October 2018 Rigging the $75 Billion Legal Marijuana Industry - DocDroid

October 2018

Rigging the $75 Billion Legal Marijuana Industry

Inside the US Marijuana Money Grab Happening Now

TABLE OF CONTENTS

ExecuSve Summary:

1

Condensed Reports:

7

Florida

7

Maryland

12

Arkansas

18

Virginia

24

Louisiana

30

Detailed Reports:

36

Florida

36

Maryland

53

Arkansas

67

Virginia

106

Louisiana

122

Exhibits:

153

MARIJUANA INDUSTRY INVESTIGATIVE REPORTING (22 JURISDICTIONS COVERED)

The incomplete list of marijuana industry investigative reporters Dec-18

Number of reporters 101

Investigative Reporter

Co-Author (if applic)

Hindenburg Research

QCM

N/A (Editorial)

Celene Adams

Amy Biolchini

Nick Corasaniti

Lydia DePillis

Tim Knauss

Bill Alpert

Maria Clark

James Higdon

Doug Donovan

Sam Karlin

Liam Stack

Graham Moomaw

Alyse Horn

Hunter Field

David Robinson

Jackie DeFusco

Lici Beveridge

N/A

Max Brantley

Andrew Left

Dominc Holden

Ryan Briggs

Dan Adams

Laura Vozzella

Jennifer Maloney

Saabira Chadhuri

Ben Lockhart

Matt Campbell

Jim Roscia

Kathleen Gray

Samantha Vincent

Sophie Quinton

Brian Hews

John Schroyer

Ryan Poppe

Jessica Boehm

James Quealy

Paloma Esquivel

Richard Deatley

Joe Nelson

Greg Hilburn

Duane Pohlman

N/A (Editorial)

Doug Thompson

Christopher Yee

Jack Cullen

N/A

Richard Fausset

Eric Sandy

Melissa Schiller

Dan Mihalopoulous

Rachel Hinton

Erin Cox

Lisa Bernard-Kuhn

Blake Sifton

Jackie Borchardt

Enzo Dimatteo

Claire Hughes

John Futty

Ashifa Kassam

Lisa Scheid

Fransisco Alvarado

Jeffrey Schweers

Jordan Ferrell

Fenit Nirrapali

Sam Wood

Kristen Wyatt

Rose Hackman

David Smiley

Michael Auslen

Justine Griffin

Meagan Campbell

Sam Levin

Nader Issa

Bob Norman

Bruce Barcott

Tom Scheck

Bobby Ampezzan

Naomi LaChance

Angela Bacca

Ellen Holland

Dan Goldberg

Dara Kam

Mitchell Colbert

Jeremy Daw

Kay Lazar

Aaron Gregg

Daniel Ducassi

N/A

John Hudak

Amanda Chicago Lewis

Tess Owen

Tracey Lindeman

Associated Press (unknown)

Anne Saker

Brian Slodysko

Scott Powers

Laura Nahmias

Shelley Murphy

John Leland

Mosi Secret

Victoria Bekiempis

N/A (Staff)

Hilary Gowins

N/A (Staff)

Headlines

Jurisdiction Covered Publisher

Aphria: A Shell Game with a Cannabis Business on the Side

International

Medical marijuana saga shows it's who you know that counts

New York

Challenges -- and controversy -- swirl around marijuana social equity programs in California

California

Billion-dollar company stakes claim on Michigan's marijuana industry

Michigan

How a Push to Legalize Pot in N.J. Became a Debate on Race and Fairness

New Jersey

Louisiana is trying to keep medical marijuana medical. It's harder than it sounds.

Louisiana

Politically connected Syracuse group flips NY marijuana license for pot of gold

New York

One of America's Richest Marijuana Companies (Curaleaf) Has Deep Russian Roots

National

What to know about Louisiana's medical marijuana program heading into 2019

Louisiana

Racial Justice and Pot are Colliding in Congress

National

National companies moving to take over Maryland marijuana businesses, despite state law

Maryland

Why Southern University's medical marijuana program is making little progress

Louisiana

Marijuana Legalization Has Gone Mainstream. Rick Steves Has Helped.

