Per Marijuana Business Daily, 4/27/20, and this 18-page EDCA grand jury subpoena on its website, the feds are apparently conducting a criminal investigation into a wide-range of California cannabis businesses, both licensed and illicit ones. Here's a few excerpts from the piece:
In all, nearly 100 cannabis businesses and individuals are identified in the Weedmaps subpoena, including company employees, officers, various investors and others in the industry.
“The bottom line is the feds are showing they’re not done investigating cannabis, not done prosecuting cannabis,” California attorney Matt Kumin said after reading the subpoena.
Among the revelations: The investigation is partially focused on Weedmaps’ relationships with both licensed and apparently illicit California cannabis companies.
Weedmaps, headquartered in Irvine, California, is a popular website among consumers looking to find marijuana retailers across the globe. It also facilitates cannabis deliveries.
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The federal government’s probe, which apparently is ongoing, is being conducted by the U.S. attorney for the Eastern District of California, McGregor Scott. Scott’s office declined to comment to MJBizDaily.
The stakes are high given the federal government’s involvement and the dozens of companies named in the subpoena.
“You only present the case to the grand jury to determine whether or not there’s probable cause to return criminal charges. So this is a criminal investigation,” said San Francisco-based attorney Henry Wykowski, a former federal prosecutor who’s worked with California cannabis companies for more than a decade.
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Of the four U.S. attorneys offices in California, the conservative-leaning Eastern District is the one Wykowski would most expect to mount a serious attack on the cannabis industry or on a company such as Weedmaps.
But Scott, the U.S. attorney whose office issued the subpoena, has indicated that his priorities involving the cannabis sector are not state-licensed businesses that are following the law but, rather, illicit actors engaging in “interstate trafficking, organized crime and (marijuana cultivation on) federal public lands.”
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As originally reported, the subpoena requested information from Weedmaps on dozens of companies it’s dealt with over the years, including Santa Rosa-based CannaCraft and Irvine-based Terra Tech Corp. (The latter has been renamed Onyx Group Holdings after a February merger.)
The subpoena demands “any and all documents related to” at least 40 different business entities and 17 individuals with whom Weedmaps has apparently worked in some capacity.
Of the 40 companies, at least 27 possess a minimum of one valid state marijuana business license, according to government records. The majority of those are licensed retailers, as opposed to brands or other business types.
The other 13 companies apparently are illegal or unlicensed marijuana businesses, further complicating the picture for industry attorneys trying to decipher the subpoena’s intent.
Some of the legal and licensed companies identified include:
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- California Green Cross (delivery license in Sacramento).
- Connected Cannabis (licenses for six retailers in Long Beach, Sacramento, San Francisco, Santa Ana and Stockton).
- DEC Medical Group (retail and distribution licenses in Los Angeles).
- Desert’s Finest (microbusiness license in Desert Hot Springs).
- East Bay Therapeutics, (three licenses in Emeryville – storefront, delivery service and event).
- Flav, formerly known as FlavRX, which currently operates as a hemp CBD company and does not hold any California state marijuana permits.
- Green Valley Collective, Purple Heart Compassionate and the Wellness Earth Energy Dispensary, which together do business as “Project Cannabis” (retail licenses in Los Angeles, North Hollywood and Studio City).
- Golden State Greens Point Loma (retail and distributor licenses in San Diego).
- Horizon Collective (retail license in Sacramento).
- Kushagram (delivery license in Oakland).
- L.A. Cannabis Co. (three retail licenses in Los Angeles).
- MMD Long Beach (retail license in Long Beach).
- Puffy Delivery (retail licenses in Palm Springs, Santa Ana and Vista and a distribution permit in Santa Ana).
- South Coast Safe Access (retail license in Santa Ana).
- The L.B. Collective (retail license in Long Beach).
- The OG Collective (retail license in Cathedral City).
- Urbn Leaf (four retail licenses in Bay Park, Grover Beach, San Ysidro and Seaside).