One of Bend’s original pot shops is in trouble with the Oregon Liquor Control Commission for misusing a medical marijuana card to create discounts for employees.
Cannabend LLC, this week negotiated a settlement to pay fines totaling $11,650 for the illegal transactions, according to Lizette Coppinger, a co-owner of the business.
The Oregon Medical Marijuana Program card numbers, which cut taxes from sale of marijuana products, were discovered during an inspection of the premises by OLCC staff.
The numbers were on a card that was taped to the bottom of a keyboard at the point of sale. The violations could have cost Cannabend its operating license.
“This did scare us,” said Coppinger. “The last thing you want to do is close your doors and destroy your product.”
Coppinger, who helped start the company in 2014, said the company accepts responsibility for the incident.
“We are embarrassed about what happened. It is on us because we should have known the rules exactly. But it wasn’t something we were trying to be sneaky about either,” she said.
The penalties are due by Aug. 17, according to a settlement agreement for marijuana violation cases released by OLCC on Thursday. The Cannabend settlement was one of four cases described in the release.
Coppinger said she permitted employees to use the card after cannabis laws changed from medical use only to recreational and medical use. Those laws changed in 2015.
“The rules were changing frequently,” said Coppinger, whose business is located at 3312 N. U.S. Highway 97 in Bend. “One of the rules stated that discounts were not allowed. We didn’t want our budtenders to pay the normal price so we allowed them to use our medical cards.”
A former employee reported the use of the medical cards, said Coppinger. The OLCC inspection occurred in November 2018.
The use of a medical marijuana card exempts the buyers from sales tax, according to Mark Pettinger, a spokesman for OLCC.
“It can be as much as 20% because you don’t pay sales tax whatsoever,” said Pettinger. “So it’s the 17% tax from the state, and the city or county tax of 3%, which would bring it to 20%.”
While such cases are uncommon, the OLCC did cite Oregon Grown, a Portland cannabis retailer, for allowing misuse of a medical marijuana card to ring up tax-free marijuana sales in 2018.
Coppinger said the incident at Cannabend has changed the way the company runs its operations.
“We are kind of happy this happened because it has made us more solid in everything that we are doing, how we apply the rules and being extra vigilant. That is how you have to operate. We turned it around to something positive.”