Law Michigan MMJ

[Baron23]

“I am a corrupt politician,” Johnson told the judge.

Now this ^^ is the definition of redundancy.


Former Michigan Marijuana board Leader is sent to prison for bribery

Rick Johnson admits he took at least $110,000 in bribes as head of a state marijuana licensing board.​

A man formerly known as a powerful Michigan lawmaker was sentenced Thursday to nearly five years in federal prison for accepting bribes as head of a marijuana licensing board.

Rick Johnson admitted accepting at least $110,000 when he led the board from 2017 to 2019.

"He built an elaborate system to conceal these bribes, that included burner phones, multiple LLCs, and cover stories. He received at least $110,200 in the form of direct payments, luxury travel and commercial sex," said U.S. Attorney Mark Totten for the Western District of Michigan.

“I am a corrupt politician,” Johnson told the judge, according to The Detroit News.

Johnson was a powerful Republican lawmaker years ago, serving as House speaker from 2001 through 2004. He then became a lobbyist, and ultimately chair of a board that reviewed and approved applications to grow and sell marijuana for medical purposes.

"He injected corruption into an emerging, promising new industry, where getting a head start could make all the difference. Public Corruption is a very serious crime," added Totten as he spoke to reporters outside the federal court house following the sentencing.

U.S. District Judge Jane Beckering sentenced Johnson to about 4.5 years in prison.

“You exploited your power, and you planned it out even before you got the appointment,” Beckering said.

Totten said he is satisfied with the sentence, and explained that Johnson's 55 months is above the national average for bribery, which was 23 months in 2022.

Next to Totten was Peter Ellis, Acting Assistant Special Agent in charge for the FBI in Michigan, who commented on the importance the FBI places on investigating corruption.

"Public corruption is FBI top priority, and FBI along with the attorney's office will continue to seek out individuals who undermine the public's trust," said Ellis.

Two lobbyists who referred to Johnson as “Batman” in text messages have also pleaded guilty to bribery-related charges. A Detroit-area businessman who paid bribes, John Dalaly, was recently sentenced to more than two years in prison.

Prosecutors had recommended a nearly six-year prison term for Johnson. In a court filing, they said one of the lobbyists paid for him to have sex with a woman.

“Rick Johnson’s brazen corruption tainted an emerging industry, squandered the public’s trust and scorned a democracy that depends on the rule of law,” Totten said after the hearing.

After Johnson's sentencing, Totten sought to warn of the threat corruption poses to the democratic process.

"Those who play by the rules, they're left behind or hurt. The public begins to lack confidence in our public institutions, and people kind of lose hope and why they might participate in the democratic process," said Totten.

Ellis also encouraged the public to contact the FBI by phone or online if they have any information concerning public corruption.

Michigan voters legalized marijuana for medical purposes in 2008. A decade later, voters approved the recreational use of marijuana.

Gov. Gretchen Whitmer abolished the medical marijuana board a few months after taking office in 2019 and put oversight of the industry inside a state agency.

 

[momofthegoons]

Michigan Removes Pre-Employment Marijuana Testing For Most Government Employees​

The era of pre-employment marijuana screenings for most would-be state workers in Michigan officially came to a close on Sunday as a code change approved in July took effect.

The change is the result of an amendment unanimously approved in July by the Michigan Civil Service Commission, which also gives people who’ve already been penalized over positive THC tests an opportunity to have the sanction retroactively rescinded. Commission Chair Jase Bolger said at the time that the intention is to treat cannabis more like alcohol.

A person who either “overindulges in alcohol” or uses marijuana on a Friday night is “likely not under the influence of either” when they come back to work on Monday, he said, “so we’re going to treat them the same.”

The reform was first proposed in May, with commissioners opening up a public comment period to solicit feedback. It amended language that said state agencies must drug test applicants for cannabis and other Schedule I and II substances by adding an exception saying that “appointing authority shall not require testing for marijuana for a pre‐employment drug test of a new hire to a position that is not test‐designated.”

Some jobs will still require applicants to be tested, including those requiring a commercial driver’s license or operating heavy equipment or machinery, law enforcement and corrections officers, healthcare providers, people working with controlled substances and positions involving hazardous or explosive materials.

