WARWICK – A local cannabis cultivator will pay a $625,000 fine to keep its license and settle the state’s claims that it had failed to disclose the identity of one of its owners and grew a significant amount of unregistered product.
In a consent agreement with the R.I. Office of Cannabis Control in October, STJ LLC, also known as Fire Ganja, settled those claims and is allowed to start selling its products to licensed retailers.
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The company also agreed to drop its federal lawsuit filed in August seeking monetary relief and requesting that the court “revoke and dissolve” an administrative hold and quarantine of marijuana plants the R.I. Department of Business Regulation had issued in June.
“We’re happy to have some finality in this situation,” said STJ LLC CEO and founder, Nick Salvadore. “Glad to get our employees back to work as they have been waiting since mid June and resume creating products for all the patients and customers that have supported us over the years. We are also appreciative that the DBR and OCR worked with us to come up with a resolution that worked for both parties.”
On June 21, state regulators notified STJ they were placing an administrative hold on all of the cultivator’s inventory and plants through Metrc, which is the state system that tracks marijuana products. This was the result of a state regulator’s investigation into STJ after the cultivator’s manager and principal, Mark Laraway, had emailed regulators on June 19 asking for assistance with logging plants into Metrc.
Throughout the following two days, regulators visited STJ’s facilities and found more than 1,400 untagged or improperly tagged plants, 3,500 ounces of untagged or improperly tagged cannabis flowers and concentrates and 276 ounces of cannabis concentrate in their facility at 36 Bellair Ave.
The hold prohibited STJ from manufacturing or selling cannabis products, which the company stated caused them to lose approximately $8,200 per day in sales revenue as well as $885,228 in destroyed and quarantined plants as of Aug. 17. STJ also stated they were forced to reduce its staff from 15 full-time employees to just two part-time workers, according to court records.
Court records also show that both parties were in the process of negotiating a consent agreement. However, talks broke down on Aug. 9 after each side rejected each other’s settlement offers. The R.I. Department of Business Regulation had initially proposed an administrative penalty of more than $2.9 million, while STJ countered with $35,000.
Through their investigation of STJ, regulators also discovered a lawsuit between Fire Ganja’s owners and the company, San Miguel LLC. Regulators argued that the lawsuit revealed STJ had violated state regulations by failing to properly identify San Miguel’s ownership interest in STJ. STJ disagreed, stating that they filed amended paperwork with regulators in June 2021 adding San Miguel as a lender to the business.
However, Fire Ganja cleared up the ownership dispute as part of the October settlement by submitting an affidavit from the owner of San Miguel “disclaiming any and all past, present, or future ownership interest” in the marijuana-growing company.
(UPDATE: Comment from STJ added in 4th paragraph)
