A shooting at a cannabis grow operation in Saginaw resulted in one man being hospitalized and another taken into custody.
The incident occurred around 9 a.m. on Monday at a facility located in the 2000 block of South Niagara Street, where the cannabis cultivation operation is situated.
According to the Saginaw Police Department, a 51-year-old man contacted 911 to report that he had shot a 42-year-old man. Upon arrival, officers discovered the victim with a gunshot wound to the chest.
The injured man was transported by ambulance to a nearby hospital. As of Tuesday, his condition was reported as stable, though the specific details of his injuries remain unknown.
Authorities have arrested a suspect in connection with the shooting. His identity has not been released pending his court arraignment.
As of Tuesday, Saginaw police have not provided information regarding the possible motive behind the shooting.
For nearly two and a half years, Michigan's cannabis industry has been closely monitoring a significant legal dispute between state regulators and Michigan's largest cannabis testing facility, Viridis Laboratories. This conflict, stemming from one of the most extensive recalls in the state's young cannabis industry, has led to extensive legal proceedings and could significantly impact future regulatory practices.
The administrative hearings between Viridis Laboratories and the Michigan Cannabis Regulatory Agency (CRA) concluded last Wednesday after multiple days of testimony. Although the hearings have ended, the legal process is far from over. Both parties will submit written closing briefs and responses over the next six months, and subsequent appeals are anticipated even after a final decision is made.
Central to this litigation are questions about Viridis' compliance with testing methods designed to accurately detect contaminants and measure the potency of THC, the psychoactive compound in cannabis. Testimony from these proceedings reveals a complex narrative involving historical complaints, the company's founders' connections to the Michigan State Police, and allegations that Viridis was unfairly targeted by CRA employees after raising concerns with Governor Gretchen Whitmer's office.
Viridis Laboratories CEO and founder Greg Michaud questioned the state's motives, suggesting that the recall and subsequent legal actions were efforts to justify initial allegations against the company. "You've got to step back and ask yourself: Why is the state using so many of their resources targeting one agency on what basically, it is saying, is an unapproved potency method?" Michaud stated.
The CRA declined to answer specific questions, pointing instead to extensive hearing transcripts. The agency is currently advocating for legislative changes to allow it to collect, possess, and test cannabis through a state-run lab to establish standards for licensed testing facilities.
Attorney Michael Komorn, a veteran cannabis defense lawyer, emphasized the industry's focus on the case. "If true, it creates a potential health risk for the consumer, which is contrary to what the regulated system purports to provide," Komorn said regarding the allegations exchanged between Viridis and the state. He underscored the importance of this case in the regulated market since 2016.
In May 2022, the CRA issued updated complaints against Viridis, alleging issues with potency, microbial and foreign matter contamination, and quality management. The CRA's interest in Viridis was reportedly driven by concerns over inflated THC potency, but flaws in Viridis' contaminant testing ultimately led to the recall.
During a hearing, the state presented data indicating that several of Viridis' tests for the mold aspergillus were overturned by retests from other labs. Despite Viridis' lower failure rates for aspergillus compared to industry averages, CRA's Claire Patterson expressed concerns over the abnormal data.
Viridis has contested the state's findings, suggesting that the retest results were manipulated and that the sample fragments tested may not have contained the same contaminants. Over recent months, Viridis has attempted to prove in court that it was unfairly targeted by the CRA to diminish its market share.
Michaud testified that after expressing concerns about CRA's administrative rules and alleged unethical practices within the agency to Governor Whitmer's Chief Operating Officer, Tricia Foster, Viridis faced increased scrutiny. Foster reportedly dismissed Michaud's concerns, which Michaud believes marked the beginning of targeted actions against Viridis.
Former CRA employee Leeann Barrett testified that CRA scientist Allyson Chirio expressed persistent doubts about Viridis' testing methods, particularly its potency results. Chirio's comments, according to Barrett, were part of ongoing discussions about the validity of Viridis' scientific methods.
