Law enforcement authorities across the nation, which includes the FBI, have cast a wide net in their efforts to root out corruption amongst nearby government officials overseeing the marijuana business.
The crackdown has ensnared nearby government and cannabis business officials in states such as California, Massachusetts and Michigan. Charges have incorporated bribery and extortion.
Though claims of licensing bias and flawed scoring are additional frequent, an examination of the landscape suggests that there have been a quantity of blatant efforts more than the years to improperly influence public officials into awarding hugely coveted marijuana licenses.
Such corruption, combined with flawed and biased licensing, undermines the approach, hurting the possibilities for corporations that play by the guidelines, business professionals warn.
In California, for instance, nearby corruption became sufficient of an concern final year that it was identified as a hurdle for marijuana business enterprise license seekers in the newly regulated state.
Elsewhere, Nevada’s cannabis licensing director lately was placed on administrative leave immediately after allegations of bias and improper conduct arose through court hearings associated to complaints from unsuccessful applicants about a current licensing round. He is no longer with the state’s Division of Taxation, which oversaw the cannabis business.
And in Fall River, Massachusetts, at least 4 business enterprise owners allegedly paid a total of $600,000 in bribes to win Mayor Jasiel Correia’s help of marijuana license applications.
Correia lately pleaded not guilty to several federal corruption charges.
Some marijuana business officials have welcomed the stepped-up enforcement.
“If we want to be a legal business, we require to act like it,” mentioned David McPherson, who leads the cannabis consulting group at California-primarily based HdL Cos. “Let’s be transparent and make it specialist.”
He mentioned the business really should demonstrate that it has nothing at all to be concerned about. And if the FBI finds anything, “then let’s clean it up.”
The Fall River case, in truth, is 1 of a quantity nationwide that federal authorities have investigated in current years as component of a probe into public corruption in the marijuana business.
The FBI highlighted its investigation in a current podcast, through which it also solicited strategies from the public.
Douglas Berman, director of Ohio State University’s Drug Enforcement and Policy Center, wrote in a current e mail to Marijuana Small business Every day that the FBI podcast “may be a way to urge licensing officials to be confident to play by the guidelines.”
Here’s a roundup of some of the higher-profile alleged marijuana corruption instances in current years:
The restricted healthcare cannabis business enterprise licensing in Arkansas has spawned a quantity of lawsuits as nicely as an ethics complaint against a commissioner who did some legal perform for an applicant.
But 1 of the most curious instances involved an allegation that an MMJ cultivation applicant attempted to bribe a member of the Arkansas Health-related Marijuana Commission. The allegation surfaced in a letter to the Arkansas Supreme Court from state Lawyer Common Leslie Rutledge.
The commissioner, Carlos Roman, in turn was criticized for providing a higher score to the applicant, and some accused Roman of sharing details to aid the corporation with its application. He denied carrying out so.
The Arkansas Democrat-Gazette obtained a video of a meeting among the commissioner and the applicant.
In the video, the businessman can be heard telling Roman he appreciated his aid and adds, “If I owe you anything, let me know.”
The commissioner responds that a sort word to the state Senate President that he really should be reappointed would be adequate. Roman told the newspaper he reported the incident to the FBI.
Roman completed his term and wasn’t reappointed. A state MMJ spokesman mentioned Roman is not beneath investigation.
Arkansas had no rule banning private discussions among a commissioner and a marijuana license applicant, according to the newspaper.
Federal authorities in November 2017 charged Adelanto, California, Mayor Pro Tem and City Councilor Jermaine Wright with attempted arson and bribery.
Wright allegedly solicited and accepted a $10,000 bribe from an undercover FBI agent to help a marijuana business enterprise in acquiring a license.
Wright pleaded not guilty. His trial has been scheduled for Feb. 25, 2020.
The FBI in Might 2018 raided the property of then-Adelanto Mayor Wealthy Kerr as nicely as a marijuana dispensary as component of an ongoing probe into the city’s relationships with cannabis corporations. No charges have been filed against Kerr.
Kern County, California, Supervisor Leticia Perez was charged final year with two misdemeanors relating to alleged conflict of interest violations. She pleaded not guilty to the charges, claiming they are primarily based on political retaliation and are racially driven.
Earlier this month, two Massachusetts guys pleaded guilty in federal court to charges that they extorted dollars on behalf of Correia, the Fall River mayor, from businesses searching for to get recreational marijuana cannabis licenses.
Correia, as noted earlier, faces federal corruption charges, which he denies.
He refused to step down regardless of becoming voted temporarily out of workplace by the City Council. The City Council has sued to get rid of Correia from workplace.
3 household members – Mike Baydoun, Ali Baydoun and Jalal Baydoun – pleaded guilty to federal charges associated to a bribery scheme to get a healthcare marijuana dispensary and cultivation facility licensed in Garden City, west of Detroit.
One particular of the guys allegedly handed a city official an envelope containing $15,000 – $five,000 for every single of 3 council members. The official turned the envelope more than to the FBI.
Prosecutors mentioned the guys had been prepared to spend as a lot as $150,000 to get the permits authorized and also presented city officials a 25% reduce of the earnings in return.
Issues about possible corruption prompted then-Michigan Gov. Rick Snyder to request that state police investigate irrespective of whether regulators had been taking bribes in exchange for healthcare marijuana licenses.
Jeff Smith can be reached at [email protected]