National

Virginia picked five companies... Officials won't explain why some bidders won and some lost

Virginia

The Exclusive Industry That's Supplying Pennsylvania's Medical Cannabis

Pennsylvania

Applicant for Arkansas medical-marijuana growing license secretly videotaped meeting

Arkansas

Marijuana legalization in New York: Here's the money behind politically charged pot war

New York

Investigation reveals city leaders privately supported Bristol casino before plan was made public

Virginia

Clinton pharmacist (Marco Moran, OTC:DEWM) will head to prison in compound pharmacy scheme

Mississippi

Investor Alert: Marijuana Investments and Fraud

National

The underbelly of Arkansas politics revealed in unsealed text messages

Arkansas

Cronos: The Dark Side of the Cannabis Space

Canada

Inside the Trump Administration's Secret War on Weed

National

Hidden testimonials show attempts to influence marijuana licensing

Pennsylvania

Payments for marijuana licenses appear to skirt state law

Massachusetts

Dozens of companies compete for a piece of Va.'s limited medical marijuana market

Virginia

Corona Brewer Bets $4 Billion on Cannabis Startup

Canada

The money behind Utah's contentious medical marijuana initiative

Utah

Let's Be Blunt: (State Rep) Bob Ballinger's Suspicious Ties to Medical Marijuana Licensing

Arkansas

More money flowing into Florida's medical marijuana market

Florida

Police to investigate if marijuana bribes offered to state employees

Michigan

OSBI confirms inquiry into allegation of bribery by Board of Pharmacy Executive Director over medical marijuana Oklahoma

Marijuana Bills Increasingly Focus on Social Justice

National

Corruption and Bribery Alleged in Lawsuit Filed Over Marijuana Permit Process

California

Local corruption becoming hurdle for mariuana license seekers in California

California

Regulators Seek To Ban All Non-State Approved CBD Products

Texas

Tactics scrutinized in Phoenix medical-marijuana dispensary cases

Arizona

Federal agents search Adelanto's mayor's home, City Hall amid corruption probe

California

FBI agents serve search warrants at home of Adelanto mayor, City Hall and elsewhere

California

House keeps medical marijuana monopolies intact

Louisiana

Calls come for Ohio's medical marijuana licensing process to be redone

Ohio

Medical pot mishandled

Arkansas

Woods trial: Marijuana money proposed for Christian school

Arkansas

Allegations of corruption fly as Baldwin Park approves development agreements for all its marijuana businesses California

Stern still fighting Iowa for CBD dispensary license

Iowa

Marijuana Entrepreneurs Film Documentaries of Corruption in Las Vegas Marijuana Industry Amidst Legal Battle Nevada

A Dying Southern Town Needed a Miracle. Marijuana Came Calling.

Arkansas

Canada Cannabis Producers Receive Millions From Offshare Tax Havens

Canada

Pot exects show the green for ex-regulator's bid for Cook County Board seat

Illinois

Plan to diversify Maryland medical marijuana market might boost white firms instead

Maryland

Will Ohio's medical pot program go up in smoke?

Ohio

Who is cashing in on Canada's marijuana 'Green Rush'?

Canada

Ohio auditor finds flaw in medical marijuana business license scoring process

Ohio

The ex cops, politicans and friends of Bill Blaire cashing in on legal weed

Canada

Rejected companies cry foul in N.Y. medical marijuana selection process

New York

Lawsuit challenges Ohio's racial quota for medical-marijuana growing licenses

Ohio

Canadian marijuana advocate blasts 'hypocricy' of ex-police cashing in on cannabis

Canada

State agency ordered to open up about marijuana applicants

Pennsylvania

Florida Pot Growers May Soon Get Rich

Florida

Mike Sweets brings medical marijuana link into FBI probe

Florida

Canadian Connection: how an equity firm bought its way into the FL marijuana industry

Florida

Marijuana experts scored prospective Md. pot businesses. Some had ties to them

Maryland

Medical marijuana permits leave losers fuming in Pa.

