Pot Owners Plead Guilty in Unique Charges vs. Legal Business

Pot Owners Plead Guilty in Unique Charges vs. Legal Business

[Editor’s Note: This won’t be the last fraud case in the legal cannabis industry. This serves as a warning to cannabis dispensaries to stay on the right side of the law.]

The owners of a Denver marijuana business pleaded guilty Friday to drug and racketeering charges and will spend a year in prison in what city officials called the first local prosecution of a legal pot enterprise in the U.S.

A yearlong investigation of Sweet Leaf’s sales practices centred on a practice known as “looping,” where a customer purchases the maximum amount of marijuana that Colorado law permits and repeatedly returns to the same retailer to purchase more on the same day. Prosecutors believe people using the strategy at Sweet Leaf locations purchased more than 2 tons of marijuana intended for sale on the black market.

The case is unique in that Denver authorities charged a pot business in one of 10 states plus Washington, D.C., that broadly allow marijuana use by adults and a commercial market to supply cannabis products. The majority of such businesses “are reputable and responsible and strive to obey our marijuana laws,” Denver District Attorney Beth McCann said in a statement.

“Sweet Leaf is an exception,” she said.

Under a plea agreement, Matthew Aiken, Christian Johnson and Anthony Sauro will serve one year in prison followed by a year of parole tied to the drug charge and a year of probation for the racketeering charge.

Aiken, 40, was sentenced immediately, and courtroom deputies placed him in handcuffs following the hearing. Johnson, 50, and Sauro, 33, will be sentenced in several weeks.

They and their attorneys left the courtroom without speaking to reporters.

Senior Deputy District Attorney Kenneth Boyd said investigators found evidence that Sweet Leaf’s owners knew about and encouraged the illegal sales. Employees would even contact buyers known as “loopers” to notify them of medical marijuana deliveries to dispensaries, he said.

“Once the practice was authorized by ownership, it was pushed at the highest levels,” Boyd said. “It was sell, sell, sell. This was about greed and making money, and that came from the top.”

Denver police began investigating the chain of dispensaries in 2016 after a neighbour of one Sweet Leaf location complained about repeat customers visiting the dispensary day after day.

Investigators scrutinized Sweet Leaf’s sales practices by using data collected by state regulators and material collected during December 2017 raids of several company properties. Several months earlier, the company’s owners told Marijuana Business Magazine that they had 350 employees and $60 million in revenue.

Boyd said the 12 low-level employees arrested during the raids have since reached plea agreements contingent on community service. Two former managers received 30-day jail sentences in November as part of a plea agreement that required them to co-operate with investigators.

Boyd said Denver prosecutors still are pursuing cases against 10 people accused of using looping to buy excess marijuana at Sweet Leaf locations.

The investigation prompted Colorado regulators last year to clarify rules limiting how much marijuana an individual customer can buy in one day.

Attorneys for the company’s owners had argued that the rules only limited the amount of product a customer could buy during a single sales transaction. City and state regulators rejected that argument, and Denver revoked all 26 of the company’s city-issued licenses after the police investigation began.

Colorado regulators later reached a settlement requiring the owners to surrender all of their state-issued business licenses. The deal also bans the owners from working in Colorado’s marijuana industry for 15 years.

Original Post: 420 Intel Business: Pot Owners Plead Guilty in Unique Charges vs. Legal Business

First Marijuana Recall Issued for Michigan

First Marijuana Recall Issued for Michigan

[Editor’s Note: Attention lower Michigan medical cannabis patients. Patches and tinctures have been recalled. Find out if your medicine is part of this recall.]

The Department of Licensing and Regulatory Affairs (LARA) has issued a voluntary recall on marijuana products.

According to LARA, the recall includes non-laboratory tested marijuana products that were supplied to provisioning centers by Choice Labs, LLC in Jackson. Patients or caregivers who have these affected medical marijuana products in their possession are advised to return them to the provisioning center from which they were purchased for proper disposal. During the recall, provisioning centers are encouraged to notify patients or caregivers that purchased these medical marijuana products of the recall.

