Cannabis Grower Slapped With $35K Penalty For Failing To Carry WC

Tony Sutton-Deangelico

Salinas, CA (WorkersCompensation.com)-Ever since recreational marijuana became legal in California, officials have struggled to handle the ambush of entrepreneurs who have rushed county offices to secure licenses and permits to start growing. Many during this free-for-all scurried to start their businesses without having all the requirements in place.

Battle Mountain Genetics, a company that grows cannabis in Salinas, is among those companies that allegedly tried to operate without complying to certain rules. According to a judgment that was filed in Monterey County Superior Court by the state Labor Commissioner’s Office, the company did not have workers’ compensation insurance from January 16, 2018, to August 30, 2018 for its 20 employees.

“The discovery was made by the SB 863 program, which uses employment data that is collected by a variety of state agencies to identify possible employees for investigation that are non-compliant,” a spokesperson for the Department of Industrial Relations told WorkersCompenation.com. Senate Bill 863, which went into effect Jan. 1, 2013, made widespread changes to California’s worker’s compensation system.

Battle Mountain Genetics was ordered to pay $ 35,106 for failing to carry workers’ compensation insurance. The amount was based on a formula for calculating the weekly workers’ compensation insurance premium cost, which is then multiplied by the number of weeks for which the company’s employees were not insured.

The order to pay was issued to the company on Jan. 15, 2019, and according to a state spokesperson the company had two weeks to appeal. They did not, nor have they paid the penalty which was due 15 calendar days after the order.

“A demand letter was mailed on February 19, 2019, notifying the company that they had a balance of $35,196.30 due,” the DIR spokesperson said. “The citation was referred to the Division of Labor Standards Enforcement’s Judgment Enforcement Unit. The judgment was mailed to the county recorder on May 30, 2019, and recorded by the county on June 10. The judgment filed gives the Labor Commissioner the right to seize the company’s assets if the penalty continues to go unpaid.”

In 2016, Battle Mountain Genetics filed as a business with the California Secretary of State’s Office,. The company is currently listed as being suspended by the Franchise Tax Board for not meeting tax requirements. Also, a month after Battle Mountain filed with the state, it was acquired by a company out of Colorado called Sunset Island Group, Inc. The documents that were submitted by Sunset Island with the Securities and Exchange Commission state that Sunset Island received the company in exchange for 50 million shares of stock. The company is now operated through its solely owned subsidiary, VBF Brands.

In its SEC reports Sunset Island specifies the space it leases in Salinas as a 12,000 square feet of greenhouse space, 10,000 square feet of bare land that can be used for the construction of greenhouses in the future, 2,000 square feet of space for a nursery greenhouse and another 2,400 square feet dedicated for trimming, drying, manufacturing and distribution of cannabis. The CEO/CFO Valerie Baugher of Sunset Island did not comment before press time.

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