Viridis, run by former Michigan State Police employees, including Michaud, Chief Science Officer Michele Glinn, and Chief Operating Officer Todd Welch, has maintained its methodologies are robust and independently accredited. The company has continued to use its potency testing method, certified by third parties, despite ongoing disputes with the CRA.
Viridis' connections with the Michigan State Police extend to performing marijuana testing for the agency's Marijuana and Tobacco Investigations Section since 2020. Michaud highlighted the potential impact of CRA's allegations on these longstanding relationships and contracts.
Moreover, Averhealth, where Glinn serves as a toxicologist, faced scrutiny from the Michigan Department of Health and Human Services, which discontinued its use for drug testing in child custody cases. Averhealth had planned legal action against the state, alleging a breach of contract, though it later withdrew the notice.
As this protracted legal battle continues, its outcomes will be closely watched by the entire Michigan cannabis industry, shaping future regulatory practices and standards.
Ryan Richmond, the owner of the Warren-based medical cannabis dispensary Relief Choices LLC, has been sentenced to 24 months in prison for tax evasion and obstructing an IRS investigation, according to the U.S. Department of Justice.
Federal authorities revealed that Richmond engaged in extensive tax evasion practices. He reportedly paid operating expenses in cash and routed credit card payments through an unrelated third-party bank account to hide the company's gross receipts. This scheme allowed him to avoid paying approximately $1.1 million in taxes between 2011 and 2014.
Richmond was convicted in federal court in September. The case highlights the complexities and legal ambiguities surrounding the cannabis industry in Michigan during the early years of its medical cannabis law.
Michigan voters approved the state's medical cannabis law in 2008. However, due to ongoing court battles, the first medical cannabis operating licenses were not issued until 2018. Relief Choices operated in this legal gray area, technically outside the state's formal regulatory framework, yet did not face enforcement from state authorities amid the ongoing legal disputes.
Federal prosecutors noted that Richmond's business primarily used cash, a common practice among cannabis businesses at the time due to their exclusion from the traditional banking market. While most cannabis businesses now bank with credit unions willing to accept the associated risks, cash operations remain prevalent.
Despite the legal ambiguities, cannabis businesses are still obligated to pay federal income taxes on all income, including from illegal sources, under Section 61(a)(2) of the Internal Revenue Code. This precedent was set in 1961 in the case of James v. United States, involving union official Eugene James, who faced restitution but not criminal charges for tax evasion.
Richmond's case is particularly severe. In addition to his 24-month prison sentence, he must pay $2.8 million in restitution to the IRS, which is more than twice the amount of taxes he owed. Richmond failed to file a personal tax return in 2014 despite Relief Choices generating $1.8 million in revenue, prompting an IRS audit that revealed further discrepancies.
The effective tax rate for cannabis businesses can be as high as 75% due to Section 280E of the IRS Tax Code, which disallows the deduction of business expenses for income from controlled substances listed under Schedule I, including cannabis. This section was established after Jeffrey Edmondson, a drug dealer, successfully claimed business expense deductions in 1981, leading Congress to close this loophole by enacting Section 280E in 1982.
Efforts are underway to reclassify cannabis as a Schedule II drug, which would eliminate Section 280E and potentially improve cash flow for dispensaries. This change could also encourage more cannabis business operators to comply with tax regulations, altering the cost-benefit analysis currently influenced by high tax rates.
Early Sunday morning, three men were apprehended following a break-in at the TruLeaf Dispensary in the Village of Lawrence. A fourth suspect remains at large, according to the Van Buren County Sheriff's Office.
The incident began around 3:30 a.m. when the dispensary's owner observed several individuals inside the building via surveillance footage. Authorities were promptly notified, and deputies arrived on the scene to find multiple suspects attempting to carry bags of cannabis and other products out of the facility.
Upon spotting the deputies, the suspects retreated back into the building. Three of them then exited through an unmonitored door and fled into the nearby woods.
Law enforcement managed to apprehend the first suspect as he attempted to reach a getaway vehicle. A second suspect was found hiding inside the dispensary. The third suspect was initially spotted walking along I-94 near County Road 681 before disappearing into the woods. He was later seen walking north along the same highway and was subsequently taken into custody.
