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FBI Investigating Alleged Corruption in Nevada's Cannabis Licensing Process

The feds suspect foul play and bias.

By
This story originally appeared on Cannabis.net

The FBI suspects foul-play in the Nevada cannabis licensing process and has started investigating all aspects involved in the process.

Since the industry was legalized in 2016, there have always been claims and complaints on how licenses were being issued to businesses. It has been a cycle of lawsuits being brought up by rejected applicants against licensed applicants.

The ethics being used in the licensing process has brought up so many suspicions as to why only cannabis companies affiliated with politicians and other business leaders were the only ones being licensed by the state.

In the last five years since the industry was established, almost 800 licenses have been issued for all segments of the industry. 335 of the issued licenses are dual licenses for businesses to sell both medical and adult-use cannabis.

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Alleged corruption 

For the last 12 months, agents of the Federal Bureau of Investigation (FBI) have been analyzing the several stages involved in getting a cannabis retail license in Nevada. The agents claim that they have received reports of corruption in the way cannabis business permits are awarded to applicants in the state.

It is said that since the state established the legal recreational cannabis industry, actors have had to grease the palms of some executives to get their licenses to operate. The FBI describes this as a "pay-to-play situation" and it seeks to establish whether their allegations are true or false.

Las Vegas Review-Journal has been on top of the case. According to their findings, the bureau's agents have had several discussions with the executives of the marijuana industry for some months.

The Review-journal was able to discover that dispensary owners have also been interviewed by FBI agents.

Chad Christensen, a former state lawmaker and a part-owner of Pisos dispensary in Las Vegas disclosed to the publication that he had a 45 minutes discussion with FBI agents late last year. He said that the agents wanted to know whether or not he had misgivings about the licensing process and if he suspected corrupt practices by the executives.  Chad said that he was very concerned about the industry and that his 'spidey senses' think a lot is going on underground.

Two other industry actors have disclosed that they had similar interactions with the FBI. The two who chose to be anonymous added that the agents specifically asked if promises of campaign contributions or bribes were used to convince the executives to allocate license slots to them.

Steve Sisolak, the executive governor of Nevada took up the mandate to root out criminal influences and other corrupt practices on the state's cannabis industry.

Influencing the decision of officeholders with monetary gifts or other promises is a crime on both state and federal levels. This is why the state department of public safety and the FBI took up the case early last year— February 2020. They subsequently notified the office of the attorney general of Nevada of the joint investigation that was about to commence.

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More details

The investigation was being kept under wraps for a while, however, since the ongoing legal battle commenced between the applicants that applied for licenses in 2018 and the state, the agents have begun to speed up the process for justice to take place. This battle had been termed 'World War Weed' by the affected parties and other industry personnel.

The Review-Journal reported that the Nevada marijuana regulatory committee awarded 64 marijuana business licenses to only 17 businesses, and the total applicants were over 120. Foul-play is highly suspected. The lawsuit is now being handled by the Nevada Supreme Court.

The FBI has refused to make any comments on the investigation till it has been concluded.

The Las Vegas Review-Journal tried to get comments out of one Agent Matt Edwards, however agent Edwards refused to comment saying that the FBI agents were not authorized to comment on ongoing investigations.

He reiterated that he was not going to give any information on any FBI investigations.

The licensing process lacks trust

Applicants have less trust and confidence in the process used by the state executives to issue licenses.

A member of the Nevada Cannabis Compliance Board called Tyler Klimas said that regulators of the state's cannabis industry are cooperating with the federal agents to ensure that normalcy is returned to the industry.

Tyler added that it is important for the integrity of the process to not be compromised.

Public trust and confidence must be regained to ensure no damage is done to the state's reputation. Corrupt actions like those entailed in the allegations could harm the industry's growth.

Mitigating the controversy

The state government has taken away the licensing control from the Gaming Control Board and has since created the Nevada Cannabis Compliance Board to take up the licensing duties in the industry.

Despite doing this to eliminate suspicion in the process, the FBI has discovered that the new board may also have engaged in corrupt activities in the last months. An anonymous source claims that the new board still engaged in the pay-to-play act in April 2021.

This means the new individuals are not unbiased after all. Growers manufacturers and retail businesses have still not had easy access to the licenses.

Last words

The Federal Bureau of Investigation (FBI) is reportedly focused on all licensing issues from 10 months ago and more.

Rumors are also going around that the previous deputy director of the taxation department, Jorge Pupo, is being incriminated by the findings of the federal agents.

Pupo has been placed on leave since 2019, so it seems he might be a person of interest in this investigation.

What is clear right now is that these corruption allegations are not going to be swept under the carpet. The state department of public safety and the federal agents are taking this investigation very seriously.

We all await official statements from the state government and the federal agents once the investigations have been concluded. The earlier the investigation is concluded the earlier the public's trust and confidence in the licensing system can be restored.