Efforts intensify to battle corruption involving local Government Officials and cannabis industry

Law enforcement authorities across the country, including the FBI, have cast a wide net in their efforts to root out corruption among local government officials overseeing the marijuana industry.

The crackdown has ensnared local government and cannabis industry officials in states such as California, Massachusetts and Michigan. Charges have included bribery and extortion.

While claims of licensing bias and flawed scoring are more common, an examination of the landscape suggests that there have been a number of blatant efforts over the years to improperly influence public officials into awarding highly coveted marijuana licenses.

Such corruption, combined with flawed and biased licensing, undermines the process, hurting the opportunities for businesses that play by the rules, industry experts warn.

In California, for example, local corruption became enough of an issue last year that it was identified as a hurdle for marijuana business license seekers in the newly regulated state.

Elsewhere, Nevada’s cannabis licensing director recently was placed on administrative leave after allegations of bias and improper conduct arose during court hearings related to complaints from unsuccessful applicants about a recent licensing round. He is no longer with the state’s Department of Taxation, which oversaw the cannabis industry.

And in Fall River, Massachusetts, at least four business owners allegedly paid a total of $600,000 in bribes to win Mayor Jasiel Correia’s support of marijuana license applications.

Correia recently pleaded not guilty to multiple federal corruption charges.

Some marijuana industry officials have welcomed the stepped-up enforcement.

“If we want to be a legal industry, we need to act like it,” said David McPherson, who leads the cannabis consulting team at California-based HdL Cos. “Let’s be transparent and make it professional.”

He said the industry should demonstrate that it has nothing to worry about. And if the FBI finds something, “then let’s clean it up.”

The Fall River case, in fact, is one of a number nationwide that federal authorities have investigated in recent years as part of a probe into public corruption in the marijuana industry.

The FBI highlighted its investigation in a recent podcast, during which it also solicited tips from the public.

Douglas Berman, director of Ohio State University’s Drug Enforcement and Policy Center, wrote in a recent email to Marijuana Business Daily that the FBI podcast “may be a way to urge licensing officials to be sure to play by the rules.”

Here’s a roundup of some of the high-profile alleged marijuana corruption cases in recent years:

Arkansas

The limited medical cannabis business licensing in Arkansas has spawned a number of lawsuits as well as an ethics complaint against a commissioner who did some legal work for an applicant.

But one of the most curious cases involved an allegation that an MMJ cultivation applicant tried to bribe a member of the Arkansas Medical Marijuana Commission. The allegation surfaced in a letter to the Arkansas Supreme Court from state Attorney General Leslie Rutledge.

The commissioner, Carlos Roman, in turn was criticized for giving a high score to the applicant, and some accused Roman of sharing information to help the company with its application. He denied doing so.

The Arkansas Democrat-Gazette obtained a video of a meeting between the commissioner and the applicant.

In the video, the businessman can be heard telling Roman he appreciated his help and adds, “If I owe you something, let me know.”

The commissioner responds that a kind word to the state Senate President that he should be reappointed would be sufficient. Roman told the newspaper he reported the incident to the FBI.

Roman completed his term and wasn’t reappointed. A state MMJ spokesman said Roman isn’t under investigation.

Arkansas had no rule banning private discussions between a commissioner and a marijuana license applicant, according to the newspaper.

California

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 assist a marijuana business in obtaining a license.

Wright pleaded not guilty. His trial has been scheduled for Feb. 25, 2020.

The FBI in May 2018 raided the home of then-Adelanto Mayor Rich Kerr as well as a marijuana dispensary as part of an ongoing probe into the city’s relationships with cannabis businesses. No charges have been filed against Kerr.

Kern County, California, Supervisor Leticia Perez was charged last year with two misdemeanors relating to alleged conflict of interest violations. She pleaded not guilty to the charges, claiming they are based on political retaliation and are racially driven.

One charge stemmed from a vote on a marijuana issue in which her husband, a cannabis lobbyist, had received $25,000 from a company to arrange meetings with county officials.

Massachusetts

Earlier this month, two Massachusetts men pleaded guilty in federal court to charges that they extorted money on behalf of Correia, the Fall River mayor, from companies seeking to obtain recreational marijuana cannabis licenses.

Correia, as noted earlier, faces federal corruption charges, which he denies.

He refused to step down despite being voted temporarily out of office by the City Council. The City Council has sued to remove Correia from office.

Michigan

Three family members – Mike Baydoun, Ali Baydoun and Jalal Baydoun – pleaded guilty to federal charges related to a bribery scheme to get a medical marijuana dispensary and cultivation facility licensed in Garden City, west of Detroit.

One of the men allegedly handed a city official an envelope containing $15,000 – $5,000 for each of three council members. The official turned the envelope over to the FBI.

Prosecutors said the men were willing to pay as much as $150,000 to get the permits approved and also offered city officials a 25% cut of the profits in return.

Concerns about potential corruption prompted then-Michigan Gov. Rick Snyder to request that state police investigate whether regulators were taking bribes in exchange for medical marijuana licenses.

New U.K. clinical trials explore CBD as treatment for Parkinson's-related psychosis

Researchers in the U.K. are planning clinical trials that may give new hope to sufferers of Parkinson’s and their families.