LARA said Choice Labs will dispose of or retest the recalled medical marijuana products. All affected medical marijuana has a label affixed to the container that, at a minimum, indicates the license number of the marijuana facility that manufactured the marijuana product, as well as the production batch number assigned to the marijuana product, said LARA.

This recall affects the following batches under Processor License PR-000005:

  • 1A4050100000900000000035
  • 1A4050100000900000000046
  • 1A4050100000900000000064
  • 1A4050100000900000000073
  • 1A4050100000900000000075
  • 1A4050100000900000000077
  • 1A4050100000900000000138
  • 1A4050100000900000000164
  • 1A4050100000900000000167
  • 1A4050100000900000000340
  • 1A4050100000900000000339

The following products sent to the provisioning centers listed are subjects to the recall:

Mary’s Transdermal Indica Patches

  • 5 & Dime
  • Compassionate Care by Design
  • Om of Medicine
  • 3843 Euclid, LLC – Dispo
  • Montrowe, LLC – Greenhaus
  • Exclusive PR Center
  • Bloom City Club
  • Cannarbor, Inc – Arbors Wellness
  • Five Star Relief, Inc.
  • Green Skies – Far West, LLC
  • Green Skies – Hoover, LLC
  • Green Skies – Healing Tree, LLC
  • Utopia Gardens, LCC
  • Choice Labs – Ann Arbor Rd
  • The Green Mile Detroit

The Remedy Tincture-Mary’s

  • Bigfoot Wellness
  • 5 & Dime
  • Five Star Relief, Inc.
  • Choice Labs – Ann Arbor Rd
  • Choice Labs – Page Ave
  • 3843 Euclid, LLC – Dispo
  • 3843 Euclid, LLC – Dispo
  • Om of Medicine, LLC
  • Green Skies – Far West, LLC
  • Compassionate Care by Design
  • Green Skies – Healing Tree, LLC
  • Cannarbor, Inc – Arbors Wellness
  • Bloom City Club

Mary’s Transdermal Patches CBD

  • Montrowe, LLC – Greenhaus
  • 5 & Dime
  • Compassionate Care by Design
  • Om of Medicine, LLC
  • 3843 Euclid, LLC – Dispo
  • Exclusive PR Center
  • Bloom City Club
  • Green Skies – Far West, LLC
  • Green Skies – Hoover, LLC
  • Green Skies – Healing Tree, LLC
  • Utopia Gardens, LCC
  • The Green Mile Detroit
  • Cannarbor, Inc – Arbors Wellness

The Coltyn 1:1 Tincture

  • 5 & Dime
  • Five Star Relief, Inc
  • Choice Labs – Ann Arbor Rd
  • Choice Labs – Page Ave
  • 3843 Euclid, LLC – Dispo
  • Utopia Gardens, LCC
  • Exclusive PR Center
  • Green Skies – Far West, LLC
  • Green Skies – Hoover, LLC
  • Compassionate Care by Design
  • Bigfoot Wellness
  • Green Skies – Healing Tree, LLC
  • Bloom City Club
  • Cannarbor, Inc – Arbors Wellness
  • 5 & Dime

Mary’s Transdermal 1:1 Patches

  • Compassionate Care by Design
  • Om of Medicine, LLC
  • Exclusive PR Center
  • Bloom City Club
  • Five Star Relief, Inc
  • Green Skies – Far West, LLC
  • Green Skies – Hoover, LLC
  • Green Skies – Healing Tree, LLC
  • Cannarbor, Inc – Arbors Wellness

Original Post: 420 Intel Business: First Marijuana Recall Issued for Michigan

Oregon’s Marijuana Industry is Creating More Jobs than its Tech Sector

Oregon’s Marijuana Industry is Creating More Jobs than its Tech Sector

Ed. Note: Portland is a hotbed of tech right now and cannabis is hiring more people. Not everyone who works in a cannabis shop is a techie, nor is everyone who works in a cannabis shop a stoner.

