Cannabis Corruption in Nevada – The FBI and the Federal Reserve open investigations into marijuana licenses

The FBI suspects foul play in the cannabis licensing process in Nevada and has begun investigating all aspects of the process.

Since the industry was legalized in 2016, there have been repeated claims and complaints about how licenses were granted to companies. It was a series of lawsuits brought against licensed applicants by rejected applicants.

The ethics used in the licensing process have raised so many suspicions why only cannabis companies associated with politicians and other business leaders have been licensed by the state.

In the last five years since the industry was founded, almost 800 licenses have been issued for all industry segments. 335 of the licenses issued are dual licenses for companies selling cannabis for medicinal purposes and for adults.

Alleged corruption in the Nevada cannabis licensing process

For the past 12 months, agents from the Federal Bureau of Investigation (FBI) have analyzed the various stages involved in obtaining a retail cannabis license in Nevada. The agents claim they have received reports of corruption in the granting of cannabis business permits to applicants in the state.

It is said that ever since the state established the legal recreational cannabis industry, the actors have had to rub the hands of some executives to obtain their operating licenses. The FBI describes this as a “pay-to-play situation” and is trying to find out whether their allegations are true or false.

Las Vegas Review-Journal got the case right to the point. According to their findings, the office’s agents have had several conversations with executives in the marijuana industry for the past few months.

The review journal found that pharmacy owners were also interviewed by FBI agents.

Chad Christensen, a former state lawmaker and partner in Pisos Pharmacy in Las Vegas, announced to the publication that he had a 45-minute discussion with FBI agents late last year. He said the agents wanted to know if he had any concerns about the licensing process and if he suspected corrupt practices of the executives. Chad said he is very concerned about the industry and that his “Spidey senses” think there’s a lot going on underground.

Two other industry players have announced that they have had similar interactions with the FBI. The two, who opted for anonymity, added that the agents specifically asked whether campaign donation promises or bribes were used to convince executives to assign them license seats.

Steve Sisolak, the executive governor of Nevada, assumed the mandate to root out criminal influence and other corrupt practices in the state’s cannabis industry.

Influencing the decision of public officials through gifts of money or other promises is punishable at both state and federal level. Because of this, the State Department of Public Safety and the FBI picked up the case early last year – February 2020. They then notified the Nevada Attorney General’s office of the upcoming joint investigation.

More details

The investigation has been kept under wraps for a while, but since the ongoing legal battle between the applicants who applied for a license in 2018 and the state, agents have begun accelerating the process for the judiciary. This battle has been referred to by the parties involved and other industry representatives as the “World War I herb”.

The Review Journal reported that the Nevada Marijuana Regulatory Committee granted 64 marijuana business licenses to only 17 companies and the total number of applicants exceeded 120. Foul play is strongly suspected. The lawsuit is now being processed by the Nevada Supreme Court.

The FBI has refused to comment on the investigation until it is completed.

The Las Vegas Review Journal attempted to get comments from an agent Matt Edwards, but Agent Edwards refused to comment because he said the FBI agents had no authority to comment on an ongoing investigation.

He reiterated that he would not provide any information about FBI investigations.

The licensing process lacks trust

Applicants have less confidence in the process used by state law enforcement agencies to issue licenses.

A member of the Nevada Cannabis Compliance Board named Tyler Klimas said the state’s cannabis industry regulators are working with federal agents to ensure the industry returns to normal.

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

Public trust needs to be regained to ensure that the state’s reputation is not harmed. Corrupt acts like those mentioned in the allegations could hurt the growth of the industry.

Defuse the controversy

The state government removed license control from the Gaming Control Board and has since created the Nevada Cannabis Compliance Board to take over licensing obligations in the industry.

Though this was done to remove suspicion, the FBI has determined that the new board may also have been involved in corrupt activities in the past few months. An anonymous source claims that the new board was still involved in the pay-to-play act in April 2021.

This means that the new individuals are not impartial after all. Breeder manufacturers and retailers still did not have 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.

There are also rumors that the current deputy director of the tax department, Jorge Pupo, is being incriminated by the findings of the federal agents.

Pupo has been on leave since 2019, so he appears to be a person of interest in this investigation.

It is clear that these corruption allegations are not swept under the carpet. The State Ministry for Public Security and the federal agents are taking this investigation very seriously.

After the investigation is over, we are all waiting for official statements from the state government and federal agents. The sooner the investigation is completed, the sooner public confidence in the licensing system can be restored.

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