California labor board shuts down hemp seed company for workforce pay, insurance violations

A California hemp seed company was closed by the state labor board following complaints that the company hadn’t paid more than a dozen full-time workers since mid-December.

The California Labor Commissioner’s Office shut down Castillo Seed Company, based in Half Moon Bay, in late January.

The company had sent a letter to its workforce in January, acknowledging the missing payments. Employees also complained of receiving paychecks from Castillo Seed that bounced, according to the San Francisco Chronicle.

The Labor Commissioner’s Bureau of Field Enforcement investigated the company for labor law violations after receiving reports in mid-January, fining Castillo Seed $33,000 and forcing it to close due to a lack of worker’s compensation insurance. The company cannot reopen until it shows proof of insurance.

Investigations remain open on the company regarding potential violations of additional labor laws, which could draw administrative penalties or even criminal charges, if there is proof that pay was intentionally withheld from workers.

Castillo Seed had partnered with Oso Vega, a Texas-based hemp supplier, to lease a 1 million square foot greenhouse facility that was formerly operated by Bay City Flower Co., one of the largest U.S. ornamental producers, which closed in 2019 after 60 years in business.

The two companies had hired back the greenhouse operation’s workforce in April, according to a press release.