Oregon’s marijuana industry is adding more jobs to the economy than the state’s tech industry, albeit at a lower average wage rate.

Since 2007 – the beginning of the Great Recession – the economy of Oregon has added more jobs via the alcohol and marijuana industries than its popular technology sector, according to the state’s Office of Economic Analysis (OEA).

While the average wage for tech workers is still significantly higher than for alcohol or cannabis workers, the data underscores the state’s thriving alcohol and emerging cannabis sectors. Oregon state economist Josh Lehner noted that tech workers in the state earn three times higher than employees within the marijuana and alcohol sectors.

Oregon’s alcohol industry continues to boom in the state primarily because of the development of a cluster of brewery system manufacturers.

“So when a new brewery opens up elsewhere in the country, there is a good probability they are buying and using Oregon-made equipment,” said OEA’s Josh Lehner.

While the alcohol/weed and tech industries are not related or comparable in any form, their different abilities to create jobs is a talking point for further economic discussions. Lehner hopes that the marijuana industry in Oregon will develop like the state’s alcohol industry – into a cluster as well and similarly become a source for the national marijuana industry.

“Prices continue to plunge as the market matures and marijuana commoditizes,” Lehner revealed. “But increasing market activity in extracting oils, creating creams, making edibles in addition to hopefully building up the broader cluster of lab testing equipment, and branding and design firms, means Oregon will see a bigger economic impact from legalization.”

OEA’s employment data shows there are between 11,000 to 12,000 marijuana-related jobs in Oregon at the moment.

Original Post: 420 Intel Business: Oregon’s Marijuana Industry is Creating More Jobs than its Tech Sector

Researchers Unlocking the Mysteries of Marijuana in Colorado and Michigan

Researchers Unlocking the Mysteries of Marijuana in Colorado and Michigan

Ed. Note: Finally some research is being conducted by universities in Colorado and Michigan. We simply don’t understand what cannabis is, exactly what it does, how, and why. Research is being conducted to find out about a plant that’s a complete enigma to scientists. More money is earmarked for cannabis research in Michigan, when Proposal 1 passes.

The caterpillars are talking, and researchers at Colorado State University in Pueblo are listening as they explore the mysteries of cannabis. Questions are plentiful. Federal law hasn’t allowed much scientific research into this ancient plant, once widely shunned in the U.S. and now increasingly accepted.

Just what, exactly, makes cannabis tick? Its genetic code isn’t fully understood. A well-known, non-psychoactive chemical compound in cannabis called CBD has been shown to help relieve some seizures — there’s a federally approved CBD drug now — but what else can CBD or other cannabis compounds do?

It’s a question university researchers across the country have been tackling, including in Michigan. At the University of Michigan, medical marijuana has been studied for chronic pain management. Michigan State University studies are exploring how cannabis compounds might help protect the brain against inflammation caused by disorders like Parkinson’s and Alzheimer’s.

If Michigan voters in November approve Proposal I to legalize adult-use cannabis, at least $40 million more could go into research. Proposal I earmarks state marijuana tax money for clinical trials to study the use of marijuana in treating medical conditions of military veterans and preventing veteran suicide.

In Pueblo, experiments with caterpillars are pointing to potential new uses of the CBD compound. Could CBD act as a natural pesticide? Or could it be used to treat an alcohol hangover?

In one experiment, caterpillars ate up cannabis leaves that contained a little CBD but rejected leaves with high levels of the substance. Another experiment showed that the deadly effects of alcohol on caterpillars appeared to be mitigated by CBD.

“Somehow CBD rescued the insect from alcohol toxicity,” Sang Hyuck Park, senior research scientist at the Institute of Cannabis Research at CSU Pueblo, said.

He muses about where that information ultimately could lead — perhaps treating or preventing a hangover? But much more research would have to be done, maybe next in mice, then maybe in humans. “Our ultimate goal of this research is for the human application,” he said.