It’s estimated that just under a third of state jobs—about 14,000 of 48,000 positions—will still require testing.

It will also remain a civil service violation to be at work under the influence of marijuana, with testing permitted in circumstances where at-work impairment is suspected.

The commission in July also addressed what it described as a “related issue” under the code. The prior rules made it so people who test positive for cannabis as part of an application process for classified positions lose their conditional offers of employment and face a three-year ban on applying to other state agencies.

Under the new rule that the commission adopted, “a person with an active three‐year sanction based on a positive result for marijuana from a pre‐employment drug test for a non‐test‐designated position may request the sanction’s prospective rescission as provided in the regulations.”

In 2022, the state denied 151 people who had already received conditional job offers after they tested positive for marijuana, according to The Detroit Free Press, which raised the issue in February as the state faced difficulties filling a large number of jobs.

As a result of the rule change, just over 200 people who are currently barred from state government jobs can now become eligible by emailing officials, the paper reported.

Michigan voters approved adult-use marijuana legalization in 2018, with legal sales beginning the next year.

In 2021, Michigan Attorney General Dana Nessel (D) submitted a legal opinion to another state commission, arguing that residents fired from the jobs for marijuana use outside the workplace are still eligible by law for unemployment benefits.

Between adult-use and medial marijuana sales, Michigan sold nearly $277 million in cannabis products in July, beating a record set the month before.

The state is seeing these consistent record-setting sales even as the average cost of marijuana has remained at record lows, with the price of an ounce for adult-use cannabis now hovering around $98. In December 2021, by contrast, the cost of an ounce was about $180.

Meanwhile a bill recently introduced in the legislature would legalize psychedelic plants and fungi so long as activities like cultivating and distributing the substances are done “without receiving money or other valuable consideration.”

And earlier this month, state lawmakers called on the U.S. Congress, Department of Defense and Department of Veterans Affairs (VA) to prioritize research and investment in “non-technology treatment options”—including psychedelics—to treat psychological trauma from military service.

 

[Baron23]

‘We own the board’: Court documents detail Michigan Medical Marijuana bribery scandal ​

Pot is now legal in Michigan, although lots of laws were broken in issuing the first licenses to sellers and growers.​

Two additional bad actors were sentenced today in connection with a brazen bribery scandal.


The person who admits accepting the bribes is Rick Johnson—a former Speaker of the Michigan House of Representatives who became chair of the Michigan Medical Marijuana Licensing Board in June of 2017.


Johnson went on to receive 38 illegal payments over the next 28 months from lobbyists representing medical marijuana license applicants.


The total amount received was over $110,000.


According to court filings, the bribes came in the form of direct payments, private plane trips to Canada, and even a $2,000 payment for commercial sex between Johnson and a woman in the adult entertainment industry.


Court documents further indicate that Johnson set up elaborate systems to conceal the bribes that included burner phones, multiple LLCs, and cover stories. For instance, Johnson’s wife was paid $2,000 per month for bookkeeping services she never performed.


Johnson and the medical licensing board had the power to decide which marijuana sellers and growers were going to be the first to operate legally in Michigan at a time when a marijuana license was seen as a “golden ticket.”


“What is ringing through my mind is the words, four words from a text message that Vince Brown sent to one of his clients, when he said, ‘We own the board,’” said U.S. Attorney Mark Totten upon leaving the courtroom in Grand Rapids. “Now, in fact, he didn’t own the board, but he did own the chair of the board, and for $40,000 and some free commercial sex, they owned Rick Johnson. The problem with that is obvious. No one should ever own an elected official.”


Two of the lobbyists involved in the scandal were sentenced today. Vincent Brown received a 20-month sentence, while Brian Pierce received 24 months behind bars.


Johnson was sentenced last month to 55 months. He’ll begin serving that sentence on Dec. 2, after he has recovered from a recent heart surgery.

 

[Baron23]

First, none of these celebs grow even a gram of this flower. Nada, zip, zilch. Its just a licensing scheme and in the case of Nelson, he doesn't even manage the licensing...he contracted his name out to a company that does...well, yeah...licensing.