The suspects, aged between 18 and 23, are all residents of the Battle Creek area. They now face multiple charges including burglary, forced entry, larceny in a building, possession of burglary tools, and resisting and obstructing police. The vehicle used in the crime was identified as stolen from Battle Creek.
Efforts to locate the fourth suspect are ongoing. The Van Buren County Sheriff's Office is urging anyone with information about the incident to contact them at 269-657-3101 or Silent Observer at 269-343-2100.
The Cannabis Regulatory Agency (CRA) of Michigan has issued a formal complaint against Flavor Galaxy, LLC, underlining serious allegations of regulatory breaches. Located in Hazel Park, this licensed cannabis processing facility faces multiple accusations which, if proven, could result in severe penalties including fines, license suspension, or revocation.
According to the complaint, discrepancies were found between the product descriptions on Flavor Galaxy's consumer packaging and the actual contents as recorded in Michigan's statewide monitoring system, Metrc. Notably, the "Amnesia Watermelon Freeze Hybrid" pre-rolls were labeled as containing "Premium Refined Cannabis Distillate and Cannabis Derived Terpenes," whereas the Metrc entry showed only shake/trim with basic safety compliance testing for potency.
Further issues were uncovered during an unannounced CRA inspection on February 7th, 2024. It was revealed that the facility also used non-FDA approved botanical terpenes in their products, contrary to claims on their packaging. In addition, numerous inventory inconsistencies were noted, including untagged products and significant discrepancies between physical stock and Metrc records. For instance, during follow-up visits, the CRA found untagged vape cartridges and pre-rolls, mismanagement of waste products, and inadequate record-keeping for product formulations and adjustments.
These actions violate multiple provisions of the Michigan Regulation and Taxation of Marihuana Act (MRTMA) and associated administrative rules, leading to 18 counts in the formal complaint. These include inaccuracies in entering information into the statewide monitoring system, failure to maintain records, improper tagging and tracking of marijuana products, and misleading advertising.
Flavor Galaxy, LLC has the opportunity to respond to these allegations by requesting a hearing within 21 days from the notice date. They may also opt for a compliance conference to discuss these findings and demonstrate current adherence to state regulations. This case underscores the importance of compliance in the regulated cannabis industry, not only to adhere to legal standards but also to maintain the safety and trust of consumers.
In a recent turn of events at Logan Airport, authorities intercepted a substantial amount of cannabis bound for the United Kingdom. The latest seizure involved a 70-pound cache of cannabis, found with a British woman attempting to depart for London this past Sunday evening. This incident follows closely on the heels of a similar case, where a woman from Michigan was caught with 74 pounds of cannabis, also destined for London.
According to a spokesperson from the Suffolk District Attorney's Office, the recent arrest occurred approximately six weeks after the first, signaling a notable pattern of smuggling attempts through this route. The spokesperson quoted Suffolk District Attorney Kevin Hayden, who expressed a stern warning against such illegal activities. "These two arrests in a fairly short time span should send a clear message that attempting to transport cannabis through Boston to the U.K. is highly ill-advised," Hayden stated.
The street value of cannabis in the United Kingdom is notably high, fetching around $5,000 per pound. This places the estimated value of the seized 70 pounds of cannabis at about $350,000.
The individual apprehended on Sunday, 19-year-old Fareedat Folunsho, faces charges of trafficking between 50 and 100 pounds of cannabis. During her arraignment in the East Boston session of the Boston Municipal Court, Folunsho pleaded not guilty and was subsequently detained on a $1,500 bail at the Nashua Street Jail. Her legal representation could not be reached for comment. She is scheduled for a probable cause hearing on May 21st.
The arrests highlight the stringent enforcement of drug trafficking laws at federal and international levels, despite the legality of cannabis in Massachusetts. Cannabis remains illegal federally in the U.S. and is also prohibited in the United Kingdom, underscoring the legal complexities surrounding its transport and sale across international borders.
These cases serve as a significant reminder of the ongoing challenges and legal consequences facing individuals who attempt to smuggle cannabis internationally, particularly from regions where it is legally permissible to areas where it is not.
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