CCB approves $50,000 settlement, conditions sale of Vireo licenses to Caliente Partners and DB Processing

The Cannabis Compliance Board on July 17 approved a settlement and related transfers involving Vireo Health of Nevada and two MJ Distributing licenses, resolving disciplinary findings and clearing proposed buyers to complete purchases under conditions. The board voted to accept a combined $50,000 civil penalty and to allow the sale of cultivation license C201 to Caliente Partners Group LLC and production license P132 to DB Processing LLC, with conditions tied to separating the collocated facilities and heightened, risk‑based oversight.

The agreement resolving the disciplinary action was described by Allison Hurr, Deputy Attorney General assigned to the case, as a negotiated settlement that limits the stipulated violations to two counts: one category 2 violation against the cultivation license for allowing a person under 21 to work in a cultivation facility (negotiated fine $30,000) and one category 3 violation for failing to follow an approved security plan at the production license (negotiated fine $20,000). Hurr told the board the combined civil penalty would be paid in monthly installments over 10 months.

Why it matters: the violations the board identified—unauthorized workers under 21 and deficiencies in surveillance and security—are explicitly central to the agency’s ability to maintain a regulated market and to reduce federal enforcement risk, according to the board’s counsel. The transfers involve licenses that were collocated on a single parcel; the board conditioned approval on steps designed to ensure separate, independently secured operations under new ownership.

David Staley, Division Chief of Investigations for the CCB, told the board the violations were observed between June 2023 and June 2025 and included multiple statements of deficiencies tied to operations while Caliente was acting as a management services provider. "All of the SODs are related to Caliente Partners' operations of Vireo licenses," Staley said, noting the volume and seriousness of documented deficiencies.

Laurie Rogish, counsel for Vireo Health of Nevada 1 LLC, said Vireo is conducting a comprehensive review of its internal compliance program and pointed to recent corporate changes and a merger intended to strengthen operations. "We are committed to addressing the issues identified and are conducting a comprehensive review of our internal compliance program to ensure it reflects current best practices," Rogish said.

Representatives for the prospective buyer Caliente Partners Group described remedial steps taken at the facility and a planned site plan to create a separate processing building with its own entrance, fencing and address so DB Processing can operate independently. Jared Khan, counsel for Caliente Partners and DB Processing, said a new site plan separating the two operations was expected to be submitted to the CCB within days and to local government for approval at an upcoming Caliente meeting.

Caliente and DB Processing agreed to board conditions. The board’s motion to approve the transfers included two explicit conditions: (1) the licensees must complete physical separation of the cultivation and production operations so that each facility has separate security, fencing and entrances and no shared staff; and (2) the CCB will place the new owners on an elevated, risk‑based review schedule that may require quarterly inspections or audits (more frequently if necessary) during initial operations. Jared Khan told the board his clients welcome those conditions and invited board members to tour the facility.

Board deliberations repeatedly returned to oversight: several board members said they preferred a monitoring check‑in at six months and heightened inspection cadence while local approvals and construction occur. Deputy Attorney General Allison Hurr said that because the sale was pending and ownership would change after local approval and site plan resolution, it was more effective to attach detailed monitoring conditions to the transfer approval; the CCB also said it would deploy a higher risk profile to the location, which can result in more frequent audits or inspections.

Formal actions: the board approved the settlement agreement and then approved the conditional transfers of interest for C201 to Caliente Partners Group LLC and P132 to DB Processing LLC. The motions carried with no recorded opposition.

Next steps: the buyer teams must submit and secure CCB approval of the site plan modifications, obtain local government clearances where required, and implement the separate building and security work before the transfers are finalized. The board also indicated it will schedule follow‑up reporting and reserve authority to increase audit frequency if compliance lapses continue.

Speakers who appeared and were quoted during the discussion include Allison Hurr, Deputy Attorney General (assigned to the matter); Laurie Rogish, counsel for Vireo Health of Nevada 1 LLC; Tyson McDonald, Chief Financial Officer, Vireo Health (participating by Zoom); Jared Khan, counsel for Caliente Partners Group LLC and DB Processing LLC; David Staley, Division Chief of Investigations, CCB; and Michael Cook and Duranda (Duranda) Buxton, representatives for Caliente Partners and DB Processing respectively.

The board took the votes during the July 17 CCB public meeting in Carson City (hybrid).