Park is thinking about many possible health benefits from CBD, which he says is already known for anti-inflammatory, pain relief and other properties, as well as for seizure relief. In June, the Food and Drug Administration approved the first cannabis-derived drug to treat some seizures caused by epilepsy, a CBD oral solution called Epidiolex. Park also is conducting research that looks at how CBD might affect metabolism, which could have implications for managing diabetes.

Park’s work is among a dozen or so projects underway at the Institute of Cannabis Research, which was founded in 2016 at this Colorado State University extension campus in Pueblo, about two hours south of Denver.

Institute director and chemistry department chair Chad Kinney said cannabis research is needed as more states legalize marijuana but the scientific evidence of its health or other effects remains scant.

It’s been difficult to study the plant in the U.S. because of its federal classification as a Schedule I drug, meaning it’s considered highly addictive and of no known medical value. Schedule I includes other drugs like heroin and Ecstasy.

But the 2014 Farm Bill opened the door for more research on industrial hemp, the non-psychoactive type of cannabis, Kinney said.

No federal money has come through for research, according to Kinney, but the state of Colorado provides the institute’s annual budget of $1.8 million.

Pueblo County gave the institute $270,000 in 2016 marijuana tax money to study the effects of legal cannabis on the community. The study, published at the end of 2017, looked at education, jobs, law enforcement, and economic impact, among other things. Researchers estimated a net positive impact on the county of more than $35 million from retail marijuana, but in general noted difficulty in determining impacts because of a lack of long-term data. Colorado legalized adult-use cannabis in 2012, and retail sales started in 2014.

The cannabis institute, meanwhile, is delving into an array of other research projects, including the labeling of marijuana edibles (where there seems to be widespread confusion), using hemp fibers in 3-D printing, and growing hemp to clean contaminants from the soil.

Another significant piece of research is mapping the DNA sequence, or genome, for cannabis.

“I would say this is one of the most important things because of all the repercussions and all of the future endeavors that are available once you have a reference genome,” botanist and researcher Brian Vanden Heuvel said.

Park said knowing the DNA sequence could, for example, lead to genetic modifications that boost certain traits, such as stronger hemp fiber or levels of chemical compounds like CBD or THC (the psychoactive substance found in marijuana). Genetic tweaks could make the male cannabis plant — which is generally weeded out after pollination — produce something growers desire, he said.

All those possibilities are stored inside the genome, if researchers can unlock it. “Having that blueprint,” Vanden Heuvel said, “can be very important in changing how we view cannabis and what we can do with cannabis.”

Original Post: 420 Intel Business: Researchers Unlocking the Mysteries of Marijuana in Colorado and Michigan

As Canada Makes Marijuana Legal, the U.S. Resorts to Prohibition-inspired Tactics

As Canada Makes Marijuana Legal, the U.S. Resorts to Prohibition-inspired Tactics

Ed. Note: This story makes us furious. I can hear Customs and Immigration talking to Canadians as they cross the border. We are not surprised by this. Our draconian administration is just plain stupid. We’re saddened by this because it’s a reversal to an earlier time.

America’s own history reveals the depths of its reportedly old-fashioned approach to sharing a border with a nation where weed is legal.

As Canada hurtles towards the date that weed is legalized federally on Oct. 17, there remain a lot of unanswered questions amid a fraught patchwork of laws and regulations that depend on your province, your city, even your condo.

Big change like this often is awkward, and laws have to catch up. But it’s also raised serious questions about how legal weed will play out at the United States border. Obviously, bringing any weed into the U.S.—even small amounts for personal use—is just as illegal as ever.

But recent reports have suggested that U.S. border services might also deny entry to Canadians who tell them they’ve ever consumed marijuana, worked in the Canadian marijuana industry, or even have investments in pot stocks. Perhaps the most alarming scenario involved border agents checking Canadians’ credit card data—accessible to them if it’s stored on an American server—to check if the prospective border-crosser ever bought pot with plastic.