Pennsylvania

Budding pot industry ripe for corruption

National

A billion-dollar industry, a racist legacy: being black and growing pot in America

National

How profitable will medical-marijuana shops be? Very, says confidential pitch for investors

Florida

Meet Florida's Legal Drug Cartels

Florida

How public officials got into the weed game

Canada

Big Pharma's anti-marijuana stance aims to squash the competition, activists say

National

Marijuana organizations given green light on political donations

Illinois

Did Florida's Pot Czar pad his resume?

Florida

GW Pharma is moving CBD bills on the down low

Louisiana

Charges: Minn. medical marijuana execs illegaly distributed oils

Minnesota

Medical Marijuana Commission itself may still be grappling with the merits of medical marijuana

Arkansas

Sheldon Adelson fights marijuana legalization while funding pro-marijuana research

National

How Rick Scott Rigged Florida's Medical Marijuana Program for Profiteers

Florida

Colorado-owned Florida Cannabis Company Opposes 'Colorado-Style' Legalization

National

State-approved medical marijuana company falters amid 'financial constraints'

New York

Judge refuses to let Florida House of Representatives intervene in fight over medical marijuana license process Florida

How the Trump Campaign Got its 'Golden Ticket' to Big Marijuana

National

Why Florida's Medical Marijuana System is Ripe for Corporate Takeoever

Florida

Marijuana dispensary licenses to the highest bidder?

Massachusetts

Lawmaker who pushed medical pot in Md. is part of team applying to sell the drug

Maryland

Judge keeps tight lid on names in medical marijuana dispute

Florida

Assessing New York's Medical Marijuana Program: Problems of Patient Access and Affordability

New York

Worry about bad marijuana -- not Big Marijuana

National

How Black People Are Being Shut Out of America's Weed Boom

National

How New York Totally Screwed Up Legalizing Medical Marijuana

New York

The business of marijuana: as legalization looms, who is poised to profit? The chosen few

Canada

Cost of medical marijuana in Minnesota leads some to return to illegal sources

Minnesota

What you need to know about marijuana initiative

Ohio

Some lawmakers worry medical marijuana could spur corruption

Louisiana

State pot committee heavy with commercial interests

Florida

Lobbyists prepare for medical marijuana boomlet

New York

Marijuana licensing went awry early on, records show

Massachusetts

For Pot Inc., the Rush for Cash is Underway

New York

Is New York Too Corrupt For Medical Marijuana?

New York

Former Politicans Square Off for Delaware Dispensary License

Delaware

State, Insiders Stand To Benefit From Illinois' Medical Marijuana Law

Illinois

Court Upholds Initial Cap on New Jersey Marijuana Dispensaries, Nonprofit Requirement

New Jersey

Hindenburg Research Syracuse New Times MjBizDaily MLive New York Times CNN Health Syracuse New Times Barron's Times Picayune Politico Baltimore Sun The Advocate New York Times Richmond Times-Dispatch West Virginia Public Broadcasting Arkansas Democrat-Gazette LoHud WJHL Hattiesburg American Securities Exchange Commission Arkansas Times Citron Research BuzzFeed News City & State Pennsylvania Boston Globe Washington Post Wall Street Journal Deseret News Blue Hog Report Florida Politics Detroit Free Press Tulsa World Stateline Los Ceritos Community Newspaper MjBizDaily Texas Public Radio The Republic Los Angeles Times The San Bernandino Sun News Star WKRC Pine Bluff Commercial NW Arkansas Democrat-Gazette San Gabriel Valley Tribune Quad-City Times HeadlinePlus New York Times Cannabis Busintess Times Chicago Sun Times Baltimore Sun WCPO Cincinatti Al Jazeera The Plain Dealer () Now Toronto Times Union The Columbus Dispatch The Guardian Reading Eagle Miami New Times Tallahasee Democrat First Coast News Washington Post Philadelphia Inquirer Associated Press The Guardian Miami Herald Tampa Bay Times Maclean's The Guardian Chicago Sun Times WPLG Leafly Minnesota Public Radio News Arkansas Public Media The Intercept Huffington Post Alternet Politico News Service of Florida Alternet Alternet Boston Globe Washington Post Politico Drug Policy Alliance Brookings Institute BuzzFeed News Vice News Montreal Gazette The Guardian The Cincinnati Enquirer Associated Press Orlando Sentinel Politico Boston Globe New York Times Newsweek MJBizDaily Huffington Post MJBizDaily

