Massachusetts Cannabis Control Commission Forces Wellspring to Cease Operations While it Addresses Violations

The regulator of the state’s cannabis industry has issued a cease and desist order to registered marijuana dispensary (RMD) Wellspring. According to the Summary Cease and Desist Order issued by the Massachusetts Cannabis Control Commission, the agency conducted two unannounced inspections last week, finding a dozen violations ranging from improper storage to poor record-keeping:

  1. Marijuana and marijuana products stored outside of secure locked safe or vault area approved by the Commission for adequately secured storage.
  2. Use of a non-approved laboratory room and cure room for secondary vault storage despite lack of panic alarm or architectural review approval to utilize area as a secure vault. Enforcement staff observed marijuana and marijuana products unsecured in the non-approved laboratory area and patient consultation area
  3. The vault room lacked adequate security camera coverage, adequate sanitation controls and was being used for purposes other than storage of marijuana. Enforcement staff observed Marijuana MIP beverage products stored in an unlocked refrigerator alongside employee food items.
  4. Unsecured access to surveillance room containing the facility’s surveillance equipment. Enforcement staff observed unlocked, open-door access to the on-site surveillance room, missing ceiling tiles and exposed wiring, unlocked storage doors containing the facility’s server equipment and accumulation excessive trash cultivation equipment.
  5. Insufficient camera coverage including: ( 1) lack of perimeter surveillance including area with accessible hole in chain link fence, (2) lack of surveillance coverage on marijuana waste disposal area (3) use of a decoy camera not capable of recording live video, ( 4) inability to produce a clear, color, still photo,
  6. Insufficient perimeter security alarm coverage. Enforcement staff observed a rear exit door lacking a security alarm.
  7. Illegible and incomplete labels lacking required information specifying product origin and statement that the product had been tested for pesticides. Enforcement staff observed that labeling affirmatively acknowledged deficiency by stating that “this product may not meet established standards for pesticides.”
  8. Finished marijuana flower product obtained from a wholesaler and stored in plastic containers lacked testing results for various strains and types of marijuana contained therein.
  9. Lack of manifests or documentation demonstrating that wholesale product is reweighed or recounted upon delivery.
  10. Marijuana waste disposed of without proper documentation and not rendered unusable or unrecognizable. Enforcement staff determined that Respondent failed to produce waste disposal logs documenting the disposal date, type and quantity of marijuana disposed of and manner of disposal of marijuana or marijuana products.
  11. Respondent did not have policies and procedures on site including policies and procedures for secure cash handling, diversion prevention, transportation, patient sales and cultivation.
  12. Respondent failed to maintain a written visitor log or implement other measures to monitor facility access of vendors, contractors or outside vendors for authorized purposes.

Wellspring, which is based in Acton, faces potential revocation of its license. The company’s website suggests that it is working to rectify the issues raised by the regulator.

Published by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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