If these policies feel archaic and draconian, straddling the fine line between absurdity and inexcusably intrusive in how it would affect everyday Canadians’ ability to cross the border for family or work, your instincts are right. After all, they have plenty of echoes of the last time Americans have worried that Canada posed a threat to the moral health of the people of the United States, resulting in tensions at the border.

During Prohibition from 1920 to 1933, key anti-alcohol forces in the U.S. devoted considerable energy into pressuring Canada to change its drug policy, even often overstepping its jurisdiction, all for the sake of preserving American morality.

For 25 years, the Anti-Saloon League (ASL), the American anti-alcohol group, took aim at a most ambitious goal: changing the U.S. Constitution. It sought to ban the manufacturing, transport, and sale of intoxicating liquors—and in 1919, Congress officially passed the 18th Amendment, doing just that.

It was a crowning achievement for an organization that had successfully transformed a women-led grassroots temperance movement into a powerful, well-financed lobby group that effectively invented “pressure politics.” And riding the high of accomplishing this seemingly impossible feat, the ASL turned its sights to global domination, immediately establishing the World League Against Alcoholism (WLAA), a group designed to pressure the rest of the world to follow America’s example. First stop? Canada.

At that point, Canada was already mostly dry itself, owing to the War Measures Act, which had suspended some normal rights including drinking. But unlike the U.S., Canada had no hard-and-fast, permanent federal law around alcohol, so provinces were free to settle their own fate after the Armistice, and Quebec’s “prohibition” was the first to be called off in 1919.

The ASL’s argument was that there were serious practical border issues around this, from smuggling to Americans being tempted to take a quick weekend trip to Montreal for an alco-holiday. As the prolific and militant ASL activist Ernest Cherrington wrote in his 1922 book, America and the World Alcohol Problem: “The boundary line between Canada and the United States extends for 3,898 miles … The single province of Quebec, Canada, on our northeastern border, imported, during the fiscal year 1921, more Scotch whisky than had been imported into that province during the entire 10 years proceeding.” That whisky, he argued, wasn’t for Quebecers’ personal use, but was just passing through on its way to southern Ontario, where he claimed that 1,000 cases of contraband liquors were smuggled across to Michigan every 24 hours.

Cherrington used this shocking (and frankly, suspicious) argument to justify the location for the WLAA’s 1922 convention—Toronto. In November 1922, the WLAA held a five-day event that the Toronto Star dubbed a “monster temperance convention,” thanks to the many foreign and local dignitaries in attendance—delegates from 20 countries, including Japan, Peru and Finland, as well as Toronto Mayor Alfred Maguire, Ontario Governor Harry Cockshutt and, of course, Cherrington himself. There were keynote speeches, banquets at the King Edward Hotel, public health seminars, and prayers, plus a seminar by a lawyer on the “Ways and Means of Securing Action Through Government Officials for the Enforcement of Law”—a crash course, effectively, in how to pressure local police and city politicians into making more arrests.


Liquor is unloaded from rum runner boat Mary Mother Elizabeth after it was seized by the Coast Guard at Jones Inlet on Dec. 10, 1929.

But the convention didn’t work. Instead, by 1925—just three years after the WLAA event—Ontarians were quaffing back Fergie’s Foam (4.4 per cent beer made legal by Premier Howard Ferguson) and, two years after that, witnessed the introduction of retail liquor stores, leaving only two dry provinces (P.E.I and Nova Scotia). The tables had turned on Prohibition and the ideas that fuelled it in Canada; one political poster framed it as a victory for progressives, who had seen the “falseness and dishonesty” of Prohibition, which had been built on a “foundation of bigotry and intolerance.”

That aspect of Prohibition—that it was a pretext to increase surveillance and incarceration of minorities—wasn’t just dawning on Canadians. Every violent day in the United States made it clearer that bigotry was built into the booze ban. Consumption was legal in private homes and the rich could afford to pay fines when caught in public, while minorities who couldn’t afford the fines were being jailed. In places with uneven enforcement, the Ku Klux Klan’s night riders even took it upon themselves to raid speakeasies and burn crosses on the lawns of Italians and Jews who were suspected of being bootleggers.

