PORTLAND, Ore. – Cannabis producer Cura Partners, Inc. (Cura), manufacturers of Select brand, were fined a record $110,000 by the Oregon Liquor Control Commission (OLCC) for mislabeling more than 186,000 vape products as containing “100% cannabis” ingredients, and also for misrepresentation in social media posts that claimed its Select brand of products contained only terpenes and oil extracted from cannabis.
Officials from the OLCC uncovered the mislabeling last fall. Apparently, though products were labeled and promoted as containing only cannabis-derived ingredients, other botanical terpenes not derived from cannabis were added for flavor, as well as medium-chain triglyceride (MCT) oil, which is commonly used in vape products to add volume.
Part of the settlement included a $10,000 “dishonest conduct” sanction, according to The Oregonian’s Oregon Live news site, which was issued in lieu of a 36-day suspension. The OLCC said the violations did not warrant cancellation of Cura’s licenses.
The Portland Business Journal acquired emails related to the situation through a request for public records from the OLCC, and quoted Cura attorney Amy Margolis in one email dated November 18. “This was a communication problem,” Margolis wrote. “Cura is, as you know, a large company with many employees each working in different departments and at different locations. In this case what we think happened is that an employee (or employees) in the manufacturing connex decided to add [terpenes and MCT oil].”
Compounding the violations, some of the Select branded products may have been sold during a period of time last fall when Oregon lawmakers had passed a ban on flavored vape products, as a result of fatalities attributed to EVALI, the vaping-related condition that emerged in the fall, and which currently effects more than 2,700 patients and has resulted in at least sixty deaths.
There is no evidence that the terpenes and MCT oil added to the products contributed to any cases of EVALI, though public health officials have yet to arrive at a definitive cause for the lung condition.
A pending acquisition of Cura by Massachusetts-based cannabis producer Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) had been held up, partially, by the settlement decision.
“The transformational acquisition of Cura and the Select brand is another step in our journey to create the most accessible cannabis brands in the U.S.,” said Joseph Lusardi, chief executive officer of Curaleaf, in a May press release, when the acquisition was announced. “The combination of Curaleaf and Select is a perfect fit. With our industry leading capacity, expansive retail distribution network, and Select’s impressive sales and marketing capabilities, we intend to meaningfully accelerate our topline growth trajectory with the addition of the Select Oil product range. In addition, we intend to create significant operational synergies from the integration of Select’s wholesale business with our vertically-integrated cultivating, processing and retail platform. We look forward to welcoming the talented Select team who will bring superior brand marketing expertise and a culture of innovation in technology and product development.”
The settlement was approved by the OLCC on Thursday, with expectations by industry pundits that the all-stock acquisition of Cura by Curaleaf, valued at nearly a billion dollars in May, could happen as soon as today.