And its not even the same product in diff parts of the country. They license the name/likeness to growers in states that are legal. We have Nelson's stuff here in Maryland but I've not seen Tyson's (but it may be here).

I feel the same about celeb liquor brands....they don't distill it, they don't know shit about it, so why would I buy it because they own the company or licensed their name/likeness.

Willie Nelson, Mike Tyson step into Michigan Marijuana market as celebrity brands bloom ​

Willie Nelson's cannabis brand Willie's Reserve is now sold in Michigan.​

What’s in a name?


An aging hippie from Texas hill country and mainstay in the "Outlaw Country" music synonymous with weed culture is, perhaps to no surprise, a growing cannabis brand name in Michigan.


Willie’s Reserve, a marijuana licensing company started by singer and songwriter Willie Nelson in 2015, is among the latest celebrity brands to grace Michigan dispensaries — when they can keep it on the shelves.


Green Stem, a dispensary in Niles in Southwest Michigan, sold out of its first shipment last month of Willie’s Reserve — nearly 32 ounces of flower and 160 joints — in less than 36 hours.


“People have started to have it with celebrity brands,” said Katie Lindgren, brand director at Green Stem. “If the product isn’t good or doesn’t stand up in the culture … weed people, all weed people — soccer moms, teachers, just about anybody that consumers cannabis regularly — can tell who is a poser. If they aren’t picking up the vibe, that brand doesn’t last.”


Celebrity brands come and go in the cannabis space just like in regular retail goods, but the industry is beginning to find success under certain names as consumers are faced with an overwhelming number of choices at the store and operators look for a way to stand out.


“At the end of the day, the name gets your foot in the (consumer) door once,” said Hilary Dulany, chief marketing officer for Aardvark Industries, which as the exclusive licensing contract for Willie’s Reserve. “It’s the experience that keeps them coming back. You have to have some of the best cannabis behind the name, or you’re done.”

Roll me up​

Dulany and her family are no strangers to licensing. The family owned Tony Sacco’s Coal Oven Pizza franchises in 13 states before entering the cannabis market, including a location in Eastwood Towne Center in Lansing. They’ve since sold the restaurants.


Dulany said Aardvark Industries was established in Michigan in 2019 — it previously operated in Oregon before exiting that market for Michigan — and began selling its own weed under a licensing deal with Cheech’s Stash in the fall last year. The brand is owned by famed Cheech and Chong actor and comedian Cheech Marin.


The brand was an instant success for Aardvark, but immediately limited its ability to diversify.


“Within three months of selling Cheech, we were selling out,” Dulany said. “We were selling all of the product even before our testing came back. It was a problem.”


The company operates a 500-plant grow operation in Dewitt in mid-Michigan. The Cheech brand was accounting for everything the cultivator could produce.


“In our industry, every segment of the vertical can pivot except a single source grow,” Dulany said. “They are like freightliners; they take six months to correct. We needed a solution. Few growers our size have a marketing budget, so we needed something that could market itself and operate on exclusivity.”


So while the company grows 100% of Cheech’s Stash, it turned to other growers to supplement volumes for other brands. Today, Aardvark manages smaller output for Willie’s Reserve, planning to only sell around 70 pounds of product under the brand in November and 100 pounds in December.


Aardvark only grows 25% of Willie’s Reserve.


“We don’t ever want this to be a mainstream brand,” Dulany said. “We want it to be found in a really good retail. We take those relationships seriously. We find a retailer and give them Willie’s exclusively in their region and don’t sell to other retailers around them.”


Green Stem sells many celebrity-branded cannabis options, including Blues Brothers from Belushi Farms and Garcia Hand Picked, the brand owned by the family of late Grateful Dead singer Jerry Garcia.


“We sell quite a few celebrity brands because they play well in our area,” Lindgren said. “Mostly because of the over-the-border clientele.”


Lindgren said many of Green Stem’s customers hail from Indiana, where marijuana remains illegal, and Illinois, which is hamstrung by high taxes and limited availability. Those consumers may not be immediately familiar with Michigan’s marijuana brands, but instantly recognize celebrity names.