But despite the chaos and the increased social-justice arguments against Prohibition, U.S. President Herbert Hoover’s administration refused to back down. Instead, he increased penalties at home, putting pressure on foreign governments to cooperate and encouraging more aggressive law enforcement.

These U.S. edicts led to regular skirmishes on the Great Lakes and in border towns in Quebec and the Prairie provinces, as Americans chased smugglers into Canadian territory where they had no jurisdiction. And tensions between the two countries on the issue continued to climb, with relations already a little tense for most of the 1920s, thanks to spats over immigration and trade.

But then, in 1929, one such conflagration led to the sinking of the I’m Alone—a Canadian rum-running vessel in the Gulf of Mexico, some 200 miles outside of American waters, killing Canadian boatswain Leon Mainguy. Although the diplomatic correspondence was “moderate and friendly,” according to a front-page article in The Globe, Canadian authorities, in consultation with the British, were debating whether or not the sinking was authorized by the U.S. government—which would have made it an act of war—or simply a case of Coast Guard agents gone rogue. Ultimately, it decided, despite Canadian resentment, to arbitrate, and the issue was finally settled six years later.

Americans didn’t just go beyond their jurisdiction in international waters. The U.S. Bureau of Prohibition sought to station its agents on Canadian soil so that they could gather intelligence about departing shipments and alert colleagues on the other side of the Great Lakes that a boatload of booze was headed their way.

On this, however, Canadian authorities said yes. This was followed up by reports of gunplay on the Canadian side of the Detroit River, as the Coast Guard opened fire—at least once with machine guns—on two separate suspected rum-runners. The city council in La Salle, Ont., condemned the American officers for excessive force, pointing out that in Canada, “good … officers catch rum-runners without firearms.”

And one parliamentary session in the House of Commons in 1930 saw members demanding an accounting of the number of ships destroyed and Canadian citizens “murdered” by U.S. agents—a debate that made the American news, too. People were horrified about excessive force and the fact that this American drug war was being exported to Canada—but it also became a question of Canadian sovereignty.

The irony of the manoeuvres in Canada is that, despite the presence of rum-runners, most of the liquor Americans drank didn’t come from here. In the beginning, far more would have come from the United Kingdom and France, via St. Pierre and Miquelon.

When that slowed down, American ingenuity took over, and bootleggers started making counterfeit spirits from industrial alcohol, which almost certainly wound up with a bigger market share than genuine contraband liquor. The same, of course, is true with weed: As Eric Schlosser uncovered in his 2003 book Reefer Madness, more weed is grown domestically in America than is smuggled in from Canada, Mexico, or anywhere else.

As we anticipate a seemingly parallel drug policy chasm looming around marijuana, the Prohibition episode is instructive: It’s possible that, in time, reason will prevail in the U.S. on the issue of marijuana. After all, recreational use is already legal in nine states, and people like Cynthia Nixon, who was defeated this summer by Governor Mario Cuomo in New York state’s Democratic primary, are openly calling decriminalization a racial-justice issue, bringing the underlying logic of drug laws out into open discourse.

But while we wait, we should steel ourselves for more tensions at the border. It’s not just a matter of history repeating: once we understand that drug laws are at least as much about providing a pretext for stop-and-search as they are about actually stopping the trafficking of drugs that are, after all, grown in mass quantities on both sides of the border, it’s hard not to expect them to be used in full force now. That’s especially true since the border is already a hot-button issue in trade, security and immigration debates.

And the Prohibition episode offers a warning, too: that anti-drug advocates, in their zealotry, seem to have about the same amount of respect for sovereign countries’ drug policy choices as they do for the civil rights of their own citizens.

Which is to say, remarkably little.

Original Post: 420 Intel Business: As Canada Makes Marijuana Legal, the U.S. Resorts to Prohibition-inspired Tactics

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