A Vermont cannabis company ordered to halt operations is questioning the authority of the state board that gave the order.
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DERBY, Vt. (WCAX) - A Vermont cannabis company ordered to halt operations is questioning the authority of the state board that gave the order.
Derby-based Holland Cannabis is currently fighting to stay in business after the Vermont Cannabis Control Board found positive tests for a banned substance in their product.
Now the question is how much power does the board have to penalize these companies?
“The legislative intent was we’re doing this for public safety and consumer health. Those are our guiding principles always,” said James Pepper, the chair of the Vermont Cannabis Control Board.
In 2023, the Cannabis Control Board investigated Holland Cannabis after a Vermonter reported getting sick from consuming pot grown by the company.
Lab test results showed the pot, sold in five retail locations, contained a prohibited pesticide called Eagle 20.
In a filing to the board, Holland Cannabis denies responsibility for the contamination. But the company is also disputing the authority that the board has to take punitive action against them.
“The order to stop sale and the order to stop growing, we think, violates the due process laws under the United States Constitution and under the Vermont Constitution,” said Stuart Revo, the attorney for Holland Cannabis.
In their defense, Holland Cannabis points to a letter from the governor to lawmakers last session on a bill regarding the future of the Cannabis Control Board in which Gov. Phil Scott raises concerns about separation of powers. In his letter, the governor wrote, “The Legislature has no authority to delegate the Constitutional power of the Governor ... to an entity that is now permanently independent of the executive branch and is, therefore, not accountable to the people of Vermont.”
But Pepper calls that constitutional argument meritless. He says the Legislature legally gave the board authority over licensing, regulation and enforcement.
“In order to achieve that well-regulated system, we need to have consequences for our actions. Of course, the most severe consequence, one that we don’t enjoy using, is to revoke or suspend a license,” Pepper said.
Lawmakers who were at the table when the retail market was created say they needed to be able to hold cultivators accountable.
“The Liquor Control Board has the ability to pull a license if people are misbehaving. I believe we wouldn’t have called it a control board if we didn’t intend for them to have that ability,” said Jeanette White, a former Vermont senator.
Following the hearing in front of the Cannabis Control Board this week, Holland Cannabis will now have to wait at least 10 days for a written decision on whether their license will be revoked. Their attorney says should they not get the outcome they want, they could appeal as high as the Supreme Court.
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