State Cease-and-Desist Response: License Suspension Avoided

The Challenge

A Nevada cannabis dispensary operator received an emergency Cease-and-Desist Order from the Cannabis Compliance Board (CCB) following a routine compliance inspection that identified three violations: (1) an undisclosed employee had a disqualifying conviction that had not appeared in the operator's pre-hire background screening; (2) the dispensary's CCTV coverage had a 45-minute gap in recorded footage on a specific date, triggering a CCB data integrity concern; (3) product labeling on 14 SKUs did not comply with the October 2023 updated CCB labeling regulations.

The Cease-and-Desist Order required the operator to close to the public within 72 hours pending a compliance determination. Each day of closure cost the client approximately $45,000 in gross revenue.

Our Approach

Immediate Response. Bob Hoban filed a formal written objection to the emergency closure within 24 hours, requesting an expedited compliance conference with the CCB's Enforcement Division. The objection documented that none of the three violations met the threshold for emergency closure under NRS 678B — which requires evidence of immediate consumer safety risk — and that the violations were amenable to immediate remediation.

Background Investigation Issue. We retained a Nevada-licensed private investigator to reconstruct the background screening process and confirmed that the employee's conviction (a 2019 misdemeanor) had been correctly disclosed on the employment application but had been misclassified as non-disqualifying by the operator's HR process. We prepared a corrective action plan: immediate reassignment pending CCB review, updated background screening criteria, and a written attestation protocol.

CCTV Gap. We obtained the CCTV vendor's service logs confirming that the recording gap was caused by a firmware update pushed remotely by the vendor — an event the operator had no knowledge of and no control over. The vendor provided a sworn declaration confirming the technical cause.

Label Remediation. We prepared an accelerated label remediation plan: a 14-SKU compliance matrix, new label artwork meeting updated CCB specifications, a sequenced sell-through plan for existing labeled inventory under a CCB variance request, and a compliance training certification for all dispensary staff.

The Outcome

The CCB withdrew the emergency Cease-and-Desist Order 4 days after filing, citing the operator's "prompt and complete" corrective response. The dispensary reopened on day 5 — avoiding a projected 30-day suspension that would have cost the operator approximately $1.35M in lost gross revenue.

The CCB imposed a $25,000 civil fine in lieu of suspension — the minimum fine for the three violations under Nevada law — and accepted the compliance plan without modification. Hoban Law Group established a quarterly compliance audit program for the client to prevent future inspection deficiencies.