The trials will examine the effects of cannabidiol (CBD), a psychoactive but non-intoxicating compound derived from the cannabis plant, on Parkinson’s-related psychosis, which can include terrifying symptoms such as delusions and hallucinations.

The small preliminary study, which is to be led by King’s College London and will be funded by Parkinson’s U.K., is set to begin in 2020.

The trial will be composed of two parts. After establishing the most effective dose of the cannabinoid in the first stage (up to 1,000 mg of CBD), 120 patients will be recruited for the second stage, with 60 patients being administered CBD via capsule and 60 receiving a placebo.

King’s College scientists will then administer numerous tests, including neuroimaging, to assess the potential efficacy of the treatment. The trial will run for 12 weeks.

Parkinson’s U.K. has pledged £1.2 million for the second phase of the trials.

Professor of neuroscience and psychiatry Dr. Sagnik Bhattacharyya and clinical researcher Dr. Latha Velayudhan will lead the study.

“The study will also look at the effect of CBD on other symptoms, which will pave the way for scientists to investigate the potential of the compound in treating these in future studies,” Dr. Bhattacharyya stated. “We hope this will progress to large-scale clinical trials—the final step towards becoming a new treatment that will improve the lives of people with Parkinson’s,” he added.

Parkinson’s U.K. director of research Dr. Arthur Roach concurred. “There are many unanswered questions about the value of CBD for people with Parkinson’s,” Dr. Roach said in a news release.

“But this trial will help us to determine whether it can help with the debilitating symptoms of hallucinations and delusions. If successful, this trial could result in people with Parkinson’s being able to access a regulated medicine, rather than reverting to expensive unregulated supplements that haven’t been monitored for their effectiveness,” he said.

How CBD blocks the paranoia and anxiety from marijuana’s THC

A common refrain from those who abstain from marijuana consumption is that smoking weed gets them paranoid. The green stuffs turns their brain red, blasting their synapses with anxiety and panic.

Neil Young has some pretty good advice if this happens to you. “Try black pepper balls if you get paranoid. Just chew two or three pieces,” Young told Howard Stern back in 2014. “I just found this out myself.”

But a new study published in the Journal of Neuroscience suggested you consume something else—cannabidiol, or CBD. Using rat models, researchers discovered those paranoid thoughts you might experience while smoking marijuana is no apparition. THC, the psychoactive cannabinoid in marijuana, stimulates a molecule located in the brain’s hippocampus, where memory, learning and emotional associations are often stored.

When that molecule is triggered, the study found, it can have side effects of anxiety, depression and addictive behaviours.

Scientists then tried giving rats CBD and THC simultaneously and discovered lower levels of anxiety and paranoia. In addition, the molecule in the hippocampus, called extracellular-signal regulated kinase (ERK), maintained normal levels of activity. To put it more clearly, CBD blocked the negative side effects that marijuana’s THC can typically cause.

“Our findings have important implications for prescribing cannabis and long-term cannabis use. For example, for individuals more prone to cannabis-related side-effects, it is critical to limit use to strains with high CBD and low THC content,” said researcher and professor Steven Laviolette.

That said, these scientists didn’t find lower levels of ERK and anxiety when administering CBD on its own. As the Western University researchers told Global News, CBD and THC is a combination that operates best in unison.

“However, by co-administering CBD and THC, we completely reversed the direction of the change on a molecular level,” the study’s lead author Roger Hudson said. “CBD was also able to reverse the anxiety-like behaviour and addictive-like behaviour caused by the THC,” Hudson said.

Maine farmers look to reap benefits from hemp industry

After years of prohibition, federal regulations have made it legal to grow hemp in the U.S. again, and many Maine farmers hope to cultivate success in this fledgling market.

Though hemp comes from the marijuana plant, by itself it does not have the same effect.

Since the December enactment of the 2018 Farm Bill, which declassified hemp as a controlled substance, the number of hemp growers in Maine has grown exponentially.

According to figures from the state’s department of Agriculture, Conservation and Forestry, in 2016 – the first year Maine issued growing licenses – there were two licensed growers for 0.25 acres. In 2019, there are roughly 170 licensed growers for 2,700 acres. The counties with the most grow sites are Somerset, with 42, and Oxford, with 25.

According to the National Hemp Association, about 90,000 acres of industrial hemp are being grown across the country.

“Hemp can grow nearly anywhere in the world, in many types of soil – even in short growing seasons or in dry regions – and helps purify soil as well as kills some types of weeds,” according to the association’s website.

The FDA is still drafting rules on how hemp products will be regulated. According to John Jemison, an agronomist with University of Maine Cooperative Extension, valuable research hasn’t been conducted in recent decades because it was illegal.

“We know some of what we need to know to grow it,” Jemison told Maine Public Radio. However, research is lacking on best soil properties, pest management, plant spacing, harvest times and cost reduction opportunities.

“I wish we could have put the horse before the cart and done all the legwork – really known what it was supposed to do – and then been able to teach farmers, ‘This is what you need to do,’” Jemison said.

Maine law requires that industrial hemp be planted using a certified seed source, for example, in accordance with standards set by the Association of Seed Certifying Agencies, and comes from plants with 0.3 percent THC content or less.