Can LAC lose a license for this?

In the most general terms possible, yes he/she could lose their license and be subject to legal action and possibly time in jail. In many states in the US and in many countries, it is illegal for anyone other than licensed acupuncturists and some other health professionals (MD's, etc.) to purchase and/or utilize acupuncture needles. This is certainly the case in California.

From a professional standpoint (i.e. my point of view) there is absolutely no reason to give/sell a patient needles. Home treatments that are appropriate are acupressure, moxibustion, magnets, even TENS units, etc. and I recommend them for certain patients. I can think of no clinically valid reason to provide a patient with needles.

If they need more constant stimulation many practitioners will leave small intradermal needles in certain points or use auricular press balls/seeds to provide a longer treatment effect between sessions. This again would remove any necessity for the patient to needle themselves.

From a health standpoint there is a real danger in re-using needles and in needling incorrectly. People can theoretically puncture their lungs, major arteries, organs, and cross contaminate themselves with improper procedures. None of these risks are worth whatever a practitioner feels he/she is trying to help the patient with by providing needles.