The FBI has released a short audio notice asking for the public’s help investigating any possible public corruption in the nation’s burgeoning marijuana business — noting that some states are charging as much as $500,000 for dispensary licenses.
The announcement, released on the FBI’s website in August, has gotten the attention of local officials, since Rhode Island is one of the few states — if not the only state — that charges that much for a medical marijuana dispensary license.
While it’s unknown whether any Rhode Island lawmakers are under investigation, Gov. Gina Raimondo was emphatic Tuesday when she told reporters that the process for choosing who will win licenses for six new dispensaries next year will not mirror the allegedly corrupt process used in Fall River, where federal officials have charged the mayor with taking bribes from marijuana businesses.
Raimondo said the licenses will be chosen through a lottery system and the process and criteria used for deciding which companies win the lucrative licenses are still being drafted by regulators.
But one emerging marijuana company is threatening Rhode Island regulators with a lawsuit if the state doesn’t begin accepting license applications immediately.
The threat, from Green Reservoir Inc., comes as Raimondo has asked a judge to rule unconstitutional a legislative provision that House leaders gave themselves in the last session to approve any new cannabis rules.
In an Oct. 7 letter to Norman Birenbaum, the state’s top marijuana regulator, Green Reservoir, of Warwick, says regulators are violating new laws by not issuing licenses now.
“If prompt action is not taken with respect to the licensing of new compassion centers [otherwise known as dispensaries], our office is prepared to file a complaint with the Rhode Island Superior Court,” wrote Stephen Izzi, a lawyer for Green Reservoir. Izzi wrote that the company plans to combine forces with Kelsey Green, a company licensed to cultivate medical marijuana.
Izzi’s letter quotes from the legislation passed last session creating the capacity for six new dispensaries on top of the three existing ones:
“If at any time on or after July 1, 2019, fewer than nine compassion centers are holding valid licenses in Rhode Island, the Department of Business Regulation shall accept applications for new compassion centers … ”
Izzi also demands that the Department of Business Regulation accept his letter as Green Reservoir’s “formal application” for a dispensary license.
But in a reply letter to Izzi, dated Tuesday, Department of Business Regulation Associate Director Pamela J. Toro wrote that “your assertions and claims … are without merit” and that the law does not prescribe a timetable for when after July 1 the department must accept applications.
Toro said the department is working as quickly as possible to draft regulations that “ensure transparency, fairness and compliance” and would not accept “purported applications or have meetings or other communications with potential applicants.”
To ensure that all applicants are treated equally, Toro said, “the department will notify all interested parties, including your client, of the draft regulations, [public] hearing and comment period, application form and requirements.”
Izzi’s law partner Mark Ryan, who also lobbies for Kelsey Green and is a former Providence Journal executive, also appealed to the Department of Business Regulation in a letter last month requesting a meeting to discuss the license application process.
Green Reservoir’s director is Alex Lavin, who pushed unsuccessfully in 2015 for lawmakers to legalize hemp. Records show Lavin affiliated with several local cannabis companies, including Kelsey Green and Growth Industries.
In May, Growth Industries touted that it had raised some $17 million in investment for growing, extracting and testing cannabis products at a Jefferson Boulevard building. But state and local officials say those plans have yet to be fully realized.
Lavin did not return an email sent Friday.
A transcript of the FBI’s Aug. 15 audio release, asking for the public’s help in uncovering marijuana corruption, quotes Supervisory Special Agent Regino Chavez: “We’ve seen in some states the price go as high as $500,000 for a license to sell marijuana. So, we see people willing to pay large amounts of money to get into the industry.”
Another agent, Mollie Halpern, says: “States require licenses to grow and sell the drug — opening the possibility for public officials to become susceptible to bribes in exchange for those licenses. The corruption is more prevalent in western states where the licensing is decentralized — meaning the level of corruption can span from the highest to the lowest level of public officials.”
She asks, however, “If you suspect a dispensary is operating with an illegally obtained license, or suspect public corruption in the marijuana industry, contact your local FBI field office.”
With staff reports from Patrick Anderson
— tmooney@providencejournal.com
(401) 277-7359
On Twitter: @mooneyprojo
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