The retailer sells 75 pounds to 125 pounds of marijuana products to an average of 4,800 people a week.


“We are able to communicate very well with our clientele about what brands are coming out and what celebrity brands are worth buying,” Lindgren said. “We are owners who consume. We pride ourselves on being standup drug dealers.”


Mike Bites are Mike Tyson-branded cannabis gummies in the shape of a chewed ear.

Punch up, punch out​

While Aardvark is focusing on exclusivity of the Willie name, one of the state’s largest vertically-integrated operators is building on volume and name recognition.


Marshall-based Common Citizen recently launched Mike Tyson’s marijuana brand at its own retailers, including Liv Cannabis, and others not owned by the operator. The company currently grows, processes and sells Mike Bites, which are gummies shaped like an ear with a bite taken out — an ode to Tyson’s fight against Evander Holyfield for the heavyweight championship where Tyson bit a one-inch chunk out of Holyfield’s ear, a move he did late in the match that resulted in his disqualification.


Coincidentally, Tyson and Holyfield now jointly license a gummy product around Christmas called Holy’s Ear.


Mike Elias, CEO of Common Citizen, said he long fought against licensing a celebrity brand, but as retail shelves become overstuffed with different product, having Tyson on board gives a new way to differentiate.


“Look, this idea of licensing brands is an old age idea that manufacturing and retail has been doing since the beginning of time,” Elias said. “There is a sea of noise in the market. Walk into any retail store. It’s overwhelming from the options that exist. No one has really ever been able to stand out. When you walk in there isn’t always a brand that sticks out. There is differentiation and distinction. Mike Tyson’s name on the package is distinct.”


Elias said the Tyson label generates a 15% to 20% price tag lift for the same product under a different brand.


“Economically it makes a lot of sense for us,” he said. “Look at the gummies, Mike’s Bites. It’s Holyfield’s ear. It’s novel. People gravitate toward novel items. And it happens to taste amazing as well. It’s a great discussion point.”


The company is looking to expand Tyson’s product offerings to vapes and other products soon.


But Common Citizen isn’t rushing to license more celebrity brands.


“When you’re tying up product in your facility and dedicating it to a license brand and not your own, there’s a risk,” Elias said. “For us, all the noise means we want to wait to see how some of these brands stabilize in other states before we make any decisions. Doesn’t matter whether it’s a celebrity brand or a well-known brand like Wana or Kiva.”


Common Citizen produces and sells both popular out-of-state-created brands Wana and Kiva in Michigan.


Aardvark is going the other way. The company is in negotiations with an actor on an edible brand that Dulany believes will “be as big of news as Willie in our state.”


The company plans to build a stable of celebrity brands across Michigan.


“If too many show up and they are not represented correctly in the marketplace, it can get muddy,” Dulany said. “That’s why boots on the ground is so important. There aren’t a lot of celebrity brands that are going to work in the market, but it’s not about the brands, but who is marketing their brand. We know what people are looking for beyond just a name.”

 

[Baron23]

Just when you thought you had plumbed the absolute depths of politician's stupidity, you get this...FFS

One city's Cannabis Licensing day devolved into a footrace, now it may turn into a fight​

Footrace for Cannabis Licenses Sparks Controversy in Harper Woods, Michigan.​

This screen capture from a video last Nov. 1 shows would-be cannabis licensing applicants racing to be first in line in Harper Woods' first-to-file application system. One would-be applicant at the top left has fallen down.


Getting a local marijuana license in Michigan is supposed to be a competitive process.


Municipalities are required under state law to make the selections based on a competitive process that typically takes the form of a scoring system — often revolving around an applicant’s ability to invest in curb appeal or sustainable operations.


But in Harper Woods, the process devolved into a show of athletic prowess, much like issues are settled on the playground. With a footrace.


The outcome of that mad dash has created controversy as applicants who lost prepare potential lawsuits while the municipality moves forward with reviewing the race winners’ documents at a Feb. 28 planning commission meeting. Licenses could be issued soon thereafter.