Publish Date Journalist Contact Info

Co-Author Contact Info

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2-Page Overview (December 2018 update) Marijuana is transitioning from the underground to legal markets globally at an accelerated rate. The total global market is around $150 billion in annual sales. Cowen Group projects $75 billion in annual legal marijuana sales in the US by 2030 (link). 34 states in the US currently have legalized cannabis production and sales (link). Most of these states (24 out of 34) have created oligopolies with limited licenses to produce and sell cannabis.

(Note: Only refers to state-level licensing, does not include municipality-level licensing limits) This report goes into 150-page depth into how five of these states -- FL, MD, AR, VA, LA -- have developed their legal marijuana markets. The takeaway: the industry is transitioning to legal markets through discriminatory and potentially criminal "bid-rigging" in terms of license applications and awards. The current license value given out by these states to a handful of wealthy and politically-connected owners is ~$1.8 billion. To cover up the fact that these applications are rigged, the state creates the appearance of merit-based applications that attract substantial public participation and costs. By doing this, the state collects millions in application fees and causes tens of millions in losses from its citizens typically to out of state consultants and law firms (to develop competitive applications/business plans). It's discriminatory because those harmed most by illegal marijuana, disproportionately people of color and the poor, are being shut out from this industry and not disproportionately benefitting from industry taxes.

 This population has been targeted, arrested and incarcerated for marijuana crimes (most often small possession) over the last century.

This population is often legally barred from entering the industry. In cases like Virginia, people convicted of marijuana and paraphernalia misdemeanors aren't allowed to be owners and employers in the industry.

It's potentially criminal because in AR, possibly in FL and probably other states, the FBI is looking into corruption in the licensing process. Investors should understand the risk of investing in companies that have acquired licenses in limited-license states.

It's also concerning on a patient advocacy front -- there is inflated pricing because of oligopoly structures, concerns about price fixing, and concerns with patients being forced to make the compromising decision to buy legally or remain in the criminalized market to purchase uninsurable medicine more affordably. Legalization advocates have largely overlooked the role of market structure and who owns this industry as patient access issues also. The oligarchs often side with patient access advocates to push their business interests -- dissuading legal action that causes delays and liberalizing/expanding the market.

16 states are yet to legalize cannabis production and sales. Many of the states yet to legalize do not have ballot initiative rights, and the likelihood of oligopolies is high. Many of these states are in the South.

Marijuana legalization has popularized the government-contract economy and is helping to expose it. States have looked to suppress competition to avoid legal action and greater backlash, however this has done little to limit media interest. States have then legalized marijuana in ways that don't appear like marijuana (like Virginia and THC-A) as a way to limit interest and then incrementally legalize moving forward. This is working.

In short: Those whose lives have been derailed because of marijuana crimes, disproportionately the poor and people of color, are being shut out from benefitting from the mega-billion legal industry. Meanwhile, the rich and politically-connected are cornering the industry and enriching themselves with help from the state and getting away with it, so far. By winning these oligopoly business licenses, these rich and politically-connected individuals are raising hundreds of millions giving them an advantage in consolidating the industry (accelerated by US tax code 280E) and in lobbying for maintaining oligopolies and shaping future legalization at the statelevel and federally.

Adding: concern also about money laundering boosting public and private company valuations.

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