The former wunderkind mayor of Fall River, Mass. was sentenced to six years in prison after being convicted of public corruption in a marijuana licensing scheme.
In Forbes, veteran weed beat journo Chris Roberts argues federal law enforcement loves the cannabiz because it invites local political corruption.
- Massachusetts requires PotCos to obtain local permission to open, which makes said permission extremely valuable. How do you win it? In Fall River, a struggling former mill town and one of the poorest cities in the state, the answer was “bribe the mayor.”
- The story, Roberts continues, is “a cautionary tale about how cannabis permits work when elected officials are granted the power to pick and choose who enters the business, rather than letting the almighty market decide.”
- He argues granting cities the power to pick who runs their pot shops “ensures that cannabis remains in the hands of wealthy investors and entrepreneurs, who skew white.”
Meanwhile in California, regulators are investigating a case where legalization allegedly abetted smuggling.
Regulators have opened an investigation into Oakland-based distributor Blue Tree after a “credible” tip from an anonymous whistleblower accused the company of a smuggling operation that fed tens of thousands of pounds into the illegal market over the past six months.
- Leafly: “Looking at Blue Tree’s METRC [track and trace] activity, the whistleblower claimed the activity represented ‘rampant, massive, organized fraudulent diversion.”
- The whistleblower alleged a “burner license” scheme, in which licensed companies participate in illegal activity.
- Burner schemes are a topic of frequent griping in the California industry. A new lawsuit filed by a dispensary CEO against California regulators alleges they tolerate burner schemes for reasons of revenue and pride.
- Leafly found “abnormal traffic” i.e. volume discrepancies, between the company’s inbound and outbound orders.
- No charges have been filed against Blue Tree. It did not respond to Leafly‘s requests for comment.
- Reporter David Downs also gives a very thorough explanation of how “burner” license schemes work.