The wild scene in Harper Woods is emblematic of a cannabis licensing regime where each municipality can create its own rules to allow some or many cannabis businesses. Now, several years into legalization, fewer and fewer towns are opening up to legal weed, and that has amped up competition when licenses do become available.


Whether the footrace abides by state rules that forbid “arbitrary” licensing processes is up for debate. A city hall employee who did not give her name told Crain’s by phone that the city did not host a sanctioned footrace to determine whose planning documents would be reviewed and that the process was simply a first-to-file system.


But to those that participated, those who sprinted from the parking lot to the back door of Harper Woods City Hall that day, it was only the fastest that are being rewarded.


Emails sent to the mayor, every City Council member, the city manager and both economic development officials were not returned. Attempts to reach the mayor, city manager and economic development office by phone were not successful.

"A total ruckus"​

The event that turned into a race started with Harper Woods City Council’s decision to limit cannabis licenses and the method by which it would decide who received those licenses.


The city settled on three available dispensary licenses and decided it would abstain from scoring applicants and instead settled on the seemingly simpler approach of choosing those that filed their planning documents first.


It’s not a new method. Other cities, including Garden City and Westland, used the first-to-file method as their competitive process as well, seemingly without hiccup.


But there was no footrace in Garden City. Instead, applicants secured their spot in line outside city hall days before the city took review documents, like concert ticket buyers of old.


Harper Woods, however, didn’t want applicants “loitering” on city grounds, as it said in a list of rules for filing obtained by Crain's. Instead, it chose to squeeze the first-to-file process into one morning — on Nov. 1 last year.


The city's rules ordered applicants to arrive and line up in a specific way at a specific time. Participants were not allowed to enter the city hall parking lot until 8 a.m. Once there, they had to wait until 8:30 a.m. to line up at the city hall’s back door.


The first three applicants to that line, marked by chalked numbers on the sidewalk, would have their documents reviewed for licensure by the planning commission.


While a seemingly innocuous method to determine winners, the process incentivized participants to run, not walk, to secure a spot in line.


Pandemonium ensued.


“I’ve never seen anyone going for a business, trying to establish a business anywhere where a footrace is involved to get your doors open,” said Maj Dabish, owner of real estate development firm Heavy Industrial LLC. “You usually show your plans, you show your financials, you show things you’ve done in the past. That’s how these things get done. But instead there was running and people shoving and a total ruckus.”


Dabish has applied for a local marijuana license with intentions of leasing out his property at 19950 Kelly Road to a marijuana dispensary operator.


Dabish’s son, who joined him on that day, landed in the sixth spot in front of the city hall door after being pushed aside by other applicants, Dabish said.


Another applicant, who spoke to Crain’s on the condition of anonymity, finished fourth, just out of the running for planning commission review.


“This wasn’t a competitive process like the state demands,” the applicant said. “It was running a race. There was an elderly man there. That guy can’t run. This was a joke.”


The state Cannabis Regulatory Agency declined to comment on the happenings in Harper Woods.

Spinting for spoils​

Security video obtained by one of the applicants through the Freedom of Information Act and shared with Crain's shows a chaotic scene of applicants sprinting with their planning documents in arms and crashing into each other as they reached the city hall door. One applicant even fell in the parking lot and got up limping.


Some applicants realized ahead of time that running speed would wind up being a factor.


House of Dank, which operates nine dispensaries across the state, sent three runners, all with duplicate materials, to secure a Top 3 spot in line. It didn’t happen.


“We sent them down there early to scope the place out and figure out a strategy,” said Mike DiLaura, House of Dank’s chief corporate officer and general counsel. “But it’s awkward. No one knows when a race is supposed to start unless there’s a starting gun or something. It was pure chaos.”


Stephen Lindley, the city’s economic and community development deputy director, stood in front of the door, according to the video obtained by Crain’s. Numbers were chalked on the sidewalk to his right, according three people there that day who spoke to Crain's.


Once the rest of the applicants reached the door, there were shoves and jostling to get a space in line. On applicant had run from the side of the building, not the designated parking lot, per the rules, to secure the third spot in line, the video showed.


Crain’s has been unable to verify the identity of the first three applicants in line.


