.
In another example that Ross gave, an unlicensed operator worked out of a rental property and the landowner was unaware of what the tenant was up to. The landowner faced civil penalties for environmental violations, water diversions, waste near waterways, and pesticide usage.
“It resulted, for the innocent landowner, in $680,000 in penalties,” Ross said.
Lawrence, director of the Division of Environmental Health and Sustainability for the Colorado Department of Public Health & Environment, mostly focused on hemp. In Colorado, he said, the law allows him and his colleagues to embargo products that don’t meet the state’s regulatory standards. That might mean that they found an ingredient from “unapproved sources,” or hemp that tests above the 0.3 percent threshold for THC requirement, Lawrence said.
“Specifically, the THC and the levels of THC are our biggest concern. We obviously have a well-branded, well-regulated marijuana industry in Colorado, and we don’t want to create diversion or undermine our marijuana industry by allowing hemp products that really mimic marijuana products,” Lawrence said.
And when violations are serious enough to involve someone like Dundin, the senior enforcement counsel for the Massachusetts Office of the Attorney General, one of the first steps is the “policy” that the AG’s office has of reaching out to the allegedly violating company owner to share that the office is considering bringing a case. If the potential defendant wants to talk and share their side of the story with the goal of a resolution in mind, the office is open to it, Dundin said. Broadly, Dundin said, the most important thing for someone to do if they hear from an enforcement agency related to a cannabis operation is to respond to the agency within the timeframe they’ve given.
“I think that the rule, as opposed to the exception, would be our willingness to have a conversation, unless there is some particularly serious life-threatening situation happening, to see if we could get some resolution,” Dundin said.