“I broke the rules every single way possible,” said an applicant who did not make the top three and asked not to be named due to their company still seeking a license in Harper Woods. “They gave us guidelines that said if the rules were broken, they’d do a random draw from a hat. We wanted that, because this clearly wasn’t a fair process. But they must have liked the outcome of the lineup because they didn’t even question the wrongdoing.”


Dabish said when people complained to Lindley about the process, he told several applicants they had weeks to prepare and that they could have had a faster runner show up. Dabish said Lindley said this to an elderly applicant.


Lindley did not return an email on the matter, and calls to city hall would not be connected to Lindley or the city manager.


“To walk away after years of negotiating for properties and dealing with rules changes, realizing you’ve lost all of that in 30 seconds, I’m at a loss for words,” DiLaura said. “Harper Woods put together a process that was doomed to fail. I’ve seen less malfeasance in this industry and more just dumbass decisions. It’s not bad faith, but bad lawyering and bad advice.”

Lawsuits threatened​

Travis Copenhaver, a partner at cannabis law firm Vincente LLP in Ann Arbor, said he warned the city about using an “arbitrary” selection process.


Copenhaver represents Altum LLC in its application for a dispensary in Harper Woods. Altum operates which operates a single dispensary in the state, Pure Canna in Lansing.


“We’ve been telling them there needs to be a merit-based system, but they kept sticking with this first-come, first-serve selection process,” Copenhaver said. “My clients have written why they have a problem with this, and I don’t think it’s too out of our way to say that if this method officially gets used, my clients will seek legal proceedings.”


Dabish also said he plans to sue the city if licenses are distributed based on the footrace results.


“We will definitely 100% take legal action as soon as they follow through and issue the licenses,” Dabish said.


House of Dank isn’t as sure it wants to pursue legal action, DiLaura said.


“Absent a clear path to a license, I don’t think we’ll sue,” DiLaura said. “Three or four years ago, everyone was primed to fight for every license in every municipality. Things have changed. To spend $100,000 or more fighting for a shot at a license just doesn’t make sense for us.”


Those potential lawsuits will likely be filed sometime after the Harper Woods planning commission holds its Feb. 28 meeting and licenses are distributed. If one of the first three to file are denied a license, the city would move to the next applicant in line, which is why some of the applicants asked to speak off the record.


Cannabis lawsuits over the selection process have embroiled several municipalities across the state.


The city of Detroit’s launch of recreational marijuana licensing was delayed by two years due to lawsuits over its selection process. Royal Oak, Warren, Pontiac and others also remain tangled in lawsuits.


"The driver of all of this is from probably the worst decision that the drafters of the adult-use statute made — requiring that competitive selection process," Lance Boldrey, partner and cannabis attorney at Detroit-based law firm Dykema Gossett PLLC, told Crain’s last year. "It all sounds well and good from a policy standpoint, trying to eliminate picking favorites, but it is the longest process and most expensive process for applicants to follow, and you end up with these lawsuits that can tie applicants up in court for three or four years."


Harper Woods’ marijuana ordinance, only allowing for three dispensaries, is largely based on a rule dictating a 1,500-foot buffer between all marijuana businesses. The small city near Detroit's east side is only 2.61 square miles. But the city was also taking heat for its selection process.


To avoid litigation, the acting city manager recommended the city eliminate its 1,500-foot buffer, which could open up the city to unlimited licensure that would effectively eliminate the need for a competitive process.


However, residents pushed back, gathering to support the buffer at an August 2023 council meeting. The City Council voted 4-3 to keep the buffer and limit the number of licenses, WDIV-TV reported.


But the city chose not to create a more advanced competitive structure than the lineup in November.


The city of Roseville, for example, uses a scoring system to determine whether a medical marijuana license is issued based on scores from several factors, such as: Sufficient application information; whether proposed facility is consistent with land use; physical improvements to the property; whether applicants have any criminal record; sufficient financial resources; proximity to existing facilities; reasonable size; sufficient operating experience; and more.


“I’m $100,000 into this already, and it’s been nothing but a joke,” said the applicant who requested anonymity. “We’re getting blackballed because I didn’t run to the front of the line fast enough? Come on.”